FEDUSA says the government itself is now fueling the fires of the grossly high unemployment statistics, by engaging in this mild form of retrenchment. Photo: Supplied

CAPE TOWN – The Federation of Unions of South Africa (FEDUSA) is totally disappointed by the announcement made by Finance Minister Tito Mboweni during his Medium Term Budget Policy Statement (MTBPS) in Parliament, that he intended to reinvigorate the early retirement package unilaterally offered to public servants because of a very low uptake of only about 4 000 people. 

At its core the plan allows public servants to leave the service before statutory retirement age without incurring any penalties as a strategy of drastically cutting the public sector wage bill. 

Considering the wave of retrenchments that have been lodged this year albeit the commitments made during the 2018 Jobs Summit, Government itself is now fueling the fires of the grossly high unemployment statistics, by engaging in this mild form of retrenchment. 

FEDUSA firmly believes any measures materially affecting the employment of public servants should be subjected to good faith negotiations at the Public Service Coordinating Bargaining between government as the employer and public sector trade unions.

FEDUSA cautiously welcomed the Minister’s plans to freeze the salaries of for Cabinet, Premiers and MECs at current levels, reducing compensation for Board and Executive Management, capping the cost of official cars at R800 000, inclusive of VAT and introducing a new cell phone dispensation that will also cap the amount claimable from the state; all domestic ministerial travel will be on economy class tickets. 

The minister also added that he will make a determination on the appropriate use of subsistence and travel for all arms of the state and appealed Parliament’s presiding officers to introduce similar austerity measures for Members of Parliament. 

The truth lies in the commitment to implementing these measures with further downward adjustments to these perks announced annually during both the budget and adjustments to the estimates.    

The strict conditions that National Treasury has imposed Eskom - a systemic economic risk -  such as ensuring that it runs its current plant and equipment better; achieve other operational efficiencies, including much better cash management and fast track the separation of the utility into three ring-fenced parts of generation, transmission and distribution so that it receives a budgetary of R230 billion over the next 10 years that have its endorsed by the political principals at the Department of Public Enterprises is to be welcomed. 

Equally to be welcomed is the announcement that it cannot be business as usual for the rest of the resources draining State Owned Enterprises and that they should implement careful restructuring as a priority.

However it is outrageous that the national debt ballooned to more than R3 trillion this year alone and is expected to rise to R4.5 trillion in the next three years; and prudent policy adjustments are not effected timeously, it will most likely breach the 70 per cent of gross domestic product by 2022/23. 

Such a development is deeply undesirable as it will divert scarce resources away from vital socio-economic imperatives in health, education and infrastructure; the R53 billion shortfall in revenue collection will surely not help matters.

BUSINESS REPORT