By Sibongile Khumalo for Fin24
Government welcomed the signing of a three-year multi-term Public Service wage agreement, although it exceeded the 2018 Medium Term Expenditure Framework by R30bn.
According to the Department of Public Service and Administration, the R110bn provision for the salary adjustments for the period from 2018/19 to 2020/21 was made in the 2018 Medium Term Expenditure Framework (MTEF).
“The 2018 salary agreement exceeds this amount by R30 Billion over the Medium Term Expenditure Framework,” the department said in a statement.
“This then calls for cost containment measures to ensure that the wage bill remains within the existing compensation ceilings,” it added.
The Public Service Coordinating Bargaining Council (PSCBC) last week said 65.74% of trade unions had agreed to salary adjustments and improvements on conditions of service in the sector for three years, from 2018/19 to 2020/21.
For 2018/19 level 1-7 workers agreed to a 5.5% CPI linked increase, plus a 1.5% , the pay would then be hiked by a CPI related rate for the next two year, with an additional 1%.
Government said the agreement was reached after “a long and difficult negotiations process”.
Employees in the level 8-10 scale would get a CPI rate plus 1% for the current year, followed by 0.5% for the next years, while those in the level 11-12 bracket would receive an increment of 0.5% for this year on top of the CPI. The highest grade will only get a CIP rate for the following year.
Also included, is that the housing allowance of R1 200.00, which would be increased annually by the average CPI of the preceding financial year on an annual basis.
The country’s bulging public wage bill has been a major source of challenge raised by international lenders and rating agencies.
“As government we are glad that we have reached another multi-term agreement,” said Minister of Public Service and Administration Ayanda Dlodlo.
She stressed that the negotiations took place amid growing concerns over the escalating public service wage bill and a contracting economy, which pose serious challenges to the already strained government fiscal purse.
“The agreement proves that it is possible for both parties to reach an amicable agreement that puts the stability of the country and service delivery first.”
The adjustments will be effected on the 1st of July of each year.
Discussions reached a deadlock earlier this week, with the Public Servants Association (PSA) demanding a 12% wage increase across the board. Government offered a 7% increase for lower level workers, 6.5% for mid-level employees and 6% for senior managers.
Unions had started tabling demands in September 2017.
Source: Supermarket & Retailer
Consumer confidence in South Africa surged to an all-time high in the first quarter of the year, indicating the willingness of consumers to spend more, following the election of Cyril Ramaphosa as head of state.
The First National Bank (FNB)/Bureau for Economic Research (BER) consumer confidence sentiment index (CCI) raced to 26 points in the first quarter of 2018 from -8 points in last year’s fourth quarter.
The increase is the largest single quarter improvement since BER started publishing a composite index in 1982. It also dwarfed the previous record high of 23 index points reached in the first quarter of 2007.
FNB chief economist Mamello MatikincaCRT said the index indicated that most consumers were more optimistic about the outlook for the South African economy and their household finances.
“While the VAT hike to 15 percent would have weighed on consumer sentiment, the zero rating of basic food items such as maize meal‚ brown bread‚ dried beans and rice will mitigate the impact of this tax increase on low-income households,” Matikinca said.
“The extraordinary improvement in consumer sentiment during the first quarter of 2018 can largely be ascribed to the change in the country’s leadership, which triggered many positive economic developments.”
The BER said consumer confidence surged across all income and population groups during the first quarter of the year.
It said sentiment among those who take home R14 000-plus a month reached new record highs of 31 points while those who earn R3 000 a month improved their confidence to levels last seen in 1995.
FNB and BER said index among white consumers reached a level last seen in 1988, while confidence among their black counterparts also hit 34 index points, the second highest level since the all-time high of 38 points after the 1994-election.
Statistics South Africa said this month that retail sales, which best indicate consumer sentiment, increased 4.9 percent year-on-year in February and above market expectations of a 2.8 percent gain.
New car sales have also soared in the first three months of the year.
Citadel chief economist Maarten Ackerman said the buoyant mood among consumers bodes well for the future outlook for the economy.
“As consumer confidence acts as a leading indicator to the economy, the recent surge in consumer confidence in South Africa supports the idea that our economic growth in 2018 will likely be better than initially expected,” Ackerman said.
The BER, however, cautioned of a risk that the CCI overshot of the positive sentiment, charging that there could be a negative correction during the second quarter. All three sub-indices of the CCI saw substantial improvements.
The index, which gauges consumers’ perception of the economy in the next 12 months outlook, jumped from -2 points in the last quarter of last year to 34 points in the quarter under review.
The consumers’ assessment of their own financial position surged to 31 points from 2 points previously.
The number of individuals deeming it appropriate to purchase durable goods presently improved to 14 points from -24 points in the prior quarter.Lara Hodes, an economist at Investec said: “The waning of policy and political uncertainty following Ramaphosa’s election as president of the ANC and subsequently the Republic, together with the avoidance of a sovereign rating downgrade by Moody’s rating agency and a budget more orientated towards fiscal consolidation, boosted the outcome.”
Original article by Kabelo Khumalo for IOL
Spending in SA improved in the third quarter as economic growth grew slightly over the period and government spending increased, although at a slower pace.