Unions reject government attempt to renegotiate pay

Freezing wages in the public sector could save as much as R128 billion over the next three years: Barclays economist.
Image: Brett Eloff/Bloomberg News.

South African labour unions have rejected a government proposal to review planned increases for civil servants days before they were due to be implemented.

The Public Servants Association, which represents 230,000 government workers, said the state on Tuesday asked to review the last leg of a three-year pay agreement because it couldn’t afford it. Finance Minister Tito Mboweni is due to announce the annual budget on Wednesday.

“The timing of the proposal, a few days before the adjustments were due to be implemented, speaks of a government that regards public servants as an easy target to resolve its financial woes,” the PSA said.

Pushing the proposals through in the budget speech will be seen “as a declaration of war,” the Central Executive Committee of the Congress of South African Trade Unions, the country’s biggest labor federation, said in an emailed statement. Earlier this month, Cosatu said the government is seeking to cut 30,000 civil-servant jobs as Mboweni seeks to rein in government debt and get economic growth going.

“The CEC views this action by the government as a direct attack on collective bargaining, which will never be accepted,” Cosatu said. “This irresponsible and blatant act of provocation will seriously destabilise the public service and we warn the government to abandon this idea and give workers what is due to them.”

What Bloomberg’s Economist Says

“Public wages are set through bargaining with unions and agreements stay in force for three years. The current agreement is in place until March 2021, making it unlikely that the Treasury can report much progress on its efforts to address the wage bill before negotiations are finalized by the end of the year.”

– Boingotlo Gasealahwe, Africa economist

Freezing wages in the public sector could save as much as R128 billion over the next three years, Barclays Plc economist Michael Kafe said in note dated February 24. Barclay’s base case scenario is that Treasury will only be able to save R7 billion over the period because the government lacks the political will to cut payroll costs before the ruling party’s national general conference in June.

The wage bill accounts for more than 35% of government spending.

© 2020 Bloomberg

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COMMENTS   9

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The penny still hasn’t dropped, has it? Rather have a job during these times than no job at all. But then again, what logic can one expect from an anc supporter?

Why should they care?

Wierdsicka (sic) has offered to take clients’ pension savings and hand it over to the ANC to fill the budget shortfall.

Get your money out f Sygnia asap.

Magda is crazy.

Soooo glad I have nothing to do with Sygnia.

If you look at the photograph carefully you will notice they are NOT ANC supporters….it’s much worse than you think.
The Unions will be the death of this economy.

The ANC would like to chat to you as they believe they are entitled to some of the credit!

Actually if you really look carefully, they appear to be Ferrari supporters lol …. those red caps are misleading!

Why would the unions ever agree to that? There is no motivation for them to do so, and it is not their mandate.

Don’t pander to the unions

This continual mudslinging of the ANC will not help.
All the readers of Moneyweb are intelligent enough to know this.
We comprise a small minority of the voting public and until the rural masses and government grant receivers understand that the bucket is empty, nothing will change. This is Africa

End of comments.

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