Public service wage offer willl cost extra R30bn - Lindiwe Sisulu

Minister says this amount is R8,1bn more than what was budgeted

Remarks by the Minister for Public Service and Administration, Ms Lindiwe Sisulu at the National Press Club, Court Classic Hotel, Pretoria

19 Jun 2012

Let me start by thanking the National Press Club (NPC) for inviting us to share our thoughts of a public sector in the service of the people.

I am accompanied by the Deputy Minister, Ayanda Dlodlo and my Director General, Diphofa Mashwahle and Deputy Director General, Khumbula Ndaba.

One of the singular most important and urgent need for our Government is to answer that we can deliver to our people, that is the mandate, that is what our people expect. This being the last stretch of our twenty years mark in Government you can understand that nothing is more urgent than delivery of services to our people. The engine of delivery is Public Administration and the delivery vehicles are our Public Servants.

We have developed sound policies however we have not been able to deliver fully on expectations. The recent Monitoring and Evaluation report released by Minister Collins Chabane has drawn attention to lack of compliance and performance in service delivery.

We are placed in an extremely challenging environment and we cannot fail. I would like to be able to count on you as a partner to ensure we can check on whether we are succeeding in our mammoth task and through you also identify where we are not going right.

Right here and now we have what in my language we might call "Clear and present dangers" - that of a looming potential wage dispute. The state of our global economy, the reality of our own limited budget, our own credit rating and credibility makes me hope and believe that Labour and ourselves as Government have no appetite for a dispute and worse a strike.

We remain committed to the process of negotiations and would like to invite labour back to the negotiation table.

What in it for them? First they will see first-hand that I have no horns, as some media have threatened. Secondly it will be in their interest that we have an amicable resolution at the earliest possible time. What in it for me? It will give me the opportunity to craft an Accord with labour which will culminate in a service delivery charter firmly based on the needs of our people, ensuring that people are indeed our joint priority.

A service charter that will ensure that we commit ourselves to a multi-year agreement. Our economy and our people can ill afford the unease caused by this period in our calendar, a service charter where we will both develop principles governing increases in remuneration conditions of a service charter where salary increases are based on productivity and performance improvements. We cannot go on like this or we are headed for a crisis that will affect the whole Government service delivery and our people.

I am convinced we will find each other around the table. We need to broaden the conversation which has been too narrowly determined by such a time as we are in now.

Change has come, change had to come, between us we can make it a change for good, a change that our people will embrace. We are sensitive to the needs of Labour and equally to those of our people. We ask that together we be sensitive in balancing this with the needs of our people in the time of a global economic crisis.

Let me first sketch out for you our current position. Firstly I come into this the day on which Government has signed a final offer of 6.5% increase.

Public Service Wage Negotiations

At the opening of negotiations labour unions demanded 10% across the board and they have since moved to 08% cost of living adjustment. I know that Independent Unions are considering a 7% settlement.

After a series of protracted negotiations, which included a facilitation process by seasoned facilitators, the employer tabled a multi-year settlement offer of 6.5% ie, CPI plus 0.6% for 2012/13, CPI plus 0.5% in 2013/14 and CPI plus 0.5% for 2014/15. Additional to the salary increment, on 1 July every year satisfactory performers will receive a 1.5% pay progression.

In summary, the state has offered 9%: 6.5% in wages and salaries and 2.5% in benefits. This will cost the state R30 billion. This amount is R8.1 billion above the budgeted amount for compensation of employees.

Other improvements on the conditions of service contained in the offer include the recognition of long service, an increase in night shift allowance; a cash bonus of 10% of employee's salary on improvement of qualifications; an increase in shop steward, family responsibility and pre-natal leave.

On housing, the offer includes an increase of monthly allowance from R800 to R900 per month with the allowance to be converted into a subsidy towards a bond at the introduction of the Government Employees Housing Scheme.

Public service wage Bill has risen sharply from R211 billion in 2008/9 to R314.9 billion in 2010/11 and now constitutes 38.7% of consolidated non interest expenditure. Over the past three years the State as the employer has offered salary increases that are higher than the inflation which is financially unsustainable moving forward.

Democracy and history are always in the making. They are both products of decisions we make from time to time. In doing so, we are or should be guided by our values, assumptions, expectations and our pro-poor policy orientation. Our deliberations and decisions are at all times guided by the imperatives of social justice, fairness, and reasonableness, all of which are inscribed in our pro-poor policies.

Our good intentions and wishes must however contend with the objective economic realities. Any unrealistic settlement will impact negatively on our pro-poor policy especially our poverty alleviation efforts and infrastructure spending. In other words, our decisions must not undermine and curb government's capacity to meet its economic growth and developmental objectives. Doing so, will have unintended consequences of reducing social expenditure and employment. 

This calls for all of us to work together and apply our minds in ensuring that the decisions we arrive at are not only economically sustainable, morally defensive but are seen to be socially responsive.

Issued by the Department of Public Service and Administration, June 19 2012

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