Trade unions representing the majority of public servants in SA are prepared to accept the government's offer to increase pay by 7.5% during the 2023/24 fiscal year, followed in 2024/25 by pay adjustments linked to the consumer inflation rate.

The government and trade unions are close to concluding an agreement over the pay rise of 1.2 million public servants over the next two years, which could bring an early settlement to compensation negotiations in the state.

Trade unions representing the majority of public servants in South Africa are prepared to accept the government's offer to increase pay by 7.5% during the 2023/24 fiscal year. Unions bosses canvassed by Business Maverick said a pay rise deal with the government was set to be signed within days, bringing an end to compensation negotiations.

There has been a compromise on both sides.

The government initially offered public servants a pay rise of 4.7%, but sweetened its offer to 7.5% to prevent drawn-out negotiations or worse, public servants from embarking on a prolonged strike. Implementing the improved offer will be costly for the government, which budgeted R701.2-billion in 2023/24 to pay public servants including nurses, doctors, teachers and police officers. It might cost the government an additional R50-billion to implement its latest pay rise offer, going against its plan to stabilise the remuneration bill, which is the biggest fiscal risk to the budget.

Trade unions initially demanded a 10% rise in the pay...