Ramaphosa Proposes Deep Wage Cuts Cue showdown with Unions.

Ramaphosa Proposes Deep Wage Cuts Cue showdown with Unions.
Ramaphosa Proposes Deep Wage Cuts Cue showdown with Unions.

Ramaphosa Proposal

South African President Cyril Ramaphosa controlled the increasing South African debt. This is through a proposal of cutting the wage of civil servants. This proposal was suggested by the state’s finance minister, Mboweni during his budget speech in parliament. As such, there was a hitted debate as the majority were not in agreement.

Moreover, following the proposal to slash the public wages there will be a lot of controversies. The minister says this deal is to push through for three years to stabilize the country’s economy. Failure to implement it will result in economic crises in the country attributed to the spiraling debt and high inflation rates. Moreover, this proposal will also result in a fight between the government and the trade unions. Especially as the unions played a role in President Cyril Ramaphosa’s victory during the previous presidential elections.

Which factors contributed to the rise in civil wage in South Africa?

Public wage refers to funds allocated by the government to the public civil servants for their services i.e. doctors, teachers, nurses, national and provincial officials, etc. This wage forms about a third of the government’s budget. Approximately, the one third represents 629 billion such that when serious control measures are not adopted, the cash will grow progressively in that by the time we hit 2023, it will be 697 billion rand.

Annually there are high fluctuation rates. This is due to the increasing number of civil workers. With the growing amount, the civil wage keeps increasing. Some of the highly skilled civil workers like doctors and engineers even increase their wages. The inflation rates are high on salaries. It’s about 40%.

The alliance between ANC and powerful unions also contributes to increased inflation rates.

Proposals to solving the problem

The South African government is in a position where it cannot fire staff despite the overburdened wage bill. As a result, possible suggestions were made.

Public Service and Administration minister Senzo Mchununo told the city press his department had figured a way to salvage the government. The proposal was an offer of early retirement for employees aged 55-60. He emphasized this offer wasn’t about getting rid of some staff but also providing an equivalent opportunity for young workers. This would aid in controlling the government wage because less-experienced workers earn a lot less income than experienced older ones. Many people have however ruled out the proposal stating it was sought of discriminatory.

There is also the issue of a high wage bill where Economist Mike said that despite 13% of government workers, about 33% of the total wage for civil workers is allocated to them. Government workers are well paid at the expense of taxpayers. As such the country should reduce its number of departments to 28 which is the normal average size. This will aid in budgetary costs.



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