You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

No more funds available to be reprioritised for public sector wages

‘It’s too late. There is no money that can be reprioritised.’
DPSA Director-General Yoliswa Makhasi refers to the ‘unsustainably high wage bill’ of small part of SA workforce fortunate to have jobs during a national crisis. Image: dpsa.gov.za

As public sector unions and the government continue discussions at the Public Service Co-ordinating Bargaining Council regarding the next round of wage negotiations, the Department of Public Service and Administration (DPSA) says there are no more funds available that can be reprioritised to fund the last leg of the 2018 wage agreement.

Read: Treasury puts the brakes on the wage bill

“It’s too late. There is no money that can be reprioritised,” says DPSA Director-General Yoliswa Makhasi.

Implementation of the last year of the three-year wage deal was struck down by the Labour Appeal Court in December when it ruled that the deal is not binding because it had not been approved by the National Treasury. The court further ruled that implementing the deal would also set back the government’s plans to rein in public spending.

Freeze on increases

Last year, the government unilaterally decided to announce a freeze on public sector wage increases, in line with its bid to save R160 billion over the next three years.

Public service wages accounted for about 34% of consolidated state spending by 2019/20.

The unions’ appeal for the courts to force the government to implement the final year of the 2018 wage deal contravenes sections 213 and 215 of the Constitution and sections 78 and 79 of the Public Services Act, the court ruled. 

Four trade unions including the Public Servants Association of SA (PSA), the SA Democratic Teachers’ Union and the National Education, Health and Allied Workers’ Union (Nehawu) have taken the matter to the Constitutional Court on appeal. 

In court papers, Makhasi says at the beginning of 2020 the government began to negotiate the terms of Clause 3.3 of the wage agreement, which states that public servants are due to receive salary increases of up to 7% or CPI plus 1%, depending on job grade. 

Unions reject ‘gratuity’ offer

In the revised proposal by the DPSA public servants would receive a collective, once-off “gratuity” of R13.5 billion.

This would come from cuts and savings from government programmes, including school feeding schemes.

These payments would have no effect on the public sector wage bill for 2019/20. 

The proposal was made to unions in light of the country’s worsening public finances due to the Covid-19 pandemic. 

Trade unions rejected the proposal and were informed by the DPSA that the offer would not be made available later, according to Makhasi.

“The funding from cuts to budgets elsewhere has been used to combat the Covid-19 pandemic. It is no longer available for just and equitable relief for union members,” she says.

Government would need to borrow a lot more money

DPSA Minister Senzo Mchunu previously said in court papers that the government would be required to borrow more than R78 billion if the last leg of the three-year wage deal was implemented. 

“South Africa cannot afford to borrow funds to pay for an unsustainably high wage bill for a small part of the national workforce fortunate to be in employment during a time of national crisis,” Makhasi says. 

For the next round of wage negotiations, the government expects to increase public servants wages by 1.2% annually in the next three years. Unions have tabled a demand of CPI plus 4% across the board.

According to the February 2021 budget, spending on public servant wages is likely to decrease from 61.1% of provincial budgets to 60.8% over the medium term.

Read:
Court dismisses public sector wage bill appeal
Treasury warns of fiscal crisis over state wages

Please consider contributing as little as R20 in appreciation of our quality independent financial journalism.

AUTHOR PROFILE

COMMENTS   22

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.

SIGN IN SIGN UP

78 million is not a lot of money at all. If it were 78 billion then I would be worried.

Be worried it is R 78 billion

The ANC have stolen all the money either directly or indirectly through overemploying useless cadres and buying votes through patronage.

All happened under the watch of Pravin Gordhan… and of course your honorable Mr. Jacob Z…

No value for money from the Public Servants, its more like public Public parasites. They just exist to feed and reproduce.

Whilst i do feel sorry for the handful that try make a meaningful contribution, by far the majority think they have a job for life.

Given that almost 50% of the country is unemployed, business are closing down and people who can leave are trying to get out… So what are the public servants busy with?

Do you have kids? If so, do they go to school and doctors? I am 35 a mom of one. I have been teaching for 12 years, I don’t feel like I am a parasite, I taught my class every single day during lock down, I paid for resources out of my own pocket. I still paid full daycare fees whilst my son was at home. We as public sector will not receive an increase in 3 years, despite wage agreement for last year. Petrol and groceries have gone up. Rent has gone up, school fees have gone up. I am struggling to make ends meet. Yet I wake up at 5:30 every day and leave home before my child wakes up to greet your child with a smile and positive attitude, ready to learn. I only see my son 12 hours later at 17:30 because I have to ensure YOUR child’s books are marked and I have put interventions in place. Please explain to me me how I am a breeding parasite?

