Answer to Question #194680 in Microeconomics for wtrv

Question

Provide a brief explanation on the background of the public sector wage bill in South

Africa

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Why it has become topical

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Define relevant terms, that is public sector wage bill and expenditure control measure

Answer 1

(a) South Africa spends close to a third of its budget on civil servants' salaries and government spending on public sector wages is expected to continue increasing to 697 billion rand. This increase started after the end of apartheid where government sought to empower millions of disadvantaged black people by placing them in public sector jobs.

(b) It has become topical because South Africa want to freeze public sector wages for the coming three years so as to cut its salary bill and contain a yawning budget deficit. This issued has raised the risks of strikes by the 1.3 million- strong public-sector workforce.

(c) public sector wage bill is the amount of money that the government is supposed to pay all civil servants per month. On the other hand, expenditure control measure is a government restriction that ensures public resources are spent as intended, within authorized limits, and following sound financial management principles.