South Africa’s millionaire government employees
The number of government employees earning over R1 million per year has risen from 10,000 in 2013/14 to over 55,000 in 2023/24. Almost half of all 1.3 million employees will earn above R350,000 per year.
This was revealed in finance minister Enoch Godongwana’s Medium-Term Budget Policy Statement (MTBPS), detailing the government’s employment and compensation data.
In recent years, the government has tried to slow the growth of the Public Sector Wage Bill, which includes the compensation of national, provincial, and local government employees.
It also includes the wages of employees at public entities and state-owned enterprises.
Over the past decade, the wage bill has declined from 35.7% to 32.1% as a share of government spending.
However, in absolute terms, the government employee wage bill has skyrocketed from R408 billion in 2013/2014 to R724 billion in 2023/2024.
Godongwana announced that he would honour the public sector wage deal struck in March to give employees a 7.5% increase, though it had only budgeted for a 4.5% raise.
The deal will come at an additional cost to the Treasury of R23.6 billion, Godongwana said.
Government departments will have to find the remaining R10.1 billion through reprioritisation of budgeted funds.
Over time, a higher proportion of government employees have moved into higher-earning categories due to the higher cost-of-living adjustment agreed to in wage negotiations.
The number of employees with annual earnings in excess of R1 million per year has also increased from just above 10,000 in 2013/2014 to over 55,000 in 2023/2024.
Almost half of all government employees will earn over R350,000 per year.
Compensation of government employees has risen by an annual average of two percentage points above the inflation rate for the past decade, contributing to widening budget deficits.
National Treasury said managing this growth is critical to fiscal sustainability and that above-inflation increases have raised the average remuneration per employee.
South Africa’s government employee wage bill is one of the highest among emerging markets. As a share of GDP, it is 3.5% greater than the OECD average.
The average remuneration per employee has grown significantly over the past decade, largely because of above-inflation increases for national and provincial employees.
These substantial increases have occurred during a period of weak economic growth and tightening fiscal constraints.
This article was first published by Daily Investor and is reproduced with permission.
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