Finance minister Tito Mboweni’s decision to  cut the public wage bill is a huge disaster, trade union Cosatu said on Wednesday.

During his budget address, Mboweni announced  huge expenditure cuts over the medium term. A R160bn drop in the remuneration costs for national and provincial administrations and other public bodies will form the bulk of the anticipated R261bn in savings.

The government had told the Public Service Co-ordinating Bargaining Council on Tuesday that it intended to withdraw from the existing wage agreement.  

Matthew Parks, Cosatu’s parliamentary co-ordinator, said in an interview after Mboweni’s speech that Cosatu was shocked when the government took the decision to the bargaining council. It was the first time the ANC’s alliance partner heard about the drastic step.

He said the government's decision to take its proposal to the bargaining council collapsed the space of a serious engagement with labour. “We basically feel our members — nurses and teachers — are being thrown under the bus here. The only fixation of this budget is around fixing the wage bill.” 

He said Cosatu recognises the fiscal crisis SA faces and that it made proposals to address all of the crises at state-owned enterprises (SOEs), such as Eskom, as well as on the public-sector wage bill, state expenditure and corruption, but that the ANC failed to take them seriously.

He said the only way to look at the budget is as an “attack on workers”, but that Cosatu will continue to engage as its members’ jobs are on the line.

Politically, it places Cosatu in a tough position. Cosatu was the first ANC-aligned structure to endorse President Cyril Ramaphosa’s bid to become president of the ANC.

Parks said Cosatu supported Ramaphosa even when some in Luthuli House, the ANC’s headquarters, wanted to throw him under the bus. “We are the one’s defending him while people in Luthuli house and the ANC are sabotaging him. It doesn’t help us when the government does not reciprocate that support. Our support is not a blank cheque,” he said.

ANC spokesperson Pule Mabe said his party was “firmly” behind Mboweni’s budget, which it considered realistic. “We did not promise people things that are not possible. We acknowledge that we are leading in very difficult times,” he said.

Geordin Hill-Lewis, the DA’s spokesperson on finance, welcomedMboweni's budget but was sceptical about his ability to implement the public-sector wage cuts.

“There’s a bit of a credibility problem there, as I don’t believe those public wage cuts are actually achievable,” he said, adding that Mboweni did “quite a good job” with very little breathing space.

EFF leader Julius Malema said the party will oppose the proposed wage cuts. He said the current agreement should be honoured, and that there should be proper engagement when the next round of negotiations start to suit the economic situation faced by SA.

mailovichc@businesslive.co.za