Try capitalising civil service benefits

11 May, 2018 - 00:05 0 Views

eBusiness Weekly

Government is coming under increasing pressure from civil servants for pay rises, part of that crisis of expectations that many have discussed coupled with the tactical planning, which any public sector labour leader can figure out, that a good time to seek advantage is shortly before a general election.

Several factors have to be recognised.

First, few would disagree that Zimbabwe pays skilled professionals with graduate or near graduate levels of tertiary education very badly. People like teachers and nurses should be earning a lot more and even junior doctors, an exploited class in every country as they are still technically getting the practical experience they need before full registration, are unfairly treated.

The second fact is that the pay for all these people must come out of taxes. You cannot borrow money to pay salaries and allowances, even if you could find someone stupid enough to lend the cash for such purposes. You can borrow for revenue enhancing capital projects, but not for running costs.

The third fact is that Zimbabweans do not pay enough tax to pay the numbers involved what they deserve, leaving the choice between underpaying them or reducing the numbers. A lot of people say the civil service is grossly overstaffed. Well there are some numbers in some areas that can be trimmed, but we need to remember that a super majority of civil servants are teachers, health workers, agricultural research and extension staff, and those men and women who man registration ad passport offices.

These are groups that just about everyone agrees should not be cut in numbers, and unfortunately there are not that many inessential staff in the rest of the service.  Even in the uniformed services there has been a trend to allow retirement attrition to reduce numbers in the Defence Forces while keeping the ratio of police to public at a minimum level as population grows, meaning police numbers do inch up.

Added to all these pressures are of course the “experts” who want the percentage of tax income spent on salaries to be slashed so there is more money for “services”, without asking what that service actually is.

As we have said before, for something like an education ministry the main service is lining up a trained teacher for every 30-40 children, so obviously we can have a higher percentage of education budgets spent on salaries than say for a ministry where the main service is buying things.

Until the economy, and therefore the amount the State can raise in taxes, grows faster than population growth the Government’s room to manoeuvre when it comes to State pay is very limited.

But we do not have to accept that we do nothing.

It is possible to capitalise some of the benefits we can give civil servants which increase their effective standard of living without slashing numbers of essential staff or destroying the economy.

One obvious starting point is housing, something that has been done half-heartedly. If every health worker, every teacher, had a decent modest house or flat with rent just covering maintenance, lights and water then this would have the same effect, in a large number of cases, of almost doubling pay.

Yes, the health ministry has over the decades been scraping a thin rind of budget to build flats for nurses and doctors. But there are still a lot without Government accommodation. Yes many rural schools have built teachers houses so they can attract staff, but again the numbers are well below demand. The ideal would be to give the entitlement to Government housing to all, and even if they wished to live in their private home they could rent out the Government accommodation, under conditions, to gain the full benefit.

In fact a full benefit package could include salary, allowances, housing and the right to buy a stand at the development cost price, so that a career civil servant would have their employment housing while working and their own family home on retirement.

The advantage of capitalising some benefits is that not everything has to be at once for all staff. But we would have to commit ourselves to moving somewhat faster than we have been moving over the last couple of decades, and have a proper policy in place, differentiating between housing that can be sold to civil servants and housing that must remain in State ownership. Such a policy might well have to be approved by Parliament, preferably with support from both sides so there is guaranteed consistency regardless of who wins the next election.

The other advantage is that some of the funds could be borrowed. This could be done without raising taxes if the maintenance charge each month for occupants also included the interest on the borrowed money, remembering that interest rates for a Government’s sovereign debt, especially one backed by fixed assets, is just about the lowest obtainable.

For some groups the modest Zimbabwean resources could be eked out with aid money. Those interested in assisting improvements in health might well understand that decent doctors and SRNs might well be prepared to accept postings in more remote rural areas if the post came with a decent house and pleasant working environment.

There may well be a lot of other solutions. Let us use our imagination. But we all have to start from the point that many civil servants deserve more pay, that the bulk of civil servants are in essential posts and so cannot be dumped, and that tax income is limited. Generally we need to face the problems and do something effective, not just sit around and wring our hands.

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