The South African government has rejected a 10% increase in labor unions representing 1.3 million state workers and claims for housing allowances and other stipends, instead proposing an additional R1 000 ($ 63) monthly cash stipend for another year.
It will cost R146 billion over three years to comply with the unions’ proposals, which is not affordable, the government said in a submission to the Public Sector Bargaining Council, which Bloomberg observed. It also rejected the demand for permanent hiring of contract workers.
Remuneration accounts for about one-third of total government spending, and it is key to the National Treasury’s plan to control the budget deficit and bring the fugitive state debt under control. The unions have argued that inflation-boosting growth has been ensured in light of rising food and energy spending. The annual consumer price inflation rate is currently 5.9%.
The February budget provides for total compensation for an average annual increase of 1.8% for the next three years and no additional provision for wage increases beyond the R20.5 billion allocation in FY 2022-23 to cover interim costs. The pay deal hit last July. That single-year contract provides for a monthly payment of R1 000 in addition to the salaries of civil servants – a rebate that the government has proposed to extend until the end of March 2023.
The government has agreed to a union request to negotiate another single-year pay deal, subject to negotiations ending next month.
The amount of state proposals has increased from 1.5% to 2% overall, and it remains to be seen how the money will be allocated and whether the gratuity will be lump sum or added to workers’ baseline wages, said Cloud, a spokesman for Nike, the Public Servants Association, which has 230,000. Represents more than three state workers.
“None of the demands we made in our proposal were met by the employer,” he said. “What we’ve done now is we’ve got a proposal from the staff and our next meeting will be at the end of May,” he said, adding that the state would provide more details on its pay proposal.
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