South African Finance Minister Pravin Gordhan pledged to cut spending targets by 25 billion rand ($1.64 billion) over the next three years, mainly by reducing the wage bill.

The National Treasury is forcing government departments to cut back on jobs by eliminating non-critical vacant posts and in some cases, reducing administrative and managerial staff, it said in the Budget Review released on Wednesday in Cape Town.

The government’s wage bill makes up about 35 percent of spending and is set to increase 7.4 percent a year until 2018-19.

After adjusting for inflation, total expenditure is forecast to increase 0.8 percent a year over the next three years, compared with an average of 4 percent since 2012-13.

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