Mthuli proposes 5 percent salary cut

Harare – Finance and Economic Development Minister, Prof Mthuli Ncube in his austerity 2019 Budget says Government will implement wage and nonwage expenditure rationalisation including a 5 percent salary cut for all senior positions from Principal Directors, Permanent Secretaries and their equivalents up to Deputy Ministers, Ministers and the Presidium, effective January 1, 2019.

Prof Ncube said the 2019 Budget, consistent with the Transitional Stabilisation Programme, places emphasis on living within our means by instilling fiscal discipline and rationalising expenditures in order to create additional financial capacity for funding developmental expenditures and enhancing delivery of public services.

“Mr Speaker Sir, it is critical that we reduce public spending on employment costs. As a first step, Government has decided that effective 1 January 2019, a 5% cut on basic salary, be effected for all senior positions from Principal Directors, Permanent Secretaries and their equivalents up to Deputy Ministers, Ministers and the Presidium.

“This is also extended to basic salaries of those in designated posts in State Owned Enterprises (CEOs, Executive Directors and equivalent grades), including Constitutional Commissions and grant aided institutions. A standardisation/alignment exercise in remuneration including benefits for Constitutional Commissions, will also be undertaken to remove inequity and disparities,” he said.

With regard to the 13th Cheque payment, the Treasury boss said Government recognises that this is an integral component of the Remuneration Framework.

“Government appreciates the hard work its employees render in their various portfolios and services. For 2018 in particular, we close the year at a time when employees face a number of hardships. Accordingly, Government has taken the position that bonus be payable for 2018, with commitment that these payments be processed before year end.

“Traditionally, payment of the 13th Cheque is computed as the sum of Basic Salary, Housing and Transport allowances.

“Previously, the Budget incurred expenditure of around US$174.6 million in bonus payment. In light of the resolve to ensure that expenditure commitments do not further worsen challenges associated with deficit financing that have placed us in the prevailing difficult situation that we find ourselves in, the 13th Cheque is, henceforth, computed based on Basic Salary only (excluding housing and transport allowances).”

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