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JOHANNESBURG, June 14 (Reuters) – South Africa has broken
off wage talks with 1.3 million state workers seeking
above-inflation pay increases that threaten the government’s
ability to keep this year’s budget deficit in check at 4.6
percent of GDP, union officials said on Thursday.
“The state has lost patience and terminated bargaining,”
said Chris Klopper, spokesman for the Independent Labour Caucus,
a state union umbrella group involved in the negotiations.
The Congress of South African Trade Unions (COSATU),
representing 14 state unions with an estimated 1.3 million
members, has been pushing for an 8 percent raise, down from 10
percent initially demanded.
The government has been offering 6.5 percent, compared with
headline inflation at 6.1 percent in April.
In its February budget, the Treasury allowed for a wage
increase of only 5 percent for public servants, adding that a
ballooning state salary bill was crowding out investment in
infrastructure and other key productive sectors.
Any settlement above 5 percent is likely to undermine the
government’s ability to get the budget deficit in Africa’s
biggest economy down from the current forecast of 4.6 percent of
GDP.
South African wage negotiations tend to last several weeks
in a mid-year bargaining session known as “strike season”, with
unions often downing tools to back their demands, disrupting
mine production and hitting services in hospitals and schools.
(Reporting by Jon Herskovitz; Editing by Ed Cropley)
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