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Govt to cut allowances for civil servants

Government is set to cut allowances for its workforce in a cost-cutting move that is expected to see huge income losses for civil servants.

Our Staff

Earnings for most government workers are made up more of allowances than basic pay. The move is designed to create fiscal space for other capital expenditures.

Finance minister Patrick Chinamasa said last month that government would cut the wage bill by half, from 80 to 40% of national budget.

Among other measures, Chinamasa said government would stop carrying the burden of its employees’ pension contributions on its own. Government had taken the full responsibility of its workers’ pensions in February 2009 because of limited employee benefits.

“…the progressive review of remuneration levels across the Public Service, since 2009, warrants the re-introduction of employee pension contributions,” Chinamasa said.

He said the proposed re-introduction of employee pension contributions would constitute the initial tentative steps towards adopting a funded Public Service Pension Scheme which entailed that government and employees jointly contribute towards the funding of members’ future pensionable benefits.

The move comes as the central bank has also proposed fiscal and internal devaluation, terms literally meaning cutting down on employees’ financial benefits including allowances.

Fiscal devaluation is a combination of two measures: decrease in social contributions paid by employers and an increase in consumption tax.

The reduction in employers’ social contributions reduces the unit labour costs. If the latter are passed through into final prices, the improvement in price competitiveness would favour exports and reduce imports. Internal
devaluation looks at reducing the cost of doing business in an economy.

There are now fears that government will cut allowances received by the civil servants.

Civil servants get transport and housing allowances, among other benefits which augment their low salaries.

Analysts yesterday said they feared the private sector could also follow suit and cut down on allowances, especially those that were not negotiated by the employee and the employer. the High Court recently ruled that employees had no legal rights to such allowances.

Jacob rice, secretary for economic affairs in the Zimbabwe Federation of trade Unions told The Standard that it would be bad if companies were to scratch allowances as they augmented low salaries.

He said the Zimbabwean economy was in bad shape and businesses that were still operating were ever in debt. He applauded the Labour Amendment Bill, likening it to “a rubbish bin which contained rubbish, but in which someone had thrown some jewellery”.

“We are bending towards the demands of the Bretton Woods,” he said. Progressive teachers Union of Zimbabwe
secretary general Raymond Majongwe told The Standard that the move to cut allowances for civil servants would be a tragedy for the workers.

“Any tinkering or tampering with allowances will be wrong as government has failed to provide non-monetary incentives,”Majongwe said.

“If they [government] are honest, they are supposed to engage.”

Majongwe said government had started freezing or suspending salaries for minor offences under the guise that the affected teachers were not at their work stations when the head count was conducted.

Employers’ Confederation of Zimbabwe president Jack Murehwa said the biggest threat facing companies was low productivity coupled with a huge workforce.

“We are operating at low capacity with the same number of people that can work at high production. the moment we start operating at 100%, costs per unit will come down,” he said.

8 Responses to Govt to cut allowances for civil servants

  1. Charles Frizell August 23, 2015 at 10:54 am #

    Why are “educated” Zimbabweans unable to see that anti-gravity cannot exist in business, or anywhere else?

    With the economy being systematically destroyed, of course there are less jobs available. If a business is producing less, it needs (and can only afford) fewer people.

    Just about everyone (except those in control it would seem?) knows what needs to be done. You cannot run an economy by decree, you cannot rig an economy.

    The tragedy is that most of those running the country were indoctrinated long ago in Socialist-Communist ideology and think you CAN run an economy by decree, despite the obvious fact that you can’t.

    • Obert August 23, 2015 at 2:24 pm #

      So Civil Servants are on a non contributory pension scheme?Madness.

  2. Emmanuel August 23, 2015 at 12:10 pm #

    What I find completely incomprehensible is continuation with such a large cabinet, complete with 2 vice presidents and more than 400 legislators in a country with, not only a tiny population, but one of the poorest economies in the world. Surely, cutting government expenditure should start here?

    • Timothy Nanda August 24, 2015 at 6:19 am #

      Well said…Mugabe should reduce his foreign trips, reduce the number of people who travel with him, reduce the T and S too. Government should stop buying those top of the range vehicles. The private sector should follow suit; the remuneration of executives should match revenues…included are municipalities and parastatals. We have executives entitling themselves to rich perks yet they are ineffective in their functions, example Tendai Mahachi. Mugabe and his government should address corruption forthwith; right people in the right positions, bringing to book even those involved in salarygate scandals. The target so far are the poor people already and it is wrong!!

  3. Pilsener August 23, 2015 at 1:02 pm #

    As it stands Zimbabwe has three VPs on its payroll.

  4. Layman August 23, 2015 at 9:05 pm #

    The gvt should wean the elite colleges like Peterhouse, Watershed, Mt Pleasant, Hillcrest and a lot more which can foot their staff salaries. Some mission stations should cater for their teachers in the same way they cater for their nurses and other staff. The same should apply to councils. They should cater for teachers at their schools in the same way they cater for their nurses at their clinics. Therefore all non-gvt schools should look after their staff and the gvt should then address the educational needs of those who may not afford the fees of private schools.

  5. orders nyoni August 25, 2015 at 11:28 am #

    The government has failed us by wanting the poor to pay for their good life styles. They buy luxurious cars for themselves spend money as if all was above normal, shameless leaders!!

  6. froclejudr August 29, 2015 at 10:09 am #

    my buddy’s ex-wife makes $88 /hr on the laptop . She has been laid off for 6 months but last month her pay was $12492 just working on the laptop for a few hours.

    try this web-site …….… http://www.22forbescash.com

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