Chinamasa proposals on salary cuts and bonuses shot down

Government has reassured civil servants that they will receive their traditional annual bonuses and there will be no reduction of their salaries and allowances as announced by Finance and Economic Development Minister Patrick Chinamasa last Thursday.

Government's response was triggered by Minister Chinamasa's announcement, while presenting the Mid-Term Fiscal Policy Review statement, that civil servants' bonuses would be suspended for two years, while their salaries and allowances would be reduced as part of measures to bring the economy back on track.

However, Government yesterday said Cabinet had rejected the proposals when Minister Chinamasa presented them on July 12 this year and they should not have been factored into the statement.

In a statement yesterday, Information, Media and Broadcasting Services Minister Dr Christopher Mushohwe said it had become necessary to clarify Government's position in view of genuine concerns within the civil service on their conditions of service and job security and on farmers in respect of agricultural pricing for the 2016-2017 maize crop.

In his statement, Minister Chinamasa proposed a reduction in salaries and allowances for civil servants, suspension of bonuses, taxation of allowances for civil servants, the introduction of vehicle loan schemes from director grade going downwards and import parity pricing for maize for the 2016-17 season among other measures.

However, said Dr Mushohwe: "For the record, the above proposals were tabled before Cabinet by the Minister of Finance and Economic Development on July 12, 2016 as part of cost-cutting measures to facilitate economic recovery.

"After extensive deliberations, cost-cutting measures relating to the civil service were rejected and the position of Cabinet is that the Minister of Finance and Economic Development did not take into account the rejection by Cabinet earlier on. Once again, at the last Cabinet of 12 September, 2016 the proposals were rejected.

"The President and Cabinet want to assure the civil servants, the farmers and the public at large that these proposed measures are not friendly operative. It is hoped that this clarification puts to rest anxieties that may have arisen within civil service, the farming community and the public at large."

In the statement presented in Parliament, Minister Chinamasa said, Government had embarked on a civil service restructuring exercise, which included a reduction in employment numbers adding that it would also rationalise the number of embassies and consulates, review class travel arrangements of all officials including ministers, parliamentarians, independent commissions and authorities and State enterprises' officials and a reduction in foreign allowances.

The measures were expected to reduce employment costs to around 60 percent of total revenues by 2019 from the current 97 percent and ultimately redirect revenue towards capital expenditure, which was expected to stimulate production.

Minister Chinamasa said fiscal space remained tight as revenues consistently underperformed while expenditures continued to outstrip targets. He said Government would continue with rationalisation and realignment measures already approved by Cabinet, which would reduce the baseline public employment costs by around $118 million by end of 2016.

Already some of the key Wage Bill Rationalisation Measures have since been implemented, and are already yielding monthly savings of around $6,5 million, effective January 1 2016, he argued.

Minister Chinamasa said to reinforce the measures while creating scope for financing drought, debt service and other capital and operations programmes, Government would reduce salaries and allowances by 5 and 20 percent starting with deputy directors to ministers effective October 2016.