Government Remuneration
Government Remuneration
Government Remuneration
Staatskoerant
R E P U B L I C O F S O U T H A F R I CA
R E P U B L I E K VA N S U I D A F R I K A
Regulation Gazette No. 10177 Regulasiekoerant
February
Vol. 656 13 2020 No. 43019
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ISSN 1682-5843
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Contents
Gazette Page
No. No. No.
THE PRESIDENCY
NOTICE 90 OF 2020
90 Remuneration of Public Office-Bearers Act, 1997 (Commission Act): Annual Remuneration Recommendations for 2019/2020 43019
1. In terms of sections 8(4) and (5) of the Independent Commission for the Remuneration of Public
Office- Bearers Act, 1997 (Commission Act), the Independent Commission for the Remuneration of
Public Office Bearers (Commission) is mandated to make annual recommendations relating to the
salaries and/or the upper limits of the salaries, allowances, benefits, and the resources required by
some public office bearers (POBs) to enable them to perform their respective duties effectively.
4. During the period leading to the finalization of these recommendations the Commission consulted
with the Minister of Finance, Minister of Cogta, Minister of Justice and Correctional Services, the
Chief Justice and Lower Courts Remuneration Committee.
The Commission considered the submissions received from various stakeholders relating to the
review of salaries, allowances and benefits of POBs. It is important to note that not all issues
raised by the stakeholders can be addressed through the annual recommendations. Some of the
issues raised will be addressed by the major remuneration reviews. The Commission is currently
assessing the reports from the service providers and preparing its own recommendations.
6. Section 8(6) of the Commission Act requires that the Commission take into account the following
factors:
The role, status, duties, functions and responsibilities of the POBs concerned
7 The Commission considered the role, status, duties, functions and responsibilities of the POB's
and concluded that it was not possible to fully address the required changes in the annual
recommendations but that these would instead be addressed through the respective remuneration
reviews.
Affordability
8. The Minister of Finance (Minister), in the Medium Term Budget Policy Statement of
24 October 2018, indicated that government's compensation bill accounts for about 35 per cent of
consolidated expenditure, and as such is a major driver in spending pressures. The Minister
further emphasized that the public service wage bill constitutes the largest share of government
expenditure by economic classification. The 2018 public service wage agreement will result in
expenditure exceeding the previously budgeted baseline expenditure by approximately R30,2
billion through 2020/21 with no additional funding available over the 2019 Medium Term
Expenditure Framework (MTEF) period.
9. He also indicated that the deteriorating economic performance and revenue shortfalls have
contributed to some slippage in fiscal projections.
10. The Minister, in the Budget Speech of 20 February 2019, again indicated that the public wage bill
was unsustainable and emphasized that the national and provincial budgets will be reduced by
R27 billion over the next three years. To reduce the expenditure on remuneration, he indicated
that members of Parliament, provincial legislatures and executives at public entities will not receive
a salary increase during 2019/2020 financial year.
11 The Minister of Public Service and Administration determined a 5,2% cost -of- living adjustment for
SMS (level 13 to 16) members employed in terms of Public Service Act, 1994, effective 01 April
2019.
12. A three -year wage agreement was signed in June 2018. The wage adjustments for 2019/2020 are
aligned to CPI as follows: employees on salary levels 01 to 07 received increases of 6,3 %, salary
levels 8 to 10 received 5,8% and employees on salary levels 11 to 2 received an increase of
5,3 %.
Inflation
13. In order to determine an appropriate level of inflation to be used as a starting point on which to
consider any cost of living adjustments the Commission considered the following:
14. The Monetary Policy Committee (MPC) statement of 1 January 2019 indicated that core inflation
was forecast to average 5,0% in 2019 (down from the previous forecast of 5,3 %), 5,1% in 2020
(down from the previous forecast of 5,5 %) and 4,8% in 2021.
15. The MPC has taken note of the improved inflation outlook, especially the mid -term. Over the
forecast period, inflation is expected to remain within the SARB's inflation target range (3% to 6 %).
