DA three-step guide to solving the public sector wage impasse

4 May 2021

The DA has today presented the Minister of Public Service and Administration, Senzo Mchunu, with a three-step guide to break the ongoing public sector wage impasse that would save R163 billion over the Medium Term Expenditure Framework (MTEF). The DA believes that the burden of cutting our bloated wage bill should not fall on frontline service delivery staff – mainly nurses, teachers, and police officers. They should instead be provided with inflation-linked increases.

The public sector wage bill cuts should be focused on the 29 000 millionaire managers employed in the state as well as on wasteful luxuries. To achieve this outcome, our model proposes that the government should:

Freeze the wages of the 33.7% of public servants who are not covered by Occupation Specific Dispensation (OSD). This category includes office managers, administrators and supervisors who spend most of their working hours in air-conditioned offices. In turn, this would enable the state to protect the wages of frontline workers by ensuring that the 66.3% of public servants who are covered by OSD receive CPI inflation-linked increases;

Reduce the 29 000 millionaire managers in the public service by a third; and

Eliminate funding for VIP blue-light security and the New Development Bank.

In total, our three-step plan would save R163 billion over the MTEF period, exceeding the target set by the finance minister by R2.9 billion and restoring South Africa to the path of fiscal sustainability:

Our proposal protects frontline staff by utilising the OSD system as it was originally intended. The government in 2007 introduced OSD under the guise of attracting and rewarding skilled personnel – like doctors, engineers, and teachers – through higher salaries. However, OSD has thus far failed, because the government has not limited salary increases to these skilled workers. Instead, wage hikes have often favoured those in senior management positions at the expense of skilled public servants delivering frontline services to citizens.

The premium paid to public sector workers is a function of patronage-driven wage increases over the last decade, and there is little evidence that productivity has kept pace with wage growth. Exorbitant public sector wages is crowding out productive investment and South Africans are not getting value for money. It is time to choose country over cadres by reigning in spending on salaries for non-OSD personnel so that we can protect our frontline service delivery heroes while cutting the bloated wage bill.

The DA’s three-step plan will correct the immoral choices of the past, protect critically needed frontline services, and put our country on the path to fiscal sustainability.

Issued by Leon Schreiber, DA Shadow Minister for Public Service and Administration, 4 May 2021