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Medium Term Budget Policy Statement Employment and Economic Development 31 October 2006

Medium Term Budget Policy Statement Employment and Economic Development 31 October 2006. Introduction. South Africa has a two-tiered economy; one rivalling other developed countries the other with only the most basic infrastructure

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Medium Term Budget Policy Statement Employment and Economic Development 31 October 2006

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  1. Medium Term Budget Policy Statement Employment and Economic Development 31 October 2006

  2. Introduction • South Africa has a two-tiered economy; • one rivalling other developed countries • the other with only the most basic infrastructure • It therefore is a productive and industrialized economy that exhibits many characteristics associated with developing countries, including a division of labour between formal and informal sectors, and uneven distribution of wealth and income

  3. The Millennium Development Goals • Eradication of extreme poverty and hunger • Achieving universal primary education • Promote gender equality and empower woman • Reduce child mortality • Improve maternal health • Combat HIV and AIDS, malaria and other diseases • Ensure environmental stability • Develop a global partnership for development

  4. Asgi-SA and JIPSA. • The primary aim of Asgi-SA is to halve unemployment and poverty by 2014. • To have the desired impact on poverty and unemployment, growth must be boosted to at least 6%. • JIPSA is an Asgi-SA initiative to address the issue of scarce skills that will negatively affect the capacity of public(own emphasis) sector in terms of service delivery imperatives.

  5. Jipsa interventions • Mentoring programmes • Overseas placement to fast track development • Special training programmes • Expatriate repatriation retire re-employment • Recruitment of skilled immigrants

  6. Asgi-Sa: Discernable Constraints and response initiatives in relation to the DPSA Of the six constraints to boosting economic growth to 6% those requiring specific DPSA attention are: • Deficiencies in state organisation capacity and leadership and • Shortage of skilled labour The two categories of intervention are thus: Beefing up public administration and Skills development

  7. Sectoral Forecast Model Expected real average annual growth rates for major sectors of the South African economy – 2005 to 2014

  8. Sectoral Growth Prospects and Skills Implications • It may be concluded that there is a strong demand for both a larger variety and a higher level of quality of skills, particularly in the following broad areas: • Programme and project management; • Engineering; • Finance and economics; • ICT professionals • Spatial planning; • Intergovernmental relations; • Education management and professionals, and • Health and Welfare Service management and professionals • This is supported by the Report on Scarce and Critical Skills produced by DoL in August 2006

  9. Overview of the Public Personnel Expenditure

  10. Overview of the P P Expenditure

  11. HR Management Practice Trends Vacancy Rates

  12. HR Management Practice Trends Overtime

  13. Quantitative Analysis relating to HR Management Trends RECOMMENDATIONS

  14. Recommendations: • The findings of the analysis on public personnel expenditure trends indicate that there is scope for upward movement in personnel expenditure. • These findings have revealed fairly significant shifts in the relative priorities of key economic categories of government expenditure over the past decade. • In this process, personnel expenditure has declined in relative terms, although it has continued to increase in absolute terms (at rates that exceed inflation). These shifts in expenditure priorities have been relatively more pronounced at provincial level. • The scope for upward movement in personnel expenditure must factor in the following key issues: • Increases in remuneration for specific occupational groups as one of the mechanisms in ensuring retention of such skills; and • Improving critical infrastructure development capacity in all spheres of government

  15. Recommendations:Remuneration Framework in the PS • The following remuneration principles have been identified as critical for the implementation of a new Public Service Remuneration Framework: • Total rewards approach (employment value proposition) • Equitable and fair differentiation • Affordability • Performance based remuneration • Market related remuneration • Openness and transparency • Occupational Differentiation • Governance and oversight

  16. Recommendations: Remuneration Framework in the PS Proposed New Remuneration Framework • Implement a Total Cost of Employment (TCE) for salary levels 1 -10 • Occupational Differentiation • Introduction to Dual Career Pathing • Scarce skills • Remuneration process • Flexible Employment Contracts for Professional/Specialists • Salary Progression and Performance Related Remuneration • Equate Levels 11 – 15 and Professional/Specialist Levels 7 – 12 • Broad banding & Performance Based Salary Increases

  17. Health Professionals Public Service Salary Scales Physical, Mathematical and Engineering Sciences Information Technology 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 12 12 12 11 11 11 10 10 10 9 9 9 8 8 8 7 7 7 Remuneration Framework in the Public Service Dual Career Pathing – Remuneration Structures

  18. Remuneration policy framework: Key policy considerations and principles • The principle of a total cost to employer remuneration system should be considered. • System underpinned by an appropriate JE system to ensure the continuation of the key guiding principle of equal pay for work of equal value. • Establishment of a review panel to be considered – to review from time to time all aspects of the remuneration dispensation applicable to Senior and Middle Managers and professionals at levels 11 to 16.

  19. Remuneration policy framework: Key policy considerations and principles • Performance management to be improved. Possibly greater emphasis on performance related pay. • Macro benefits to be maintained and further strengthened where required. • Allowances should as far as possible be rationalised and where justifiable, incorporated into salary. Allowances retained should be reviewed and adjusted where necessary. • Personnel growth in specific sectors • Affordability is a key consideration. • The policy framework must seek to ensure stable labour relations. • The elements of the policy framework must be transparent, perceived to be fair by employees and easy to administer.

  20. International Initiatives:Co-operation with India • Exchange of study tours • Exchange of expertise,capacity building comparative studies through joint research • Exchange of information • Reciprocal secondment of officials to each others countries. • Mentorship and exchange programmes: Math and Science, IT knowledge management. • HRD and training

  21. THANK YOU

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