12 numbers that put the public wage debate in context

Government representatives have proposed an adjustment to the public sector wage bill, sparking outrage from unions.

But among 1.2 million civil servants, who works where and earns what? What's being spent and on whom? And who will be affected by an adjusted agreement with the Public Service Bargaining Council, should it come to pass?  

Fin24 examined some of the numbers. 

35%: A chunk of national spend

In 2018/19, spending on compensation of state employees accounted for 35.4% of consolidated national expenditure. Government wages as a percentage of GDP comes in at around 14%, compared to a global average of 10% and an average of 10.4% for member countries of the Organisation for Economic Cooperation and Development (OECD).

"Compensation is one of the largest components of public spending and, since 2006/07, has grown faster than any category except payments for financial assets. This trend has become a source of spending pressure across government, squeezing out spending on other inputs and capital equipment," Treasury said.

Between 2006/07 and 2018/19, total compensation spending on the main budget more than tripled, from R154 billion to R518 billion. Above-inflation remuneration increases accounted for the largest proportion of this spending, Treasury said.

61%: A bigger chunk of provincial spend

The provincial government wage bill stood at 61% of total in 2018/19 – up from 56% in 2006/07.

Provincial budgets have also flagged underspending in other areas over the years.

According to the 2019/20 Financial Year First Quarter Provincial Budgets and Expenditure report, personnel expenditure amounted to R94.3 billion or 24.2% of the R389.6 billion main budgets by June 30, 2019, representing an increase of 12.9% or R10.8 billion year-on-year.

Individual provinces have come under scrutiny previously, because service delivery has not always matched expenditure on staff salaries. Limpopo, the Eastern Cape and KwaZulu-Natal came under fire in 2017 when Treasury's fourth-quarter provincial budgets and expenditure report noted that Limpopo spent some 70% of its budget on salaries, with the other two provinces hot on its heels. 

Limpopo had scored lowest in Statistics South Africa's State of Basic Service Delivery in SA report the previous year, followed by the Eastern Cape, while the Western Cape, which had spent proportionally the smallest portion of its budget on salaries at 53%, had also scored highest.

2018/19 data from Treasury released in September 2019 stated that there had been a 6.9% growth on expenditure on salaries and wages across provinces since the previous year, while 2019/20 data indicated the provincial breakdown as below. 

public sector wage

8%: Public service salary increases 

The average salary increase public sector employees have received since 2010 is 8%. In the private sector, the average is 7.2%.

The gap is widening, however:

public sector wage

R518 billion: The cost has trebled

The total public sector wage bill in 2018/19 amounted to R518 billion, according to National Treasury's payroll data.

Stats SA issued a breakdown of average salaries in 2017, with the top spot going to the Office of the Chief Justice at over R808 249 per year on average. At the higher end of the list were also Parliament and the Department of International Relations and Cooperation, as well as Public Enterprises. At the bottom of the list were police, public works, home affairs, and higher education and training. Average salaries at the latter came in at R255 065.

R310 million: Millions on suspended civil servants

According to a 2019 Business Day report, R310 million had been paid in the past financial year to civil servants who were suspended or on sick leave. Prior to that, the Democratic Alliance cited officials being paid years after being suspended, complaining that in 2017, 69 officials had been kept on suspension with pay for longer than six months, at a cost of over R135 million in that financial year.  

1.2 million: Government workers

The total number of employees in the public service. 

28 000: Senior managers

The number of senior managers at national and provincial level.

R2 169 585: Senior salaries

The annual salary of a government employee at job grade 16.

R130 379: Junior salaries

The annual salary of a government employee at job grade 1.

0.38: Wage (in)equality

Despite the salary gap above, the Gini Coefficient in the public sector is 0.38. The Gini Coefficient is a number between 0 and 1 that indicates the level of income inequality – the closer to 1, the more unequal.

In the rest of the economy, the Gini Coefficient is over 0.64. The public sector therefore has greater wage equality than the rest of SA.

102 700: A glimpse of SOEs

Over 100 000 people were employed at Transnet and Eskom as at November 2019, according to Public Enterprises Minister Pravin Gordhan. Responding to a question in Parliament at the time, Gordhan said that Transnet employed 56 718 people, Eskom employed 45 982, and SAA 5256. The World Bank has previously said Eskom - whose wage bill hit R32.35 billion in 2019 - could be overstaffed by as much as 66%. 

Speaking at News24's Frontline panel discussion last week, Cosatu's parliamentary coordinator Matthew Parks said state-owned enterprises should be included in the Public Sector Bargaining Council (PSBC), which would see them also subject to state wage determination - and affected by any wage adjustment going forward. 

Unions including the Public Servants Association (PSA) and Cosatu have argued that state workers in the PSBC are, through the proposed wage adjustment, having to shoulder the burden of cost-cutting disproportionately. 

Eskom has attempted to cut its wage bill through voluntary exit packages. SAA, which is in business rescue, has announced planned job cuts, sparking protest from unions. 

R273 000: Private vs. public salaries

The average annual salary of a private sector worker comes in at R273 000.

In the public sector, by contrast, the average annual salary is R352 000 - R393 000, according to data from Stats SA's Quarterly Employment Survey.

However, notes Treasury, it's also true that a larger percentage of public servants have tertiary qualifications. On average, South Africans with tertiary education earn 330% more than those without

R160 billion: Mboweni's savings goal - and how he plans to get there 

Finance Minister Tito Mboweni wishes to adjust the public sector wage bill by an ambitious R160 billion over a period of three years. This would mean R37.8 billion in 2020/21, R54.9 billion in 2021/22 and R67.5 billion in 2022/23.

According to calculations presented by government representatives to the Public Sector Bargaining Council last Tuesday, the 2018 wage agreement left a total estimated shortfall of R30.2 billion. The presentation said this was because the annual cost-of-living adjustment, housing allowance and equalisation of pay progression - which would affect mostly police and teachers - would cost R242.7 billion, against a budgeted R212.5 billion. 

Broken down by year, the three agreed-upon elements would come to R39.5 billion in 2018/19, R79.6 billion in 2019/20 and R123.5 billion in 2020/21. Initially, early retirements and reduction in performance bonuses were expected to plug the gap, but according to government representatives, they did not achieve sufficient savings. 

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