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JOHANNESBURG - Today will be a make or break day for the acrimonious public sector wage negotiations ­after the parties failed to reach an agreement last week, with threats of industrial action looming large.

The public sector wage deal for about 1.3million civil servants lapsed on March31, and negotiations have been ongoing since October at Public Service Co-ordinating Bargaining Council (PSCBC).

The Public Servants Association (PSA) general manager, Ivan Fredericks, said the current format of negotiations was not yielding the desired results, and that labour now needed to take steps to resolve the impasse.

“It is clear that the employer is trying to deviate from the formal offer, which was circulated to members for a mandate. The PSA will not allow the employer to table a less favourable offer than the one that was originally tabled,” Fredericks said.

The PSA represents some 238000 public service employees. Unions are demanding wage increases of Consumer Price Index (CPI) plus 3percent for junior government employees and CPI plus 2percent for mid-level employees.

They also want a one-year wage agreement instead of the current three-year cycle. Trade unions have also highlighted the first value-added tax (VAT) hike since 1993, and other tax hikes introduced by the National Treasury in the 2018 Budget as having affected the financial wellbeing of the members.

The Bureau for Economic Research (BER) said on average, inflation was expected to be 5.2percent this year, 5.3percent in 2019 and 5.4percent in 2020.

The government’s opening offer was CPI increases for junior and mid-level government employees on levels 1 to 10, and an increase of CPI plus 1percent for senior government employees on level 11 to 12 and a three-year deal.

PSCBC general secretary Frikkie de Bruin said parties were committed to finalising the process soonest.

“I am of the opinion that parties are not far apart. We will be reconvening Monday (this) afternoon at 3pm, and I hope that we will by the evening or on Tuesday morning have a clear direction to a possible settlement,” De Bruin said.

The last public servants’ strike in 2010 saw 1.3million public servants, including nurses, health practitioners and teachers, embark on a 20-day strike for higher wages. Economists estimated that the strike cost the state more than a billion rand a day.

The Minister for Public Service and Administration, Ayanda Dlodlo, has called for patience to allow parties to reach an amicable settlement, saying that “the current round of negotiations is being undertaken under very difficult economic conditions”. The negotiating teams who have been engaging throughout the weekend would want to avoid a debilitating public sector strike.

Annabel Bishop, the chief economist at Investec, said the public-service wage bill had crowded out spending in other areas, particularly in capital investment.

“Should the wage settlement again exceed inflation it is likely that the composition of expenditure will be altered so as not to affect overall expenditure,” Bishop said.

In its 2018 Budget Review, the National Treasury said the public service wage bill comprised the largest share of current expenditure, at an expected 35.2percent over the medium term, on account of both an expansion of civil servant head counts and high average wages.

Trade federation Cosatu said a strike would reverberate all the way to 2019.

-BUSINESS REPORT