Govt cuts bonuses, salaries

37
1951

PRESIDENT Robert Mugabe’s cash-strapped government has proposed a raft of cost-cutting measures including cancelling civil servants’ 2016 bonus payments, taxing their allowances and cutting salaries for senior government officials, including ministers, to reduce its unsustainable wage bill.

XOLISANI NCUBE

Patrick-Chinamasa-presenting-the-2015-budget

Finance minister Patrick Chinamasa (pictured) made the revelations as he presented his mid-term budget review statement, where he indicated that government’s wage bill was now consuming 96,8% of total revenue.

“The wage bill remains a major component of high expenditures, with employment costs taking 96,8% of the total budget. The wage bill is at the centre of the fiscal deficits and, hence, overall macroeconomic instability,” he said, warning of looming job cuts in the public service.

Government has in the past months been struggling to fund its wage bill, forcing it to stagger salary dates for civil servants and pensioners, sometimes running into the next month.

“The respective adopted expenditure rationalisation measures are meant to reinforce the supply side measures proposed in this Mid-Year Fiscal Policy Review, sustain the wage bill, while creating scope for financing drought, debt service and other capital and operations programmes,” he said.

“I propose a reduction of salaries and allowances by 5 to 20% starting with deputy directors to ministers, effective October 2016.

“Foregoing the 2016 and 2017 bonus, this proposal will translate to savings of around $180 million per annum, which will be channelled to essential expenditures relating to the drought.”

This is the second time Chinamasa has proposed cancelling bonus payments for civil servants.

Last year, he tried it, but his decision was reversed by President Robert Mugabe during the 2015 Independence Day celebrations, where he insinuated that bonuses were a right.

The Finance minister also proposed to tax civil servants’ allowances with effect from next month using a progressive tax structure.

“Taxation of civil servants’ allowances will also bring equity, as similar allowances and benefits earned in the private sector are currently taxed. This is subject to engagement with respective unions,” he said.

In his budget review statement, which the opposition dismissed as a joke, Chinamasa admitted that the government has failed to meet its revenue targets due to depressed economic activity.

Chinamasa also proposed a review of travel arrangements for all the government officials including ministers, parliamentarians, independent commissions and authorities and parastatal bosses.

“I propose reviewing and enforcing compliance with official foreign business travel per diem rates, taking account of global cost of living development,” he said.

Chinamasa said the government should consider cutting its workforce from 298 000 to 273 000 by December 2017, so as to reduce the wage bill to manageable levels of 75% of the total budget.

“The target to reduce employment numbers from the current 298 000 to 273 000 by end of 2017 will yield annual savings of $155 million, which would go towards supporting various development projects and programmes,” he said.

Under the proposed new dispensation, deputy ministers and permanent secretaries would be entitled to only one official vehicle, while directors and equivalent grades will migrate towards a broader vehicle loan scheme instead of condition of service vehicle.

Review of condition of service vehicles will also apply to independent commissions, statutory entities, and State enterprises’ officials.

Chinamasa also proposed to reduce the number of embassies and consulates, in consultation with the Ministry of Foreign Affairs, review benefits for diplomatic staff, including support for educational expenses, rental ceilings and travel support for their families.

Former Finance minister and opposition PDP leader, Tendai Biti yesterday trashed Chinamasa’s budget review statement, describing it as a joke.

“This is a serious admission that they can’t pay salaries. Surely Chinamasa, do the right thing and fall on your sword. In other words, we are living way beyond our means. Fiscal disequilibrium is at the centre of the crisis,” he said.

MDC-T secretary for economic affairs, Tapiwa Mashakada, said by year end, government would have collapsed, as it has no clue how to increase its revenue base.

“This is total disaster, we are headed nowhere and soon it will be a shutdown. The budget deficit is growing and nothing is being done to stop that. Really, this is the end of the regime,” he said.

37 COMMENTS

  1. I looked at the bank draft which had said $7437 , I be certain …that…my friend could realie earning money in their spare time on-line. . there neighbor has done this for less than twelve months and resently paid the morgage on their mini mansion and got a great new Lancia . have a peek here….

