The Treasury has warned that the mooted 3.8% salary hike for public office bearers such as judges and ministers is tone-deaf in a country battling high levels of poverty, forcing President Cyril Ramaphosa into a deft balancing act when he determines pay increases for the 2022/23 fiscal year.
Finance minister Enoch Godongwana, whose department is trying to save every cent to pay down a hefty debt pile and recoup the coveted sovereign investment grade rating, cautioned the Independent Commission for the Remuneration of Public Office-bearers that the proposed salary increase sends the wrong message.
In a note obtained by Business Day, the Treasury told the commission — mandated to recommend pay and other benefit levels for the executive, legislative and certain judicial sector categories — public office-bearers were already receiving above-average remuneration.
“The minister highlighted that the current recommendation by the commission will increase earnings beyond tolerable scales when budget constraints do not permit for such increases.
“Submissions were made regarding the public perception that such high salaries were gratifying a specific sector or the public office-bearers while the country is battling with extreme levels of poverty,” the commission said in its explanatory memorandum. “Tools of trade and benefits as per the Guide for Members of the Executive were also referred to as benefiting the public office-bearers enhancing their level of remuneration.”
The memorandum shows that Godongwana pleaded with the commission to consider the state of the ailing economy, which is punctuated by load-shedding, unemployment and endemic poverty.
According to data from the Pietermaritzburg Economic Justice & Dignity Group, about 30.4-million people in SA live below the old upper-bound poverty line of R1,268.
The entity estimates that 13.8-million people live below the food poverty line. SA also has one of the highest unemployment rates and is regarded by the World Bank as the most unequal society in the world.
The country’s unemployment rate is 32.7%. However, unemployment for the demographic of job seekers between 15 and 24 is at an alarming 61%.
Godongwana said that the 2021 wage agreement provided for a pensionable increase of 1.5%, as provided for in that year’s budget and included a one-off nonpensionable cash gratuity of R1,000 after tax per person per month, which was not budgeted for.
He said this gratuity cost the government R20.5bn in the 2021/22 fiscal year, with a preliminary carry-through of R20.5bn in 2022/23 if no new agreement is reached. Taking all this into consideration, Godongwana told the commission he did not support the recommendation of a 3.8% increase. He instead proposed a 1.5% increase plus a one-off cash gratuity to be granted for all categories of public office-bearers.
Godongwana said he was alive to the criticism of the government for awarding the 3% salary increase to the political top brass for the 2021/22 financial year. He said the consumer price index was not the only factor to be considered in determining the salaries of elected public officials.
“The minister intimated that the effect of a 3.8% increase ... would translate into a 6.8% accumulated baseline increase, which will result in a far greater than the 4.5% granted to the public service. It was further stated that senior management service salary increases were restrained to the extent that other categories in that sector were negatively affected,” the commission said.
Its proposal for a 3.8% rise got support from justice & correctional services minister Ronald Lamola, who argued judges have fallen behind the inflation curve for the past seven years.
“The minister supports the 3.8% increase for the judiciary and the state institutions supporting democracy.”
The commission said chief justice Raymond Zondo made a submission through the heads of court committee on judges’ remuneration. “The committee requested the commission to consider the inflationary erosion of judges’ salaries. An overview on the erosion of a period of seven years was provided which indicates a total shortfall amounting to -20.6%.”
Should Ramaphosa rubber stamp the recommendation of a 3.8% salary increase, it would take his annual salary to just under R3.2m.
Deputy president Paul Mashatile will have a package of R3m. Ministers will earn nearly R2.6m and deputy ministers R2.1m. The commission also proposes increasing the salary of the chief justice to just under R3.1m and judges of the apex court will earn R2.4m. High court judges will earn R2m and magistrates R1.1m.
Salaries of premiers will rise to R2.4m and MECs to R2.1m.
“The commission has considered the fiscal condition of the state demonstrated by the minister of finance, the state’s wage bill, the impact of public office bearers, salary increment on the fiscus, previous presidents’ determinations, stakeholders’ submissions and general economic status of the country as it is recovering from the effects of the Covid-19 pandemic,” it said.
Presidency spokesperson Vincent Magwenya said: “The president is yet to fully consider the recommendations and consult with National Treasury before arriving at a determination that will be gazetted and announced.”
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