Here's the DA's proposal for Mboweni to cut the public wage bill
The DA's shadow minister of finance Geordin Hill-Lewis has urged minister of finance Tito Mboweni to implement the DA’s proposal to cut the wage bill.
This after Mboweni on Wednesday revealed the nation’s difficult financial situation.
Mboweni admitted that the public wage bill was a mess, saying that action needs to be taken against some former cabinet members responsible for the unsustainable cost, BusinessLIVE reported.
Hill-Lewis said things were worse than many imagined and the DA welcomed the minister's “tough talk” on cutting the public wage bill and on the mismanagement of state-owned entities (SOEs).
However, he said the DA made a “credible proposal” to cut the wage bill by R168bn in three years, adding that it would protect front-line service delivery staff like teachers and nurses.
“The minister echoed the call, with tough talk on the wage bill, but didn’t do anything about it.
“All of the cuts he announced will be applied to 'non-compensation' spending, with no cuts to the R630bn wage bill. Effectively, he procrastinated again on the tough action needed to turn our finances around,” said Hill-Lewis.
Here is how the DA proposes a R168bn cut to the public wage bill over the next three years can be implemented:
- A three-year freeze on all non-occupation specific dispensation (front-line) wages, saving R138.6bn over three years
- Reducing the number of the most highly paid head office management staff in the public service by about 9,200 posts, saving R29.4bn over three years.
Hill-Lewis said the DA minimised these cuts by proposing further revenue-raising mechanisms and cuts to other superfluous programmes:
- Auctioning digital spectrum would raise R32.5bn
- Selling Telkom shares would raise R14.5bn
- Selling Sentech would raise R1.8bn
Additional cuts over MTEF period
- Eliminating New Development Bank funding would save R13.25bn
- Eliminating National Health Insurance funding would save R5.8bn
“It is morally indefensible to cut public jobs, basic services, infrastructure investment and support for the poor, just so that government can continue to bail out failing SEOs.
“The cuts required over the medium term are so deep, that it is unlikely that basic services and infrastructure spending will not be affected. Indeed, this is the path of least resistance politically, although it also has the most devastating effect on the poor,” said Hill-Lewis.