SOUTH AFRICA
South African Minister for Finance, Tito Mboweni sparked immediate union anger after telling Parliament the country’s public sector wage bill would be reduced by R37 billion ($A3.7 billion) over the next three years.
In his maiden Budget speech, Mr Mboweni said this would be achieved through early retirements and natural attrition, with no additional money allocated for salaries.
“The wage bill accounts for more than 35 per cent of consolidated public spending and has been a major driver for the fiscal deficit, with spending reductions typically falling on goods and services and capital investment,” Mr Mboweni said.
“Reducing the public wage bill is key to rebalancing the Budget and shifting the composition of expenditure away from consumption towards investment.”
He said older Public Servants who wished to retire should be facilitated to do so “graciously”.
In another effort to cut costs, Mr Mboweni said he would also look at phasing out performance bonus payments, telling Parliament that in recent years the Government has paid out R2 billion ($A20 million ) a year in in this area. Active management of overtime and progression payments were also under consideration.
“As a gesture of goodwill, Members of Parliament and Provincial Legislatures and executives at public entities will not be receiving a salary increase this financial year,” the Finance Minister said.
The moves are unlikely to find favour with the country’s powerful public sector unions. In an initial statement, the largest, the National Health, Education and Allied Workers Union (Nehawu) complained it had not been consulted.
First Deputy President of Nehawu, Mike Shingange said the Government knew it should first consult its employees in the Public Sector Co-ordinating Bargaining Council before embarking on such radical measures.
Pretoria, 24 February, 2019
