/ 25 October 2013

Civil service gets a kick in the cupboard

Stop-start: The public sector workers’ wage bill has proved a drain on the fiscus.
Stop-start: The public sector workers’ wage bill has proved a drain on the fiscus. (David Harrison, M&G)

When Finance Minister Pravin Gordhan consulted his cupboard before the medium-term budget, he found himself in Old Mother Hubbard's plimsoles.

But instead of a poor dog waiting for its dinner, he had an army of public servants to feed — its legions once gaunt from lean pay but now well fed on above-average salary increases. And they have grown in number by more than 250 000 since 2005.

"Growth in the public sector wage bill has exceeded the rate of inflation over the past several years," the treasury said in the budget policy statement.

This relates "partly to the implementation of occupation-specific dispensations designed to raise public sector salaries for skilled and experienced staff to those of similarly skilled professionals in the private sector".

In addition to that, it reflects "above inflation annual wage settlements".

Research compiled by the South African Institute of Race Relations has compared the average monthly earnings of workers in the public sector with that of the private sector between 2000 and 2010.

Public sector wage
The public sector wage has been consistently higher, with the differential quadrupling over the decade: In 2000, public sector wages were 12% higher than private sector wages; in 2010, public sector workers had an average wage that was 43.6% higher than those of their private sector counterparts.

According to Georgina Alexander, an assets and incomes researcher at the institute, it is "safe to say" that the trend of public sector pay outweighing private sector pay has continued in the past three years.

However, the treasury said, since a multiyear wage agreement was struck in 2011, the public wage bill increases have been more moderate.

"Following the conclusion of the largest occupation specific dispensations and the three-year wage settlement … earnings increases have begun to align more closely with inflation," it said.

"In the past two years, public sector employment growth has begun to slow," said the policy.

And the government has vowed to keep costs under control. "Over the medium term, government will ensure that growth in employment and earnings does not threaten the expenditure ceiling," the policy statement said.

Working to improve the monitoring of wage bill trends
"The national treasury and the department of public service and administration are working to improve the monitoring of wage bill trends and to enforce discipline in hiring of new personnel.

"Government aims to maintain staff numbers at a constant level over the next three years; exceptions will require a compelling explanation. Government is also committed to reaching a sustainable public sector wage agreement."

Despite this, the medium-term budget outlines the redistribution of R1-billion at a national level for "inflation related and other salary costs".

Provincially, R1.3-billion has been allocated to cover inflation-related salary adjustments and to "upgrade clerical posts".

The budget policy document projects that the cost of inflation adjustments in the public wage bill will amount to R12.2-billion over the next three years.

In addition to this, the treasury foresees that national and provincial public sector salaries will increase more this year than previously.

"National and provincial public-sector salaries are linked to inflation, which is forecast to be higher than previously projected this year and over the next two years," the treasury said.

New positions created
Most of the new positions created by the government since 2005 were for teachers, nurses and police — areas generally acknowledged as needing them.

But the treasury is "concerned about the growth of managerial and administrative staffing across government," said Gordhan.

The medium-term budget draws particular attention to this, saying that "specific attention will be paid to restraining growth in administrative posts".

But, despite the commitment to curb administrative growth, the treasury plans to allocate an additional R5.2-billion over the next three years to "upgrade the salary levels of clerks in the public service".

With next year's election on the horizon, the government can ill-afford a repeat of the crippling wage-related public sector strike that rocked the country in 2010.

The 2012 Annual Industrial Action Report from the department of labour showed that 20.7-million working days were lost in that year, compared with just over 1.5-million in 2009, 2.8-million in 2011 and 3.3-million in 2012.

About four weeks ago, the South African Municipal Workers Union (Samwu) started a short-lived strike in Cape Town, after negotiations with the South African Local Government Authority (Salga) deadlocked.

The union's grievances related to an increase in the homeowners' allowance and other non-wage-related issues.

Samwu had hoped the upcoming elections would "inject some urgency" into Salga's negotiations with the union, said its spokesperson, Tahir Sema, but the employer had shown no such inclination.

The union had threatened a national strike but it was suspended after the City of Cape Town acceded to some of its demands.