The state is committed to a sustainable wage bill. During the tabling of the 2020 budget, the Minister of Finance announced the reduction in compensation budgets by R160.2 billion over the 2020 MTEF. The reductions are distributed as follows: R37.8 billion in 2020/21 financial year, followed by reductions amounting to R54.9 billion in 2021/22 financial year and R67.5 billion in 2020/23 financial year.
Changes to the sovereign rating of the Republic by rating agencies and the impact of the novel coronavirus (Covid-19) have created an unprecedented economic and social catastrophe at a local and global level. As a consequence, Cabinet will re-evaluate the impact this has had on the measures to reduce the public sector wage bill by R37.8 billion by 31 March 2021.
Government respects the process of collective bargaining.
I am informed that the Minister for Public Service and Administration has already commenced engagement with labour unions in the Public Service Coordinating Bargaining Council (PSCBC) on the concomitant economic challenges and implications of the reductions with specific reference to the 2020/21 financial year.
We will continue to engage with labour unions at the PSCBC regarding measures to implement the reductions to the public sector wage bill.