Parliament - Defence and Military Veterans Minister Nosiviwe Mapisa-Nqakula has defended the 23.1% salary increase for employees at the state-owned entity Armaments Corporation of South Africa (Armscor) in 2017-18.
During the year under review, executives and senior management received 6.2% salary increases and middle management down to general workers 7.75%. This cost the entity a whopping R1 billion.
The group executives also received bonuses of 10% of their annual packages and the remaining employees 8% of the annual packages, equivalent to their monthly salary.
In the previous financial year, employees across the board received 7.5% salary increases that cost Armscor R943 million.
In a written response to parliamentary questions from the DA’s Sarel Marais, Mapisa-Nqakula said the increases were due to normal annual salary increments, compliance with legislation and escalation of medical costs. She said the increases were aimed at redressing the unjustifiable wage gaps between employees doing the same or similar work.
“This parity project was initiated as a result of the new Labour Law amendment on equal pay for same or similar work of equal value. In doing so, Armscor followed the prescribed gazetted regulations,” she said.
Mapisa-Nqakula said the increase was also attributable to the internal promotions across the SOE in line with corporate promotion practice.
“During the last six financial years, the Discovery medical (aid) premiums increased at an average of 9.15% per annum The annual increases of 7.5% contributed to the total amount.”
Asked about the justification of the increase against a lower budget at Armscor, Mapisa-Nqakula said the entity had needed to comply with legislation.
The increases, she said, were to “ensure that the organisation remains competitive and is able to attract and retain the highly sought-after skills that are necessary in ensuring that it delivers work of superior quality”.
“Armscor has also adopted a strict policy in filling vacancies that are critical to the operations of the organisation by optimising the utilisation of these resources, hence deriving huge operational savings. These savings amounted to R22.4m in total,” she said.
The minister insisted that the salary increases had been budgeted for.
“Armscor did not utilise reserves to fund salary increases of Armscor employees since April 1, including salary increases and bonuses for senior management service employees and any other benefits such as free hunting trips and the Cape Town Jazz Festival.”
Armscor obtained a clean audit report from Auditor-General Kimi Makwetu in the 2017-18 financial year.
Meanwhile, Mapisa-Nqakula said she had attended events organised by the Hindu community to mark the Diwali festival, where members of the Gupta family had been in attendance.
“These invitations have always been extended to ministers, deputy ministers and the business community, long before I even assumed the responsibility of being the Minister of Defence and Military Veterans,” she said.
Mapisa-Nqakula was responding to a parliamentary question from the IFP’s Mkhuleko Hlengwa, who asked if she had met with any member of the Gupta family since January 2009.