The National Treasury has reiterated its decision to freeze public servant wages in the country, with data showing that government remuneration has spiralled over the last 15 years.
In a parliamentary briefing on Friday (6 November), chief director at National Treasury of South Africa Edgar Sishi said that until the mid-2000s, public-service compensation spending grew more slowly than nominal GDP.
Since 2004, however, this relationship has reversed, and the ratio of compensation spending to GDP has increased to about 11%, he said.
“Since 2006/07, average public-service remuneration has increased at a faster pace than per capita GDP, and is now 4.7 times larger – partly the result of slow economic growth and high levels of unemployment,” he said.
“Remuneration for employees of national and provincial governments tends to be higher than that of private-sector workers. More than 95% of public servants earn more than the bottom 50% of registered taxpayers.”
Statistics South Africa survey data also suggests that public-sector compensation growth has outpaced private-sector compensation growth over the past decade, as discussed in the 2019 Medium Term Budget Policy Statement.
An increase in personnel numbers over the period, from 1.15 million to 1.33 million, accounts for the remainder of the increase, Treasury said.
Data shows that the majority of the country’s civil servants fall in levels 6 to 9.
Government is proposing growth in the public-service wage bill of 1.8% in the current year and average annual growth of 0.8 per cent over the 2021 Medium-Term Expenditure Framework (MTEF) period.
However, the move is likely to face stronger opposition from the country’s labour unions after government signed a 2018 wage agreement which guaranteed significant increases for the country’s public workers.
Government has not implemented the third year of the 2018 wage agreement, with the matter currently being considered by the labour court. Treasury said that government is actively engaging with labour unions to find a solution to a more sustainable cost of employment.
The budget guidelines also propose a wage freeze for the next three years, Treasury said.
“Additional options to be explored include harmonising the allowances and benefits available to public servants, reconsidering pay progression rules and reviewing occupation-specific dispensations.”
The National Education, Health and Allied Workers’ Union (Nehawu) said it is planning a major strike action at the end of November in response to the government’s decision to freeze public-sector wages.
The union said it will convene a national day of action in the form of marches to be directed to both the union building and national parliament on 26 November 2020.
“(The action is) aimed at physically collecting our money as Public Servants from Tito and to raise sharply the issue of the onslaught on collective bargaining, austerity measures and neoliberal policies by National Treasury and the intended wage freeze,” the union said.
The union accused finance minister Tito Mboweni and National Treasury of reversing ‘the hard-won gains of workers while peeing on collective bargaining’.
“They are intending to cut R60 billion in 2021/22, R90 billion in 2022/23 and R150 billion in 2023/24 from the public sector wage bill and they have already started with the R37 billion from the last leg of the 2018 wage agreement.”
Nehawu said it will never accept a wage freeze on behalf of its members and workers.
“Furthermore, we condemn the misleading statement by Mr Mboweni that engagements are taking place creating an impression that we agree with the wage freeze or the non-implementation of salary increases for the current financial year,” it said.