DPSA must stand strong on wage freeze

Unions must be rational given current economic crisis.

29/04/2021 09:51:59

DPSA must stand strong on wage freeze


The Organisation Undoing Tax Abuse (OUTA) has written to Minister Senzo Mchunu, Minister of Public Service and Administration, in response to his request for input from civil society regarding the deadlock in the current public sector wage negotiations. In the letter, OUTA urged the minister to stand his ground on a wage freeze and outlined factors that support this stance.

“The public and tax-paying citizens are largely responsible for footing the bloated government wage bill. Therefore, it is only right that they have input when it comes to public service salaries and bonuses,” says Wayne Duvenage, OUTA’s CEO. 

OUTA believes that the past above inflation increases handed out to the public sector since 2007 – which has averaged at 45% above inflation – is unsustainable and the state’s call for a salary increase freeze is a rational one. Furthermore, Treasury’s research shows that – given the past excessive increases – over 95% of public servants earn more than the bottom 50% of registered taxpayers. This means that a wage increase is not even a case of trying to correct an underpaid sector.

OUTA also appeals to the labour unions to apply a rational stance given the current economic crisis the country finds itself in. Unions should also consider the fact that the repeated above inflation increases of the past should not have happened in the first place and the current position by the state is called for.

According to OUTA, past government leadership has not been strong enough to quell increases demanded by the public sector unions. Political interference has further exacerbated this problem, as the ruling party wanted to appease unions as not to harm the party’s cosy relationship with labour. This made the current stand-off between the state and the unions – however unfortunate – also inevitable. 

“The unions’ demand of CPI plus 4% is excessive in today’s environment and given the current high levels of public sector salaries, this could be construed as negotiating in bad faith,” says Duvenage. “This is the time for nation building and for the unions to cease with their tiresome tactics of unacceptably high demands in the hope of settling at somewhere around CPI. Barring the odd position that may require some adjustments, the state’s wage bill is simply too high, and the taxpaying public is overburdened.”

In its letter to minister Mchunu, OUTA suggested that the state also includes credible public sector performance indices, when deciding on future salary increases and bonuses. “A number of credible and verifiable indices – such as the Edelman Trust Barometer, education performance, crime statistics, health, transparency, wasteful expenditure and others – should be introduced and applied when calculating public service salary payments.”

South Africans are amongst the highest taxed citizens in the world, a situation made worse by the dismal return society receives for its taxes. This is even more reason to support a freeze of public sector salaries for the next three years.  “When it comes to public sector wage increases, the minister should also remember the state’s duty to act on behalf of its citizens. It is government’s job to curb state expenses on behalf of all citizens and taxpayers to ensure a better country for all.”


Voice note by Wayne Duvenage here.