Supplementary Budget 2020

Problem not public servants, but corruption - trade unions

Security Guards march from Church Square to Tshwane House against outsourcing and job losses on July 17, 2017. (Gallo Images / Alet Pretorius)
Security Guards march from Church Square to Tshwane House against outsourcing and job losses on July 17, 2017. (Gallo Images / Alet Pretorius)

It is unfair to blame workers in SA's public service for pressures on government expenditure, members of Parliament (MPs) have heard.

During public hearings about the mini budget on Wednesday, MPs from the standing and select committee on finance heard trade unions' position on comments made about the public service wage.

Last week, during his maiden mini budget, Finance Minister Tito Mboweni said no money would be made available to cover the increase of the new wage agreement signed in June. Provincial governments will have to reprioritise funds to compensate for the increases.

However, General Secretary of the Federation of Unions of South Africa Dr Dennis George told the committees that the wage bill, which accounts for 35% of government expenditure, was reasonable.

George highlighted that wage increases had been above inflation - a good thing, in his view, because inflation erodes income of workers, who also have to get to work by contending with high transport costs due to fuel price hikes.

George put forward the economic theory that wage increases cover inflation and productivity growth.

George also presented data to the committees which showed that during the Zuma administration, since 2009, salaries for those earning more than R30 000 increased substantially up until 2017. George attributes this to the deployment of "comrades". In contrast, salaries of those earning less than R20 000 remained consistent. 

Parliamentary coordinator of the Congress of South African Trade Unions Matthew Parks  recognised the fiscal crisis and said 100% of government expenditure could not go towards the wage bill, saying the current level of 35% was "fine and stable".

Costs can be reduced by addressing management at state-owned enterprises, slashing the executive bill, as well as perks for politicians, he said.

Former finance minister Malusi Gigaba had spent over three quarters of a million rand to fly his spouse overseas, said Parks. Nurses and teachers did not pay to send their spouses to New York, he added.

Parks said wastage could be reduced in procurement processes by state entities. He explained that if supply chain management processes by both local government and state-owned enterprises were investigated, then "a lot of dead bodies" would be found.

Parks also raised concerns about jobs in the public sector – given news that the SABC would be embarking on retrenchments. This is opposite to President Cyril Ramaphosa's agreement at the jobs summit that no jobs would be shed in the public sector.

"We see other state-owned enterprises inching toward retrenchment despite the president's commitment," he said.

Economist Professor Jannie Rossouw, who represented the Fiscal Cliff Study Group, also shared views on the public sector wage – and indicated that increases should be limited to inflation.

Increases have been above inflation, but productivity levels of workers must catch up, he argued.

"Civil service remuneration increases, including promotions and bonuses, can't exceed the rate of inflation. It is necessary for the productivity in civil service to catch up with large adjustments given in the last 10 years," he said.

Mboweni told journalists at a press briefing following the mini budget that government should take a creative approach to managing the public wage bill, such as freezing posts of the deceased or workers who have retired, as well as doing away with an "automatic" 13th cheque, instead giving bonuses based on performance.

* Visit Fin24's 2018 mini budget hub for all the news, views and analysis.

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