State drags its feet on wage offer decision

Government this week remained tight-lipped on its negotiation position despite delaying the public service wage talks by more than three weeks.

The department of public service and administration, which represents government in wage talks, has said it was still pondering its official position regarding the long list of demands already submitted by labour unions last month.

Public Service and Administration Minister Faith Muthambi’s spokesperson, Pfarelo Maduguma, said: “The employer is still busy with the internal processes relating to collective bargaining issues as tabled by labour. Once completed, the employer will go back to the formal negotiating processes at the Public Service Coordinating Bargaining Council.”

Government postponed the overdue negotiations at the eleventh hour last month, citing a lack of preparation.

The unions are demanding wage hikes of up to 12% and a number of other perks.

This is in direct opposition to the medium-term budgetary policy statement documents that Finance Minister Malusi Gigaba unveiled last month, which refer to the financial year ending March 2018 to the financial year ending March 2021. Government is forecasting an average increase in wages of 7.3%.

In the budget statement, Gigaba said that government finances would deteriorate substantially if the public service wage talks led to an agreement that exceeded consumer price inflation.

“Strains and imbalances within the public finances may become more pronounced. The public sector wage bill has increasingly crowded out other spending and limited government’s ability to increase public employment,” the budget document said.

“A new civil service wage agreement in which salary increases exceed consumer price inflation, and without headcount reductions, would render the current expenditure limits difficult to achieve.”

Labour’s demands include a call for the Public Investment Corporation (PIC) to create a housing investment portfolio that will directly invest in housing schemes. The reason for this is that the PIC has a diversified portfolio and some of its investments do not have a direct benefit to the owners of the funds while they are still in service.

The PIC already has a R10.5 billion investment in SA Home Loans to facilitate housing finance for qualifying government employees and members of the public, but the unions said the demand was specifically aimed at interest-free loans.

Other demands tabled by the unions include that the children of public servants who attend higher education institutions must be granted bursaries or be subsidised, and for pay progression to be allowed beyond the top notches of salary levels.

Meanwhile, the Independent Commission for the Remuneration of Public Office Bearers has recommended that a 4% wage increase be given to ministers, MECs and deputy ministers, as well as to the speakers of Parliament and of provincial legislatures, the chairperson of the National Council of Provinces and all judges.

A wage hike of 4.5% was recommended for members of Parliament and provincial legislatures, the chief whip of the majority party, permanent members of the National Council of Provinces, the deputy speaker of provincial legislatures, executive mayors and deputy mayors, as well as for traditional kings and queens.

Members of municipalities’ executive councils and chief whips, as well as chairpersons of traditional authorities, would get a 5% increase.

The commission further recommended that a 6% wage increase be given to magistrates, councillors and all members of the National House of Traditional Leaders, while an 8% increase should be given to senior traditional leaders.

Headmen and headwomen are tipped to get R106 106 and an extension of their medical aid benefits, part of which will be subsidised by the state.


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