The government is tightening the screws on the hiring of new employees in its bid to cut costs as part of responding to the current challenging fiscal environment.
THE GOVERNMENT is tightening the screws on the hiring of new employees in its bid to cut costs as part of responding to the current challenging fiscal environment.
It is implementing tighter control measures that will help Cabinet ministers to effectively manage fiscal sustainability when creating and filling certain vacant posts.
Public Service and Administration Minister, Noxolo Kiviet has informed her colleagues that motivation for creating or filling certain vacant posts by national government departments must be submitted to her for her concurrence, or the relevant premier in the case of a provincial department or provincial government component.
“Chief financial officers are expected to advise their departments on the financial implications of creating or filling certain critical posts and confirm the availability of funding for the medium-term expenditure framework (MTEF) period,” states the new directive issued by Public Service and Administration director-general Yoliswa Makhasi.
Makhasi’s department has undertaken to assist others in assessing motivation for creating or filling certain critical posts in line with the criteria in the directive as well as verifying the availability of funding over the MTEF period with the national or provincial Treasury’s budget analysts.
Finance Minister Enoch Godongwana has stated that the cost of the wage agreement for the 2023/24 financial year will require significant trade-offs in government spending over the short and medium term as the wage bill is a significant cost driver.
”Financing of public services is governed by the government’s fiscal policy and budget framework, aimed at maintaining a sound and sustainable balance between spending and borrowing, keeping consumption at an affordable level and ensuring that salary increases are fiscally sustainable,” the department said.
It has called on other departments to realign their human resource plans with service delivery imperatives and compensation allocations, where necessary, taking into consideration the MTEF and fiscal sustainability.
The control measures to be implemented on the government’s payroll systems will be with the assistance of Cabinet ministers and the National Treasury.
In his Medium-Term Budget Policy Statement this week, Godongwana said the main budget deficit had increased by R54.7 billion compared with the estimates earlier this year due to lower revenue performance, higher public service wage bill costs and higher projected debt-service costs.
”Government has made a strategic decision to allocate funds to sectors that are personnel-heavy, such as health, education and police services,” he explained.
Additional funding of R24bn this year and R74bn over the medium term will be used to fund the 2023/24 wage increase and the associated carry-through costs in these sectors, according to Godongwana.
The government’s spending is projected to be reduced by R21bn in 2023/24, R64bn in 2024/25 and R69bn in 2025/26, which will be partially offset by departments implementing the cost containment guidelines issued by the National Treasury.
”It will also be offset by implementing control measures on payroll systems in line with the directive issued by the Department of Public Service and Administration, as well as implementing the recommendations from the spending reviews conducted in the past two fiscal years” he added.
