SOUTH AFRICA
A plan to reduce numbers in South Africa’s Public Service appears to have failed.
Minister for Finance, Tito Mboweni (pictured) had set a target to shed 30,000 employees by encouraging older workers to take early retirement without losing any pension benefits.
However, figures show that fewer than 3,000 officials in South Africa’s three biggest Provinces applied to take the offer before the 30 September deadline.
There were 1,452 applicants in KwaZulu-Natal, 904 in Gauteng and 525 in the Western Cape for a total of 2,881.
No other Province produced numbers, suggesting applications were too few to bother about.
The normal retirement age is 60; state officials can retire from age 55, but are discouraged from doing so by the subtraction of 0.33 per cent a month from their pension benefits.
Under Mr Mboweni’s offer, a retiring official’s pension would be calculated only on the basis of their years of service.
Chief Economist of Efficient Group, Dawie Roodt said the numbers were consistent with anecdotal evidence.
He said few teachers came forward to accept the offer after their unions advised them against it.
Teacher unions feared that up to 7,000 teachers might apply, while a highly placed source in Western Cape said the Province could not afford to lose the experience these teachers brought.
During his budget speech in February, Mr Mboweni said he wanted to cut the state’s salary bill by ZAR27 billion (A$2.7 billion) over three years.
At present, there are 1.23 million people working for the state.
If 30,000 had accepted the package, it would have meant a saving of ZAR4.8 billion (A$4.8 million) in 2019–20 and, by 2022, ZAR8 billion (A$8 million) would have been saved.
Mr Roodt said he did not expect Mr Mboweni to come forward with any more drastic plans immediately.
“Not yet,” Mr Roodt said.
“This is a thing that will be ironed out in time, but I think it will be a disappointment to Mboweni with so few officials applying.”
Pretoria, 15 October 2019
