OPINION

COSATU defends widening Public Sector Wage Gap

Dion George says so-called champions of working class seem content to overlook significant wage disparities

South Africa's growing debt burden is escalating into a humanitarian disaster as the cost of servicing our interest bill is fast approaching R1 billion a day.

The steep rise in interest charges has diverted vast amounts of resources away from schools, hospitals, the police, and other vital public services meant for the most vulnerable. Frontline workers are as a consequence forced to do more with less.

The depth of the impact of the public debt burden on the well-being of South Africans becomes clear when we consider how quickly it has ballooned relative to tepid economic growth and revenue shortfalls. In 2008, our debt-to-GDP ratio stabilised at a healthy 27%, which escalated to 74.1% in 2024. If all things remain equal, Treasury estimates that debt will stabilise at 75% by next year.

Research by the Wits Public Economy Project (PEP) indicate that Treasury is overly optimistic in its assessment of the outlook for the economy, and forecasts that public debt will rise to 80% of GDP by 2025.

What must Government do to course correct and stabilise our fiscal situation?

Currently Government allocates the largest share of its budget to the public wage bill, largely to the benefit of high-ranking bureaucrats. There are nearly 38,000 workers who earn over one million Rand annually. The number of public officials in this pay bracket has surged by almost 300% since 2014.

COSATU, South Africa's largest trade union, has oddly never mentioned this disparity.

These high-earners have evidently not served to enhance the quality of basic services and often obstruct progress. According to analysis by CODERA Analytics, since 2000, real wages and unit labour costs in the public sector have increased more rapidly than labour productivity.

This is an obvious area where the Government must concentrate its fiscal consolidation efforts.

The introduction of the ‘Responsible Spending Bill’ into Parliament marked the first real attempt to address the triad of uncontrollable spending, a top-heavy bureaucracy, and an escalating debt crisis head-on.

South Africa currently stands out for having implemented an expenditure rule without an accompanying debt rule. Treasury’s reliance on an expenditure rule without a debt rule to support it has limited its ability to contain government spending in response to revenue shortfalls.

The Bill sought to introduce a debt rule to complement the existing expenditure framework. It proposed shift in fiscal policy aimed to enforce discipline by setting sustainable limits on government debt accumulation and spending. If performance targets were not met within the fiscal year, the Bill would have held those responsible for mismanaging public money accountable through targeted wage adjustments.

The PEP’s report stressed the importance of protecting frontline services from expenditure cuts. Therefore, it is crucial to note that the Bill would have protected the civil servants who are covered by the Occupation Specific Dispensation (OSD) fund - these are the dedicated nurses, teachers, and police officers who serve tirelessly but disproportionately bear the brunt of the government-induced cost-of-living crisis.

During the discussions at NEDLAC – prior to the Bill being presented to the Committee – a variety of stakeholders, including Treasury, had an opportunity to provided comment on the Bill. Organised labour failed to offer any input after having been granted multiple opportunities to do so. The union later falsely claimed that the Bill had not been submitted to NEDLAC for commentary.

The Bill was subsequently introduced to Parliament after feedback from stakeholders was carefully considered.

Yet, when the Bill was deliberated in Committee, COSATU blatantly misrepresented it during their presentations. Their attempts to frame it as an attack on frontline workers deliberately politicised the debate. Instead, they should have focused on the detrimental impact that the debt burden has on the very people they claim to represent.

This matter raises a troubling question regarding the union’s intimate relationship with the ANC, which has gained infamy for appointing party loyalists to high-paying government positions. As if following a predetermined script, members of the ANC within the Committee were swayed by COSATU’s distorted portrayal of the Bill. It was likely that they did not want to scupper their chances of securing lucrative posts in the executive following the national elections on May 29th.

Throughout the entire process, the so-called champions of the working class have vocally referred to and criticised the unequal wage distribution in the private sector, yet they seem content to overlook the significant wage disparities between lower-level workers and their superiors in the public sector. Regardless of whether most of their members occupy the lower salary brackets the unions' actions have continuously favoured high-earning managers at the expense of everyone else.

This betrayal must serve as a crucial reminder to voters at the polls.

The 29th of May will present South Africans with a choice to either endorse the DA, which has actively championed fiscal responsibility alongside the equitable treatment of the working class, or allow the continued disparities perpetuated by the tripartite alliance to undermine South Africa’s economic stability.

Dr Dion George MP, DA Shadow Minister of Finance