16. According to the MPC statement of 29 March 2019, the SARB expects GDP growth for 2019 to
average 1,3% (down from 1,7% in January 2019). The forecast for 2020 is 1,8% (down from
2,0 %), rising to 2,0% for 2021 (down from 2,2 %). The reduced GDP growth rates result from, inter
alia, the bigger than expected slowdown in the global economy, declines in South African business
confidence, potential supply side disruptions due to load shedding, increasing rates of
unemployment and growing pressure on household disposable income.
7. The average forecasts for South Africa's big banks indicate forecast inflation to average 4,9% in
2019 while National Treasury had forecast inflation to average 5,2% in 2019.
18. As from end of June, the average official inflation rate (year -on -year) was 4,3 %. The CPI was 4,3%
in August 2019, up from 4,0% in July 2019 and increased by 0,3% month -on -month in August
2019.
19. According to the BER Economic Prospects report (2019 Q1), the previous editions of Economic
Prospects highlighted the weak performance of the SA economy in recent years and a continuous
decline in real GDP growth since 2011. As a result, the real GDP growth forecast for 2019 was
revised down to 1,3% from 1,5% previously forecast. Growth is however still expected to
accelerate towards 2% during 2020.
20. The consumer inflation is expected to average at 5,1% in 2019, down from 5,6% projected
previously. For 2020, the outlook is largely unchanged at 5,4 %.
21. While there may be a motivation for the fact that inflation affects individuals in different ways,
Headline Inflation as measured by the change in the Consumer Price Index remains a sensible
measure on which to base cost of living adjustments.
22. Year -on -year Headline Inflation (change in CPI) from January 2019 to April 2019 has averaged at
4,3 %.
23. Taking into account both historic and inflation forecast would indicate an appropriate cost of living
adjustment would range between 4,3% and 5,0 %.
24 Below graph indicates average Level of Settlement (LOS) against Average Consumer Price Index
(CPI) from 2005 to 2019: ^
2005 2006 2007 2008 j 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
CPI 3.4 4.7 7.1 11.5 I 7.1 4.3 5 6 5.9 6.1 4.6 6.5 6.3 4.1 4.2
25. The average level of wage settlement in the private sector was 7,1% compared with 7,4% in the
first quarter of 2018 and the overall average of 7,2% in 2018.
According to Andrew Levy the CPI moved to 4,5% in March 2019 compared with 3,8% in March
2018 and the overall average of 4,6% in 2018.
Available resources
27. The Minister indicated that the deteriorating economic performance and revenue shortfalls have
contributed to slippage in fiscal projections. The continued decline in the financial condition of
some state -owned companies has also lead to requests for additional support from the fiscus.
28. To ensure the expenditure ceiling remains intact and to support policy priorities, baselines are to
be reprioritized by a total of R32,4 billion over the next three years.
1 Andrew Levy and Associates is the county's leading research services and provides the Wage Settlement Survey reports on wage
agreements and settlement levels, as well as the Industrial Action Monitor.
29. The Minister emphasized that in 2016, government introduced legally binding compensation
ceilings for national departments. These ceilings remained unchanged over the MTEF period
ahead, with departments expected to absorb any shortfall within their current allocations.
30. The table below illustrates the overall sustainability of the entire public service wage excluding
POBs, as published by National Treasury:
Table 1
R thousand 2018/19 2019/20
2020/21 2021/22
COE Ceiling 525 460 155 566 083 004 606 669 048 646 646 707
Projected cost 523 887 869 564 582 363 606 850 882 651 686 170
31. The following table sets out National Treasury's previous CPI statistics relative to the
Commission's recommendations and the President's determinations:
Table 2
Year National Commission's Recommendations President's
Treasury CPI Determinations
Executive and Deputy Ministers 0% 0%
National Parliament
Provincial Executive and Legislature
Judges
Executive Mayor to Whip
6.4% King /Queen to Full -time Deputy
Chairperson of PHTL
Municipal Councillor 4% 4%
Magistrates 6% 6%
Full -time Member of NHTL to Headmen
/ Headwomen, and sitting allowances of
all members of NHTL and PHIL
National Executive and Deputy Ministers 4% 4%
Speaker / the Chairperson of NCOP to
House Chairperson
Provincial Executive and the Speaker of
the Provincial Legislature
2017/2018 5.3% All Judges
Chief Whip: Majority Party to Member: 4.5% 4.5%
National Assembly / Permanent
Delegate: NCOP
Deputy Speaker to Member of Provincial
Legislature
32. The principle of anchoring the salaries of the three arms of the state (Deputy President, Speaker of National Assembly /Chairperson of
NCOP and Chief Justice) has been maintained since the major remuneration review of 2008. The President's determination for the year
2018/2019 has to some extent distorted the previous alignment, as consequence, the Chief Justice is earning a higher salary than the
other two arms of the state.
