Government to set up pay strategy to cope with recent wage increases
Provinces and national departments will get advice on how to absorb the R30bn increase in the government wage bill
The government will develop a remuneration strategy in all its three spheres and in public entities to help provinces and national departments cope with the added financial burden of footing public servants’ wage increases.
The department of public service & administration says this strategy, among other interventions, will ensure the public-sector wage bill remains within the budget ceiling.
Finance minister Tito Mboweni wants the provinces and national departments to absorb the R30bn government wage bill increase emanating from the 2018 agreement with organised labour.
He announced during his medium-term budget policy statement last Wednesday that the Treasury did not have additional funds to add to the wage bill. Reacting to Mboweni’s announcement, Eastern Cape finance MEC Oscar Mabuyane said he did not know where the money would come from, while the Limpopo provincial government said it was ready to foot the bill.
Limpopo provincial government spokesperson Phuti Seloba said the province would “cope” with the bill, emphasising that Mboweni’s announcement was not a surprise.
“We will be able to cope since the provincial administration is very stable now. We were brought on board before the announcement, [it] is something we have been expecting,” he said.
The department said it was calling on government employers to implement strict management of overtime, performance bonuses and leave.
Mboweni suggested natural attrition as one of the ways the government could deal with the hefty wage bill. He said it was not sustainable, warning it could eat into funds used for service delivery.
His sentiments were met with outrage by organised labour, with trade unions such as the Public Servants Association of SA (PSA) saying the Treasury’s inability to foot the bill would unsettle labour relations between the government and its employees. The PSA argued that by virtue of the Treasury being unable to pay the increases, it meant the government had negotiated in bad faith. Fedusa and Cosatu said public servants were forced to pay for governance failures of their principals’ doing.
The department has, however, dismissed the concerns, saying “as the employer”, the government had an obligation to honour the wage agreement.
“We can confirm that as the employer we have an obligation to honour the implementation of the multiterm 2018 agreement on salary adjustments and improvement of working conditions of the public service, as concluded in the Public Service Coordinating Bargaining Council in June,” the department said.
This was in spite of the state of the provincial or national department coffers that had to now take responsibility for the hikes.