Tough task for Chinamasa on wage bill cut

via Tough task for Chinamasa on wage bill cut – NewsDay Zimbabwe August 4, 2015 by Ndamu Sandu

Finance minister Patrick Chinamasa needs political will to be able to cut the government wage bill and create fiscal space for other national commitments, economic analysts have said.

Presenting his Mid-Term Fiscal Policy review last week, Chinamasa said the government was concerned with the level of resources that employment costs continued to absorb from the National Budget at the expense of developmental expenditures and other expenses directed at government operations and public service delivery.

“Hence, Cabinet has given a directive to the Public Service minister in conjunction with the Finance minister to urgently propose remedial measures to gradually bring down the share of the wage bill in the Budget from over 75% to under 40%,” he said.

Chinamasa said significant progress had been made to develop measures to rationalise the wage bill with the Public Service Commission having completed the physical head count for all civil servants as part of the government staff audit. He said Cabinet would be considering the full package of necessary proposals in the next couple of weeks.

Economist Godfrey Kanyenze said it was not the first time that the government had embarked on an exercise to cut the wage bill.

He said under the Economic Structural Adjustment Programme, those who would have retired or resigned were not replaced.

Kanyenze said there was need to rationalise the civil service to see areas that had shortages and others with excess in manpower, a move he said would show whether there were ghost workers or not.

He said the government could review the benefits “entrenched in people at the highest level”.

“Senior people go on holiday to do what when the economy is not performing?” he asked.

Kanyenze said political will, courage and social dialogue were paramount to attain that.

“You can’t deal with the issues without talking to the affected employees and unions,” he said.

An economic commentator said it was clear that given the already high unemployment levels in the country it was politically imprudent for the government to retrench.

He said cutting salaries was a non-starter as the civil servants’ salaries were generally low.

He said there was no political will to deal with the outcome of the civil service audit, adding that such reports “are always shrouded in mystery and secrecy meaning that the ghost workers are part of some political structures”.

“It means that the only way to reduce the share of the wage bill is to increase revenue while keeping current expenditures on employment constant through a civil service wage freeze”.

“This is the only possibility, but it is not feasible under the circumstances where the economy is in meltdown. There is no economic growth so there will be no growth in revenues,” he said, adding that Chinamasa’s proposals were impossible to implement at this stage.

“I don’t see how a government that has failed to get rid of ghost workers can be able to get rid of real workers.”

An economist with a leading commercial bank told NewsDay that the first step to cut the wage bill was to flush out ghost workers, adding that such an exercise “was a low hanging fruit with no costs at all”.

“That will be the first step because no one will be losing their job other than removing corrupt elements and ending double dipping,” he said.

“Secondly, in her report the Auditor-General highlighted leakages and made recommendations. If we are to embrace the recommendations, we will be somewhere in terms of reducing the wage bill.”

In 2012, government announced that it had flushed out 6 000 ghost workers from its payroll following a payroll and skills

Some of the workers whose names were listed on the payroll as receiving salaries did not exist or no longer worked for the concerned organisation.

Their payments and other benefits may have been facilitated by corrupt third parties.