JOHANNESBURG — South Africa has broken off wage talks with 1,3 million State workers seeking above-inflation pay increases that threaten the government’s ability to keep this year’s budget deficit in check at 4,6% of GDP (gross domestic product), union officials said yesterday.
“The state has lost patience and terminated bargaining,” said Chris Klopper, spokesman for the Independent Labour Caucus, a State union umbrella group involved in the negotiations.
The Congress of South African Trade Unions, 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.
