R3 billion ‘performance’ bonuses for government workers

 ·29 Apr 2024

Over the past five years, civil servants have earned nearly R3 billion in incentives – including performance bonuses and 13th cheques.

This was revealed by Public Service and Administration Minister Noxolo Kiviet responding to a question posed to her in Parliament by DA MP Leon Schreiber.

The Sunday Times reported that between 2019 and 2024, national departments spent over R726 million on staff performance rewards, with R321 million disbursed in 2022 alone.

Provincial administrations, employing the most public servants, accounted for the lion’s share of bonuses, totaling R2.2 billion over the past five years.

In 2021, amidst the economic stagnation triggered by Covid, R819 million was released in bonuses by provinces.

Since 2019, nearly R129 million had been paid to about 400 government officials who were on suspension on full pay, some for as long as 42 months for allegations ranging from fraud and corruption to harassment and assault on school pupils. 

Additionally, the government spent over R42 million on 56 luxury vehicles for 23 ministers and their deputies to use for official purposes in Pretoria and Cape Town.

Government employees are guaranteed a 13th paycheck, equal to one month’s salary, which is typically issued on their birthdays. Additionally, employees who enter into performance agreements are eligible for a bonus if they meet the criteria of their performance evaluations.

Public Service and Administration department spokesperson Moses Mushi told the Sunday Times that the “service bonuses” encourages employees to stay in the public service. “This has been a standard remuneration philosophy across the public and private sectors,” said Mushi.

Mushi also noted that there had been a major effort to cut spending on bonuses over the past five years, going from 218,792 employees who earned performance bonuses in 2018, to 3,767 in 2024.

“This reflects a consistent management of the wage bill,” said the spokesperson.

“But this is not the only intervention in the management of the national fiscus. Managing the wage bill continues to be aligned with the delivery of services.”

Kiviet said that performance bonuses are only given out based on the audit outcomes of each employee’s department.

“The performance assessments of heads of department and members of the senior management service take into consideration the auditor-general’s findings and opinions and the department’s performance against the planned targets included in its annual performance plan,” she said.

SOE woes and planned turnaround

While the government has been paying attractive incentives to civil servants in hopes of boosting performance, numerous state-owned enterprises have been losing funds.

Over the past three years, Eskom has reported losses of R54.6 billion, while the South African Post Office’s accumulated losses for the same period are R6.8 billion.

State-owned logistics company Transnet had a year where it was profitable — in 2021/22 — but has still accumulated a net loss of R9.4 billion over the past three years.

Financials for quarter 3 (October – December 2023) of Eskom, Transnet, South African Airways (SAA), the South African Post Office, the Land Bank, and Denel show that, since 2020, R325.3 billion has been allocated by the government for bailouts of the abovementioned SOEs.

The Department of Public Enterprise said in its recent annual performance plan that “unfortunately, the performance of SOEs’ has been undermined by factors such as poor governance, malfeasance, lack of accountability and consequence management as well as a loss/lack of skills amongst others [which] has impacted negatively on the respective SOEs’ finances and operations.”

A big part of what the DPE describes as “reform efforts for SOEs,” is seen in its gazetted National State Enterprises Bill.

This bill proposes, among other provisions, the creation of a new state-owned holding company with the state as the sole shareholder – the State Asset Management SOC Ltd.

This would have commercial SOEs—such as Eskom and Transnet—as subsidiaries of the holding company, which would ultimately manage their finances.

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