Cut public sector wages
It is patently unjust that government workers who are less efficient, less productive and add less value to society than their private sector counterparts are being paid almost double.
South Africa has one of the most highly paid governments in the world; all the while our debt skyrockets, and the economy continues to crumble. Rather than trying to implement grandiose schemes like National Health Insurance (NHI), or proposing raising VAT or charging a wealth tax, the government needs to cut the bloat. That means lowering civil service salaries and laying off wasteful and incompetent employees.
The government wage bill accounts for the majority of state’s expenditure, and over the last few decades has mostly been funded by mounting debt. Since 2008/2009, gross loan debt has increased from R627 billion (26% of GDP) to R5.21 trillion (73.9% of GDP). This is almost entirely thanks to an overpaid civil service, which received overly generous increases, especially during the Zuma presidency. Likely as a method to pay for the loyalty of public sector workers.
The government did not have the money to pay for these increases, which has resulted in our skyrocketing debt and the current fiscal crisis.
It is common knowledge that South African government workers are overpaid, underworked and grossly incompetent. There is a lot that needs to be done in South Africa, but despite a bloated and overpaid civil service, none of it is accomplished. It is clear that the current bulk of public sector staff are lazy and incompetent.
Dawie Roodt, lead economist of the Efficient Group, proposes halving the government wage bill by roughly half, bringing us closer in line with other governments that don’t spend near to the 12 – 13% of GDP that we spend. In fact, according to political analyst Moeletsi Mbeki, South Africa has the highest paid civil service in the world. The Centre for Risk Analysis places South Africa as third most highly paid.
The government wage bill has ballooned from R55 billion in 1995, to R724 billion as of 2023/2024. Yet, the number of public servants has only grown from 1.27 million to 1.28 million. So, while capacity has relatively stayed the same, despite a possible need for more civil servants due to an increasing population, the cost has gone up.
This is purely due to the rise in government salaries. In 1995, the average government annual salary was R43,150. In 2024, it was R566,241 per a year. Even adjusted for inflation, this is a ludicrously high increase. Adjusted for inflation alone, the 2024 government salary should be sitting around R341,508, which is more in line with the average private sector annual salary of R303,648.
Since 1995, government salaries have increased by 1213%. Well above the cumulative inflation of 691.5% (which is a scary number in itself). This shows a real salary growth above inflation of 65.8%.
It is patently unjust that government workers who are less efficient, less productive and add less value to society than their private sector counterparts are being paid almost double. Private sector jobs must perform well, or face bankruptcy or retrenchment, while the public sector will keep bailing out failing parastatals and keep ineffective and corrupt civil servants on the payroll in perpetuity.
There is no just reason why government salaries have increased so much, while their effectiveness has gone down. In fact, one could likely draw a direct correlation between the rise in government salaries with its mountain inefficiency and apathy.
Private sector jobs produce sustainable wealth for society. They provide a job that generates wealth and doesn’t sap money from already crushed taxpayers. In fact, every private sector job creates an additional taxpayer. And while government workers technically pay tax, they are being paid by tax in the first place. All that charging tax from a government worker achieves is creating an unnecessary administrative cost and, in essence, charging taxpayers tax in order to pay someone else’s tax.
It is imperative that the government give the vast majority of government workers a choice. Accept a lower salary that is in line with the average annual salary of the country and linked to the value they produce, or be laid off.
On top of this, government function that can be privatised should be. Parastatals like Eskom, Transnet and SABC should be funded directly by consumers; no tax money should touch their budgets. De-bunding and selling these state companies will save the taxpayer billions, while also possibly forcing these institutions to perform better now that they face private competition.
Most importantly, the tremendously wasteful hierarchy of ministers and departments chockful of deputies, consultants and a whole host of hangers-on must be cut down to only a handful of crucial ministries.
South Africa needs to focus on the fundamentals of creating a prosperous and safe society. This means focusing the budget on security, infrastructure, and providing certainty for businesses. Most cabinet positions could also be consolidated into single positions.
South Africa can get its spending under control. We just have to have the will to stand up against the bloat and make the right decisions to cut waste and corruption.
Nicholas Woode-Smith is a political analyst and the Managing Editor of the Rational Standard. He is a senior associate of the Free Market Foundation.
Asking the government to cut its salaries is like asking drug addicts to reduce their addiction. It won't happen unless done under duress by some external agency.