The average remuneration of public servants in South Africa is high by international standards, a research report by Intellidex has found.
Business Unity South Africa (BUSA) commissioned the report and released it on Monday. It is titled, “The Public Sector Wage Bill – An Evidence-Based Assessment and How to Address the Challenge.”
In a statement, BUSA CEO Cas Coovadia said according to the report, South Africa’s public service is not large in per capita terms but is “unusually well- remunerated.”
He added, “The report shows that public sector wages in South Africa are higher than the average of 46 countries looked at by the IMF. These ranged from Bangladesh to Norway and Denmark and included countries from Europe, Africa, South America and elsewhere.
“Payroll costs in South Africa are larger than the global norm as a percentage of GDP, public spending, or tax revenues.”
While the average public sector salaries for the 46 countries surveyed by IMF was 9.4 percent of GDP in 2017, South Africa’s average was at 11.6 percent (25 percent higher than international average) and 15 percent in 2019.
‘High by international standards’
“The average remuneration of public servants in South Africa is high by international standards and when compared to private sector employees and per capita GDP.
“Teachers’ salaries, measured in purchasing power adjusted US dollars, are nearly 50 percent higher than the OECD average,” Coovadia said.
The report states that in the first quarter of 2010 (2010Q1), average monthly salaries in the public sector were R15,200 compared to R11,200 in the private sector.
“By 2020Q1, the figures were, respectively, R33,200 and R22,000. Over the period, the public sector premium rose from 34 percent to 38 percent,” it added.
Coovadia said there is no optimal public service size and the main issue is therefore affordability. South Africa therefore needs to address the high payroll costs and an increasingly “unproductive” public sector employment.
He said, “The downward adjustments to the payroll can be made either by reducing wages, reducing headcount, or doing both.
“These are very difficult decisions, but the country has jumped off the cliff and we need to achieve a soft landing. An essential element of a soft landing is a decrease in the public sector wage bill.”
Click here to read the Intellidex report in full on BUSA’s website.