Medium%20Term%20Budget%20Policy%20Statement

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

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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

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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

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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.

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Jipsa interventions

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

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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

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

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Overview of the Public Personnel Expenditure
Table 2 Employee Numbers by sector Table 2 Employee Numbers by sector Table 2 Employee Numbers by sector Table 2 Employee Numbers by sector Table 2 Employee Numbers by sector Table 2 Employee Numbers by sector Table 2 Employee Numbers by sector
Sector Name 2001 2002 2003 2004 2005 Actual Growth
Agriculture 50,448 47,703 45,092 43,154 40,089 (10,359)
Arts/Sport 4,001 4,428 3,243 3,593 5,294 1,293
Criminal Justice 170,281 181,032 187,923 199,141 205,437 35,156
Defence Force 76,720 76,266 75,913 76,969 77,858 1,138
Economic/Environmt 13,784 13,598 11,279 11,603 13,015 (769)
Education 426,215 434,460 434,664 436,017 440,824 14,609
Finance 5,164 4,925 4,869 5,369 5,592 428
Foreign Affairs 1,659 1,656 1,597 1,756 1,952 293
General Admin 16,610 13,625 11,674 11,495 14,110 (2,500)
Health 219,924 218,497 217,680 224,937 232,377 12,453
Home Affairs 5,916 5,995 5,880 6,808 6,936 1,020
Infrastructure 55,221 53,112 50,129 49,455 48,429 (6,732)
Other 2,941 2,892 1,854 1,806 1,793 (1,148)
Welfare 11,308 11,895 13,950 15,252 15,789 4,481
Grand Total 1,060,192 1,070,084 1,065,747 1,087,355 1,109,495 49,303
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Overview of the P P Expenditure
Table 5 Major Occupational Groupings in the Public Service 2001 to 2005 Table 5 Major Occupational Groupings in the Public Service 2001 to 2005 Table 5 Major Occupational Groupings in the Public Service 2001 to 2005 Table 5 Major Occupational Groupings in the Public Service 2001 to 2005 Table 5 Major Occupational Groupings in the Public Service 2001 to 2005 Table 5 Major Occupational Groupings in the Public Service 2001 to 2005
Occupational Groupings December 2001 December 2001 December 2005 December 2005 change
Occupational Groupings Total employment share of total Public Service employment Total employment share of total Public Service employment change
Unknown 76742 7.4 0 0 -7.4
Elementary Occupations 166406 16.1 139689 13.5 -2.6
Admin Office Workers 101859 9.9 132503 12.8 2.9
Professions Managers 104243 10.1 133393 12.9 2.8
Technical Associate Professionals 8489 0.8 7996 0.8 0
Service Workers 6767 0.7 11436 1.1 0.4
Social, Natural, Technical and Medical Sciences Supplementary and Support Personnel 63502 6.2 67195 6.5 0.3
Craft Related Worker 11205 1.1 9501 0.9 -0.2
Driver Operator Ships 12018 1.2 9477 0.9 -0.3
National Security Services Custodian Personnel 122652 11.9 138500 13.4 1.5
IT Personnel 1060 0.1 1145 0.1 0
Other Occupations 1000 0.9 9051 0.9 0
CS Educators 346631 33.6 374982 36.2 2.6
TOTAL 1031594 100 1034868 100 0.0
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HR Management Practice Trends

• Vacancy Rates

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HR Management Practice Trends

• Overtime

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Quantitative Analysis relating to HR Management
Trends
RECOMMENDATIONS
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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

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RecommendationsRemuneration 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

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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

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Remuneration Framework in the Public Service
Dual Career Pathing Remuneration Structures
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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.

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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.

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International InitiativesCo-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

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• THANK YOU