via Budget delay hits bonuses – DailyNews Live by Roadwin Chirara 8 NOVEMBER 2013
As thousands of workers look forward to their 13th cheque, confusion now reigns over how it will be paid out after government postponed its annual budget which usually gives direction to employers through tax-free threshold announcements.
The national budget, traditionally delivered in November, has been moved to a later date after Finance minister Patrick Chinamasa said he required more time to craft the document.
The tax-free threshold for bonuses is traditionally announced during the national budget, which also outlines next year’s spending plan.
“It’s obvious this delay is going to have a negative impact on the workers and the economy as it causes further uncertainty,” Zimbabwe Congress of Trade Unions (ZCTU) president George Nkiwane said.
“Although the workers would get their bonuses, they would be taxed in retrospect yet some form of relief could have been offered to them through the budget.”
He said his organisation will be engaging its membership on what action to take over the delay.
“As you know, these are policy issues, but as the ZCTU, we will be meeting over the development that we only got to know through the press and deliberate on the action to be taken,” he said.
Labour economist Godfrey Kanyenze said employers would be forced to find a solution on how to come up with their employees’ 13th cheques.
“Zimbabwe has lived on a tight rope before, where people had to improvise and I think employers will have to come up FROM P1
with a solution on how to reward their employees without the guidance of the budget,” he said.
“We can extrapolate from the past that life has to go on and the struggle will continue.”
He said government would however, struggle to own up its pledge to give its more than 250 000-strong civil service, bonuses.
“They really have to find ways of delivering on the promises they made to the civil servants or there would be grave consequences,” the economist warned.
Kanyenze said like most of its election promises, the Zanu PF-led government will have to come up with solutions to meet its end of the bargain, after promising better working conditions for employees.
“I think looking at the current situation; they would struggle to raise the funds and would have to stagger the pay-outs as they have to live up to their promise.
“Like they say, a promise is a credit and civil servants are waiting to get what they have been promised come payday,” he said.
The labour economist said lack of income streams was providing a challenge for the new government.
“We already knew the fiscal situation was getting tighter because of weakening global metal prices, negatively affecting the growth of the economy.
“While expectations were higher after the elections, the revenue base has become tighter.
“As you know, 70 percent of government expenditure goes to civil service salaries,” he said.
Economist Christopher Mugaga said bonus payments to civil servants will negatively impact on the economy.
“Government will definitely pay them but the implications will be adverse, with no funds left for development,” Mugaga said.
He said bonuses should not be a priority for government as it had more pressing issues to address to keep the economy running.
“It should not be a priority however, government can still meet bonus pressures of civil servants hence crowding out funds for capital investment projects,” the economist said.
“Confidence building measures, employment creation, addressing the liquidity crunch and addressing the domestic debt should be its priority,” he said.
Currently, government is engaging civil servants in salary negotiations that are likely to balloon its already unsustainable wage bill which gobbled more than $2 billion last year.
The government employees are demanding a minimum salary of $540 a month and 30 percent of basic salary as rural allowance.
They are also proposing a housing allowance of $160, transport allowance of $63 for the least-paid employee and land for residential stands.
The lowest-paid government worker’s salary is pegged at $297 per month.
Efforts to get a comment from Chinamasa were fruitless but the Treasury boss recently indicated that government will pull out all the stops to ensure that civil servants get their bonuses.