By Peroshni Govender
PRETORIA (Reuters) – A South African minister urged unions representing about 1.3 million state workers to return to pay talks on Tuesday, but warned that any increase above the current 6.5 percent offer would mean dipping into state reserves.
Talks over pay increases broke down last week, raising the threat of a strike that could shut down hospitals and schools.
“The state of our global economy, the reality of our own limited budget, our own credit rating and credibility make me hope and believe that labour and ourselves as government have no appetite for a dispute and, worse, a strike,” Lindiwe Sisulu, minister of public administration, told a news conference.
A spokesman for one of a dozen unions involved in the dispute said he welcomed the government’s call.
“Going back to the negotiation table is the right thing to do but we are not going to be intimidated,” said Sizwe Pamla of health and education union NEHAWU, one of the most powerful public sector unions with a quarter of a million members.
Unions must consult members before formally accepting the invitation and no date for a new round of talks has been set.
The government had originally budgeted for a 5 percent increase but was forced to increase its offer as inflation has inched up in recent months, hitting 6.1 percent in April.
Sisulu said the 6.5 percent offer would swell spending and cost the government about 10 billion rand more than had already been set aside.
“We live in tight financial times. We will have to go into our reserves if the increase is over and above what we are offering,” she said.
The two sides are not far apart, after unions dropped their latest demand of an 8 percent increase and appear willing to accept just over 7 percent – the inflation rate plus 1 percent, union sources said.
Wages for government employees are the largest sector of state spending, equivalent to more than 40 percent of tax revenue. A perk to provide civil servants with about $100 a month to help them with housing costs the country as much each year as its court system.
