Related Articles
Top Stories
May 25 2012 13:58
The costs of the first phase of the Gauteng Freeway Improvement Project have increased significantly to almost R90bn, according to a report.
May 24 2012 17:31
The Reserve Bank will maintain current interest rates, and a considerable reduction in the local petrol price is anticipated, says governor Gill Marcus.
May 25 2012 11:36
The JSE has identified and stopped "incorrect" trades from one of its members, and will reverse the trades and lower the session's total value after the close.
Pretoria - The government raised its pay offer to civil servants on Thursday to try to avert a strike that could cripple commerce in the continent's largest economy, but the gesture was quickly rejected.
Around one million public sector workers under the umbrella of the country's biggest labour organisation Cosatu have threatened a national strike from next week.
Analysts expect more sparring between the groups in the coming days but believe a deal tilted in the unions' favour will be reached to head off a repeat of mass action by civil servants three years ago that battered the economy.
The Public Service Ministry said in a statement that it was prepared to increase salaries by 7%, after previously offering 6.5%. Its offer of a monthly housing allowance of R630 remained unchanged.
Unions are demanding an increase of 8.6% - double the current inflation rate - and a housing allowance of R1 000, which would put pressure on the state budget.
The government says the combined demands amount to a raise of 9% and would make it nearly impossible to fulfil its commitment to bring its budget deficit down from 6.7% of GDP. Spending on personnel is the largest sector of the budget.
"These are above what is affordable," Public Services Minister Richard Baloyi told a news conference, urging unions to accept the latest offer or face the prospect of cutbacks in other parts of the budget.
"We have to take painful decisions," he said.
Workers who have threatened to strike include customs and immigration officers, police, health care staff and teachers.
"Cosatu public sector unions are deeply angered by the government's failure to accede to the moderate wage increase demands of the workers," the unions said in a statement.
The latest offer suggests the ANC has little stomach for a fight with organised labour, with whom it has a long-standing political alliance forged in the struggle against apartheid.
"The government has strong political incentives to reach an early settlement, but this poses fiscal risks," Eurasia Group Africa analyst Anne Fruhauf said in a recent research note.
The ANC also does not want to see a long halt in public services which could erode support before national elections are held early next year for almost all local government posts.
- Reuters