Mchunu denies ‘ fiscal treason ’ in making offer to trade unions
Public service & administration minister Senzo Mchunu has rejected suggestions that he committed “fiscal treason” by proposing a R27bn wage settlement to the public sector trade unions.
The minister was speaking during the debate on his vote in the National Assembly during the processing of the Second Adjustments Appropriation Bill on Friday.
DA public service & administration spokesperson Leon Schreiber noted that finance minister Tito Mboweni had for more than a year promised that the state would not increase wages and in fact imposed a wage freeze for the next three years.
Yet Mchunu, Schreiber said, had offered the public sector workers a R27bn wage increase. The DA MP asked Mchunu why he was committing this “fiscal treason” against the country.
In an earlier media statement, Schreiber said the government’s bid to settle with the trade unions signals the beginning of the end of the government’s halfhearted effort to reduce the out-of-control wage bill. As a result of the ANC’s desire to hang on to political power at all costs, SA is now hurtling towards a budget blowout and a fiscal crisis from which we may not recover for at least a generation ”.
Minister Mboweni’s supposed plan to hold the fiscal line and freeze the state wage bill has been summarily torn up by political considerations to keep tripartite alliance cadres on side.
“We all know that the ANC has chosen to appease these cadres and unionists because Cosatu had threatened to withdraw its support to the ANC during the 2021 local government election if the ANC implemented Mboweni ’ s plan,” Schreiber said.
The fiscal framework that aims at consolidating the government ’ s mounting debt burden and reining in the rising budget deficit depends on the wage freeze. Credit ratings agencies are sceptical about the government ’ s ability to impose a wage freeze and will be closely watching the outcome of the talks under way.
SETTLEMENT
The government’s offer included a one-off cash payment or bonus and a year-long pension holiday. This would reduce the cost of the initial 2018 package from R37.5bn to about R27bn. The government has asked for more time to work out the finer details of the proposed settlement.
Mchunu said he did not know anything about the offer that was mentioned.
“What I know is that we had discussions with the unions based on four fixed principles — the first one was that whatever was agreed outside court had to be in line with the principle of not affecting in any way the budget baseline which is in line with the current fiscal framework.
“Second, any agreement could not expand in any way government ’ s borrowing margin; third, it must maintain stability; and, fourth, it should enable the government to sit down with labour to discuss the new dispensation in the public service.”
Mchunu insisted this was what was discussed with labour.
In 2020, the government unilaterally decided not to implement the third leg of a three-year deal signed with unions in 2018, arguing it was unaffordable. Implementing the agreement this year would cost R37.8bn.
The matter is now before the labour appeal court, but on Tuesday the government asked unions to postpone the case to February 1 to allow for further negotiations. The unions refused.
MBOWENI ’ S PLAN ... HAS BEEN TORN UP BY POLITICAL CONSIDERATIONS TO KEEP TRIPARTITE ALLIANCE CADRES ON SIDE
WHAT I KNOW IS THAT WE HAD DISCUSSIONS WITH THE PUBLIC SECTOR TRADE UNIONS BASED ON FOUR FIXED PRINCIPLES