EWN reports that national Treasury has confirmed that the government’s latest wage offer to public servants would break the compensation ceiling.

This means Treasury will have to make reductions in other areas of government spending, including allocations for key service delivery budget items. Although unions initially demanded 7% hikes across the board, government has offered them 1.5% and a monthly payment of at least R1,000 . The lowest-paid workers will get adjustments of about 11.7%. While the government appears convinced that a settlement can be reached, Treasury said its preliminary costing indicated it would need about R20 billion to fund the deal for one year. National Treasury chief director Edgar Sishi told 702 that while the 1.5% pay progression due to several employees was budgeted for, the rest of the offer was subject to negotiation through a political process. He said the ministers who formed the mandating committee on wages had been appraised of the consequences if they breached the ceiling. “We would try avoid making reductions to critical priority areas. But it is unavoidable that if you negotiate beyond the ceiling, you are going have to find the money from somewhere. The compensation ceiling would be bridged by the new offer which means funds will have to be taken from elsewhere to make up the difference,” Sishi stated.

• Read the original of the short report in the above regard by Theto Mahlakoana at EWN

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