The government is offering unions representing 1-million state employees inflation-busting pay increases at a time when the country needs to rein in spending to help keep its investment-grade credit rating. Negotiations over wages for teachers, nurses and other state workers are testing the ability of the new Cabinet, led by President Cyril Ramaphosa, to walk a political tightrope with labour unions that supported his rise and keeping the country’s finances under control. Treasury wants the state to contain the public-sector wage bill, which has crowded out spending in other areas. The government has offered increases of 7% for the most-junior employees for the year up to end-March and 6% for senior staff, including managers, a document seen by Bloomberg shows. Consumer prices rose 3.8% in March. The unions had demanded a 12% increase — more than double the Reserve Bank’s forecast of 4.9% for average inflation this year — and lowered the request to 10% on May 4, according to an offi...
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