Public sector unions have set themselves up for a battle with the state, asking for an increase well above inflation less than a week after finance minister Tito Mboweni staked the credibility of the government’s fiscal framework on keeping a lid on compensation costs.

According to the demands tabled at the Public Service Co-ordinating Bargaining Council on Monday, seen by Business Day, public sector unions asked for an across-the-board increase equivalent to the consumer price index (CPI) plus 4%...

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