BL Premium reports that Finance Minister Enoch Godongwana is expected to pencil in 3% in the expenditure framework — the government’s latest wage offer that only the SA Democratic Teachers’ Union (Sadtu) has accepted — when he presents the medium-term budget policy statement next week.
Absa chief economist Peter Worthington pointed out that the 3%, on top of the 1.5% notch progression and a R1,000 per month post-tax cash gratuity, would “nudge up” the deficit and debt ratios if the amount was not funded by higher projected tax collections or expenditure cuts. Last week, Sadtu, which represents about 260,000 of 1.3-million public service union members, accepted the government’s latest wage offer. It said that the proposed 3% wage increase, coming on top of the 1.5% automatic pay progression and continuation of the R1,000 a month cash gratuity, "was fair at this difficult economic juncture". A key remaining concern is that other key public sector unions, such as those representing healthcare workers and police, will continue to reject the government’s latest wage offer. So it is hard to know for sure when a pay deal will be settled or at what level overall. Noting that “there remains great uncertainty about where the current wage negotiations will settle”, Worthington went on to note: “We see a strong likelihood of slippage on the National Treasury’s fiscal consolidation plan founded on a three-year pay freeze.”
- Read the full original of the report in the above regard by Thuletho Zwane at BusinessLive (subscriber access only)
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