Govt Slashes Salaries For Parastatals Bosses To $6 000 Ceiling

Harare,March 18, 2014-Government has resolved as an interim measure that chief executive officers (CEOs) of state owned enterprises, parastatals and local authorities should receive a total pay package of not more than US$6000 per month while the lowest paid employee should not fall below the poverty datum line, which stands at about US$515, with immediate effect.

The Chairperson of the Cabinet Committee on State Enterprises and Parastatals Development, Patrick Chinamasa announced the interim total pay packages for CEOs at a press conference in Harare on Tuesday.

“”Accordingly and with immediate effect Cabinet has decided, as an interim measure, that no Chief Executive Officer of any state enterprise, parastatal or local authority should receive a  total pay package (basic salary plus benefits) which is above US$6000 per month for those on job level 1. Accordingly therefore, salaries should be immediately cascaded downwards in each organisation,” said  Chinamasa.

The drastic measures will be in place pending the finalisation of the appropriate remuneration structures.

According to Chinamasa, the decision was arrived at following the realisation that employment costs in the public sector are a key driver of costs in the economy and that most parastatals raised their service charges to finance the obscene salaries.

Chinamasa also announced that the government has approved principles that should guide remuneration policy for public enterprises which include the performance of the economy, the organisation’s capacity to pay and level of responsibility.

The Minister of Information, Media and Broadcasting Services, Professor Jonathan Moyo expressed confidence that the new measures will improve the competitiveness of the local economy.

Other measures approved by cabinet include the need to carry out an investigation to ascertain the extent of the board fees, that the 13th cheque be based on performance, that tax laws should be applied on the total pay package and that the total pay package be split into basic and benefits at a ration of 60 percent and 40 percent respectively.

Meanwhile, cabinet has directed that the Cabinet Committee on State Enterprises and Parastatals Development should remain seized with the salary structure issue and should on the basis of audit findings come up with concrete recommendations.