Wage negotiations for the public sector began late this week, amid increasing criticism of the Public Sector Bargaining Council for ignoring the fact that high salary bills cut into the ability of provinces to deliver services. Tabled wage demands ranged from 9,5% to 15%.
In Mpumalanga last week, for instance, MEC for Finance Lassy Chiwayo warned that “spending on personnel costs is … replacing capital expenditure in the budget”.
In Gauteng, the provincial adjustment appropriation Bill notes that the most significant strain on the budget were increases of R270-million in the cost of personnel and promotion systems based on years worked for government, not productivity.
Gauteng MEC for Finance Jabu Moleketi noted in a pre-budget briefing this week that it is important for provinces to be part of the team briefing government negotiators at the Public Sector Bargaining Council.
“Provinces are the primary deliverers of services,” said Moleketi. “Rank and leg increases [which guarantee annual promotion] last year had a tremendous impact on health departments.
“If people are promoted automatically, there are cost implications – and so there is a trade-off on personnel spend and the spend on capital expenditure. The time has come to confront that.”
Provinces and provincial departments are increasingly pointing fingers at the bargaining council for making salary awards that do not take into account either the competence of individuals or the impact the awards will have on the provision of services.
In Mpumalanga, as an example, the wage bill will consume 61,3% of spending, compared to 56,8% in 1997/98. This in turn led to cuts in capital expenditure, which slumped to 4,8% from 8,3% in 1997/98.
The wage bill is ravaging budgets in other provinces: last year it swallowed 65,4% of the Northern Province’s budget; 62% of Gauteng’s budget; 58% of that in the North West; 49,8% in the Northern Cape; 58,5% in the Eastern Cape; and 55% in the Western Cape.
Audits are presently taking place in all provinces to begin a much-needed retrenchment process. But the government is looking at packages which up to now have been exceedingly generous, paying out an average of five years’ full pay.
The problem is the government does not have the money to continue paying out such packages, but neither can it afford to continue employing redundant or non- performing staff.
Performance packages, presently in place at director level and above, are also being examined. Gauteng’s Department of Finance already has these in place at all levels, but it is the only government department in the country that has progressed this far.
Dr Steve Hendricks, public sector negotiator at the Department of Health, says critics clearly do not understand the structure of public sector negotiations.
“We arrive at the wage bill by negotiations. There is a mandate committee of eight or nine Cabinet ministers from national level.
“This committee receives proposals from unions and employers. They look at those proposals and give their decisions to the negotiators.”
Hendricks points out there are 1,2-million civil servants, and 237 000 are unionised health workers. Unionised workers pay between R20 and R60 a month in union dues, so the cynical could be forgiven for believing that the unions have a vested interest in keeping the civil service bulky and expensive.
Last year salary increases ranged between 5% on average and 10,5% at the lowest levels for staff such as general assistants and cleaners, says the secretary of the bargaining council, Shamira Shulman. Pay for most teachers, police officers and nurses rose by around 6,8%.
Shulman disputes complaints from the provinces that they have no input at the Public Sector Bargaining Council: “We issue invites to the chief director of every provincial administration for our bargaining council meetings.”
But what the provinces are calling for is direct input right at the very earliest stages of the negotiations process, not observer status.