25 September 2023

SOUTH AFRICA: Finance Minister upsets PS union

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South Africa’s Minister for Finance, Tito Mboweni (pictured) is facing a backlash from unions after he said the country’s public sector wage bill was a danger to the entire economy.

The Minister made the comments in his first medium-term Budget Policy Statement to Parliament.

It comes at a time when the Government is grappling with Public Service unions over wage increases and fears from unions that the Government is considering widespread retrenchments.

Speaking to reporters during a press briefing after he released the Statement, Mr Mboweni encouraged unions to familiarise themselves with the predicament in which the Government found itself.

He said unions would also do well to understand that the Government had been relatively kind to its employees.

“The law of the land should be commonly understood,” Mr Mboweni said.

He said employers and employees should take the time to understand the nature of the beast.

“They must then decide what to do and when they both know where they stand, a proper conversation can start,” Mr Mboweni said.

He said the Government must be more innovative in its approach to the public sector wage challenge, suggesting that performance evaluation might be introduced to determine each employee’s compensation instead of giving all PS employees an automatic annual bonus.

“The headline is the wage bill, what drives it and how to reduce it,” Mr Mboweni said.

He said reducing the bill did not necessarily mean retrenchments.

“The Minister of Public Service is better placed to talk about this,” Mr Mboweni said.

However, he pointed out that between 2006–07 and 2017–18, spending on public sector wages had more than tripled, from ZAR154 billion to ZAR480 billion (A$14.8 billion to A$46.2 billion).

“Inflation accounts for just over 40 per cent of the increase in compensation spending,” Mr Mboweni said.

“The rest of the increase stems from a rise in employment and above-inflation increases in remuneration.”

There was a swift reaction from the South African Federation of Trade Unions, with its General Secretary, Zwelinzima Vavi saying better savings could be made by a reduction in the size of the country’s Cabinet.

“The Public Service is running short of 129,000 jobs as we speak; they can’t afford to lose one person,” Mr Vavi said.

“They must redeploy people into those vacancies.”

Pretoria, 30 October 2018

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