Nene: Public sector wage demands will cost R20bn

Cape Town - Wage demands by South African public-sector unions would cost the government an extra R20bn over the next financial year,  Finance Minister Nhlanhla Nene said as workers threaten mass protests in a push for higher pay.

Unions are seeking a 10% pay rise. That would increase government spending by about 1.5% in 2015 and 2016, Nhlanhla Nene said in a written response to parliamentary questions on Thursday.

"The state as employer remains optimistic that the conciliation process will produce a mutually-beneficial outcome and that negotiations will conclude in April 2015," the Department of Public Service and Administration said in a communique to public sector workers.

It said some progress, such as increasing the housing allowance to R1 200 from R900, has been made in conciliation talks after government declared a dispute.

Talks to break the deadlock, which could see 1.3 million teachers, nurses and police officials walk out if the impasse remains, are expected to resume on Tuesday.

Cracks have already emerged among labour, with independent unions revising their demand to 8.5% from the 10% still being pursued by public-sector unions aligned to the largest labour sector, Cosatu, which represents more than half of all public-sector workers.

The drawn-out wage talks are putting more pressure on the economy, which is already suffering from widespread power shortages and high unemployment.

READ: Expect load shedding this week – Eskom

Any wage increase greater than the 5.8% inflation rate that the government offer is based on "cannot be financed through debt issuance," Nene said. The government would need either to reallocate funds from elsewhere or cut jobs, he said.

The government would need either to reallocate funds from elsewhere or cut jobs, he said.

The Treasury has repeatedly said current levels of debt are unsustainable, at around 40% of gross domestic product.

On Friday, a union representative told Reuters that around 20 000 government workers were planning a march on April 23 to press their wage demands.

READ: Public sector wages showdown: this time it’s got to be different

"If we do not get what we want, that march will be followed by other actions that we still have to decide on," said Mugwena Maluleke, a spokesperson for trade union federation Cosatu's public sector affiliates.


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