Well said madam. If there were more like you it would be marvelous. There are state employees who give more than their pound of flesh eg doctors, nurses, teachers, but again not all !!

The type of people who would have felt my comment was offensive are the very people who is was meant for.

Those who did not get offended, i specifically wrote :
“Whilst i do feel sorry for the handful that try make a meaningful contribution, by far the majority think they have a job for life.”

I will reserve my comment regarding public schools and by enlarge any parent that sends the kids there. But here is what it might look like: We have 21st Century learners who are taught by 20th century teacher in 19 century classrooms, yet we expect the kids of today to solve the problems of tomorrow, that is why we have politicians who can barely read and write not to mention run a country.

My wife rips out chapters of irrelevant information and replacing it with subjects such as economics; physcology and new languages but the most important thing that she teaches our 5 year old is something no other school can and that is Happiness.
No child can even begin to learn unless they are happy so how can any body proclaim to be a teach when they are more concerned with giving redundant information to children, that should be a punishable offence by the law.

@MoniqueVorster

Thank you for sharing your (anecdotal) story what you had to go through during lockdown. This means as a state employee you’re FORTUNATE ENOUGH to receive your normal salary during such time. How convenient! Yet you complain, and seem oblivious about people in the private sector that LOST EVERYTHING!

(Yet you struggle to make ends meet, yet receiving your normal income. How do people in private sector struggle to stay afloat when they lost partial or the bulk of their income??)

Now, let us allow others (in the PRIVATE sector) with their anecdotal stories about how they tried to survive with being retrenched, or deal with drop in salary, or where a family business folded…especially in the hospitality sector.

Read my lips….the famous last word.

“No more funds available to be reprioritised for public sector wages.”

But we all know the Corrupt ANC …. say one thing, do the opposite. We’ll probably find later that the Corrupt ANC awarded all public servants a 6% pay increase after unions commenced “Operation Torch” whereby multiple government buildings were burnt to the ground.

I sincerely hope that if the unions do torch state buildings that they are charged with arson and terrorism

Yes, but that never happens. Municipal buildings in Stutterheim were torched, no response. Trucks torched on the freeway, anyone arrested?

Senzo Mchunu is on the right track.At long last there appears to be an understanding that budgetry objectives are there to be adhered to.
The reigning in by the court of destructive trade unions that live in their own economic bubble far removed from reality is also to be welcomed.

If we absolutely must pay an increase I suggest reducing the defined benefits of Govt Employee Pension Scheme recipients for those retiring after 2030. As a result contributions to the scheme can be reduced and public servants will see an ‘increase’ in take home pay in the short term. Government already suggested a pension contribution payment holiday last year.
Govt Employee Defined Benefits are almost obscene when compared with what a pension that a regular private sector worker invested in a Reg 28 fund and now buying an annuity would receive.
Plus, average life expectancy in SA in 63 (maybe 62 now with COVID excess deaths factored in) so many existing public servants may not raise too much of an issue with a reduction in pension benefits.

A police captain with 26 years of service does not even earn R26 000 per month. During lockdowm they got up 4.00 in the morning to perform extra duties, with no extra pay. On top of that their leave for December was cancelled at the last minute. With the previous elections he was not allowed time off to cast his vote. He worked approximately 20 hours for a measly R1400. Phonecalls to complainants are made from his private cellphone because there are no money for upgrades. Point is, the wage bill is not that high because of the salaries of the people on the ground that actually does the work, but rather as a result of the people in their aircon offices who earn huge salaries in excess of R70 000 with no idea what it is like on the ground. Overtime duties are performed when ordered by their commanders and overtime has been budgeted for, but when they submit their overtime for processing, they are told that if they cannot submit successes, they will not receive overtime.

I’m sure you will find that most of the budgets are spent on “management”: in SAPS all the kits generals etc. Welcome to a banana republic, courtesy of the ANC.

Here is an easy solution, cut the wages of the top earning government employees and allocate those funds to lowest earning government employees.

Sounds like more socialism.

In their own words at over 60% the wage bill is “unsustainable”

So to address this, their best shot is to (likely?) reduce it by 0.3% – over the MEDIUM term

More evidence that unsustainable is fundamental policy.

Reprioritised?
Let’s get real here!
There is “service delivery” failure all over the place – corruption coming out of our ears and more people employed in government (by various measures) than countries like the USA…

Come on!!!

Increase for what?? The problem is the sense of entitlement in the public sector. I have worked in sales across different industries in the private sector my entire career and annual increases have never been something that was “expected”.

If you want an increase you need to be able to justify it, not just by showing up and doing your job but by excelling at what you do.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR

Podcasts

INSIDER SUBSCRIPTIONS APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING PORTFOLIO TOOL CPD HUB

Follow us:

Search Articles: Advanced Search
Click a Company: