Cape Town - Finance Minister Nhlanhla Nene said he was hopeful that the current wage talks with public sector unions would not end up in a strike.
Noting consumer price inflation (CPI) expectations are expected to be much reduced - the Budget Review forecast a CPI inflation rate of 4.3% this year - Nene said the budgetary allocations are based on inflation expectations.
"Things look better on the inflation side... that should help us with... moderation (in pay demands)," noting that it is the aim of Treasury to protect the buying power of public servants' salaries.
Whatever the settlement, Nene said, it "should not impact on the (budget) deficit (negatively)".
Nene appealed to state departments to "moderate" the growth in employment numbers in the public service.
He noted a worrying trend of non-core workers being appointed at the expense of core workers, citing the example of health administrative staff being taken on board rather than the appointment of more doctors and nurses.
Asked if he was confident that a strike in the public sector could be avoided, he said government is working "very hard to seek ... to find a middle ground and an amicable solution" to the current wage negotiations.
He pointed out that employers enjoy a lock-out clause in labour legislation, but also noted that workers "are entitled to go on strike".
Nevertheless, a strike would have a negative impact on the economy "and we are working hard to avoid that... that is why we are in negotiations".
Nene was speaking during a media briefing before the delivery of his budget speech on Wednesday afternoon.
According to figures given in the Budget Review on the Government Employees' Pension Fund, there are 1.2 million public employees who contribute to the fund. Other reports put the figure at 1.3 million public servants.
Public sector unions last year opened wage negotiations with a 15% increase demand. Former finance minister Pravin Gordhan last year provided for a 6.4% increase in the wage bill over three years. The wage bill was some R440bn of the R1.24trn budget in 2014/15.
The expenditure side of the budget is expected to rise to R1.35trn in 2015/16.