GRN's salary bill
A WORRIED OBSERVER WRITES:
It seems to me that we want to blame everything and everybody for our country's economic predicament.
You do not have to have a lot of degrees or a PhD but common sense. Both the daily newspapers in the week after Easter had a lot of info on our government budget, spending and economy in general.
I would want to start with the employees and the salary bill that we as tax payers has to foot. It is N$28 000 000 000.00, in short 28 billion. With a workforce of 119 000. Which means the average salary in the Government is N$19 608.00 per month. Keep in mind that 30% of employees of the Government is cleaners.
Did you know?
Each Namibian in the country (population 2 500 000) contribute N$933.00 per month to the salaries of Government employees. This exclude tax that you pay.
That the primary sector of the economy contribute N$28 000 000 000.00 (28 billion) to the GDP. Farming and mining are the main contributors to the primary sector and also the biggest employer in the Private Sector, but Government's 119 000 employees' Salary Bill is N$28 billion!
When you take the Government's budget of N$60 billion and you subtract it from the total GDP of N$176 billion it leaves you with N$116 billion, contributed by Private Sector. If you calculate a tax rate of 35% on this, it equals N$40.6 billion.
Take the Salary Bill, subtract it from the N$40.6 billion and it leaves you with N$12.6 billion. That means that the Government must borrow N$20 billion a year to pay its salaries.
This means our economy is artificial.
So the tax Government employees pay back to government is tax money?!
Take the average salary of N$19,608 x 35% = N$6,862.80 coming back from the Government to the Government?
OK. Take N$6,862.80 x 119 000 = N$816,673,200.00. Almost one billion dollars can be subtracted from the Government's income projections. Almost the size of the City of Windhoek’s annual budget.
If the Government wants to make the salary account only 15% of budget it means the following: The salary account must be N$9,000,000,000.00 which if divided by N$19,608.00 (avg. salary) = 38 250 employees. Which means 119 000 - 38 250 = 80750 to be fired or retrench (deadwood)
Or if they keep the salary bill at N$28 billion it means Government income must increase to N$187 billion. Remember GDP is N$176 billion.
This means that Government did not expand its tax base but rather erode it.
If memory serves me correctly, Government inherit a tax base of 300 000 people in a population of 1.7 million.
According to my calculations it is now 260 000 of a population of 2.5 million. Work force = 850 000. Unemployed 30% (255 000). Retired 10% (85 000). Does not pay tax 30% (255 000). 855 000 - 595 000 = 260 000. No growth?
Remember that the private tax payer provides 30% of Government income.
A few things that are not clear to me:
Do the 119 000 employees include SOE, Town Council, Regional Council and Municipal employees as well? If it does not, then we are in a bigger hole than the N$28 billion salary account of the Government.
The President said that he knows there is a lot of deadwood (80 750 employees) in Government, but he is not going to fire and retrench because of the social upheaval it will bring. He must reconsider because he is busy digging our children’s graves.
On the other hand, it works out nicely for Swapo because the private sector had to fire and retrench to adapt to reality. It makes the Swapo Government look like heroes.
How long must we still struggle?
Remember General Motors in the USA? Before 2008 they also had too many benefits and employees that bloated their expenses in such a way that they considered bankruptcy but the Unions did not want to allow them. When GM was the King of the Hill it appointed people left, right and center under directives of the unions put in employee contracts.
It was not a problem until they had to look after and pay retired employees to such an extent that it was dragging GM under. Then the financial crisis happened and under this disguise they could retrench and make GM shipshape for the future.
Our Government is on the same path as General Motors used to be.
It seems to me that we want to blame everything and everybody for our country's economic predicament.
You do not have to have a lot of degrees or a PhD but common sense. Both the daily newspapers in the week after Easter had a lot of info on our government budget, spending and economy in general.
I would want to start with the employees and the salary bill that we as tax payers has to foot. It is N$28 000 000 000.00, in short 28 billion. With a workforce of 119 000. Which means the average salary in the Government is N$19 608.00 per month. Keep in mind that 30% of employees of the Government is cleaners.
Did you know?
Each Namibian in the country (population 2 500 000) contribute N$933.00 per month to the salaries of Government employees. This exclude tax that you pay.
That the primary sector of the economy contribute N$28 000 000 000.00 (28 billion) to the GDP. Farming and mining are the main contributors to the primary sector and also the biggest employer in the Private Sector, but Government's 119 000 employees' Salary Bill is N$28 billion!
When you take the Government's budget of N$60 billion and you subtract it from the total GDP of N$176 billion it leaves you with N$116 billion, contributed by Private Sector. If you calculate a tax rate of 35% on this, it equals N$40.6 billion.
Take the Salary Bill, subtract it from the N$40.6 billion and it leaves you with N$12.6 billion. That means that the Government must borrow N$20 billion a year to pay its salaries.
This means our economy is artificial.
So the tax Government employees pay back to government is tax money?!
Take the average salary of N$19,608 x 35% = N$6,862.80 coming back from the Government to the Government?
OK. Take N$6,862.80 x 119 000 = N$816,673,200.00. Almost one billion dollars can be subtracted from the Government's income projections. Almost the size of the City of Windhoek’s annual budget.
If the Government wants to make the salary account only 15% of budget it means the following: The salary account must be N$9,000,000,000.00 which if divided by N$19,608.00 (avg. salary) = 38 250 employees. Which means 119 000 - 38 250 = 80750 to be fired or retrench (deadwood)
Or if they keep the salary bill at N$28 billion it means Government income must increase to N$187 billion. Remember GDP is N$176 billion.
This means that Government did not expand its tax base but rather erode it.
If memory serves me correctly, Government inherit a tax base of 300 000 people in a population of 1.7 million.
According to my calculations it is now 260 000 of a population of 2.5 million. Work force = 850 000. Unemployed 30% (255 000). Retired 10% (85 000). Does not pay tax 30% (255 000). 855 000 - 595 000 = 260 000. No growth?
Remember that the private tax payer provides 30% of Government income.
A few things that are not clear to me:
Do the 119 000 employees include SOE, Town Council, Regional Council and Municipal employees as well? If it does not, then we are in a bigger hole than the N$28 billion salary account of the Government.
The President said that he knows there is a lot of deadwood (80 750 employees) in Government, but he is not going to fire and retrench because of the social upheaval it will bring. He must reconsider because he is busy digging our children’s graves.
On the other hand, it works out nicely for Swapo because the private sector had to fire and retrench to adapt to reality. It makes the Swapo Government look like heroes.
How long must we still struggle?
Remember General Motors in the USA? Before 2008 they also had too many benefits and employees that bloated their expenses in such a way that they considered bankruptcy but the Unions did not want to allow them. When GM was the King of the Hill it appointed people left, right and center under directives of the unions put in employee contracts.
It was not a problem until they had to look after and pay retired employees to such an extent that it was dragging GM under. Then the financial crisis happened and under this disguise they could retrench and make GM shipshape for the future.
Our Government is on the same path as General Motors used to be.
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