Finance minister Tito Mboweni’s fiscal targets looked in jeopardy as trade unions said on Sunday that they flatly refused to agree to revisit 2020 wage increases, ahead of crucial government, ANC and labour meetings on Monday.
President Cyril Ramaphosa will meet labour and business leaders at their standing monthly meeting in the President’s Council at Nedlac, which will be followed immediately by the standing weekly meeting of the ANC’s national working committee, to which Cosatu and the SACP have been invited.
The meetings come after Mboweni dropped a bombshell on Wednesday, announcing that R160bn would be cut from the state wage bill, beginning with this year’s annual increase due to be implemented on 1 April.
The proposal, which was tabled in the Public Sector Co-ordinating Bargaining Chamber for the first time the day before the budget, took unions by surprise as prior to this only cursory discussions at a political level had been held.
Renegotiating the third year of the agreement is proposed to cut R37.8bn from the wage bill. This will mean that wages in real terms would grow 1.5% in 2020 as opposed to the existing agreement, which will see the most workers getting a CPI plus 1% increase as well as notch increases of about 1%.
The government and unions are entitled to renegotiate the wage agreement at any time, but without consensus, industrial action is likely.
Mboweni’s fiscal framework depends on a R160bn cut in the wage bill as well as another R100bn in expenditure cuts to baseline budgets, mostly of education, health and provincial and municipal programmes. Without these spending reductions, the projected deficit, which rises to 6.8% in 2020, will be overshot.
If wage cuts failed to materialise, the budget deficit would be one percentage point greater, Treasury officials said at budget briefings last Wednesday.
At the consultation meetings that took place with each union federation, no proposal for 2020/2021 was put on the table. Worse still was that when Ramaphosa, public service & administration minister Senzo Mchunu and deputy finance minister David Masondo addressed Cosatu’s central executive committee meeting last Monday, no mention was made of the proposals in the budget.
Salary cuts will never be acceptable, especially if they come as a result of the mismanagement and looting that have been taking place. It’s fundamentally wrong
— Narius Moloto
National Council of Trade Unions general secretary
In an interview on Sunday, SA Democratic Teachers Union (Sadtu) general secretary Mugwena Maluleke, who heads Cosatu’s joint management team of public sector unions, said: "There is a willingness to engage, but reopening the three-year agreement is not on the table. Let us negotiate for 2021. As labour, we have already made our sacrifices when the last agreement was signed. We cannot ask workers to sacrifice twice."
Maluleke said that labour wanted the government to show it evidence on how it had cracked down on corruption and inefficiencies in negotiating the next round.
Khaya Xaba, spokesperson of the National Education, Health and Allied Workers Union, the second-largest public-sector union, said on Sunday: "We will not allow anything that seeks to take away workers’ gains.
"The government must cut wasteful expenditure and corruption instead."
General secretary of Fedusa Riefdah Ajam said the federation’s member unions would declare a dispute at the next meeting of the bargaining chamber. "We are no ways going to allow matters to be reopened."
National Council of Trade Unions general secretary Narius Moloto said: "Salary cuts will never be acceptable, especially if they come as a result of the mismanagement and looting that have been taking place. It’s fundamentally wrong."
At a meeting on Friday at Nedlac at which Mboweni and officials presented the budget to social partners, Treasury director-general Dondo Mogajane said government had been at pains to point out that "we are not taking money away from people. We are not saying salaries will be cut; we are just slowing the rate of growth.
"If labour doesn’t want to agree, which is their right, then other measures to slow expenditure will have to come in. There will be consequences."
Cosatu parliamentary officer Matthew Parks said that Cosatu had not kicked up a fuss on Friday, but had reminded the government that the right place for the negotiation was in the bargaining chamber rather than in "political theatrics".
"We will raise the issues in Monday’s meetings, and then we will engage in the bargaining chamber. The mood is militant, and definitely there will be mass action if government decides not to honour the agreement. I can’t see our unions being willing to accept any reneging on the agreement," Parks said.
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