Such increases could threaten the government’s ability to keep this year’s budget deficit in check at 4.6% of GDP Thursday.
“The state has lost patience and terminated bargaining,” Chris Klopper, spokesperson for the Independent Labour Caucus – a state union umbrella group involved in the negotiations – said on Thursday.
Cosatu, representing 14 state unions with an estimated 1.3-million members, has been pushing for an 8% raise, down from 10% initially demanded.
The government has been offering 6.5%, compared with headline inflation at 6.1% in April.
In its February budget, the treasury allowed for a wage increase of only 5% for public servants, adding that a ballooning state salary bill was crowding out investment in infrastructure and other key productive sectors.
Any settlement above 5% is likely to undermine the government’s ability to get the budget deficit in Africa’s biggest economy down from the current forecast of 4.6% of GDP.
South African wage negotiations tend to last several weeks in a mid-year bargaining session known as strike season, with unions often downing tools to back their demands, disrupting mine production and hitting services in hospitals and schools. – Reuters
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