Government incurs US$1billion carry-over expenses

Source: Government incurs US$1billion carry-over expenses | The Financial Gazette February 16, 2017

GOVERNMENT has huge carry-over expenditure demands from 2016, including US$180 million in outstanding bonuses for civil servants, Finance Minister Patrick Chinamasa  revealed during an indaba for civil servants held last month.
The costs inherited from last year’s budget constitute what Chinamasa described as “pressure points” for the 2017 National Budget, already under pressure from a huge public sector wage bill, accounting for over 97 percent of government expenditure.
Government is currently struggling to pay 2016 bonuses for its 350 000-strong work force.
The expenditure demands pushed back into this year include employment cost arrears for the December 2016 wage bill, employer contributions to service providers such as the National Social Security Authority (NSSA), the Premier Service Medical Aid Society (PSMAS) and employee contributions.
The total expenditure demands from last year amount to US$942,5 million.
In fact, some of the outstanding commitments relate to payments due from as far back as 2013.
The cash-strapped government owes US$121,8 million to various service providers, among them NetOne, TelOne, ZESA, CMED and local authorities.
It also has US$173,1 million due to NSSA since September 2013, while PSMAS, the medical aid group for most civil servants, is yet to receive about US$98,9 million.
As a result, some public servants have been denied health care services in various clinics and hospitals because of government’s failure to remit money deducted from workers’ salaries.
Despite scant resources, Cabinet ministers and permanent secretaries went abroad on their annual vacations between December and January. The vacations were fully-funded by the taxpayer.
This, critics said, demonstrated the skewed priorities within government, which is already preparing for national elections in 2018.
Civil servants, who last had a US$54 salary increment three years ago, are battling to make ends meet with meagre salaries averaging US$350 per month, against a poverty datum line hovering above US$550.
As a result, public servants are living from hand to mouth, humbling a constituency that was once the pride of the nation.
During the 1980s, teachers, for instance, were some of the civil servants who were held in high esteem and government always swiftly attended to their welfare. But things took a nasty turn in the early 1990s, resulting in the profession becoming a laughing stock.
“The government appears reluctant to improve our welfare as evidenced by the way they blew millions holidaying, but failing to pay bonuses on time,” said Amalgamated Rural Teachers Union of Zimbabwe (ARTUZ) president, Obert Masaraure.
Analyst, Rashweat Mukundu, said government should abandon a culture of profligacy if it is to meaningfully manage its finances.
He said current circumstances meant that it was “not in a position to meet civil servants’ demands nor improve their welfare”.
“(They need to) reorganise the civil service through job rationalisation, cutting down on ministries and unnecessary government expenditure,” said Mukundu.
Chinamasa last year proposed to cut the wage bill by retrenching, only for him to make a U-turn after a barrage of criticism from Cabinet colleagues who opposed the move.
Public Service, Labour and Social Welfare Minister, Prisca Mupfumira, is seeing light at the end of the tunnel.
“We have actually improved on salary pay dates and on the 20th of this month we will meet again to finalise the issue of bonuses. There is nothing wrong to disagree, but if there is anyone with an issue he should bring it to the table,” said Mupfumira.
However, the Financial Gazette can report that some teacher representative unions are already planning a strike over outstanding bonuses before the planned meeting with government.
ARTUZ has since written to the Public Service Commission advising it of a planned week-long strike over the outstanding bonus payments.
University of Johannesburg research associate, Admire Mare, said 2017 could be another barren year for civil servants.
“As for representatives of civil servants, there is need to negotiate in advance rather than to wait until its bonus season to make noise,” said Mare.
“They have to exert their power as unions to be taken seriously in some of these talk shops,” he added.