Wages: unions threaten protests

SOUTH African trade unions yesterday threatened protests after they said the government wanted to renege on the terms of a public sector wage deal struck in 2018.

Unions said officials informed them on Tuesday that they could not afford to pay public servants wage increases that were meant to come into force in April 2020, for the final year of the 3-year deal.

Such a move by the government on the eve of a closely watched Budget speech by Finance Minister Tito Mboweni would be part of an effort to contain runaway spending and preserve the country’s last investment-grade credit rating from Moody’s.

The Finance Ministry was in a media lock-up before Mboweni’s speech. The speech had been due for delivery around 2pm and the ministry was unavailable for comment.

Mboweni was under pressure to promise spending cuts that could appease Moody’s.

Public sector union Nehawu said in a statement that the government’s move to renegotiate the wage deal was “a declaration of war”. It said if Mboweni announced a freeze on public sector wages, then Nehawu would “mobilise all its members and workers to shut down the government indefinitely and render the system ungovernable”.

Nehawu is one of the largest affiliates of the Cosatu trade union federation, with more than 200 000 members.

Cosatu is in an alliance with the governing ANC party.

Cosatu said in a separate statement that reviewing the terms of the 2018 deal was an “irresponsible and blatant act of provocation”, while another large union, the Public Servants Association, said it would take to the streets if government persisted with the attempt to review the deal.

Economists have long argued that the government should take a tougher line with unions given severe fiscal constraints.

Public sector wages account for around a third of consolidated government expenditure, according to ratings agency Fitch.