HILARY JOFFE: It's time to decide who is really in charge of the budget

06 December 2020 - 05:06 By HILARY JOFFE

What is the Treasury's job actually? It's a fundamental question raised by the public sector wage debacle that played out around the Labour Appeal Court this week. The public sector unions had taken the government to court over its refusal to implement the final year of the three-year wage deal done in 2018. Finance minister Tito Mboweni had declined to pay because the state could no longer afford the R37bn increase. But his colleague Senzo Mchunu, who as public service & administration minister is responsible for negotiating wages, effectively tried to cave in, making the unions a R27bn settlement offer that raided the Government Employees Pension Fund to give civil servants a once-off cash bonus. The Treasury had not agreed to the settlement offer.

In the event, the unions rejected the offer, and the court's ruling will be closely watched. It's not the outcome for this year so much that matters - ratings agency Fitch, for one, has already assumed that the government will lose the case. Rather, it's the ramifications for the new three-year wage agreement that the government and unions have to negotiate from next year...

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