Tito Mboweni says Eskom needs to shed 30 000 jobs

Finance Minister Tito Mboweni is attempting to tread the fine line between lowering the public sector wage bill without upsetting the African National Congress’ (ANC) trade union partners.

This is what can be derived from statements made prior to the Medium-Term Budget Policy Statement (MTBPS), which have been reported on by The Citizen. According to the report, Mboweni finds himself between a rock and a hard place in his new position as the Finance Minister of South Africa.

Mboweni bemoans pricey public sector wage bill

Mboweni admitted that the public sector wage bill was becoming unaffordable in a country that is already attempting to stave off the effects of an economic recession. Mboweni bemoaned the rough bargaining tactics tabled by trade unions for creating an unaffordable public sector wage bill. The Finance Minister used an analogy which was easy to comprehend, saying:

“We should be making sure we do not have a situation where R8 of every R10 goes to salaries and wages in the public service.

That means we are left with R2 for other services – to fix a hospital or a clinic. Mathematically, it does not make sense that R8 out of R10 goes to salaries and unions still demand service. Where will the money come from?”

Finance Minister admits Eskom is bloated

It’s common knowledge that Eskom’s workforce is bloated and unsustainable, especially at a time when the power utility is struggling to keep its head above water. Mboweni concurred that at least 30 000 jobs would need to be shed in order to stabilise the financial books. Mboweni argued that Eskom’s current salary bill:

“…consumes too much money and doesn’t leave much for infrastructure management.”

Earlier in the year, Eskom announced that it was planning to cut 7 000 jobs over the course of five years, as a means of trimming its bloated workforce. However, following fierce threats from the National Union of Mineworkers (NUM), Eskom backtracked on its proposed retrenchment policy.

Eskom currently employs close to 50 000 workers.

Trade Unions will fight Tito Mboweni

Political analyst Ralph Mathekga spoke to The Citizen on the catch-22 situation in which Mboweni finds himself in. According to Mathekga, Mboweni is correct in saying that Eskom’s bloated workforce needs to be trimmed down in dramatic fashion.

The analyst also agrees with Mboweni, that the entire public sector wage bill is unsustainable. But, Mathekga argues that real change in the public sector ahead of next year’s General Elections is highly unlikely. The political analyst said:

“Cutting down the size of the public service is a bigger adventure, which may prove to be risky for the ANC before next year’s elections.

It is Mboweni who will have to drive this, should a decision be taken to downsize. Labour, especially the ANC’s tripartite alliance partner Cosatu [Congress of SA Trade Unions] will point at corruption within government, which has lost its credibility. It will be a long, drawn-out fight.”

The National Union of Metalworkers of South Africa (Numsa), along with other major trade unions, have already lamented the recent appoint of Mboweni as Finance Minister. Numsa has accused Mboweni of being inherently anti-working class, saying:

“As Numsa we celebrated when Mboweni’s term as Reserve Bank governor came to an end. This is because Mboweni is hostile to the working class majority.

During his tenure as governor of the Reserve Bank‚ he bent over backwards to champion neo-liberal macro-economic policies‚ of the governing party‚ the ANC.

These disastrous policies have entrenched and empowered a small minority of White Monopoly Capitalists in the economy.”