“We view any intention to review the 2018 agreement as a declaration of war”
ON FRIDAY, President Cyril Ramaphosa announced that Cabinet ministers and leaders of Parliament earning more than R1.5 million a year will get no increases this year, while lower-paid officials, including MPs and MPLs, will get hikes of 2.8%.
This was followed by Finance Minister Tito Mboweni announcing he intends implementing a public sector wage cut of R160billion over the next three years.
This is a bold step indeed, but one Mboweni and Ramaphosa will be hard-pressed to get past the unions, which are against any job cuts, and on whose support the ANC will depend for next year’s elections.
However, something’s got to give when the government wage bill eats 36% of revenue, and with many departments overstaffed.
The government has already offered early retirement packages in a bid to reduce the staff count, but the take-up has been far slower than expected.
While Mboweni was confident the government and trade unions would “find each other for the credibility of the fiscal stance”, the unions were already talking of “war”.
The National Education, Health and Allied Workers’ Union said the current wage agreements were not up for discussion.
“We view any intention to review the 2018 agreement as a declaration of war,” it said, while Mboweni said he has support within the Cabinet to cut the public sector wage bill.
Perhaps Mboweni and Ramaphosa should have extended the 0% increase to all MPs and MPLs too, to make the R160bn cut more palatable to the unions.
In addition, they could have chosen these officials’ perks and allowances for higher taxes or austerity measures to show it is not just those on the bottom rungs being targeted for savings.
With child support grants increasing by just R20 a month, and old-age and disability grants by R80 a month, it is an insult to these recipients for already highly-paid officials to get increases, even if only of 2.8%.
Another area Mboweni could look at to save the fiscus is the issue of “ghost workers”.
Perform a countrywide audit of all government departments, municipalities and State-Owned Entities and let’s see how much the wage bill comes down by.