Financial relief for teachers, health workers

The public labour sector, in particular education and health, were the biggest winners in Wednesday's budget speech as finance minister Enoch Godongwana allocated billions of rand to address wage increases. 

Delivering his budget speech in parliament, Godongwana allocated R25.7bn and R11.6bn to the education and health sectors respectively, to accommodate the wage agreement increases to both sectors – a move that will bring financial relief to teachers and health workers in the public sector.  

Godongwana said at the time of the 2023 medium-term budget policy statement when revenue collection had performed much worse than anticipated, departments had to reprioritise spending and absorb the wage increase within their baselines. 

“These measures were taken to protect our fiscal integrity. Equally, critical programmes had to be protected. This is a practical expression of fiscal consolidation that supports delivery of core services and the social wage,” he said.

A year ago, disgruntled public service workers demonstrated at state buildings fighting for wage increases after the government implemented a unilateral increment of 3%.

“After butchering public servants in 2020/21 and 2021/22, in the current financial year of 2022/23 the employer still expects us to accept a pathetic 3% wage increase. Yet this is a financial year in which the cost of living skyrocketed as the inflation hit a 13-year record of 7.8% in July last year and remained above 7%,” said the National Education, Health and Allied Workers' Union (Nehawu) at the time. 

Sibongiseni Delihlazo, spokesperson for the Democratic Nursing Organisation of South Africa (Denosa) said they welcome the allocation with a pinch of salt. 

“This R11bn the minister is talking about is not new because it was part of the 2023 wage increase agreement but at the time there was no plan where the money would come from. As much as we welcome it, we just hope that this R11bn was not money meant for another service and then rechannelled to salaries. We still have lots of posts that aren’t being filled by government,” said Delihlazo. 

Basil Manuel from the National Professional Teachers' Organisation of South Africa (Naptosa) shared the same sentiments.  

"We have a two-year wage agreement  with government, so what Godongwana announced is part of last year's wage agreement. It is not anything we haven't bargained on. But nevertheless, we are happy that he followed through on his commitments."

In another win, Godongwana said progress has been made on the two-pot retirement system which splits contributions, with one-third going into a "savings component" and two-thirds going into a "retirement component". 

“From September 1 2024, the first cash withdrawals could be made from the savings pot. The two-pot system ensures that we strike a balance between preserving contributions to safeguard a better retirement for members while addressing the plight of the people to access some of their retirement funds to help ease their financial burdens in times of distress.”

The system was first proposed in August 2021 and had faced several delays. 

Matthew Parks of Cosatu said they were “pleased by progress we have made with parliament and Treasury to ensure the system comes into effect". 

“This will provide badly needed relief for millions of highly indebted workers. It is critical parliament conclude passing the two Bills enabling these reforms by April so the remaining processes can be attended to by the president, SARS and the pension funds,” he said. 

Parks, however, said Treasury treated the budget as “little more than a bean-counting exercise and failed to seize the moment to respond decisively to the myriad of challenges workers, society, the economy and the state are facing”.

“The reason we are in a crisis is because the economy is not growing and unemployment remains dangerously high. The growth in debt is a symptom not a cause of this. The solution is to stimulate the economy, reduce unemployment, provide relief to the poor, rebuild the state and tackle crime and corruption,” Parks said. 

Chabalalaj@sowetan.co.za