Johannesburg - The government 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
gross domestic product (GDP), union officials said on Thursday.
“The state has lost patience and terminated bargaining,”
said Chris Klopper, spokesperson for the Independent Labour Caucus, a state
union umbrella group involved in the negotiations.
The Congress of South African Trade Unions (Cosatu),
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
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.
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.