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  2. Kikikikiki varume vakuru ngavarege kudaro. Last year wage bill was 89%. I think wage bill is not the problem but revenue is the problem. Wrong button Mr Chinamasa. Wage bill is declining teachers are not being replaced what is causing wage bill % to increase is declining revenue muchatipedza tese makaita zvekutamba

  3. Cut President foreign trips to 2 per year.
    Reduce cabinet from 28ministries to 12.
    Reduce legislatures from 220mps to the previous 120.
    Abolish the senate. Its not necessary.
    Replace Mugabe. He is now a medical liability.

  4. The Minister is correct, his government has failed to run this country hence a creating a total mess, its still a miracle why the country hasn’t shut down. So those policemen who are beating up innocent souls are getting a salary cut for all that hard work and no bonus.

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  7. Wrong person in the office.

    Does this Nigga knows mechanics of economics?

    Its not the wage bill Blaz, its the revenue which is keeping on dwindling becoz of funny policies u put.

  8. WE ALWAYS HEAR OF THE:
    1.Govt to trim cervil servants
    2.Govt to cut salaries
    3.Govt to suspend bonuses
    4.Govt to………………………
    5.Govt to do what what
    6.Govt to do so so by end of 2017 so that will yield annual savings of $155 million

    BUT WE DONT HEAR ANYTHING LIKE the important following missing statements:
    1.Govt to prepare package for 25 000 jobs cut
    1.Govt to cut mobile phone bill of $200 000. to $20 a month
    2.Govt to stop procure expensive Jeeps, V8 Rover’s & Cruisers, Mercedes’ and all manner of top of the range cars.
    3.Govt to fight corruption by end of 2017 so that will yield annual savings of $155 million

    • Ten thousand teachers, all party addicts, are being recruited right now to help reduce the government wage bill. How? The same goes for every other ministry and, the nation is supposed to be stupid.

  9. Cry the beloved employees!! With a salary cut, how will you be able to pay back loans, feed the family, pay for school fees etc!! And with the impending job cuts mmmmmmm, pakaipa!! Ibatai-batai chaiyo.

  10. ayaz brace for more social unrest you want to tax ma allowances saka ane transpoprt allowance ye waya anosara ane marii. yOU THINK CUTTING COSTS IS THE SOLUTION. NO KILLING CORRUPTION IS THE ONLY WAY FORWARD. PLIZ PLIZ PLIZ PLIZ PLIZ PLIZ MUGABE MUST GO

  11. This is nonsense to say the least. The government promised to create 2,2 million jobs but now they are saying the opposite. The minister of Finance has to be realistic-the President has to cut his travels, the cabinet must be trimmed to less than 15 ministers, do away with deputy ministers, abolish senate, stop buying executive cars for ministers, get rid of lots of directors in various ministries who are duplicating roles. then of course mr Chinamasa should resign and number 1 should also resign.

  12. 13 000 Zanu Youth officers on tax payers payroll, is that fair and what for. Doing away with those will be a good starting point

  13. Porisi Ofisa you are not spared kkkkk. Let’s see if u will still have the energy to land your buttock sticks on the fleshes of innocent citizens. Kwaaaaa kurova vanhu kunga unohora nedengu.

  14. Chinamasa when Biti was the minister of finance he was criticizing pretending as if he is the guru in financial management. You can rig elections but not with finance.
    -reduce Mugabe trips to Singapore get your treatment in Africa.
    -reduce police officers most of them are just standing on the roads doing corrupt activities.
    -remove the indigenization ministry replace it with development ministry.
    -recall commercial farmers back and resettle people in rural areas.
    -create good investment policies so that the mining industry will be vibrant again.
    -we need only 10ministries not this joke of higher and lower education ministry
    After all you are now on your way out Chinamasa and company zvaramba izvi.

  15. Too little too late Chinamasa. Your administration lacks common sense and leadership qualities to take us out of this man-made mess. For decades you’ve been in denial and like they say “It’s the economy, stupid! Not possible to rig. Get real and admit that you have all failed dismally.

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  17. There is is too many of us Ghost Workers on the Government payroll. Get rid of us and trim the wage bill by almost 50 percent! Alternatively………..just leave us alone as we enrich some peoples pockets!
    Hahahahahahaha

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