Municipal wage deal shows govt is getting serious about spending discipline, economists say

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Economists are of the view that government's ability to get a wage deal below the initial demands signalled that it was prepared to curtail spending in local government.
Economists are of the view that government's ability to get a wage deal below the initial demands signalled that it was prepared to curtail spending in local government.
Fin24/File

Economists believe that the latest local government wage deal between unions and the South African Local Government Association (Salga) at the South African Local Bargaining Council was an encouraging indication that government could come to grips with spending in the coming years.

Local government employees will receive a 3.5% increase with effect from 1 July 2021, along with once-off, non-pensionable cash allowances. Those earning R12 500 or less at 1 July will receive a once-off amount of R4 000 and those earning more will get R3 000.

During the negotiations, the South African Municipal Workers Union (Samwu) demanded a R4 000 salary increase across the board and a sectoral minimum wage of R15 000. The union even threatened to walk out of the final stage of talks in early July.

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