Public Servants Association members demand higher wages during a march in Johannesburg. Picture: SIMPHIWE NKWALI
Public Servants Association members demand higher wages during a march in Johannesburg. Picture: SIMPHIWE NKWALI

Finance minister Tito Mboweni’s announcement that the Treasury will not foot the bill for public-sector wage hikes for the next three years will strain labour relations between government and employees, according to the Public Servants Association (PSA).

The PSA, which represents 240,000 workers in the sector, was reacting to the medium-term budget policy statement (MTBPS) presented by Mboweni on Wednesday.

In his speech, Mboweni said that the national and provincial departments would have to “absorb these costs within their compensation baselines”.

Public servants received above-inflation wage increases of 7.5%  for 2018. The PSA, which declined to sign a wage agreement between unions and the government in June, said the move would have a direct impact on employment, employees and service delivery.

It also accused the government of negotiating the wage settlement in bad faith, seeing as the Treasury had not budgeted for the increases.

“Already over-stretched departments are now expected to absorb these expenses. This will have a direct impact on employment with a ripple effect on employees and service delivery.

“Should this, in fact, be the case, this will be in conflict with recent outcomes of the jobs summit and the public service collective bargaining indaba, and cannot be regarded as anything but negotiating in bad faith by the state as employer,” said PSA GM Ivan Fredericks.

The jobs summit resolved that there would be no retrenchments in the public service.

The association also said it was concerned with Mboweni’s view that “wages have crowded out other goods and services and capital investment and have contributed to a build-up of unpaid invoices”, said Fredericks.

The PSA also wants more clarity on the minister’s announcement about the restructuring and improvement of the management of state-owned enterprises (SOEs).

MahlakoanaT@businesslive.co.za