Government adopts DA proposal for cutting the public wage bill

27 March 2020

The Democratic Alliance (DA) welcomes the news that the government has adopted important aspects of our proposal for cutting the public wage bill. It was reported today that the government has turned its back on its original proposal to cut the wage bill by implementing a blanket freeze on wages across all salary levels in the public service.

The DA has long argued against this blunt approach, as it would severely impact our frontline service delivery heroes, including nurses, police officers and teachers, who are already working under very difficult conditions and who are not overpaid.

Instead, as we first proposed during the Medium-Term Budget Policy Statement (MTBPS) in October 2019, the government should grant inflation-linked increases for all frontline service delivery heroes, while freezing the salaries of all managers and administrators and reducing the 29 000 millionaire managers in the public service by a third. This will save R168 billion over the next three years, thus exceeding finance minister Tito Mboweni’s target of cutting R160.2 billion and helping to avert an all-out debt crisis meltdown.

Reports on Friday indicate that the government adopted important parts of the DA’s proposal when it tabled a new wage offer to labour unions. In line with our proposal, instead of a blanket freeze on wages across the public service, the new offer proposes that lower-level employees in wage brackets 1 to 8 receive an inflation-linked increase of 4.4% in 2020/21, while higher wage earners – including the 29 000 millionaire managers – in brackets 9 to 16 would receive no increase.

While we welcome the government’s adoption of our proposal to protect lower-level staff, the DA has today written to the Minister of Public Service and Administration, Senzo Mchunu, with two additional proposals.

The first proposal is that, in order to raise an additional R29.4 billion with which to fund the inflation-linked increases for frontline OSD workers, the government must reduce the 29 000 millionaire managers in the state by a third. 

Our second proposal is that the government should use Occupation Specific Dispensation (OSD), instead of salary brackets, to determine which staff should get inflation-linked increases. 

This is because there are some frontline service delivery heroes – like doctors, engineers and other skilled staff – who earn their higher salaries inn brackets 9 to 16, and who should not be affected by the wage freeze. These skilled staff are largely covered by OSD, which accounts for 66.3% of all public servants. They deserve to be exempted from the salary freeze.

The remaining 33.7% who are non-OSD is largely composed of the 29 000 millionaire managers and other administrators, and this is where the wage freeze should be targeted.

On average, each of the senior managers in government takes home R1.4 million per year, with the highest-level managers being paid just under R2 million per year. This is in sharp contrast to the average annual salary of R169 466 paid to a police officer, the average public school teacher’s salary of R273 209, and the average R302 000 paid to a public sector nurse per year. 

To correct this immoral imbalance, the DA reiterates our proposal to freeze the salaries of all non-OSD managers and administrators, while granting inflation-linked increases to all service delivery workers covered by OSD. 

The DA strongly urges the government to adopt these proposals in the same way that they have adopted our call to protect lower-paid staff when implementing wage freezes.

Issued by Leon Schreiber, DA Shadow Minister of Public Service and Administration, 27 March 2020