(Bloomberg) -- South African civil servants demanded a pay rise that's more than double the inflation rate, a week after the nation's finance minister insisted the government can't afford increases.
The Public Servants Association, which represents almost a quarter of a million government employees, said they want across-the-board wage increases of inflation plus four percentage points. Talks on a new pay deal began on Monday.
Finance Minister Tito Mboweni last week presented an annual budget that forecast a smaller-than-expected deficit in coming fiscal years. Those targets hinge on the government freezing public-sector salaries over the next three years, with the government proposing a “significant moderation” in spending on wages.
“Government will negotiate on the basis of fairness, equity and affordability,” Mboweni said on Feb. 24. “A pact that exceeds the budgeted amounts would present a risk to the fiscal framework.”
READ: S. African State-Pay Court Ruling May Improve ‘21 Deficit: Fitch
Average inflation in South Africa last year was 3.3%.
The PSA is currently fighting to get the government to honor a three-year deal struck in 2018 that the state reneged on last year. President Cyril Ramaphosa's rise to power in 2018 was backed by the party's powerful labor-union allies that vociferously oppose the three-year moratorium on wage increases.
READ: South African Court Backs Cancellation of Government's Pay Deal
The PSA is also demanding:
- That the government negotiate a single-year, rather than a multi-year wage agreement
- The removal of lower salary bands, which could raise the pay of the lowest-paid civil servants
- A higher housing allowance and a so-called risk-allowance of 12.5% when employees faces disasters such as the Covid-19 pandemic.
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