Today's Labour News

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southafricalogoBusiness Report writes that according to analysts, the government came out unscathed in the latest round of public sector wage negotiations.  

Capital Economics Africa economist John Ashbourne said the above-inflation salary increments would not have implications for the economy.  He explained:  “It is an above-inflation raise, albeit a small one.  But the February 2018 Budget assumed a 7% increase in staff costs, so this deal is essentially in line with the government’s own forecast.  This means that there won’t be a need to adjust spending plans elsewhere to make the budget add up.”  The 2018 Medium Term Expenditure Framework (MTEF) covering the period from 2018/19 to 2020/21 made a provision of R110 billion for salary adjustments and improvements in other conditions of service for employees.  Welcoming the wage deal, Minister of Public Service and Administration Ayanda Dlodlo warned that it exceeded the amount envisioned in the MTEF period by R30bn.  Adrian Saville of Cannon Asset Managers noted that SA’s public sector was bloated relative to other middle-income countries, with well-below-average service outcomes.  He added:  “South Africa’s public sector wages have run well ahead of inflation and also well ahead of the private sector since 2014, which adds to inflationary pressure in the economy and further aggravates the already-stressed fiscus.  Perhaps the silver lining is that the settlement figure of 7% in the first year has been budgeted.”

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