‘WE CANNOT GUARANTEE SALARIES IF WE PAY COLA’

MBABANE – Government is adamant that it will not be able to guarantee timely payment of salaries if it is to hike the wage bill any further.

This is according to a report on government’s fiscal position in relation to the demand for the cost of living adjustment (COLA) by public sector unions. The report has been attached by government in its responding papers in court. The report states that the quarterly Southern African Customs Union (SACU) allocation was only enough to cover 2.5 months salaries per quarter and these would be reduced to 2.3 months if the adjustment was allowed by government.

Government submitted that although it prioritised the wage bill over suppliers and government’s capital programmes, it was worth mentioning that the delayed payment of suppliers would result in a number of them delaying to pay taxes.
It was stated that the same suppliers would also refuse to continue to supply government and many businesses would end up closing shop which would further exacerbate unemployment and poverty levels. Government submitted that if it allowed the COLA, its capital programmes, which were for economic development and growth, would be severely compromised leading to high unemployment and poverty levels.   

The public sector associations (PSAs) were allegedly informed that the 9.15 per cent they were demanding would increase the already existing pressure on the budget and cash flow. “The additional cost of implementing this proposal, which has been underestimated by the PSAs, is E768 million since the wage bill is currently E8.39 billion,” said government. It was revealed that allowing the adjustment would increase the budget deficit by 1.3 per cent of GDP to a fiscal deficit of about 9.4 per cent of GDP.

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