33. The Commission has further noted the fact that the National Assembly has since approved the President's salary increment in March
2016 for the financial year 2016/2017. This has effect on the Commission's future remuneration recommendations regarding the
President's remuneration and the salary gap between the POBs anchor positions. The National Parliament has not taken any resolution
regarding the President's salary for the financial years 2017/18 and 2018/19.
Table 3
2016/17 2017/18 2018/19
President 2 874 851 2 874 851 2 989 845 Pending 3 109 439 Pending
Deputy President /
Speaker of NA / 2 716 798 2 716 798 2 825 470 2 825 470 2 938 488 2 825 470
NCOP Chairperson
Chief Justice 2 716 798 2 716 798 2 825 470 2 825 470 2 938 488 2 896 107
The % difference between the salary of the President and the Chief Justice
GOVERNMENT GAZETTE, 13 FEBRUARY 2020
7
STAATSKOERANT, 13 FEBRUARIE 2020 No. 43019 11
34. Historically, the Commission has recommended a differentiated percentage increase between the
higher and lower earning POBs in order to address disproportionate salary gaps and to advance
those earning at the lower end of the scale.
35. The Commission has also considered the fiscal position of the State, demonstrated in the previous
financial year i.e. 2018/2019, the impact of POBs' salary increments on the fiscus and the general
economic status of the country.
36. The Commission is mindful of the view expressed and the pronouncement by the Minister of
Finance that members of the Executive and Legislative arm will not receive salary adjustment
during the financial year under review. The Commission finds it regrettable that the Minister made
such a pronouncement without engaging it. In terms of the applicable legislation, it is the
Commission's exclusive mandate to make recommendations on the salaries, allowances and
benefits of POBs.
37. Although the Minister in his afore -mentioned speech had stated that there will be no increment in
the salary of the above POBs, the Commission is of the view that a lower percentage should be
given to those POBs which is below inflation rate. This is so because of the fact that those highest
earning echelons are not as adversely impacted by inflation as the lower echelons are.
38. However, the Commission has always taken a conservative stance when it comes to the salaries
of POBs. The Commission's recommendations over the past four financial years for higher earners
clearly indicates a below inflation increase. The table below illustrates the above point:
Table 4
Year Forecast CPI Recommendations
2016/2017 6.4% 0%
4%
6%
2017/2018 5.3% 4%
4.5%
5%
6%
8%
2018/2019 5.3% 4%
39. Noting the economic situation in the country and the Commission's review of remuneration of
POBs, the Commission is of the view that the salaries of the highest income earners amongst the
POBs should be adjusted below inflation for this financial year. This affects POBs earning
R 1 500 000 and above.
40. After considering the relevant legislation and factors mentioned above, the Commission is
recommending the following:
3% adjustment to the remuneration of all categories of POBs earning above R1 500 000
4% for all categories earning less than R1 500 000.
PART 2
42. Section 219 (5) of the Constitution of the Republic of South Africa, Act 108 of 1996 (Constitution)
provides that the national legislation must establish frameworks for determining the salaries,
allowances and benefits of judges, the Public Protector, the Auditor -General, and members of any
commission provided for in the Constitution, including the broadcasting authority referred to
section 192.
43. On 26 August 2009 Cabinet resolved that the Ministers of Justice and Constitutional Development
and of Public Service and Administration pro -actively investigate possible remuneration disparities
amongst Chapter 9 Constitutional Institutions.
45. As a result of the promulgation of the Act, the Commission was empowered with the responsibility
to consider remuneration of the Independent Constitutional Institutions (ICIs) effective from the
01st April 2019, accordingly the Commission is enjoined to make annual recommendations in
respect of the remuneration of the ICIs for the period 2019/2020
46. The Commission at its meeting held on 26 July 2019 resolved to engage office bearers and the
relevant Ministers in relation to ICIs' remuneration.
