President John Magufuli said last month that the huge development projects that consume colossal amount of money were to blame for delayed salary increments for public workers.
Technically, the demand-pull effect states that as wages increase within an economic system, often the case in a growing economy with low unemployment, people will have more money to spend on consumer goods.
The liquidity increase and demand for consumer goods lead to increasing product demand.
“We target to lower the cost of social services in the society. Ideally, an increase in salary has a direct effect on the society mainly disturbing the price of commodities at the local markets,” the premier said.
Special Seats MP Suzan Lyimo (Chadema) brought to the august House the debate on civil servants’ wage increment. She had requested the Prime Minister to categorically explain why the state had not released annual increment or promotion to public workers since the new administration came to office.
“This is a statutory right. I plead with my government to answer why there has been no salary increment to date,” she charged, adding: “The move has negative impact on pensioners should it remain unattended.”
Since President Magufuli came into power, Pay As You Earn (PAYE) has been lowered from 11 to nine per cent. Trade Union Congress of Tanzania (TUCTA) had described the double digit PAYE as a burden to workers. Unfortunately, there were no records of salary increment.
But, Premier Majaliwa said the government has made tremendous efforts to improve workers working condition, saying salary increment was delayed because of reforms in the government employment systems.
“Members of Parliament (MPs) are aware of these reforms, particularly removing ghost workers on the paymaster list,” he said, assuring that the government now has the entire list of its workers.
Mr Majaliwa said the government is working hard to improve salary and upgrade scales, maintaining that pay rise should be expected.
At least 200bn/- has been paid to cover public workers’ debt. The government says annual increment was going on but only that the state cannot make it public.
The premier said salary was a confidential matter and will be wise if it remained so. According to Mr Majaliwa, there are people in the society who are not public servants and that announcing any salary increment will affect especially those who are not on the payroll. He defended the arrangement as the best option for mutual benefit in the society.
Dr Magufuli, addressing workers at the climax of May Day celebrations at Samora Stadium in Iringa municipality, assured that public employees will get their statutory salary increment before the end of 2020.
In his speech, the president said he wished hiking salaries on Labour Day but after realising several challenges ahead, he decided to postpone his wish.
But he promised that before the end of his tenure in office, he will have increased wages for all workers. “I don’t want to give you a meagre 10,000/- salary increase, I instead, want you to enjoy a super package that will make everybody happy,” he promised.