THE country’s restive civil servants have been awarded a five percent salary increment in the upcoming 2020/21 financial year.
Finance Minister Moeketsi Majoro announced the salary increments when he presented his proposed budget for the new financial year in parliament yesterday. The new financial year begins on 1 April 2020.
In addition to the wage hike, Dr Majoro proposed to increase the disposable real income of the lowly paid workers by marginally increasing the minimum taxable salary from M5,090 per month to M5,350 per month.
“I propose to this Honourable House that the 2020/21 salaries and wages be adjusted by five percent across board,” Dr Majoro said, adding the increments would help cushion civil servants against projected increases in the inflation rate.
Dr Majoro also proposed a modest increase in the pensions pay out from the current M750 per month to M800 per month.
Last year, the government angered civil servants by failing to award them increments for the 2019/2020 financial year. Teachers, police officers and magistrates reacted by staging waves of strikes which negatively affected service delivery.
The magistrates have a pending case in the High Court where they have petitioned the court to issue an order compelling the government to award them salary increments and improve their working conditions.
It remains to be seen how the five percent increments will be received by the civil servants. The wage hike is three percent less than the eight percent increase teachers demanded for the 2019/2020 financial year. Last year, Dr Majoro insisted that it was not feasible to award the wage increments due to the poor state of the economy.
It is however, unlikely that the wage hike will increase the civil servants’ disposable real incomes. If anything, civil servants and others are likely to see a reduction in their spending power after Dr Majoro announced a three percent increase in the tax on communications and a one percent increase in the electricity tax.
The oil levy has also been revised from 80 Lisente to 110 Lisente while bills have been drafted to facilitate the introduction of 15 percent and 30 percent levies on alcohol and tobacco products.
The wage hikes are not likely to be well received by the by the International Monetary Fund (IMF) which has steadfastly called on the government to reduce the high public wage bill as well as undertake public financial management reforms.
The IMF has also advised the government to award performance-based salary increments.