Cosatu ‘not going to entertain an across-the-board wage freeze’

Labour federation Cosatu rejects any plans around an across-the-board salary freeze for public sector workers, its national spokesperson Sizwe Pamla said on Thursday.

Reacting to Finance Minister Tito Mboweni’s medium-term budget speech, he called for the focus to instead be on reducing compensation for higher-paid senior management within state institutions as well as politicians.

“We are not going to entertain an across-the-board wage freeze of public sector workers. The National Treasury must focus on overpaid politicians as well as senior executives and management within government departments, state-owned enterprises [SOEs] and other agencies,” he says.

According to Pamla, Treasury is targeting consolidated public spending in terms of its current public-sector wage-cut plans in light of the economic crunch caused by Covid-19.

This has seen government freezing pay increases of most public servants this year, including frontline workers such as police, nurses and teachers.

“Unions have gone to court to force government to implement the third leg [year] of the binding three-year wage agreement [signed in 2018],” he says.

“Consolidated government spending comprises total expenditure by national and the provincial government, social security funds and selected public entities, including transfers to municipalities or other entities,” he notes.

“Therefore, consolidated government spending on remuneration is distorted as it is all-encompassing, going well beyond the wage dispensation determined at the Public Service Coordinating Bargaining Council [PSCBC],” Pamla explains.

He believes Treasury’s austerity strategy is “narrowly and almost exclusively focused on the wage bill” relating to the PSCBC.

“Frankly, we don’t take what the minister [Mboweni] says seriously in terms of across-the-board wage freezes for public sector workers … because we don’t negotiate with the Treasury, we negotiate with the Department of Public Service and Administration [DPSA],” he adds.

“Currently, there are no negotiations underway even with DPSA, due to the previous wage deal being in the labour court. Public sector workers have not been given their agreed-on increase [CPI + 1.5%], which was meant to come into effect from April 1,” he notes.

Pamla says while there are some aspects of Mboweni’s medium-term budget that Cosatu welcomes, the MTBPS was “not bold or imaginative” enough.

“Some positives include the adoption of [the] social compact proposed by Cosatu at Nedlac, allowing financially-distressed workers to tap into part of their retirement savings due to Covid-19 – and the extension of the R350 grant for those worst affected by the pandemic.

How about cutting wasteful and irregular expenditure …

“However, if government is genuine about overall cost-cutting plans, it would look more seriously at reports from the Auditor-General around wasteful and irregular expenditure within government, SOEs and other agencies,” he notes.

“Consultants are earning millions if not billions of rand. We have been calling for government to stop the unbridled use of consultants.

“In addition, many state agencies are run like corporates, with boards and expensive management structures, but are mismanaged,” he adds.

“We should be cutting costs here first, before the salaries of frontline and lower-paid public servants.”

Teachers union Sadtu told Reuters that freezing civil servants’ pay is “not implementable”.

However, the union was more vocal in a Twitter post, saying the 2020 MTBPS “is a slap in the face” to the hardships that working educators and public servants face

This article first appeared on Moneyweb and was republished with permission.

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