South African taxpayers are footing the bill for massive government salary hikes: report

The government presented a document to trade unions on Tuesday (25 February) which shows how the salaries of South Africa’s civil servants have more than doubled over the last decade.

The confidential document – which has been seen by the Sunday Times – shows that a government director on salary level 13 who was earning just under R550,000 in 2007, now earns more than R1.2 million.

The salaries of low-ranking officials have also increased substantially during the same period, with mid-career civil servants at level 7 who were earning R151,000 in 2007 now being paid about R375,000.

These civil servants have also been given access to a number of perks over this time period including allowances for housing, mobile phone use, and travel.

Together these benefits and allowances cost the taxpayer of R27 billion a year, the report shows.

Labour economist Andrew Levy told the Sunday paper that public-sector salary hikes are higher than in the private sector – with no improvement in productivity.

“There’s no link in the public sector between pay and productivity. These guys are the crème de la crème , they are the labour elites and furthermore they never get fired.”

Reducing the wage bill

Government will now reduce the public sector wage bill by R160 billion over the next three years as the state attempts to reduce high spending on salaries in the sector,  finance minister Tito Mboweni said in his Budget Speech this past week.

Between 2006/07 and 2011/12, the state added about 190,000 employees. However, wages also increased significantly over this time period, he said.

“To balance the books, we slowed hiring, and since 2011/12, the number of government employees has declined,” he said.

“We cannot go on like this. Classroom sizes are growing, hospitals are getting fuller and our communities are becoming increasingly unsafe.”

He said once wage growth, corruption and wasteful expenditure was under control, government would focus its attention on hiring in important areas such as education, police, and health care.

“We can hire strategically and better match skills with opportunities,” Mboweni said.

War in the streets

The plan to reduce the wage bill has already been met with open hostility by the country’s labour unions, with a fight-back already underway.

According to Intellidex analyst, Peter Attard Montalto, Mboweni’s comments were a clear line in the sand drawn between government and the public sector unions.

“Pushback from Cosatu is going to be very strong, and we fully expect a large-scale public sector strike at some point this year now.

“We see the strike as inevitable, but also positive – a sign of necessary pain,” the analyst said.

The strike action won’t be immediate, he said – as it takes time to get approvals and initiate the processes for one – but will likely happen during the current fiscal year, with a possible second strike in the first quarter of 2021 as the next three year wage agreement is negotiated.

Read: Get ready for massive public sector strikes, analyst warns

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South African taxpayers are footing the bill for massive government salary hikes: report