47. During August and September 2019, the Commission engaged the following ICIs whose salaries,
allowances and benefits ought to be determined by the President, after the recommendations by
the Commission:
48. The Commission also consulted with the respective Ministers responsible for Independent
Constitutional Institutions (ICIs) in terms of the ICI Act.
49. The purpose of these engagements was to understand the remuneration including concerns and
challenges that affect the remuneration of office- bearers in the ICIs. The information intended to
assist the Commission in making its recommendations for 2019/2020.
50. During the engagements it was noted that there was a salary disparity among the ICIs. The
following additional issues were raised by the ICIs:
51 The Commission considered the submissions received from ICI stakeholders. It is important to
note that not all issues raised by the stakeholders can be addressed through the annual
recommendations. Some of the issues raised will be addressed by the major remuneration review
Subsection 6(b) of the ICI Act requires that the Commission, "must ", where applicable, also take
the following factors into account, in making recommendations to the President on the ICI's:
53. The Commission is aware of the dire situation of the economy and the pressure that it is exerting
on the fiscus. The Commission recommends that the office bearers of ICIs be treated in line with
other POBs and therefore the Commission recommends the following:
3% adjustment to the remuneration of all categories of POBs earning above R1 500 000
4% for all categories earning below R1 500 000
Signed at
JUDG UW
CHAIRP
SCHEDULE 1
REMUNERATION LEVELS WITH EFFECT 01 APRIL 2019
NATIONAL EXECUTIVE AND DEPUTY MINISTERS
GRADE PAY LEVEL POSITION 01- Apr -18 % 01- Apr -19
SCHEDULE 2
REMUNERATION LEVELS WITH EFFECT 01 APRIL 2019
MEMBERS OF PARLIAMENT
GRADE PAY LEVEL POSITION 01- Apr -18 % 01- Apr -19
SCHEDULE 3
REMUNERATION LEVELS WITH EFFECT 01 APRIL 2019
PROVINCIAL EXECUTIVES AND LEGISLATURES
GRADE PAY LEVEL POSITION 01- Apr -18 % 01- Apr -19
SCHEDULE 4
REMUNERATION LEVELS WITH EFFECT 01 JULY 2019
LOCAL GOVERNMENT
GRADE PAY LEVEL POSITION 01- Jul -18 % 01- Jul -19
SCHEDULE 5
REMUNERATION LEVELS WITH EFFECT 01 APRIL 2019
JUDGES
GRADE PAY LEVEL POSITION 01- Apr -18 % 01- Apr -19
SCHEDULE 6
REMUNERATION LEVELS WITH EFFECT 01 APRIL 2019
MAGISTRATES
GRADE PAY LEVEL POSITION 01- Apr -18 % 01- Apr -19
SCHEDULE 7
REMUNERATION LEVELS WITH EFFECT 01 APRIL 2019
INSTITUTION OF TRADITIONAL LEADERSHIP
PAY TRADITIONAL LEADERSHIP
GRADE 01- Apr -18 % 01- Apr -19
LEVEL POSITIONS
TA 1 King /Queen 1 206 147 1 254 393
TB 1 PTL 1 109 658 1 154 044
TC 1 Senior Traditional Leader 256 818 267 091
TD 1 Headmen / Headwomen 110 349 114 763
*
In addition to sitting allowances, part time members are entitled to their salaries as Traditional Leaders, as well as subsistence
costs (reasonable and actual expenses) and transport costs (Department of Transport tariffs for the use of privately owned
vehicles), for their attendance of official meetings, seminars, workshops and conferences of the respective Houses)
SCHEDULE 8
REMUNERATION LEVELS WITH EFFECT 01 APRIL 2019
INDEPENDENT CONSTITUTIONAL INSTITUTIONS (ICIs)
Current %
Institutions Position 01- Apr -19
Remuneration Adjustment
Auditor -General (AG) Auditor General 5 080 604 3% 5 233 022
total package
equivalent to Level 14
of DPSA
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