Cape Town - The government’s salary bill could increase by more than R30 billion following the wage settlement between the state and unions at the Public Sector Co-ordinating Bargaining Council (PSCBC) on Wednesday.
The multiyear deal, struck on Tuesday night, includes a 7-percent increase this year, and an inflation, plus 1 percent 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 over R430bn.
“Any increase beyond what is budgeted will lead to borrowing for recurring expenses such as salaries, and impact negatively on operational budgets, infrastructure development, employment creation and service delivery,” the department said.
In addition, unions also got the state to agree to increase medical aid contributions to 28.5 percent, although the steep rise is because the employer had not adjusted contributions for the past three years.
The agreement has been largely greeted with relief, as failure to conclude the talks could have led to a strike involving about 1.3 million public servants.
But labour analyst Tony Healy said outstanding issues could still scupper the deal. The major issue still outstanding is the new Government Employees Housing Scheme (GEHS). “It may even be premature to be celebrating this settlement. But the deal will give us labour peace for three years in a sector popular for violent strikes,” he said.
The bargaining chamber said while agreement on the GEHS had not yet been concluded, state workers who owned homes would still get a R1 200 allowance, while those who did not own homes would still receive R900.
The scheme would divert the difference from the increase to a savings facility for the individuals who did not own homes.
Basil Manuel, of the Independent Labour Caucus (ILC), said some of the unions had refused to sign the agreement.
“We are definitely concerned with how the housing deal is going to be managed,” he said.
Mugwena Maluleke, of teacher union Sadtu, said there was still hard work to do before a final agreement.
Despite the 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’s chairperson, Bertha Mabe, also applauded the unions’ 3-percent compromise on their 10-percent wage demand.
“The acceptance of this agreement confirms that employees are conscious of the developmental challenges facing the country and the strain this puts on the declining budget,” Mabe said.
Financial analysts and international rating agencies have expressed concerns about the country’s growing wage bill, which some estimates place at over 35 percent of the state’s budget.
Healy said linking future increases to inflation was a good first step in curbing the state’s wage bill.
Cape Times