Cosatu has rejected finance minister Enoch Godongwana's announcement that the state will unilaterally implement a 3% wage increase for all public servants, saying the minister has no standing to speak on matters before the negotiating table.
Cosatu spokesperson Sizwe Pamla said the announcement that the government cannot make a better offer than the current 3% had no substance.
“Unions don’t negotiate with parliament. It [the final offer] does not help anyone. Reconciliation is scheduled. As a federation we are cautioning the government to say this country does not need a strike. Reckless management of industrial relations will have consequences.
“As far as we are concerned, we have not concluded these negotiations… if they believe they have done so, then the economy of this country is in trouble,” Pamla said.
In a move that could trigger a public sector strike, finance minister Godongwana announced he endorsed the government’s decision to unilaterally implement a 3% wage increase for all public servants, plus a R1,000 monthly gratuity.
Godongwana announced that labour minister Thulas Nxesi, in his capacity as acting minister of the department of public service and administration, would invoke section 5 of the Public Service Act to bring finality to public sector wage talks.
On Tuesday, Nxesi invoked section 5 to implement a 3% salary wage increase for public servants after talks with public sector unions collapsed.
“We have to close this matter once and for all,” Godongwana said.
“The offer on the table is in the best interest of the fiscus and public service workers. Implementing it does not undermine the collective bargaining process. We believe the facilitation process has helped parties get to this point,” said Godongwana.
The Treasury said over the last 15 years the wage bill had grown as a result of above-inflation wage increases.
Treasury said in the context of slow economic growth, the growing wage bill began crowding out spending in other critical areas including service delivery. It said between the 2020 and 2021 budget, the government reduced the medium-term compensation baselines by more than R300bn to stabilise the public finances.
“Future wage negotiations will aim to strike a balance between remuneration increases and the need for additional staff in services such as education, health and police,” Treasury said.
Treasury said in the MTBPS that over the past several years, the government had taken steps to contain consolidated compensation costs, which accounted for 31.4% of consolidated expenditure in 2022/23, down from 34.5% in 2019/2020.
“Managing the wage bill is critical for ensuring sustainable public finances,” said Treasury. It said SA's wage bill was higher than its peers and one of the highest among emerging markets.
“This suggests that high average compensation levels are mainly responsible for South Africa’s high public sector wage bill rather than the headcount,” said Treasury.
The Treasury said a once-off payment can skew the wage trend in any particular financial year. For example, the once-off gratuity allocated in 2021/22 and 2022/23 in line with the 2021 public service wage agreement explains the decline in the 2023/24 wage baseline for most departments. “To avoid pre-empting the wage negotiations process, no provision has been made for wage increases in 2023/24, though increases will need to remain within the relevant fiscal resources to not compromise other spending priorities.”
It said teachers remained the single largest occupation category in the public service, both in terms of expenditure and headcount, and about 52% of the wage bill was spent on teachers, nursing personnel and police officers.
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