NEW Public Service and Administration Minister Lindiwe Sisulu yesterday drew a line in the sand, calling for a multiyear salary deal with public-sector trade unions and a service charter to measure future wage hikes against service delivery and productivity.
SA's public service wage bill has risen from R211bn in 2008-09 to R314,9bn in 2010-11 and constitutes 38,7% of state spending.
Over the past three years the Department of Public Service and Administration has agreed to salary increases higher than inflation - a problem flagged by ratings agencies, which have threatened to downgrade SA should the government not stick to its budgeted wage bill this year.
At a press briefing in Pretoria yesterday, Ms Sisulu said the government had offered 9% increases this year - 6,5% in wages and salaries and 2,5% in benefits. This would cost the state R30bn and was R8,1bn above the budgeted amount for government employee compensation.
"Our deliberations and decisions are at all times guided by the imperatives of social justice, fairness and reasonableness - all of which are inscribed in our pro-poor policies," Ms Sisulu said.
"Our good intentions and wishes must, however, contend with the objective economic realities. Any unrealistic settlement will impact negatively on our pro-poor policy, especially our poverty alleviation efforts and infrastructure spending.
"Our decisions must not undermine and curb government's capacity to meet its economic growth and developmental objectives. Doing so will have unintended consequences of reducing social expenditure and employment.
"This calls for all of us to work together and apply our minds in ensuring the decisions we arrive at are not only economically sustainable, morally defensive, but are seen to be socially responsive."
Ms Sisulu said SA could not afford the unease created each year by months of drawn-out salary negotiations. "Labour insisted that they want a single-year agreement this year, which would be disastrous for us because each year we spend seven months to come to the same point."
Ms Sisulu said a three-year salary agreement allowed for a certain level of stability and forward planning.
Multiyear wage agreements are not unusual in the private sector. The motor and steel industries, for example, had insisted on them to introduce certainty into their environments.
But Neren Rau, CEO of the South African Chamber of Commerce and Industry, cautioned that if the government was locked into a multiyear agreement at a "high level", this could have an inflationary effect, given that the government is a huge employer and its salary bill could "single-handedly" spur the inflation rate.
"There are inflationary issues and government is under fiscal pressure, so it will be key at which level it locks itself in. It is also key that labour abides by the agreement and does not try to reopen negotiations after two years," Mr Rau said yesterday.
Ms Sisulu invited trade unions back to the negotiating table, saying "it would be in their interests to find an amicable solution". But she warned that she would be tabling a multiyear agreement and a service charter at the talks.
"I am convinced that when labour sees that our negotiations are in good faith, and sees that we are actually in an economic crisis, they will respond reasonably. They are reasonable people," she said.
The National Education Health and Allied Workers Union (Nehawu) welcomed the invitation, but warned that Ms Sisulu was "muddying the water" with the way she presented the hike. The union had demanded 8% that related only to salaries and not to benefits, and rejected Ms Sisulu's conflation of the two.
Nehawu insisted that she had to present her new offer to the Public Service Co-ordinating Bargaining Council.
"It is always inadvisable to conduct negotiations through the media. We have all seen the unwanted consequences of a public service strike and the difficulty it causes for ordinary citizens," Nehawu spokesman Sizwe Pamla said in a statement yesterday.
South African Democratic Teachers Union (Sadtu) spokeswoman Nomusa Cembi said the union remained open to further negotiations, but accused the government of "signing off unilaterally" on the salary offer.
She said Sadtu had taken the offer of the multiyear agreement, and the salary and housing allowance increases, to its members.
Ms Sisulu said that the government had initially offered a 5% salary increase, but recognised that it was below inflation and had to be improved.
She had to fend off questions yesterday about her image as a "union basher" while she was defence minister.
Ms Sisulu explained that "nowhere the world" did governments tolerate trade unions in their security services. There was no place in the South African National Defence Force for unions and ill-discipline, she maintained, but this stance was limited to the " security environment" in which she had been.
She now had a different portfolio and one of her new responsibilities was her relationship with trade unions.
While she had applied her mind to the presence of unions in the South African National Defence Force, she had not yet applied her mind about union participation by people delivering essential services in the public service.
Ms Sisulu said it would be premature to answer any questions relating to strikes by workers in essential services as she had not yet studied the environment.