$400M cushion allowance for civil servants

04 Apr, 2019 - 13:04 0 Views
$400M cushion allowance for civil servants Prof Ncube and Sekai Nzenza


Talent Gore, H-Metro Reporter

Government yesterday offered $400 million as the cost of living adjustment for civil servants.

The increment comes after President Mnangagwa awarded the workers a “cushioning allowance” of 22,7 percent each month for January, February and March to lessen the impact of recent increases in the prices of basic commodities.

Minister of Public Service and Social Welfare Dr Sekai Nzenza said the workers had agreed with the government that $400m will be given as an offer from the initial offer of $350m.

“Following announcement of the cushioning allowance which the President offered from January to March which was $63 million, the allowance was a once off payment and we also said that there was going to be a review on the cost of living adjustment which was going to come into effect by the 1st of April 2019.

Minister Ncube

“This cost of living adjustment is expected to be implemented with effect from the 1st of April 2019; this means that it is in effect and Government is committed to the living conditions of the civil servants,” she said.

Minister of Finance and Economic Development Professor Mthuli Ncube announced the cost of living adjustment for other civil servants.

He said the public service commission including the uniform forces had been allocated $281 million, the health services board had been allocated $56million, the Judicial Service Commission has been allocated $2,5 million and the Independent Commissions was allocated $2,6 million and Grant aided institutions have been allocated $56, 8 million.

“We continue to watch inflation and the cost of living and we will have an opportunity to present the interim budget and we use that moment in June just to take stock again and see whether we will still be in line with the cost of living adjustment.

“On the issue of medical aid Government is behind the payment; we are looking into the issue and we are currently seized with the issue and we will refer to the civil servants to see what kind of progress we are making on this issue,” said Minister Ncube.

Minister Ncube said they had been playing close attention to the price increase on the market.

“As treasury we have been watching the price increases and I want to stress out this to those in retail industry that it is not correct, it is actually bad economics to link price increases to the exchange rate.

“Price increases should be driven by consumption inflation, it’s about the consumption basket because when you earn your salary, the first thing you do is not to look for forex because forex is not cooking oil, it is not soap, but you go and buy soap so the consumption basket should drive thinking around price increase,” he said.

Public Service Commission chairperson Dr Vincent Hungwe said globally there is a move away from this fixation with salaries as the basis of rewarding employees and motivating them and a happier balance is being developed between monetary rewards and non-monetary.

“Moving from a system of public pension under the State Pension Act that was basically done on a pay as you go system, and a pay as you go system is that tackle you are the current employee of the Government.

“The person who actually retires the following day a day after you have been engaged by the Government actually is paying their pension on the basis of your income, in other words whatever you pay to Government in the form of statutory deductions actually go into the consolidative revenue fund in order to able to pay the pensions of the person who retires the day after you are engaged,” said Dr Hungwe.

“But what we are saying is let’s abandon that and come with an pension system that make it possible for whatever you are contributing as pensions complimented by Government finds itself into processes of wealth and asset creation.

“It is on the back of those assets depending on how effective your pension administrator that the capacity to meet the liability as of when it you retire is significantly enhanced, so that’s the system we are moving towards,” Dr Hungwe said.

He added: “But let us also not look at these pensions in purely monetary terms; this is why we want to complement them with non-monetary investment.

“On the part of Government that make it possible for the serving employee and the employee in retirement to have been facilitated to create well for themselves so that they can cushion themselves against the possibilities of vagaries of the economy.

“So we would want a situation where whilst you are serving you are given support to be able to access wealth, assets and make sure that those assets continue to work for you in service and retirement so when you have combination of those type of interventions you are better able to cushion your worker against the vagaries of the market.”

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