Salary and wage negotiations between the SA Local Government Association and municipal trade unions, Samwu and Imatu, began yesterday.
"The current salary and wage agreement, which has been in place for the past three years, is due to end on 30 June 2009," Salga said in a statement.
Salga chief executive Xolile George said the global financial crisis would have an impact on wage negotiations with the Independent Municipal and Allied Trade Union (Imatu) and the SA Municipal Workers' Union (Samwu).
"The gloomy forecasts of severe job losses in a number of sectors and the direct impact thereof on municipal revenues and the ever-increasing fuel price, adding to increased operational costs of municipalities, do not help the situation," George said.
A looming increase in the bulk electricity price and its inevitable knock-on effect on municipal tariffs would also impact on the possible outcome of wage negotiations, he said.
"It must also be borne in mind that the anticipated slowdown in the demand for electricity and energy will lead to loss of revenue of municipalities," George added. - Sapa