Government pushes through 3% wage hike for public service workers
Finance minister Enoch Godongwana tabled the Medium-Term Budget Policy Statement (MTBPS) on Wednesday (26 October). During his speech, Godongwana reaffirmed that the government’s offer of a 3% wage increase is fair and will be implemented unilaterally.
Wage negotiations have been taking place at the Public Service Coordinating Bargaining Council (PSCBC) since early August 2022, where the government made a final offer which emanated from a facilitation process. This offer includes the following:
- Continuation of a non-pensionable cash allowance for the current financial year. This translates into an average of R1 000 per employee per month until March 2023.
- A pensionable salary increase of 3% for public servants.
“The offer on the table is in the best interest of the fiscus and public service workers,” said Godongwana
However, this decision by Godongwana may not go down well with the public servant unions. Most recently, on Monday (25 October), the Congress of South African Trade Unions (Cosatu) went back to its initial demand for a 10% wage increase from the government after salary talks collapsed, the union federation said in a statement.
“Having considered the economic outlook of government, our demands of a higher percentage above consumer-price inflation is informed by the fact that the three main items — food, electricity and public transport — which drive the expenditure patterns of our members is way above the set CPI,” Cosatu said.
The return to the steep demand also comes after the Public Service Association (PSA) served the government with a seven-day notice of intention to strike after the public service wage talks remained deadlocked at the PSCBC on Monday.
“The PSA remains committed to serving the interests of the union’s members and is convinced that a strike is unavoidable if the government remains arrogant,” said the union.
Cosatu added that the government allowed a draft resolution to fall away in the negotiations earlier this month and that the collective spirit of public sector workers has continuously been shuffled by the blatant disregard and the continued undermining of collective bargaining by the government.
However, in his speech, Godongwana said that “implementing the increase does not undermine the collective bargaining process. We believe that the facilitation process has helped all parties get to this point”.
Both Godongwana and the minister of Public Service and Administration (DPSA) Thulas Nxesi said that the government is grappling with a “balancing act” between wage increases and additional headcounts, saying “there’s always competition” between the two.
Frontline services need more employees to keep up with the increasing demand for public services such as education, police and health – which have not increased in line with the growing population, said the ministers.
“It becomes imperative that the current and future wage agreements strive to strike a balance between remuneration increases and the need for additional headcounts.”
“Therefore, the spending estimates we are tabling today (26 October) include the wage increase offered and will form part of the Expenditure framework,” said Godongwana in his speech.
Department of Public Service and Administration Director-General Yoliswa Makhasi noted that the remuneration of the state’s 1.3 million workers accounts for almost a third of total government expenditure, and keeping it in check is key to the National Treasury’s plans to rein in the budget deficit and bring runaway state debt under control.
The medium-term budget policy statement makes adjustments to cater for additional funds for unforeseeable expenditures. In the current case, the unforeseen spending is estimated at R14 billion to cater for the 3% salary adjustment, Makhasi said.
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