PRESIDENT Emmerson Mnangagwa and senior government officials are set to get a five percent pay cut as government embarks on austerity measures, focused on enhancing the health of the country’s public finances.
Delivering the 2019 Budget in the National Assembly this afternoon Finance Minister Mthuli Ncube said the 2019 National Budget proposes to institute wage bill containment measures which will yield annual financial savings to be channelled to critical areas of health and education, as well as infrastructure.
“Effective 1 January 2019, government is cutting remuneration by 5 percent for Principal Directors’ grades and their equivalents up to ministers and the presidium,”Ncube said.
“This is also extended to designated posts in State Owned Enterprises (CEOs, Executive Directors and equivalent grades) including constitutional commissions and grant aided institutions. A standardisation/alignment exercise in remuneration including benefits for Constitutional Commissions will also be undertaken to remove inequality and disparities.
Ncube said implementation of the above measures will see the employment costs inclusive of pension benefits, medical insurance and NSSA contributions reducing from 89.6 percent of total revenues in 2017 to 60.6 percent in 2021.
The budget also proposed a revision in the payment of the 13th Cheque which is computed as the sum of Basic Salary, Housing and Transport allowances.
“For 2017, the Budget incurred expenditure of US$174.6 million. However, as we embark on austerity measures, focusing on enhancing the health of our public finances, the Budget proposes a 13th Cheque that is computed based on Basic Salary only [excluding housing and transport allowances]. This proposal will yield financial savings of around US$75 million per annum.”
Efforts for expenditure containment come against a background of a structural imbalance in the composition of budget expenditure, wherein the Wage Bill accounts for a disproportionate share.
“The Budget, therefore, emphasizes on living within means by instilling fiscal discipline and rationalising expenditures in order to create additional financial capacity for funding developmental expenditures and enhancing delivery of public services,” Ncube said.