Government’s public sector early retirement Initiative is failing dismally

Issued by Dr Mimmy Gondwe MP – DA Shadow Deputy Minister for Public Service and Administration
05 Mar 2021 in News

The Democratic Alliance (DA) can reveal that the government’s public sector Centralised Early Retirement Initiative (Initiative), funded by National Treasury and designed to draw down the headcount and contain the unsustainable public sector wage bill, is failing due to a low uptake by public service employees.

In reply to a DA parliamentary question, the Department of Public Service and Administration revealed that according to information supplied by National Treasury, by December 2020, there were 5289 applications received from public service employees, in both national and provincial departments, for processing in terms of the Initiative which was introduced in 2019. Of these, only 2964 were recommended for funding and communicated to the relevant national and provincial departments.

The Initiative was introduced by the Minister of Finance, Tito Mboweni, in an effort to, primarily, scale down and contain the burgeoning public service wage bill by encouraging qualifying public service employees to exit the sector before their official retirement age. When the Initiative was initially introduced 30 000 eligible public service employees were expected to take up this early retirement Initiative and government had hoped to save R12 billion per annum through this Initiative.

However, the fact that, by December 2020, such a low number of public service employees had applied for the Initiative is a clear indication that the Initiative is, unfortunately, not yielding the desired outcomes and is failing dismally. This is a further indication that National Treasury is nowhere near to rationalising and containing the public service wage bill.

The DA will continue to repeatedly call on National Treasury to hold the line and refuse the 4% CPI wage adjustment which is being punted by public sector trade unions.

The stark reality is that our state coffers cannot sustain the current public service wage bill and it is only a matter of time before they cave in and collapse under the weight of it, especially if some of the containment measures introduced by National Treasury continue failing.

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