Harare — GOVERNMENT will from next year start grading civil servants salaries taking into account rank, skills and experience, Finance Minister Tendai Biti said.

Presenting the 2010 National Budget Minister Biti said the Government is committed to meaningful remuneration and improvement of benefits for its workers.

The Government, said Minister Biti, has set aside US$600 million, 63 percent of total expenditure, to cater for salaries of civil servants next year.

"Mr Speaker Sir, I am providing an amount of US$600 million for the wage bill. Through this allocation, Government intends to further decompress salary grades within the public service in order to further differentiate salary levels taking into account rank and experience," he said.

Currently, civil servants are getting flat and equal salaries regardless of qualification or experience, which has been a major source of discontent.

In addition, the salary levels are very low making it very difficult for most if not all state workers to keep pace with the prevailing cost of living.

Minister Biti said his ministry would work hand in glove with the Ministry of Public Service in finding ways to improve the welfare of civil servants.

The Government is in the process of undertaking an audit to clean the civil service of irregularities and ensure appropriate management of the civil service wage bill.

Minister Biti said there were indications that there was unnecessary strain on the civil service wage bill due to ghost workers, pensioners and contracted workers fraudulently included on the civil service wage bill.

"The audit also provides scope for resource savings which will be channelled to needy areas," said Minister Biti.

Minister Biti also said the Government is working on reforming the pension system for state employees. Government will replace the Benefit Pension Scheme with Defined Contributory Pension Scheme.

This will entail the creation of a Civil Service Pension Fund managed by fund managers outside the budget framework in line with market best practices.

The Government, said Minister Biti, which is presently meeting 100 percent Medical Aid costs for its workers, will keep doing that in the first three months of next year and then wean them off as their salaries improve.

This was being done with a view to lesson pressure on the fiscus. The Government has indicated that it has set aside US$21 million to pay pensioners next year.