President Cyril Ramaphosa signed off a salary increase for public officials amid tough economic times. [Picture: Thierry Monasse/STA/Bloomberg]
The poorest of the poor could stand to lose as ministers and government officials take home a bigger paycheck, an economist has warned. This after President Cyril Ramaphosa signed off on an increase in the salaries of all public office bearers (POBs).
Speaking in an interview on Salaamedia, political analyst and economist Dr Dale McKinley said the latest salary hike for the millionaire ministers signalled politicians were aloof.
“I think to get a salary increase at this stage is quite a privilege for anyone, unless you are a government official or a politician because it seems automatic with them every single year,” he said, adding, “There’s a sense that politicians are continuing to be out of touch with ordinary South Africans”.
He warned it would cost the poorest South Africans as the government will have to either raise taxes or reprioritise the budget.
“Government simply doesn’t have, at this stage, the kind of income it needs in order to make the expenditure. We’re already borrowing quite heavily, our debt limits are rising and our payments on that debt are rising.”
SMread: Uncertain future for ZEP holders
Where will the salary increase come from?
In a statement on Saturday, the Presidency said the decision followed recommendations by the Independent Commission for the Remuneration for Public Office Bearers. This meant an increase of 3% for all POBs, including ministers, judges, magistrates and traditional leaders for the 2022/2023 financial year.
McKinley said the money would have to be sourced from somewhere – suggesting possible tax hikes on the cards.
”If one looks at where the government gets its money from, it’s pretty much from the tax base, whatever kinds of different taxes those are. One of those is income taxes, which affects us as individuals, but we also pay a whole range of other taxes daily.”
The alternative, he said, would be the budget being reorganised. “In other words,” he said, “the Treasury has to look just like you would look at your household budget and say, ‘Well, my transport costs have gone up this month, I’m going to have to shift some from my food budget to my transport budget’”.
“What one gains, another one loses,” said McKinley. In either event, the poorest would likely bear the brunt as they would have to deal with higher taxes or fewer services.
