(Bloomberg) -- The South African government rejected an opening demand by public-sector workers for a 12% pay increase as unaffordable.
Instead, the state offered a 3% raise, Frikkie de Bruin, general secretary at the Public Service Co-ordinating Bargaining Council said by phone Wednesday. The proposal by workers would require 140 billion rand ($7.83 billion) and be “totally out of budget,” he said.
The government told labor unions representing state workers to “go and reconsider and relook at the position and at the demands in terms of where is it we can maybe follow a different approach,” De Bruin said.
Talks are scheduled to resume in October and run through to the middle of the month, ahead of Finance Minister Enoch Godongwana’s mid-term budget update, expected on 0ct. 30, he added
The state’s offer is below South Africa’s rate of inflation, which slowed to 4.6% in July from 5.1% in June. Still, price pressures are expected to cool further, with the central bank forecasting a slowdown to 4.3% in the final quarter of 2024 and averaging 4.4% next year.
The Public Servants Association of South Africa, which represents about 242,000 workers, rejected the state’s counter offer and will formally decline it on Friday, according to spokesman Claude Naicker.
In addition to the 12% increase in the 2025-26 financial year, public servants are seeking a 2,500-rand increase in their housing allowance. They’ve also called for a danger allowance to be raised to 1,000 rand from the 597 rand.
(Updates with union reaction in sixth paragraph)
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