FIFI PETERS: There is a looming tools-down in the general public sector of South Africa. I’ve learn reviews that round 800 000 public sector staff may down instruments as a result of they’re not proud of the present method by authorities – in phrases of the most recent wage settlement – of ‘take it or leave it’, the place authorities is making an attempt to implement a 3% wage improve whereas unions say that the employees they signify need extra. But are authorities staff being unreasonable, given the truth that a lot of presidency’s income goes to paying wages. Around a 3rd of the finances goes to paying wages, and we’ve been instructed it’s one of many fastest-growing line objects in the finances, which has been described as ‘over-bloated’.
So are staff being unreasonable, or is there one other manner that this authorities can strive to be much more environment friendly when it comes to its funds, and check out to deliver down its staggering debt? We’ve obtained [on the line] Michael Sachs, who’s an adjunct professor on the Southern Centre for Inequality Studies at Wits, but in addition a former National Treasury official.
Michael, I would like to ask you to put that earlier hat on, please, as a former authorities employee. I’d like to perceive what you make of the present debate that the wage bill is just too bloated, and it wants to come down and are available down fairly rapidly.
MICHAEL SACHS: Thanks, Fifi, good night to you. I feel that is a type of issues in life the place ‘right and wrong’ will not be essentially crystal clear as a result of, from the perspective of presidency and definitely from the perspective of Treasury, there’s a fiscal crisis that has to be handled and compensation is without doubt one of the largest objects in the finances.
When I used to be at Treasury we adopted the technique of making an attempt to include the ‘compensation of employees’ finances. The downside is at all times that what Treasury units out in its finances paperwork will get realised provided that authorities as a complete, and in specific cupboard, endorses an settlement with labour that validates these Treasury finances numbers. So, if Treasury budgets in one course and authorities is unable to ship on the wage constraints implied by that treasury finances, the result’s that budgets are saved down, wages improve and authorities is compelled to scale back the variety of folks it employs.
That is basically the sample that has occurred over the past decade which, in my view, has led to an actual erosion of companies.
So even proper now, should you say our public servants are overpaid and people sort of points, there’s no actually goal manner to reply that query, not least as a result of pay is basically associated to productiveness. So definitely on the one hand I’d say that over the past decade, and into and past the Covid crisis, public-sector staff’ pay will increase, in my view, haven’t been out of line with these in the final economic system.
So from that and now in the final two or three years I feel their actual revenue has already been compelled down fairly considerably in the final two budgets, and we are actually in the midst of a really painful value shock, which is especially hitting extra middle-class folks [in terms of] petrol and meals.
So I wouldn’t need to say that the public-sector staff are incorrect or that the Treasury is incorrect. They are each proper.
In a scenario like that it behoves the management on the centre of presidency, in specific the president and those that make govt choices, to sq. that circle and discover a resolution that balances these competing ‘right’ pursuits.
FIFI PETERS: Definitely not a simple process. But you make actually legitimate factors simply in the sense of the present financial local weather proper now, and I feel {that a} 3% wage improve for anybody to be given in this atmosphere the place inflation is operating at double the price of that [3%], and we all know that the [increased] value of meals is in the double digits because it have been, it’s a fairly powerful tablet to swallow.
But I’d like to ask one query of you as we discuss this authorities wage bill. I feel that we discuss this authorities wage bill like foreigners discuss Africa – prefer it’s only one nation and it’s all the identical. It’s actually not. Chop it up for us. Who will get paid what – from the senior authorities officers to the nurses who assist us with our well being necessities, to the police who strive to do what they [can] to be certain that crime ranges stay low, to the academics. Who will get paid what?
And, if we’re making an attempt to make this wage bill extra environment friendly, the place ought to we be chopping and the place ought to we be trying to introduce extra productiveness?
MICHAEL SACHS: Well, to begin with I feel in any public service, partly due to the character of the best way public companies are constructed, there’s probably to be a number of inefficiency.
And so what I’m about to say shouldn’t be interpreted to say there isn’t any inefficiency in the general public service, however the overwhelming majority of workers in the general public companies – and I’m speaking to you now in regards to the authorities wage bill, that’s the folks on authorities’s payroll, after all native governments, public enterprises, state-owned firms, boards, all of that sort of stuff – [are not] a part of authorities’s payroll instantly. And generally we conflate these two issues collectively.
But should you have a look at the folks on the payroll, it’s overwhelmingly academics and nurses and cops and medical doctors and engineers and legal professionals. There is a lot of managers, senior managers sort of, as we’d name them, bureaucrats. Their quantity is giant, about 17 000, I reckon. But that’s very small in contrast to the million people who find themselves really delivering fundamental training, healthcare and legal justice – that are sort of important companies. So there’s no sort of ‘on the face of it’. Of course there’s certain to be inefficiency in all places.
But on the face of it, should you’re going to scale back authorities employment in substantial phrases, it’s laborious to see how you are able to do that with out impacting on these frontline companies, in my view.
The different level to make is that, Fifi, I don’t need to go into how a lot is paid to whom, as a result of I don’t have the numbers proper in entrance of me and I’m afraid I’d misquote. I’ve obtained a paper I can provide you that has a desk of that.
So one of many issues that comes out for who’s paid what, is the senior managers in the general public sector. I’ve simply stated [that] general public-sector staff over the past decade have seen pay will increase broadly in line with the economic system, which doesn’t essentially imply that they weren’t overpaid in the start. But I’m simply saying for a decade we’ve change into accustomed to reasonable pay will increase.
But there are two classes of staff on authorities payroll which have seen substantial actual declines in their revenue, and the primary is managers, senior administration, who’ve seen constantly over the past decade pay will increase beneath CPI. The different is judges.
Now it does so occur that senior managers and judges’ salaries will not be decided in collective bargaining.
Everybody else’s salaries are decided by collective bargaining, together with probably the most senior paid cohort of public-service medical doctors. Their pay goes up with no matter is agreed in collective bargaining, however senior managers and judges have their pay proclaimed by a course of that does contain some session and, in the case of judges, parliament. But however it’s not topic to collective bargaining they usually have seen an actual erosion of pay over the past decade in a interval the place revenue on the prime of society amongst govt administration in the non-public sector has been rocketing. So you’ve seen a really giant decline in relative pay there.
FIFI PETERS: Michael, sorry, I’m going to have to reduce you brief – time – however I’m going to ask my producer Kaldora to attain out to you for that word on the breakdown of who will get paid what, and maybe we will have a lengthier dialog on one other event. But thanks for taking the time this night. Michael Sachs is adjunct professor on the Southern Centre for Inequality Studies.
He was speaking to the issue of this course of proper now of balancing the wants of presidency to deliver down debt, but in addition I feel the correct – I wouldn’t even name it a requirement, however request – of staff in this financial local weather when issues are going up by a lot. They are in a cost-of-living crisis to get a wage that retains up with rising prices on their finish.
