The decision to try cutting the government’s runaway wage bill was a better available option in trimming down the state’s spending.
This is according to President Cyril Ramaphosa who, in his weekly newsletter, said that the other available option would have had a bigger and negative impact on civil servants and South Africans in general.
According to Ramaphosa, the government had two options available in cutting down its spending - renegotiate 2020 salaries increases with public sector unions or opt for the austerity measures which would have seen reducing salaries and cutting pensions.
Ramaphosa says they opted for the former which means that the salary increments agreement signed in 2018 would have to be revisited.
“We have made a deliberate decision not to pursue a path of austerity. Such a route would have seen deep cuts in spending on the social services that poor people rely on. It could have involved dramatically reducing the salaries of civil servants, the size of the public service, cutting bonuses and pensions, raising taxes and selling off key state assets,” Ramaphosa said.
“An austerity budget would have damaged our growth prospects further and weakened the ability of the state to stimulate economic activity and meet people’s needs.”
He says the budget presented by finance minister Tito Mboweni last week, was a balanced and well-considered measure to contain government spending and increase revenue.