Freezing the public service wage bill on its own will not slash debt. Nor will it boost performance or increase value for money. Whatever savings are realised in reducing the wage bill will almost certainly immediately be lost in irregular and fruitless spending, incompetence and corruption.
Ideologically insisting that the public service must deliver a service when it does not have the capacity to do so is equally wasteful. An example of this is the government stubbornly insisting that the public sector alone should roll out Covid-19 vaccines, when it clearly does not have the capacity to do so.
In the 2019/2020 financial year, the government spent R623.8bn on public servants’ wages, which accounted for 34% of total government spending.
The government calculated that a wage freeze for the country’s 1.2-million public servants would reduce overall spending by R264.9bn over the next three years — about R88bn a year.
But irregular spending by national and provincial departments and municipalities — just one form of waste of public financial resources — is about R100bn in a good year.
So, it may appear nonsensical to insist on a wage freeze for public servants while astonishing levels of waste, corruption and incompetence continue daily without anyone being held accountable — yet it is necessary, but in conjunction with other reforms.
The public service generates both high wage costs — with very little in return in terms of quality public services — and high budgets, also with little return in terms of service delivery.
The ineffective public service is now on its own an obstacle to economic growth and new investment, and a cause of the migration of skills, capital and investment. It directly causes unemployment or at least undermines employment creation in the private sector.
The size of SA’s public service is comparable to that of competing emerging markets. However, the value for money is far below par compared to our peers
Poor service delivery is also one reason SA is de-industrialising, losing capacity in manufacturing, technology and heavy industry.
The failing public service is also a source of political instability, which is seen in violent public service protests.
The high wage cost — with the slim returns — is difficult to justify, given the damaging impact on growth, investment and its negative impact on creating employment outside the public sector.
The size of SA’s public service is comparable to that of competing emerging markets. However, the value for money is far below par compared to our peers. Remuneration per employee compared to our emerging-market peers is also disproportionately large.
SA’s public service is not only top-heavy at a managerial level, but salaries and benefits at this level are bloated. The public service is short of critical skills — mostly technical skills, from civil engineers to medical doctors to competent managers. To compound the critical skills shortage, appointment decisions are still clouded by race, ethnicity and political affiliation.
The South African public service imports doctors, and now civil engineers, from Cuba — yet there are qualified local skills that are unemployed or underemployed. Often a white civil engineer or doctor will be bypassed for appointment, leaving a critical vacancy open and undermining delivery of public services to ordinary citizens.
The public service is overpopulated by people with general skills — who are often political and patronage appointees.
A more holistic reform strategy to increase the performance of the public service would include several crucial pillars.
Executive pay should be cut. The salaries of elected representatives in the cabinet, parliament, provincial legislatures and municipalities should be reduced. The cabinet should be reduced.
The correct right-sizing of the public service is crucial. Public sector right-sizing reforms in the past often cut the most competent employees, who are often not politically well connected, and left the untouchable politically connected employees, who are the least competent. This means right-sizing efforts increase inefficiency. Incompetence, ironically, increases as consultants inevitably have to be hired, and in some cases competent employees who had been retrenched are called back.
Merit-based appointments, rather than cadre deployment, are critical. Genuinely tackling corruption is essential. Greater accountability of employees — whatever their status in the ANC or Cosatu — is crucial to cutting costs and eliminating incompetence, waste and corruption.
• Gumede is associate professor in the Wits University school of governance and author of 'Restless Nation: Making Sense of Troubled Times' (Tafelberg)
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