Pay hikes for civil servants to bite taxpayer

CIVIL servants, all 84 000 of them, are likely to receive a much lower salary increase this year compared to the previous two years. And while Cabinet has made N$844 million available for pay hikes for civil servants, and the Government Negotiating Team will thus be limited to negotiating within the parameters of their mandate, the unions will try to push the increases up to 20%. Finance Minister Saara-Kuugongelwa Amadhila announced in Parliament that she will table an amendment to the Appropriations Bill to cover a salary adjustment for public servants.

“Government is negotiating with worker representatives for a workers’ remuneration adjustment during the course of this year”. The Deputy General Secretary of the Namibia Public Workers Union (NAPWU), Gabes Andumba, confirmed that the negotiations between the Government and NAPWU and the Namibia National Teachers Union (NANTU) still have to kick off. “We have to start with the negotiations next week and hope to finalise them as soon as possible”. Apparently the Government has indicated that an agreement on salary increases for civil servants should be reached within two weeks.

It is expected that the Government will push for an increase from 6% to 8% while the unions will start much higher. It is believed that the unions are also determined that the transport allowance be increased, while the review of the housing scheme will most likely also be on the negotiating table.

The Cabinet mandate for salary increases amounting to N$844 million will push the deficit from 9,6% to 10,7% of the budget, while the total debt/Gross Domestic Product (GDP) ratio will increase by 2% from 30% to 32%. Deputy Finance Minister Calle Schlettwein confirmed that the money will have to be borrowed and this will increase the total debt of Government.

“This will leave us with less fiscal space for the next few years. We then have to drastically increase Government revenue to maintain fiscal sustainability,” Schlettwein told Namibian Sun. The Ministry of Finance is contemplating the implementation of a range of reforms to strengthen revenue collection and administration. These reforms include a review of tax laws; development of new tax administration systems; improved communication with taxpayers and taxpayer education. Kuugongelwa-Amadhila said the introduction of some new taxes, the details of which are being finalised, will be announced soon. During the past two years, civil servants received a 12% increase per year, but a much lower increase is expected for this year.

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