Government buckles on public sector pay increase
The government has sweetened its 2023/2024 wage offer increase for 1.2-million public servants to 7%, raising the prospect of clinching a pay hike deal, and throwing into doubt the credibility of the Treasury’s commitment to keeping a lid on spending of R700bn-plus on salaries.
The offer, which is an improvement on the initial pay increase proposal of 4.7%, is not far from an 8% demand from union leaders representing teachers, nurses and other public servants. They initially demanded a 10% pay hike.
But the offer cements the public wage bill’s place as one of the wildcards in finance minister Enoch Godongwana’s fiscal consolidation efforts.
His department has pencilled in an average annual growth rate of 1.6% in government employee salaries for 2023/2024, an estimate that means the wage bill would overshoot R700bn.
It comes more than a week after thousands of workers led by the National Education, Health and Allied Workers Union (Nehawu) took to the streets to express their anger over the previous fiscal year’s 3% wage increase, which was unilaterally pushed through by the government eager to demonstrate its commitment to the fiscal consolidation drive.
Efficient Group chief economist Dawie Roodt said the offer was “horrible” and lambasted the government for its handling of taxpayers’ money.
“This is totally unacceptable for a number of reasons. Civil servants, as a rule, are overpaid and they underwork. The fiscal accounts are so deep in trouble, it’s irresponsible to give them this kind of increase,” he said.
The offer also comes in the context of the cost-of-living crisis, which threatens to upend typically resilient sectors such as the taxi industry.
There are also worries among some economists that the ANC-led government might be tempted to push through populist policies to hold on to power in the 2024 elections.
“The problem is the government doesn’t have money. I suspect they will renege and not pay the increase after the elections in 2024,” said Michael Bagraim, an MP for the DA, adding that the government wanted to keep public servants “sweet until after the vote”.
Public servants are still angry that the government refused to implement the last leg of a threeyear wage deal signed in the Public Service Co-ordinating Bargaining Council (PSCBC) in 2018, citing a lack of funds. The Constitutional Court ruled in 2022 that the government could back out of implementing the last part of the agreement as the unions were “unjustifiably enriched” from the “impugned collective agreement”.
The Treasury did not respond to a request for comment on the revised 7% offer on Wednesday.
Labour’s initial demands included a one-year wage agreement of 10% and a monthly housing allowance of R2,500, while the employer proposed a three-year wage deal of 4.7%, followed by increases linked to the consumer price index (CPI) in the outer years of the agreement.
The employer — which has been trying to slash the public sector wage bill because it accounts for more than onethird of government spending — met labour representatives on Tuesday and the revised offer was tabled. At 53.9%, these unions constitute the majority in the bargaining council.
The Federation of Unions of SA (Fedusa) said labour had rejected the proposed term of the agreement, which was three years, but “workers are amenable to a two-year term with the second-year increase set at CPI plus 1.5%.”
RESOLUTE
Under the offer, workers would get CPI plus 0.5% in the second year and a raise in line with CPI in the third year.
Fedusa said a follow-up meeting would be held soon, “with the expectation that the employer will revert to the response tabled by unions”. It expects talks to end before month-end.
“Given the current material conditions and the competing priorities of the national fiscus, [the SA Democratic Teachers Union] strongly believes we have made significant strides, but we are still resolute to push government to improve their offer,” said the union’s general secretary, Mugwena Maluleke.
Public Servants Association (PSA) assistant GM Reuben Maleka said on Wednesday that the union, which represents more than 235,000 public servants, rejected the 7% revised offer. “The PSA remains resolute on its mandated demand for a 10% increase. The government’s offer does not consider the escalating cost of living and does not meet the needs of public servants,” Maleka said.
Unions that include Nehawu and the Police and Prisons Civil Rights Union have refused to participate in the wage talks until the impasse relating to the 2022/2023 fiscal year is resolved.
Parties failed to hammer out a wage deal in 2022, resulting in the employer unilaterally implementing a 3% increase in October, to the ire of unions, which had been demanding a 10% hike.
This led to Nehawu embarking on crippling industrial action a week ago, which the labour appeal court interdicted this week.
CRIPPLING
In a statement on Wednesday, PSCBC general secretary Frikkie de Bruin said the wage dispute relating to the 2022/2023 financial year had been settled by parties, marking the return of the unions to the bargaining council for the current wage talks.
De Bruin said the agreement served as the “conclusion of the dispute between parties and initiates the return of the trade unions to council”.
In a statement on Wednesday, Nehawu general secretary Zola Saphetha said the strike was now suspended.