The government rejects civil servants’ demands for a 10% salary increase.

Union Buildings in Pretoria. (Gallo Pictures, file)

The South African government has rejected requests from trade unions representing 1.3 million state workers for a 10% increase and increase in housing allowances and other subsidies, instead proposing to extend the payment of an additional monthly grant of R1 .000 of another year.

Joining the union proposals will cost Rand 146 billion over three years, which is not affordable, the government said in a presentation to the public sector bargaining council, which was seen by Bloomberg. It also rejects requests for permanent employment of contract workers.

Remuneration accounts for nearly a third of total public spending, and keeping it under control is the key to the National Treasury’s plans to curb the budget deficit and keep runaway state debt in check. Unions have argued that the increases that beat inflation are justified in light of the soaring food and energy costs. The annual rate of consumer inflation is currently 5.9%.

The February budget projected that total compensation would grow by an annual average of 1.8% for the next three years and did not foresee any further wage increases beyond an allocation of Rand 20.5 billion in fiscal year 2022-23 to cover the cost of an interim wage agreement reached last July. That one-year deal stipulated that civil servants would receive Rs.1,000 a month in addition to their salaries, a concession the government proposed to extend until the end of March 2023.

The government has accepted a request from the union to negotiate another one-year wage agreement on the condition that the talks are concluded within the next month.

The state offer amounted to a total increase from 1.5% to 2% and has yet to clarify how the money will be allocated and whether the tip will be one-time or will be added to the workers’ basic pay, Claude said. Naiker, spokesperson for the Public Servants Association, which represents more than 230,000 state workers.

“Basically all the requests we had set in our proposal, none of them were met by the employer,” he said. “What we have done now is that we have brought the proposal to the workers and our next meeting will be in the latter part of May,” where the state will provide further details on its salary offer, he said.

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