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South Africa's public-sector wage demands would cost $1.7 billion
South Africa's Finance Minister Nhlanhla Nene delivers his 2015 Budget Speech at Parliament in Cape Town, February 25, 2015. PHOTO BY REUTERS/Sumaya Hisham
17/04/2015
CAPE TOWN (Reuters) - Wage demands by South African public-sector unions would cost the government an extra 20 billion rand ($1.67 billion) over the next financial year, the country's finance minister, as workers threaten mass protests in a push for higher pay.
Unions are seeking a 10 percent pay rise. That would increase government spending by about 1.5 percent in 2015/16, Nhlanhla Nene said in a written response to parliamentary questions on Thursday.
The government is offering an inflation-linked 5.8 percent rise in a three-year deal to replace the existing agreement, which expired on March 31.
"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 1,200 rand from 900 rand, 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 percent from the 10 percent 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 Africa's most developed economy, which is already suffering from widespread power shortages and high unemployment.
Any wage increase greater than the 5.8 percent 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 Treasury has repeatedly said current levels of debt are unsustainable, at around 40 percent 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.
"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 spokesman for trade union federation Cosatu's public sector affiliates.
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