File picture: Philimon Bulawayo
JOHANNESBURG - The scene is set for acrimonious public sector wage negotiations after the public service unions at the Public Service Co-ordinating Bargaining Council said yesterday they were readying themselves for a bitter fight with the government.

The unions comprise Sadtu, PSA, Nehawu, Sapu, Denosa, Popcru, Naptosa, Hospersa, Nupsaw, and Natu.

The public sector unions said they were disappointed by the government’s lax and indifferent approach to the ongoing wage negotiations.

“We want to caution the government not to negotiate with the workers through the media, because that will muddy the waters and complicate the negotiations. We are not averse to confrontation if provoked and if they continue on this path the pushback will be ferocious and ugly,” the unions said.

The looming deadlock in negotiations comes days after both ratings agencies Moody’s and S&P Global Ratings flagged the rigidity of South Africa’s public sector wage bill as presenting a key risk to the country’s fiscal outlook.

S&P said South Africa’s external competitiveness problem had fiscal roots.

“For ex­ample, political considerations, through the influence of labour unions, make it extremely difficult to reverse recurrent annual increases in spending on the public sector wage bill, crowding out other areas of spending, such as infrastructure,” the agency said. The public sector unions are demanding between 10 to 12 percent in wage increases. Public servants have also spiked their housing allowance demands from R1200 to R2500.

Demands

The acting director-general of the Department of Public Service and Administration last week told legislators that the cost of meeting this year’s civil servant demands amounted to R282billion.

Sanisha Packirisamy, an economist at Momentum Investments, said the public sector wage negotiations were taking place against tepid economic growth and a heavily constrained fiscus.

“The public sector wage bill has increasingly crowded out other areas of more useful expenditure,” Packirisamy said. Historically, public sectors have been a tumultuous affair. In 2010 1.3million public servants, including nurses, health practitioners, and teachers, embarked on a 20-day strike for higher wages.

The strike was triggered after unions rejected government’s offer of 7percent and a R700 housing allowance.

The public servants had demanded an 8.6percent wage increase and R1000 a month housing subsidy. After a gruelling three weeks, the parties agreed to a 7.5percent increase. Economists then estimated that the strike had cost the state more than R1bn a day.

In the medium-term budget policy statement, Finance Minister Malusi Gigaba said a shortfall in government’s compensation budgets would increase dramatically if public sector wage talks led to agreements that included salary increases above inflation.

The minister also spoke on how progression and promotions have become automatic in many sectors and as a result, most public servants received an automatic cost-of-living adjustment and an increase from salary-scale progression.

- BUSINESS REPORT