MTBPS: Mini budget – Finance minister sticks to his guns on public wages, while Cosatu goes back to the drawing board

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Brasil Últimas Notícias,Brasil Manchetes

Wage negotiations in the public sector began in May when trade unions representing public servants initially demanded a 10% increase for 2022, later reduced to 6.5%.

A key point that came to the fore in this year’s mini-budget was the contentious issue of public wages. Finance Minister, Enoch Godongwana flagged this as a short to medium risk, saying that higher-than-budgeted public service wage costs would strain fiscal resources.

The continuation of a non-pensionable cash allowance for the current financial year. This translates into an average of R1,000 per employee per month until March 2023.This offer will be implemented through the payroll system, and back-dated to April 2022. Izak Odendaal, a strategist at Old Mutual Wealth notes that teacher unions have settled for a 3% increase and this is likely to be a benchmark for the remaining negotiations. “This implies more growth in the public sector wage bill than the February Budget pencilled in, but still means that the expansion of the wage bill is slowing compared to the pre-2020 trend. The ship is therefore slowly turning around,” he says.

Earlier this week, acting Public Service and Administration Minister Nxesi said the government’s 7.5% increase offer remained on the table.

 

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