From Game Docs:
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Government salaries
Government salaries can now be reduced much further and differ up to a factor of two with salaries outside the government. Such large differences will however have consequences for the movement of workers between government and the industry.
If government salaries are too low, government workers, including soldiers and officers may leave their jobs for higher salaries in the industry or business. Big difference in pay can force the army to move weapons into the reserves, hospitals may remain without staff and schools and universities may be forced to close for lack of teachers.
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So basically you can reduce the Gov Salaries as much as you want as long as you have enough Population to fill Corps and Gov Facilities.
Depending on your Game Level you might need a certain Gov-Salary Level.