20 February 2019
The Federation of Unions of South Africa (FEDUSA) has slammed Finance Minister Tito Mboweni’s announcement during his maiden budget speech this afternoon, that allocation of resources to pay wages for public servants, will be reduced by a massive R27 billion over the next three years. Mboweni justified his announcement by arguing that the public wage bill is “unsustainable” and government need to shift resources from recurrent expenditure to infrastructural and investment.
“The first step is to allow older public servants who want to do so, to retire early and gracefully. This will save an estimated R4.8 billion in 2019/20, R7.5 billion in 2020/21 and R8 billion in 2021/22. In time this will be complemented by limits on overtime and bonus payments as well as pay progression.
This announcement is totally underhanded and overturns Government’s commitment to place a moratorium on retrenchments overall, to save current jobs at the Presidential Jobs Summit last year. “The real problem is not a bloated public service, but rather the billions of Rands that have been lost to the national fiscus through rampant corruption and cronyism that has brought South Africa on the brink of collapse, while the culprits still roam scot free and are not being prosecuted and sent to prison,” said FEDUSA Acting General Secretary Riefdah Ajam. Instead, the real Achilles heel which Government continues to side step, is the need to cut down on its own bloated Cabinet and not make workers the scapegoats in this year of general elections. There is simply no justification for perpetuating and rewarding bloated and in some instances, corrupt government departments with excessive salaries and other perks in a developing country, that South Africa can ill afford”.
Equally concerning to FEDUSA is the increase in the fuel levies by 29 cents per litre for petrol and 30 cents per litre for diesel. This further erodes the disposable income of cash – strapped consumers, noting that the levy on a litre of petrol increased from 45c a litre in 2008 to R2,23 a litre, after the announcement today.
However, FEDUSA also welcomed the announcement that state guarantees will now be subjected to more stringent rules, and the consideration of a proposal to end the issuing of guarantees for operational purposes. This will most certainly place less strain on the life – time contributions of workers, when lucrative pension funds become an alternate and easy source of bailout.
The significant cuts in the cost of data is largely welcomed, as accessibility and affordability to the poorer sectors of society will now edge closer to a brighter reality. Equally welcomed, is the government’s continued support for private job creation initiatives such an allocation of R1.1billion for the Job Fund over the next three years which has already disbursed R4.6 billion in grant funding which has created more than 200 000 new jobs in different economic sectors. Likewise, FEDUSA welcomes the increase in the income eligibility thresholds for the highly successful employment tax incentive scheme (ETI), which will support jobs for 1.1 million young people.
For interviews please contact:
Masale Godfrey Selematsela
065 652 2832/083 653 3021
FEDUSA Acting General Secretary
079 696 2626
FEDUSA Media and Research Officer
072 637 8096