South Africa: DPSA Committed to 2018 Wage Agreement

Government, in a statement on Tuesday, said it has noted the uncertainty with regard to the 2018 public service wage agreement ahead of the 1 April 2020 pay day.

This comes after Finance Minister Tito Mboweni announced in the Budget Speech in February that government will adjust the wage bill by about R160 billion over the medium-term, with the aim of saving R37.8 billion in the next financial year.

Labour unions expressed concern at the announcement.

The last public service wage negotiations commenced in October 2017, culminating in a three-year wage agreement on 8 June 2018. The wage agreement was implemented with effect from 1 April 2018 and covers the period 2018/19 to 2020/21. According to the agreement, an increase was meant to come into effect from 1 April 2020.

On Tuesday, the Ministry of Public Service and Administration said it continues to look for solutions, including from more engagements between government and labour to try and deal with realities confronting the country.

"It should be noted though that there are no 'short cuts' and options are extremely limited," said the Ministry.

There are a number of issues currently facing the country, the outbreak of the Coronavirus pandemic and the recent downgrading of South Africa's credit ratings to junk status by Moody's, which the department says is "piling more anguish on the economy which is already in recession".

These developments have brought much more pressure on depleted state resources.

"These matters require dedication, understanding and commitment from all sides. Accordingly, we want to reiterate that government remains committed to the implementation of the 2018 wage agreement notwithstanding the aforesaid difficulties. At stake is how to do it, and this matters most," said Public Service and Administration Minister Senzo Mchunu.

The Ministry reiterated that the Department of Public Service and Administration is indeed seized with the matter and more importantly, recognises the need to handle everything with utmost sensitivity, respect and integrity.

"To this end, the Department, on behalf of Government, undertakes to adhere to all protocols of the Public Service Coordinating Bargaining Council and not engage in the media until the end," said the Ministry.

Earlier this month, President Cyril Ramaphosa said talks were ongoing on ways to curb the public sector wage bill, which is government's greatest expenditure.

"Indeed, the wage bill is really the greatest expenditure. Unions have also been really proactive, which is what I have appreciated. They don't want to be the sacrificial lamb and they have said there are a number of other areas where we can look at savings," said the President.

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