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Sat Jun 25 00:00:04 CAT 2016

Zille says hands are tied as she hints at looming government job cuts

TMG Digital | 03 February, 2016 12:28
Zille wrote: “No matter what fancy words are used to describe the impact of the cabinet’s decision‚ the fact remains that prior to the wage agreement being signed‚ the Western Cape Government did not have a shortfall in its budget; after it was signed we had a shortfall of about R3 billion over the next 3 years. File photo
Image by: Trevor Samson. © Business Day

Premier Helen Zille has blamed the last round of public sector wage negotiations for a budget crisis that will see appointments in vacant posts being frozen and a scaling-down of the number of new posts.

The leader said‚ in her Inside Government column on Tuesday‚ that Finance Minister Pravin Gordhan’s budget speech will see “money committed to national and provinces for the new financial year…substantially cut across the board”.

“For the Western Cape this would require substantial budget cuts‚ running into hundreds of millions of rand‚ over the next three years in order to balance the budget‚” wrote Zille.

“If we are to apply it in the way national Cabinet has suggested‚ it will have a major impact not only on our ability to spend on infrastructure‚ but also on personnel. “

Zille said the Department of Public Service and Administration (DPSA) had “been given a mandate from national Cabinet that the total negotiated amount could not go above a fixed threshold and in the Western Cape we budgeted‚ on Treasury’s budget estimates‚ for a maximum increase of 5.5%”.

When the DPSA “succumbed to pressure from the unions and settled on a 7.2% increase for 2016/17…different spheres of government were simply expected to fund the difference from within existing budgets‚” Zille recalled‚ adding that there was a “R1.249-billion increase to our wage bill for 2016/17 alone”.

“The citizens of the province would have to suffer because of an unmandated agreement reached on the basis of money that was never available.”

The Western Province took its concerns to Treasury ‚ which “appeared to appreciate our position and informed us that the shortfall we (and other provinces) would incur as a result of the decision‚ would be made up from the government’s contingency fund…for unforeseen circumstances that might occur”.

“While this did not remove the concern we had raised over the wage negotiation process‚ it alleviated the need to pursue remedies to make up our budget shortfall‚” said Zille.

However‚ at a recent meeting chaired by President Jacob Zuma in Pretoria‚ Zilla and other premiers were told “that Cabinet has now decided we will face further cuts because there is simply no money to give us”.

This‚ Zille said‚ was attributed to “a new crisis” having arisen “due to national government’s chronic under-funding of higher education over many years”.

In short‚ money promised by Treasury to cover the unbudgeted public sector wage increases had to “be reprioritised for payment elsewhere”‚ she said.

Zille wrote: “No matter what fancy words are used to describe the impact of the cabinet’s decision‚ the fact remains that prior to the wage agreement being signed‚ the Western Cape Government did not have a shortfall in its budget; after it was signed we had a shortfall of about R3 billion over the next 3 years.

“The implications of this directive are dire‚ and Treasury suggestions have included the rationalisation of our current work force -- which is code for ‘retrenchments’.’

This‚ argued Zille‚ was a “bitter pill to swallow” in a provincial government known for “good policy decisions”‚ well-managed budgets and whose “expenditure on personnel as a percentage of the budget‚ is the lowest in the country‚ at 53.2%‚ compared‚ say‚ to Limpopo’s 72.9%”.

“But when budgets are cut‚ there is no distinction between good governance and bad.”

Zille said the Western Cape had “three options at our disposal”: - To get the DPSA 7.2% wage increase agreement set aside or reversed; - To insist that Treasury provides the shortfall in funds‚ meaning key policy decision changes by national government; or - To take the option presented to us in Pretoria and initiate the process of “rationalising” our public service so as to ensure we have enough money to continue frontline service delivery and pay our remaining employees their increased salaries every month.

“These three options will now be interrogated further. It would make the most sense if we could all revert to the affordable 5.5% increase which Treasury endorsed.

This would be in the best interests of citizens and service delivery‚” Zille said. “Sure‚ it will require a small sacrifice by people who are already privileged merely to have a job in these times of mass unemployment. It is time to make this small sacrifice in the interests of the country.”

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