Mboweni’s plan fails miserably as civil servants refuse to leave

2019-10-14 23:30

Finance Minister Tito Mboweni’s plan to cut South Africa’s bloated civil service by encouraging officials to retire early appears to have failed miserably.

Mboweni’s target was for the civil service to shed 30 000 employees.

This he hoped to achieve by encouraging them to take early retirement without them losing any of their pension benefits.

State officials can retire from 55, but normally they are discouraged from doing so by subtracting 0.33% per month from their gratification and pension benefits.

In terms of Mboweni’s offer, this penalty fell away and a retiring official’s pension would only be calculated on the basis of their years of service.

Civil servants between the ages of 55 and 60 had until September 30 to apply for the offer.

But figures obtained by City Press’ sister publication Rapport show that fewer than 3 000 officials in South Africa’s three biggest provinces applied before the deadline.

There were only 1 452 applicants in KwaZulu-Natal, 904 in Gauteng and 525 in the Western Cape – a total of 2 881.

No other province reacted to the request for their numbers.

Dawie Roodt, chief economist of Efficient Group, said the numbers were consistent with anecdotal evidence.

He was approached by various education groups to give advice on the offer, and it was clear to him that not many teachers fancied the offer.

Mboweni’s target was for the civil service to shed 30 000 employees, fewer than 3 000 officials in South Africa’s three biggest provinces applied to retire

All the teacher unions also advised their members not to retire early.

Sadtu said the intellectual capital of the education sector could be “wiped out” if experienced teachers left.

Naptosa labelled it a “recipe for poverty”.

Teacher unions feared that up to 7 000 teachers would apply for these packages.

In KwaZulu-Natal the majority of the 1 500 applicants (1 093) did come from the education department.

It is not, however, known how many of these were teachers.

In the Western Cape, 283 teachers applied, but the province will not approve any of the applications.

A highly placed source said the province could not afford to lose teachers.

Roodt said that heads of department and principals had shown the most interest in the package during his information sessions.

“These are senior people, not the ones the minister wants to get rid of.”

He said that in many cases the teachers who were interested wanted to leave the civil service to go and work in the private sector – an indication that these were probably some of the better teachers in the classroom.

During his budget speech in February, Mboweni announced steps to cut the state’s salary bill by R27 billion over three years.

At present, there are 1.23 million people working for the state. If 30 000 had accepted the package, it would have meant a saving of R4.8 billion in 2019/20.

By 2022, R8 billion would have been saved.

As early as October last year, the minister had already raised concerns about wage agreements that were well above inflation.

“The 2018 wage agreement for officials exceed the baseline budget figure by about R30.2 billion over the medium term.

“We did not allocate additional funds for this. The national and provincial departments will have to absorb the costs within their salary budgets,” Mboweni said.

On Friday, Treasury would only say that it would address this issue during the medium-term budget policy speech at the end of the month.

Roodt does not expect Mboweni to come to the fore with more drastic plans immediately.

“Not yet. This is a thing that will be ironed out in time. But I think it will be a disappointment to Mboweni if so few officials did apply,” he said.


What else can government do to reduce the state wage bill?

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November 17 2019