State can’t afford public sector demands – Gordhan

SA's Finance Minister, Pravin Gordhan on Monday said the government could not afford to pay for the 9% wage hike that the country's public servants are demanding. He said this was because tax revenue has not recovered post-recession. "We are still recovering from the recession. Our tax revenue hasn’t gone back to where it was in 2008," Gordhan was quoted on East Coast Radio's website.

On Sunday, Independent Labour Caucus chairman Chris Klopper said he found it "strange" for the government to say that the unions he represented and the Congress of South African Trade Unions (Cosatu) had been negotiating wage demands through the media. This was following the unions announcing to the media last week that a wage deadlock had been reached. "It is a bit odd that they said that. Nevertheless, we will be in talks with the government this week," he said.

The government is offering a 5,2% pay hike across the board. This is marginally up from the 4,8% they had offered earlier this year. Unions were awarded a 7,5% hike last year after a strike that cost SA billions of rands.

Inflation is currently sitting around 4,1%.

Cosatu’s Mugwena Maluleke said the unions wanted a response from the government about how to take talks forward. This needed to be within the two to three days starting on Monday or they would hold a meeting to force the government to appoint a facilitator, he said.

"As it stands now, government is on strike," he said.

Dumisani Nkwamba, spokesman for Public Service and Administration Minister Richard Baloyi said there was no breakdown in negotiations in the state’s view.

Mr Gordhan has continuously warned about the inflated state wage bill. "We have lots of pressures, both to ensure that public servants are paid reasonably but also to deliver important services ... and increase our investment in infrastructure in SA," he said on Monday.

Source: Alistair Anderson State can’t afford public sector demands – Gordhan
Business Day, May 9, 2011

For text: http://www.businessday.co.za/articles/Content.aspx?id=142190

First published by the Business Day

FMF Policy Bulletin/ 10 May 2011