Lloyd Gumbo Herald Reporter—
GOVERNMENT is developing a framework that will regulate salaries, especially for top management in parastatals and local authorities as a way of reducing employment costs in those entities. This is contained in the proposed 2014 national budget presented by Finance Minister Patrick Chinamasa in Parliament on Thursday.
There are indications that top management at some entities were paid salaries and allowances that were too high, in the process suffocating the entities.
The development is likely to see pay cuts of top management at loss-making entities.
Minister Chinamasa said Government was concerned by employment costs that were higher than what these entities generated.
Some of them resorted to bank overdrafts and loans to sustain the salaries.
“Sadly, the unsustainable employment costs are largely on account of the huge salaries, allowances, and perks and being paid to top management-contrary to the Corporate Governance Framework for State Enterprises and Parastatals over principles of affordability and sustainability,” said Minister Chinamasa.
He said salaries of some of the top management were financed from commercial borrowings as they did not have the capacity to generate the salaries.
As a result, he said, Government ended up bailing out such entities through debt assumption and budget appropriations.
“In this regard, the Office of the President and Cabinet is spearheading the development of the guiding Remuneration Framework for all entities that make or are likely to make a charge on the Consolidated Revenue Fund with effect from early 2014.
“The framework will tighten governance oversight structures over remuneration, giving consideration to ability to pay, taking account of service delivery targets, as well as rewarding corporate performance that is above targets,” he said.
Minister Chinamasa said there was also a need for Government to expedite the reformation of Public Enterprises that were expected to spur economic growth.
He said there would be a need to identify and separate entities that required restructuring and those that needed capital injection.
In an interview after the budget presentation on Thursday, Zanu-PF legislator for Hurungwe West Cde Themba Mliswa, said there was a need for the executive to consistently change boards on state entities to curb corruption.
“The President has been clear in terms of corruption.
“There has got to be zero tolerance on corruption.
“We must have new people. New boards set up.
“We cannot have the same people being on these boards because that clearly is where corruption starts.
“Why don’t we have people being changed in the boards? Why don’t we have new people coming in so that we can curb corruption?
“If we can curb corruption, a lot more will happen because the new people who come on board clearly would want to advocate whatever the minister preaches.
“The background of having old people sitting on these boards is bad. All these parastatals have got to be changed.
“I am very excited about Minister Walter Chidhakwa (Mines and Mining Development) having to restructure the mining boards.
“That is a clear indication of someone who wants to see change,” said Cde Mliswa who is chairperson of the Parliamentary Portfolio Committee on Education, Sport, Arts and Culture.