Africa-Press – Eswatini. Prime Minister Cleopas Dlamini appears to be warming up to the idea of considering a structured debt bailout for civil servants instead of implementing the three per cent cost of living adjustment (CoLA), funds permitting.
With a majority of civil servants of the view that the proposed CoLA was insignificant and would do little to improve the financial situation for civil servants, Madlangempisi MP Sibusiso ‘Scorpion’ Nxumalo has urged government to explore other avenues.
This was detailed in the report of the prime minister’s office portfolio committee on the ministry’s first quarter performance report for the financial year 2022/23 tabled yesterday.
The report is still subject to debate and adoption.
The MP enquired if it would be absurd to consider a structured debt bailout programme for civil servants, considering the rising inflation rate and loss of buying power, the absence of a salary review and negative real wages over the past 20 years.
He was of the view that the less impact of the proposed three per cent CoLA could be the reason behind the disagreement over the proposed figure.
In response, the premier said government valued the role of civil servants and would do everything possible to ensure their welfare as well as terms and conditions of service were as attractive as they could be.
“It is not in government’s interests to see the civil servants divided,” he said.
He added that it, however, sufficed to say that the issues of salaries and CoLA were greatly influenced by outcomes of negotiations with employee representatives and obtaining fiscal position for government.
“A structural bail out for civil servants and other Emaswati would be a good idea funds permitting,” said Dlamini.
options
While elaborating on his proposal later, MP Nxumalo said he was of the idea that government should consider more options during negotiations. The MP said union bashing was short-term and unsustainable. He said the three per cent would have no impact and meaning and according to him, in the absence of a salary review, a solution would be to opt for a debt bailout relief programme for the civil service. He said the problem began over two decades ago when salary increments had always been less than the inflation rate, resulting in negative real wages.
“Workers have always been compelled to fund the deficit with debt. We even tried to let our women to go and work so that they assist the head of the family but to no avail. “The negative real wages prevailed and eventually got both husband and wife into debt due to the rising cost of living,” he added.
He suggested that government should consider relieving the civil service from debt through amortising their loans over a longer period of 10 years, which would relieve and give them back buying power.
He stated that this would have an impact and the older civil service would be given a debt relief as an economic stimulus, which could give the country peace and stability dividend. “Instead of giving them CoLA this could also be coupled with a cap for loans as its 33 per cent, including loans from cooperatives, which would in turn create a saving nation,” said Nxumalo.
The MP sternly believed that a debt relief programme would be a much better option in the crazy inflation.
He stated that the public could not afford basic goods and services and encouraged government and unions to consider options that would have an impact.
Nxumalo said in this situation, those who chose debt relief would not get CoLA for three years and those with no debts could get CoLA instantly. He suggested that a stimulus package structured like that could go a long way than the proposed three per cent CoLA, which was irrelevant to the hard times the nation was presently enduring.
Nxumalo said moving forward, there was a need to rethink the economic policy and believed that capitalism could not hold the country together anymore and there was a need for a mixed economic policy as a way forward with a socialist mix.
“For instance, if you increase wages, people will want more goods and services because they would be able to afford. More jobs will be created by this additional demand,” he said
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