South African government employees have seen their salaries doubled – and in certain cases almost tripled – since 2007, according to a report by the Sunday Times.
This increase in pay has not been linked to a rise in job level or productivity, however, and the government now wants to reduce the salary increases it gives employees.
The Sunday Times said this is according to a confidential document which the government presented to trade unions ahead of this week’s budget speech.
A proposal to stop a multi-year wage agreement, which would give government employees above-inflation salary increases, was also put forward.
In certain cases, the agreement has led to pay increases of 3% above inflation.
The aim of the move is to reduce the public sector wage bill by R160 billion over the next three years, stated the report.
Big salaries, and no one gets fired
As part of the presentation to unions on salaries, the government showed that a government director who was earning R550,000 in 2007, makes R1.2 million today.
“Mid-career civil servants” who earned R151,000 in 2007 now get paid R375,000, added the report.
The Sunday Times quoted labour economist Andrew Levy on the matter, who said public-sector salary hikes are higher than the private sector – and there is no improvement in productivity.
“There’s no question, these guys are the best paid around, if you look at a percentage year-on-year change. These guys are doing well,” said Levy.
“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.”
On top of the salary increases, government workers also receive allowance for housing, cellphone use and travel.
The report added that two married civil servants also both receive a housing subsidy for the same home.
While the government is set on reducing pay increases and the wage bill, unions said they are not accepting it without a fight.
Treasury officials have stated that the government will also cut perks and staff numbers, as the government was in trouble financially.
Salary cuts to fund SOEs
This is not the first time government salary controls have been touted as a way to generate cash, however.
In July 2019, the Treasury said the best way to fund the bailout of failing state-owned enterprises could be to reduce the government employee wage bill.
The issue of above-inflation increases is also not new.
In November 2015, the South African government’s wage bill reached worryingly-high levels – so much so that it had to dig into its savings to pay for public wage increases.
According to a report by Bloomberg at the time, a freeze was then placed on the hiring of state workers.
In a report by MyBroadband in January 2019, it was further highlighted that the public sector wage bill accounts for nearly R550 billion of the government’s total spend.
This amount, on a percentage of GDP level, is higher than many countries – including USA, Russia, Brazil, and Australia.