MPs’ salary increases, budget reductions force Parliament to overspend by millions

Parliament is expected to overspend on its annual budget by more than R60 million by the end of March next year.

This came to light on Friday when the Joint Standing Committee on Financial Management of Parliament convened its first meeting since MPs returned from the constituency break.

The committee was briefed on Parliament’s performance in the first quarter between April and June.

It also received an update on the restoration of the parliamentary buildings gutted by the 2 January 2022 blaze.

Expenditure

It was revealed during the meeting the legislative body of government had spent 92% (R588,9 million) of its budget of R639,3 million in the first quarter.

Now, it has been projected that the full budget of R4,35 billion will be spent at the end of the 2023/2024 financial year.

While Parliament was within budget on the legislative and oversight spending, it slightly underspent on its administration division.

According to the presentation, there is a projected overspending of an additional R61,7 million at the end of the financial year as a result of the MPs salaries increases, exit gratuities and budget reductions.

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“That was mainly due to the restoration and rebuilding of Parliament,” the national legislature’s chief financial officer (CFO) Jason O’Hara said on Friday.

“We are also underspending on goods and services mainly due to… the outstanding invoices for travel, study tours and public hearings.”

However, O’Hara highlighted Parliament’s capital spending went over budget.

“This is due to the purchase of vehicles and computer equipment.”

Watch the meeting below:

The institution also overspent on its direct charges (expenses) by 110% (R135,4 million) on a budget of R123,2 million.

The overspending was attributable to the payment of loss of office gratuities besides the payment of MPs’ salaries.

“Compensation of members was roughly 10% and that’s a slight overspending for the first quarter mainly due to the loss of office. Compensation of employees are, but roughly 1% what we expected to spend for the first quarter that is mainly due to the filling of vacancies.”

Economic Freedom Fighters (EFF) Omphile Maotwe lamented the overspending, describing it as “unacceptable”.

“It doesn’t matter what reasoning [there] is, we can’t go over the allocated budget,” she said.

Salary increases

MPs received a 3% salary hike this year after President Cyril Ramaphosa signed off the increases for the 2022/2023 financial year.

The Independent Commission for the Remuneration of Public Office Bearers had recommended a 3.8% increase.

The salary hike meant National Assembly speaker, Nosiviwe Mapisa-Nqakula now earns just over R3 million per year, which is on par with Deputy President Paul Mashatile’s salary.

National Council of Provinces (NCOP) chairperson Amos Masondo also gets the same amount as the National Assembly speaker, while ordinary MPs earn R1.2 million a year.

READ MORE: Is Ramaphosa’s proposed salary hike justified amid economic struggles?

In addition, Democratic Alliance (DA) leader John Steenhuisen’s salary, as leader of the main opposition, bumped up to R1.7 million, while all other minority leaders – including EFF leader Julius Malema – saw their salaries hiked to R1.43 million.

The salaries of chief whips jumped to R1.7 million for the majority party, while for the largest minority party and minority party whips, their salaries increased to R1.42 million and R1.33 million respectively.

Finance Minister, Enoch Godongwana had suggested a lower salary hike instead given the current economic climate in South Africa.

He instead had recommended a 1.5% increase plus a once-off cash payment.