COSATU statement on BUSA’s unsolicited and self-serving views on public sector remuneration

The Congress of South African Trade Unions has noted the problematic statement by Business Unity South Africa (BUSA) on the public sector remuneration.  In their statement BUSA are arguing that there is a need to curb public sector remuneration because according to their “research”, it is getting out of hand and needs to be reined in.

The Federation takes exception to this hypocritical and self-serving statement by BUSA. The issue of the public service wage negotiations belongs at the Public Service Coordinating Bargaining Council and not at Nedlac, where BUSA is recognised as a social partner. This issue will be resolved by public service trade unions and government as an employer, this statement is about undermining that PSCBC process and collective bargaining in general.

 This meddling by BUSA is not surprising though because in response to this health and economic crisis, big capital is manoeuvring to strengthen the exploitative system of capitalism, to acquire new impetus and use the crisis to gain more profits for themselves and create more wealth concentration as a result. All of this is done at the expense of workers through the intensification of exploitation. We have already seen a rise in unemployment, a push for the privatisation of public enterprises and a serious attack on collective bargaining and labour rights.

This so called “research” reflects the dogmatic and narrow ideological fixation with the public service wage bill by the neoliberal hardliners inside and outside of government.

In their report, BUSA attempts to compare  the average remuneration in the public sector to the rest of the economy, despite knowing full well that the average public-sector remuneration is higher in part because a larger proportion of public servants have tertiary qualifications.

It is therefore meaningless and mischievous to compare completely different types of jobs in terms of pay between the public and private sector. No farm or retail workers are employed in the public sector for example; 30% of the public service workers are teachers, almost 10% are nurses, 2% are doctors.  These are very different scales as compared to the private sector.

In terms of government’s own definition, consolidated government spending comprises total expenditure by national and provincial government, social security funds and selected public entities, including transfers to municipalities or other entities. Therefore, consolidated government spending on remuneration is all encompassing well beyond the wage dispensation determined at the Public Service Coordinating Bargaining Council (PSCBC).

BUSA like Treasury is playing fast and loose with the facts, the fact is that the wage bill has been stable at 35% of the budget since 2009.  The current wage agreement is the lowest in a decade.  The public service head count per population has barely grown since 1994 whilst our population has nearly doubled.

But both the National Treasury and BUSA are narrowly and almost exclusively focussed on the wage bill pertaining to the PSCBC.

It is telling that BUSA says nothing about the billions that are looted by consultants at a municipal, departmental and SOE levels. These private sector consultants are taking billions a year, out of the fiscus, without contributing to the efficiency of government institutions.

They also say nothing about the fact corruption is taking 10% out of the fiscus, according to the Auditor General. This is a big issue because corruption in South Africa is driven by very sophisticated operations and networks of patronage and abuse of power by both public and private sector officials.

The real cause of our fiscal crisis is the pandemic of corruption and wasteful expenditure, the decapacitation of SARS allowing billions in taxes and customs duties to be lost, the running into the ground of the SOEs requiring billions to be spent in bail outs, and declining tax revenues due to a stagnant economy with rising levels of company closures and retrenchments.  This is what needs to be addressed if the fiscal crises are to be solved.

Corruption is, in the main, a product of the unholy intersection between public officials and private sector interests or individuals with vested interests in making personal or private gains from influencing how certain transactions, goods and services are to be delivered and for whose benefit.

We challenge BUSA to conduct a survey on the impact that illicit Financial Outflows are having on the economy and the poor people of this country.According to the State Security Agency, nearly R80 billion passes through the country’s points of entry illegally every year, putting South Africa as one of the countries on the continent with high illicit financial movements. The South African economy has been affected negatively by decades of transfer pricing and other forms of illegal capital flight by private sector companies.

A World Bank study on competition in SA noted, for instance, that in the case of four cartels in maize, wheat, poultry and pharmaceuticals – products which make up 15.6% of the consumption basket of the poorest 10% – conservative estimates indicate that around 200,000 people stood to be lifted above the poverty line by tackling cartel overcharges.

BUSA does not seem to be interested in all of this but it wants workers to scapegoated again, instead of dealing with the systemic problems killing this economy. The BUSA statement is just another reminder that the elite of his country believes in their own virtue and they have bottomless contempt for workers.

 Paying skilled public servants like nurses, doctors and teachers will simply see them being poached by wealthy countries which value skilled workers of they will start moonlighting in the private sector.

If business is interested in addressing problems in wages, then it should clean its own house first.  The wage gap in the public sector is 13 to 1; in the private sector it is 33 to 1.

Whilst the country is battling with unemployment, the banking sector sought fit to retrench on average 2000 lowly paid banking workers each over the past few years.  This was whilst the banks were sitting on rising levels of profit.  The CEOs of the big five (5) banks are each paid more than R150 000 a day, yet they have no qualms about paying entry level bank workers R300 a day.

The mining industry built upon the deaths and maiming of thousands of workers has no problems paying CEOs in the hundreds of millions, whilst shedding half a million jobs over the past two (2) decades.

The retail sector is the epicentre of outsourcing with the brutally exploitative labour brokers running amok. The same CEOs of the major retailers who earn on average R350 000 every single day continue to deny workers the minimum wage and their labour rights. Why is BUSA silent on these naked forms of modern slavery?

 If BUSA is genuine, they would have tabled proposals on how they will stop retrenchments, create jobs, reduce the wage gap, and inject stimulus into the economy.

Issued by COSATU

 Sizwe Pamla (Cosatu National Spokesperson)
Tel: 011 339 4911
Fax: 011 339 5080