01 Feb 2021

Government needs to right size the public service in order to address the unsustainable level of personal emoluments emanating from wages, salaries and pension contributions which stands at 15 per cent of GDP.

Delivering the 2021/22 budget proposals February 1, Minister of Finance and Economic Development, Dr Thapelo Matsheka said in an effort to reduce the wage bill, government would abolish 50 per cent of vacant positions in value as of 1^st  April 2021.

 “In this regard, the Directorate of Public Service Management will be expected to review the size of the public service and during the 2020/2021 financial year, recommend measures to right-size it as part of over-arching public sector reforms,” he said.

He said in view of the expected budget deficit, it was imperative that going forward recurrent spending was reduced and revenues increased to bring them back into balance.

Dr Matsheka said achieving fiscal sustainability required a range of actions such as improving domestic revenue mobilisation, trimming government spending to align it with the new lower level of government revenues.

This, he said, entailed making sure that government spending was productive and efficient, rebuilding the financial buffers that had been largely depleted and ensuring that the borrowing necessary to finance budget deficits was kept to modest levels.

Dr Matsheka explained that the economic recovery transformation plan also identified the rapid roll-out of public services on digital platforms as a priority, with the potential to reduce the number of personnel required in the workplace and hence the future wage bill.

 

He said it could facilitate digital transition more broadly, including the transfer of services, processes and transactions to digital platforms throughout the economy, and thus reduce the use of physical or manual processes. ENDS