Govt halts public service wage talks

2012-06-14 08:10

The government has broken off wage talks with 1.3 million state workers seeking above-inflation pay increases that threaten the government’s ability to keep this year’s budget deficit in check at 4.6% of GDP, union officials have said.

“The state has lost patience and terminated bargaining,” said Chris Klopper, spokesperson for the Independent Labour Caucus, a state union umbrella group involved in the negotiations.

The Congress of South African Trade Unions (Cosatu), representing 14 state unions with an estimated 1.3 million members, has been pushing for an 8% raise, down from 10% initially demanded.

The government has been offering 6.5%, compared with headline inflation at 6.1% in April.

In its February budget, the Treasury allowed for a wage increase of only 5% for public servants, adding that a ballooning state salary bill was crowding out investment in infrastructure and other key productive sectors.

Any settlement above 5% is likely to undermine the government’s ability to get the budget deficit in Africa’s biggest economy down from the current forecast of 4.6% of GDP.

Wage negotiations tend to last several weeks in a mid-year bargaining session known as “strike season”, with unions often downing tools to back their demands, disrupting mine production and hitting services in hospitals and schools.


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