Deputy finance minister proposes government wage freeze

By Doug Mattushek - 10 October 2019Views : 1072

Deputy minister of finance David Masondo has proposed that the government freeze state wages in order to help solve the current fiscal crisis.

The Treasury revealed that Masondo was speaking at the Private Investors for Africa event on Monday evening and indicated that drastic measures are needed to curb costs.

"We also have to look at a wage-freeze starting with us public office bearers at all levels of the state if we are to seriously tackle our looming fiscal crisis," News24 reports him as saying.

"Our tax revenue is very low mainly due to low economic growth; and the institutional challenges at SARS associated with what is now known as state capture have affected revenue collection.

"Raising taxes in the context of low economic growth is not an option. Growing the economy is the only option in order to build a broader economic base for revenue generation."

Masondo went on to mention struggling state-owned entity Eskom and how its R128 billion bailout from government could and should be the last, as it has become "unaffordable".

"Currently a significant part of our expenditure goes to the wage bill and bailouts of our state-owned companies, with Eskom being one of the biggest recipients of government recapitalisation," added Masondo.

"These bailouts have become unaffordable."