Govt pay offer yet to be accepted

2010-09-06 14:57

A strike by 1.3 million South African public sector workers has been suspended, union officials said as the action entered its fourth week.

“Labour has decided to suspend the strike and this does not mean we have accepted the state offer,” unions representing the state workers said in a joint statement.

The unions said they had 21 days to finalise discussions with their members on a draft agreement.

Government raised its offer to 7.5% and R800 for the housing allowance last week but workers rejected the deal and unions asked for more time to explain the offer to their members.

Government officials said the state could not afford the offer they had already put on the table and there was no more room in the budget to increase the offer, which would swell state spending by about 1 percent.

The biggest strike since 2007 in terms of lost man days has left bonds, stocks and the rand largely unaffected, but market players said the strike would cap gains by the rand and could have a bigger impact if it drags on.

Economists predict that the labour action is costing the economy about R1 billion a day.

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