Govt wants state pay overhaul

Cape Town - Minister of Public Service and Administration Richard Baloyi is going to appoint a special advisory panel to investigate an overhaul for the way in which civil servants are remunerated.

Speaking to Fin24.com, Baloyi wouldn’t say who would serve on this panel but said: “We need to look at the remuneration policy as a whole. The impact of the occupation specific dispensation that was implemented was huge, it made the wage bill balloon by R38bn.”

While Baloyi had been hoping to make a statement in the national assembly on Thursday about a break in the deadlocked negotiations between government and public service unions, his office has confirmed that he will not be able to do so.

Civil servants nationwide are on strike as they hold out for an 8.6% increase.

Government is digging in its heels, arguing that the public sector wage bill cannot expand further.

While the government’s wage bill has doubled in the last five years, one third of the country’s budget is now consumed by salaries.

Reserve Bank figures also confirm that the public sector wage bill has been increasing by 6.5% above inflation for the last eight years.

Baloyi has capitalised on and repeatedly emphasised the warning by economists that these increases are unsustainable and that government’s salary expenditure is already “crowding out” other spending.

However, other research by the Labour Research Service (LRS) calls for a much more nuanced look, showing that trade unions are not the primary obstacle to lower wages and, therefore, growth and job creation.

The LRS suggests that the biggest drain on the fiscus may not be unionised workers who tend to be at the lower end of the salary scale, but workers in administration as well as in the middle and upper management levels of the wider bureaucracy.

This is exacerbated by the fact that government has a dismal, and in some cases non-existent, performance management culture, as the Public Service Commission warns in its reports regularly.

Baloyi said he was well aware of this. “We have to get into those things and get all parties on board.”

According to him, the panel would look into performance and productivity.

- Fin24.com