Salary bill could rise by R30bn
THE government salary bill could increase by more than R30 billion because of the wage settlement between the state and unions at the Public Sector Co-ordinating Bargaining Council.
The multi-year deal struck on Tuesday night included a 7% increase this year and an inflation plus 1% adjustment in 2016 and 2017. Last month the Public Service and Administration Department raised concerns about the state’s ability to foot the wage bill, which could well be more than R430bn.
“Any increase beyond what is budgeted will lead to borrowing for recurring expenses such as salaries, and impact negatively on operational budgets of departments, infrastructure development, employment creation, and service,” the department said.
In addition to the salary increases, unions also got the state to increase its medical aid contributions to 28.5% – the steep rise here was due to the failure to adjust contributions for the past three years.
Failure to conclude the talks could have led to a strike involving 1.3 million public servants. But Labour analyst Tony Healy said outstanding issues could still scupper the deal or lead to strife down the line.
The major issue still outstanding is the new Government Employees Housing Scheme. “It may even be premature to be celebrating this settlement; there is still the housing issue to be finalised. But it is good news on a societal level. The deal will give us labour peace for three years.”
The bargaining chamber confirmed yesterday that while agreement on the housing scheme had not been concluded, state workers who owned homes would still get R1 200 allowances, while those without would still receive R900.
Despite hiccups in the deal, the parliamentary portfolio committee on public service and administration expressed relief that parties had averted a potentially crippling strike.
The committee chairwoman, Bertha Mabe, applauded the unions’ 3% compromise on their 10% wage demand. “The acceptance of this agreement confirms employees are conscious of the developmental challenges facing the country,”
Financial analysts and international rating agencies have expressed concerns about the wage bill, which some estimates place at more than 35% of the state’s budget.