PSEMAS, wage bill, S&Ts under fire
29 March 2019 | Economics
This was among the immediate targeted interventions announced by finance minister Calle Schlettwein in his budget speech on Wednesday.
Also coming in for some stick was the civil service wage bill, which currently stands at 51% of the government's non-interest operational expenditure, and 15.5% of GDP, and which has increased by 110% in the past five years.
Schlettwein said significant reductions in non-core expenditure had been achieved since the adoption of targeted consolidation measures in 2015/16. He said total spending on subsistence and travel allowances (S&Ts), for instance, had dropped by 62.3% over the past three years, from N$634.3 million in 2015/16 to N$221.8 million in 2018/19.
He said hiring restraint in the public sector called for job creation in the private sector. “We would expect that all accounting officers continue to prevent public spending that is non-core and non-compliant with the cost-saving measures issued by the Office of the Prime Minister. “Policy space for rapid adjustments in the economy is limited and the fiscal stance is constrained on all fronts.
At 49.2 % of GDP, total debt will not allow for further aggressive debt financing as this is not a sustainable option.
He called on the private sector, as the envisaged engine of growth and job creation, to play a bigger role in the economy. He said his ministry would continue to spearhead consultations with the private sector, professional bodies and the newly formed high-level panel on the economy for effective partnerships. While honing in on PSEMAS, Schlettwein said the medical aid scheme covered 95 % of public servants' medical expenses. It received an allocation of N$2.8 billion for 2019/20 and covers 130 000 members and 155 000 dependants. He said to reduce costs and improve efficiency, a peer review mechanism was introduced. The outcome was revealing, the finance minister said.“
During the first round, 82 service providers, including general health practitioners, dentists, hospitals, pharmacists, dental technicians and the medical aid administrator were flagged for suspicious transactions.
“Also, membership and member card fraud were highlighted as a significant cost driver. As a follow-up, a forensic investigation was launched to verify the findings of the peer review and the outcomes were by and large confirmed.
“These findings indicate that PSEMAS suffered from a fraudulent assault launched by stakeholders across the board; service providers, members, administrators, civil servants, everyone had a hand in the till. This investigation is now coming to finality and the culprits are being brought to book. Recovery of N$23 million is envisaged, of which N$13 million has been recovered,” Schlettwein added.