SOUTH AFRICA
The heads of the South African Public Service have been ordered to cut their staff salary bills by five per cent over the coming year.
Minister for Finance, Tito Mboweni (pictured) stressed the savings must come out of money allocated for pay and not from that earmarked for projects or service delivery.
Mr Mboweni also foreshadowed further cuts, of 6 per cent in 2020–21 and 7 per cent in 2021–22.
While he is following the course recommended by almost all economists and other financial experts in South Africa, the move is likely to provoke a confrontation with both trade unions and factions within his own ruling African National Congress Party.
Mr Mboweni’s austerity measures follow in the wake of rising unemployment, no possible cuts in Government grants, poor economic growth, increased state borrowing, spiralling debt service costs and the possibility that ratings agency Moody’s may change the country’s sovereign rating to junk status.
His measures mean that in the Police Service alone, 23,000 jobs may be lost, which will be deeply unpopular in a population reeling from an unceasing crime wave.
However, without the cuts, the country’s medium-term Budget would show a ZAR30 billion (A$3 billion) shortfall.
This development comes after Public Service salaries have increased by an average of 11.2 per cent per year over the past decade — almost double the inflation rate.
During that time there has been hardly any commitment to increased productivity or improvement to the services provided to the public.
Pretoria, 27 August 2019
