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During his 2021 Budget Speech, Finance Minister Tito Mboweni announced that public sector wages would be frozen for the next three years. Over the past decade, South Africa’s public sector wage bill has compounded by 4% a year while the economy has only grown about 1.5%. As BizNews founder Alec Hogg describes in his article, ‘Budget 2021 – Cyril, Tito face their Maggie Thatcher moment‘, the result is that public servants receive 47c of every rand of tax collected in the country.
“Debt-to-GDP – which was just 26% in the best year of the Trevor Manuel ministry – is now at 80%,” Hogg writes. “Even in Treasury’s best case scenario (i.e. public sector wages are cut by R265bn in the next three years) it will reach 90%.”
It’s no secret that the situation is dire. Once Africa’s largest economy, South Africa is now galloping towards a massive debt crisis.
“You’re talking about public servant remuneration being reduced over the next three years by around 10% in real terms,” he says. “The big question – and the skepticism that is likely to follow this – is will the government be able to get such a programme through, with their alliance partners in the public sector trade unions? Who, after all, were one of the main supporting groupings behind the election of Cyril Ramaphosa as president in 2017.”
Barely a week after Mboweni delivered the disturbing news in Parliament, public sector unions submitted a document demanding a general salary increase of consumer inflation plus 4% for all workers. According to Reuters, the list includes better housing payment demands and a risk allowance of 12% of basic salary due to the Covid-19 pandemic. The public sector have also approached South Africa’s Constitutional Court to force National Treasury to pay the final tranche of the preceding three-year wage settlement struck in 2018. Reuters says workers received their salary hikes in the first two years, but Treasury resisted paying over R30bn for the final year starting in April 2020, claiming the hike was unaffordable.
“Only a capable, efficient, ethical and development-oriented state can deliver on the commitment to improve the lives of the people of this country,” he says. “This means that the public service must be staffed by men and women who are professional, skilled, selfless and honest.”
According to the president’s letter, public consultations have been underway on an important policy document that “aims to build a state that better serves our people, that is insulated from undue political interference and where appointments are made on merit.”
“All too often, people have been hired into and promoted to key positions for which they are neither suitable nor qualified. This affects government performance, but also contributes to nepotism, political interference in the work of departments, lack of accountability, mismanagement and corruption.”
Only a capable, ethical and development-oriented state can deliver on the commitment to improve the lives of the people of this country. This means that the public service must be staffed by men and women who are professional, skilled, selfless and honest. https://t.co/agVqclY2AB pic.twitter.com/zbtRezErQ3
— Cyril Ramaphosa 🇿🇦 #StaySafe (@CyrilRamaphosa) March 1, 2021
BizNews community members aren’t optimistic about how well Ramaphosa’s “far-reaching reforms” will perform.
It is terrible thing to say but given how this country and its people have been treated by the ruling party I genuinely have a better understanding of why ‘civil wars’ happen. The destruction is off-the-charts and while driving around Randburg yesterday and seeing scores of sad and forlorn people sitting on pavements waiting for an employment miracle, my desire to get away from this tragedy also went off-the-charts,” comments
“In other news, President Ramaphosa announced his new daily skit on Comedy Central,” says Still-MyOpinion247.
h he does, does he? We can expect action any time this decade then.”
hen the commies took over – South Africa was always headed towards an economic crisis!”
till talking rather than doing. Get on with it.”
You are heading towards a dead end!! No through road!!!
— InGodwetrust (@Phuumlilo) March 1, 2021
This is an impossible task if cadre deployment is still practiced.
— Noel Nel (@NoelNel3) March 1, 2021
How about starting with your cabinet.
— Duncan Haskell (@duncan_haskell) March 1, 2021
You just tell us what we want to hear but no action. Where is your ANC manifesto? As the party that won elections in 2019, how far are you guys with implementation?
— UGAGANE (@lindo_kuhl) March 1, 2021
Stating the obvious. You do realise it’s your job? When do you plan on implementing it?
— Reset_SA (@sa_reset) March 1, 2021
Start from your cabinet
— Gabu gabu (@Gabugab62673073) March 1, 2021
This is a tall order, Mr President. The majority of civil servants we have are self serving, ie they steal the limited resources they are expected to use to develop the country and its citizens. Its a cancer that you will never cure. As for depoliticising them, it’s impossible.
— Dr Bonile Jack-Pama, PhD (@BonileJackPama) March 1, 2021
Please chief, don’t lie so early in the morning.
— Piet Paniek (@piet_se) March 1, 2021
You know this, or just discovered this ? A Eureka moment?
— growthpundit (@growthpundit) March 1, 2021
Honest ANC officials. Oxymoron.#VoetsekANC
— Never-ANC (@AncNever) March 1, 2021
What is your take on the matter? Share your thoughts by commenting below.
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Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.