EDITORIAL: The coming public sector pay war

The government says there’s no way it will buckle to demands from public servants for 10% pay hikes — and it’s no exaggeration to say the country’s future depends on it sticking to this.

Unions representing 1.3-million public servants are pushing the 10% demand. But the government says it is willing only to extend for another year its R1,000 after-tax cash gratuity and a 1.5% “pay progression hike” tied to years of service.

“The state proposes that the current dispensation of cash gratuity for 2022/2023 should continue, as any cost on the baseline would significantly disrupt the tabled fiscal framework,” it says. 

It’s a critical line in the sand, given that wages for civil servants already amount to R665bn and eat up almost a third of government spending. The unions’ demands would require an extra R146bn over the next few years, cannibalising funds needed for service delivery.

But the unions aren’t buying the government’s line.

Reuben Maleka from the Public Servants Association responded: “We are not accepting the response of the employer … they must go and revise their budget and come back with something that can be acceptable.”

But it’s Maleka who is out of line. 

Not only is a 10% hike out of kilter with the 5.9% inflation rate, the below-2% economic growth and the level of salary hikes in the private sector, this ambitious demand comes at a time when satisfaction with government services is at a low ebb.

Just 27 of 257 municipalities received clean audits last year. And, as former public service & administration minister Senzo Mchunu once admitted, one in three senior managers in the public service aren’t qualified for the positions they hold.

If civil servants were shooting the lights out — rather than failing miserably — it would be another conversation. But if their salaries were linked to performance, you’d think a 10% salary cut would be more appropriate.

Private sector companies are facing similar unrealistic demands, under bizarre pressure from cabinet ministers who should know better.

Last week, mineral resources & energy minister Gwede Mantashe underscored his credentials for retirement when he went so far as to threaten to revoke Sibanye-Stillwater’s mining licence if it doesn’t settle with its striking staff.

It’s outrageous overreach, even for a minister not known for impeccable judgment.

Miners at Sibanye have demanded a wage hike of R1,000 a month for the next three years. But the company has offered R800, going up to R850 in year four and R900 in year six, as well as a profit-share scheme.

After CEO Neal Froneman said Sibanye had enough cash to withstand the strike for years, Mantashe said his officials should look at revoking the licence “for a mine that doesn’t want to mine but sits on the properties, so that we can give that property to companies that want to mine gold”.

It’s a wilful misreading of what Froneman said, and a dangerous indication of the government’s readiness to strip mining rights — weeks after executives at the mining indaba stressed that companies need policy certainty to invest in the  sector.

Reality has never been a welcome visitor for our political leaders, or our unionists. But the country has plenty to lose should it decide it’s time to jettison the path of fiscal rationality.