Answer to Question #197507 in Microeconomics for Sithandiwe

Question

How can i conclude that public sector wage bill is an effective expenditure control

Answer 1

One component of a country's budgetary provision is that of recurrent expenditure; the recurrent expenditures' allocation goes to the remuneration of public servants. More than a third of the national cake(revenue) shared by way of budgetary allocations vis a vis expenditures go this sector; this results to what is commonly referred to as public wage bill, which is always hiking every now and then, such that it has become a conspicuously debated isssue. Every government like SA is trying to come up with modalities on how to curb ever rising expenditures, and public wage bill appears to be the one of the few areas the government can appropriate and available way to curb or control this menace! The government can use its prerogatives to review and reduce the amounts it pay civil servants through wage harmonisation and doing away with unnecessary stipends it pays the civil servants, freezing employment among others, although a lot of antagonism and resistance will be meted on this move, perhaps it remains the most reachable mechanism of expenditure control for any government!