Cosatu flexes muscles

ECONOMIST Vuyelwa Vumendlini. 15/06/07. Sowetan.

Minister of Public Service and Administration, Geraldine Frase-Moleketi and Vuyelwa Vumendlini, Dir. in DPSA, at Media briefing on wages and strike issues. PIC  ROBERT BOTHA   BUSINESS DAY  12/6/2007
ECONOMIST Vuyelwa Vumendlini. 15/06/07. Sowetan. Minister of Public Service and Administration, Geraldine Frase-Moleketi and Vuyelwa Vumendlini, Dir. in DPSA, at Media briefing on wages and strike issues. PIC  ROBERT BOTHA  BUSINESS DAY  12/6/2007

The biggest part of the government's proposed payment package for civil servants has been all but ignored amid both sides' duelling with sound-bites about percentages that have inundated South Africa this week.

The biggest part of the government's proposed payment package for civil servants has been all but ignored amid both sides' duelling with sound-bites about percentages that have inundated South Africa this week.

And that, say analysts, is positive proof that Cosatu's strike against the government has less to do with workers' welfare than the union federation flexing its muscles before the ANC policy conference later this month.

Cosatu's first demand for a 12percent salary increase, better medical aid for all civil servants, larger housing allowances and other benefits for national civil servants would have cost 20percent of the gross domestic product, the value of all goods and services produced in South Africa, says a senior government economist.

Vuyelwa Vumendlini, an economist with the Department of Public Service and Administration who is deeply involved with the salary negotiations, said yesterday that Cosatu's original demands would have cost the government R393billion, more than double the current figure.

The 12percent salary adjustment would have cost R15billion. Another part of this package would have been higher medical aid benefits for all civil servants regardless of position at R3,5billion, and improved housing benefits at R9,5billion.

But by far the largest part of the proposed package was R171billion for pay progression. This is the complicated formula by which the salaries of certain professional civil servants such as nurses, doctors, teachers and engineers will be bumped up. The programme will be implemented for nurses, legal professionals and school principals in July, and for teachers from January.

"Anyone who asks for wages that would take that much from the common pool is on a political trip, not an economic trip," says Khehla Shubane, chief executive of the Business Map Foundation.

The foundation is a think-tank that focuses on the economic transformation of South Africa, especially changing the racial profile of the economy to one catering for all.

Shubane agrees that many civil servants deserve higher wages. But he says that lower-paid civil servants have been principal beneficiaries of Finance Minister Trevor Manuel's tax concessions over the past three years.

"The first R40000 of a person's income is now tax free. Why has this not been considered in the unions' demands?"

The unions and the department are quibbling about the details of pay progression, but the two sides agree on principle on most of the issues and the topic has been taken from the table as they finesse the details.

Meanwhile, the spotlight has been directed to across-the-board increases for all civil servants, regardless of training, expertise and experience.

The union federation has now dropped its demand to 10percent with a package of benefits that will cost R32billion, says Vumendlini.

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