Govt faces wage bill problem as public servants snub early retirement packages

EWN has established that only 4,600 people applied for the early retirement package, but it’s possible that only a portion of those applicants might ultimately qualify for the deal.

Public Service and Administration Minister Senzo Mchunu. Picture: @thedpsa/Twitter

JOHANNESBURG - Eyewitness News can reveal that of the 30,000 public servants who were expected to take up the offer of early retirement in the public service offer, only 4,600 employees have shown any interest.

Until September last year, employees aged 55 to 59 were offered the chance to take early retirement packages, without penalties, as part of Finance Minister Tito Mboweni's plan to cut down on government's civil service bill.

EWN has established that only 4,600 people applied for the early retirement package, but it’s possible that only a portion of those applicants might ultimately qualify for the deal.

Government hoped to save R12 billion a year through this early retirement programme.

The uptake failure could see Mboweni announce other alternatives when he delivers his Budget Speech on Wednesday as ratings agencies expect a plan to substantially reduce the bloated wage bill, which accounts for 35% of the consolidated budget.

The early retirement figures will form part of the agenda at Tuesday’s council meeting between labour unions and the Department for Public Service and Administration.

It’s understood that the meeting is also meant to set the tone for wage negotiations this winter amid concerns that government may offer workers a 0% wage increase.

State-owned institutions, which have gone this route in light of the difficult economic environment, face strikes and the wrath of workers until more suitable arrangements are made.