Tito Mboweni's speech: Performance bonuses out, early retirement in

Tito Mboweni's speech: Performance bonuses out, early retirement in

Finance Minister Tito Mboweni has brought in measures to help cut down on wage costs in the public sector. During his 2019 Budget Speech, Mboweni detailed how R27 billion will be trimmed off over the next three years.

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While this years Budget Speech, Tito Mboweni introduced his plans to cut wages in the public sector by as much as R27 billion over the course of the next three years,

This will be achieved by offering early retirement packages to around 30 000 public servants between the ages of 55 and 59.

Added to this, the Minister detailed how both national and provincial departments will phase out performance bonuses to civil servants within the next 4 years, cutting R2 billion per annum.

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READ ALSO: Eskom to receive R26bn in support over 3 years but conditions apply

According to TimesLIVE, this comes in response to the tough economic environment in which the spending for this financial year overreaches the revenue collection by R243 billion.

With public sector salaries standing at R585 billion a year, this was an obvious place to begin culling spending.

The Minister explained that allowing older employees to retire early would save the government R4.8 billion in this financial year, increasing to R8 billion by 2022:

"Government has decided to scale up early retirement without penalties. Where feasible, older employees will be allowed to retire early, with younger employees taking their place,"

Added to this, state employees will forfeit increases this year. Mboweni explained that:

"As a gesture of goodwill, members of parliament and provincial legislatures and executives at public entities will not be receiving a salary increase this financial year,"

Briefly.co.za reported earlier that the Minister announced a financial support plan for Eskom which will see the state paying R27 billion a year to the embattled entity.

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Source: Briefly.co.za

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