TITO’S GREAT PENSIONER PLAN
Early retirement from civil service seen as key to invigorate sector
Thousands of Eastern Cape civil servants aged between 55 and 59 should gear themselves for early retirement, says Finance MEC Oscar Mabuyane.
The MEC said this was in line with finance minister Tito Mboweni’s budget speech in parliament on Wednesday.
Mboweni said he would be introducing measures to trim the public sector wage bill by R27bn over the next three years, measures which would include offering early retirement packages to about 30‚000 public servants between the ages of 55 and 59.
Mabuyane said as things stand in the Eastern Cape, there were more than 120,000 civil servants, some of them at the retirement age.
He said offering early retirement would assist in bringing new blood into the public sector, a move which would help improve the “quality of services”.
As an example of an old style of doing things, Mboweni questioned why R1-billion of a sanitation grant had not been used. This now formed part of the R2.8bn grant Mboweni announced would be used to eradicate pit latrines across provinces.
“The grant would now be channelled through the Development Bank of SA, through the Asidi programme, and according to our records, this is the very same Asidi which could not deliver... when tasked to build schools on behalf of the education department. We have to get our act together, and hire people who will do the job.
“Retrenchments are not on the cards, but those in retirement age have to give way for younger ones," said Mabuyane.
Public service and administration minister Ayanda Dlodlo is expected to announce numbers, by province, of employees who could take early retirement, say Mabuyane, adding that “from where I am sitting it may be thousands”.
Mboweni also said national and provincial departments would be phasing out the payment of performance bonuses to civil servants over the next four years‚ which would amount to a saving of R2bn per year.
National public-sector salaries currently stand at R585bn per year. According to the Budget Review document‚ they are projected to cost R627bn by 2020. Mboweni said allowing older government employees to retire early would save the government R4.8bn in 2019-2020‚ rising to R8bn per year by 2022.
Despite the tough economic environment‚ government is planning to spend R5.8-trillion in the next three years‚ with the bulk of the money going to education‚ health and social development.
Over the next three years government will spend R1.2trillion on education‚ R717bn to improve the ailing public health infrastructure‚ and about R900bn on social development or social grants.
Mboweni said the department of basic education would receive R30bn to build new schools and maintain existing schooling infrastructure.
Government has allocated R19.8-billion for industrial business incentives, of which R600million has gone to the clothing and textile competitiveness programme. This will support 35,500 existing jobs and create about 25,000 new jobs over the next three years.
This is “great news for the Eastern Cape”, said Mabuyane, as SEZs such as Queenstown, Dimbaza, Vulindlela in Mthatha and Fort Jackson in Mdantsane “would surely benefit”. “The message we are getting from the minister is that cutting the wage cost of the civil service, and creating jobs elsewhere – in and SEZs and our Independent Development Zones – is our only hope. All we need to do as a province is to sit down, compile a compelling case for us to convince the national government to pump lots of money for these SMMEs to create sustainable jobs.
“This is a great opportunity to do that. The speech might not have contained details on who will get what for each of the nine provinces, but we are confident as the Eastern Cape that our case to get funding will be very convincing,” said Mabuyane.
Mboweni said the Jobs Fund is a vital complement to private sector job creation. “The allocation to this Fund will rise over the next three years to R1.1bn. R481.6m is allocated to the Small Enterprise Development Agency to expand the small business incubation programme,” Mboweni added.
The finance minister also announced a plan to hire more doctors and nurses.
“In health‚ we need simple‚ effective interventions. We need more doctors and nurses – R2.8bn has been reprioritised to a new human grant and R1bn for medical interns. Also R1bn has been added to wages of community healthcare workers to R3‚500 per month.
“Finally‚ R319m has been allocated to eliminate malaria in South Africa‚” said Mboweni.
On land reform‚ government will support 262 “priority landreform projects” in the next three years‚ at a cost of R1.8bn.
Another R3.7bn has been budgeted to assisting emerging farmers seeking to acquire arable land to farm.
R1.2-trillion on education‚ R717bn on public health and R900bn on social development