Aaron Motsoaledi said a new offer made Tuesday meant it was "better to remain in medicine than become a manager in government.
"People who have been professors for a long time are now earning more than deputy ministers in cabinet," Motsoaledi said of the revised offer which has not yet been made public.
He said he was "very, very proud" of the new offer made to doctors.
The health ministry came under fire for the 60 percent offer which opposition parties said in effect only amounted to between two and 13 percent over two years, leading to intensified illegal strikes this week.
The strikes saw hundreds of doctors being fired all over the country.
The minister admitted there was a lack of managerial skills, poor technological management, corruption as he addressed parliament "at a very challenging time in the history of health care in our country".
Mike Waters, opposition Democratic Alliance lawmaker, accused the government of years of neglect, saying that budgetary increases had mostly been allocated to deal with the massive burden of HIV/AIDS which affects 18 percent of the population.
"Dismissing doctors also won?t help either, there are so few of them you will have to re-employ them anyway unless you want a further meltdown in health services," Waters said.
"You simply cannot offer a health service with 12,000 vacancies for doctors and 42,000 for nurses," said Waters.
South Africa's public health system is crippled by the burden of disease in the country, and a severe lack of skills to staff the public health system.