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Pretoria –
South Africa’s metro councils are battling ballooning wage bills that account for a huge chunk of their budgets.
The Tshwane Metro Council’s employee-related costs are expected to go up from R5.4 billion to R6.1bn.
The increase can be attributed to the provision of medical aid for labour brokers (R86 million) and a projected 6.85 percent annual salary increase, it said.
The permanent appointment of 520 metro police students and student trainees (R113m); the appointment of new student trainees at the metro police (R48m) and filling positions during the 2012/13 financial year (R240m) also contribute, it said.
The eThekwini municipality’s wage bill is also expected to go up by R577m in the 2013/14 financial year to R6.5bn, an increase largely driven by salary increases.
Similar situations are faced by the City of Johannesburg and City of Cape Town.
Economists have cautioned against municipal workers being given large increases at the expense of hard-pressed consumers who are already falling behind with their bills.
Cape Town’s Ian Neilson, executive deputy mayor and finance mayoral committee member, said the city’s wage bill stood at R8.2bn, which accounted for 31.3 percent of its budget, and was an increase of R330m from the previous financial year.
Nielson said the reason for the increase was the rate of increases for salaries and wages which are determined nationally and which the city had “minimal control over”.
eThekwini municipality said its wage bill was continually being reviewed.
Joburg metro spokesman Nthatisi Modingoane said the city was constantly looking at ways to reduce its wage bill, which would be R8.1bn in the coming financial year.
Economist Mike Schussler said while the wage bill percentage for Joburg and Durban was lower then the national and provincial standard of 30 percent of the budget, there seemed to be “no room for more public servants”.
“About 14.5 percent of the gross domestic product goes to public servants who are only 4 percent of the population. This is not the highest in the world but it is certainly among the top five. We simply cannot afford more public servants.”
Metros should not balance their books simply by adding to the consumers’ bill, he said. “They can add 50 percent more to consumers’ bills but more people would then simply fall behind. The bad debt countrywide now stands at R64bn that consumers, businesses and governments cannot pay to municipalities or city councils.”
Metros which spent about a quarter of their budget on salaries and about half on bulk purchases of water and electricity had very little left for service delivery, he said.
He stressed that government employees, including municipal workers, were, on average, earning a lot more than those in the private sector. “There is quite a broad gap which makes it difficult for the private sector to attract people.”
Economist Dawie Roodt agreed that high salaries were a serious problem in the public sector.
“Government workers, including municipal workers, earn about 30 to 40 percent more than they would in the private sector. This is completely wrong because there is virtually no risk when you are employed by the government.”
Labour unions, which negotiate salary increases, were “militant and politically connected”, he said.
“They use their power to get what they want and for the most part the workers are not very productive at all.” – Pretoria News
