Danger in reducing country’s public wage bill

MINISTER: TALKING TOUGH ON HIGH PUBLIC WAGE BILL

Mboweni: It does not make sense that R8 out of R10 goes to salaries and unions still demand service.

Remarks by Finance Minister Tito Mboweni regarding South Africa’s ballooning public wage bill were correct, but any moves towards cutting down the public service could bring ANC-led government into a collision course with labour, political analyst Ralph Mathekga warned yesterday.

Speaking on the eve of the Medium-Term Budget Policy Statement (MTBPS) in parliament, Mboweni told the Kader Asmal Memorial lecture at the weekend in Cape Town that South Africa’s wage bill was “too high”.

“If we are better organised, we should be making sure we do not have a situation where R8 of every R10 goes to salaries and wages in the public service,” he said. “That means we are left with R2 for other services – to fix a hospital or a clinic. Mathematically, it does not make sense that R8 out of R10 goes to salaries and unions still demand service. Where will the money come from?”

Referring to Eskom, the minister said the power utility’s staff complement was bloated and that 30 000 jobs would have to be shed.

The salary bill, said Mboweni, “consumes too much money and doesn’t leave much for infrastructure management”.

While Mathekga said Mboweni was “correct”, he adds that this would lead to a confrontation with labour. “The wage bill continues to grow and no government department is showing any sign of cutting down staff.

“But cutting down the size of the public service is a bigger adventure, which may prove to be risky for the ANC before next year’s elections.

“It is Mboweni who will have to drive this, should a decision be taken to downsize. Labour, especially the ANC’s tripartite alliance partner Cosatu [Congress of SA Trade Unions] will point at corruption within government, which has lost its credibility. It will be a long-drawn out fight.”

Mathekga said tensions between Mboweni and Cosatu were “nothing new” when it came to differing on fiscal policy approach. Econometrix chief economist Dr Azar Jammine said ratings agencies would be closely watching Mboweni’s MTBPS tabling for areas of overspending – likely to be public sector renumeration and infrastructure. “But we have municipalities who have been unable to spend budgets on infrastructure due to lack of capacity,” he said. –

30 000 jobs at Eskom would have to be shed.