ANC calls emergency talks on plan to slash state wage bill

The leadership of the ANC called an emergency meeting to discuss the government’s plans to curb its wage bill — a move that has angered its trade union allies.

National treasury proposed in the budget on Wednesday that pay increases, benefits and promotions for the nation’s 1.3 million civil servants be limited, with a view to saving the state R160-billion over the next three fiscal years. Unions rejected the move, saying workers shouldn’t be made to pay for the government’s failure to spur growth and contain its debt.

The ANC’s national working committee will convene on 2 March to discuss the matter, according to two senior party members who spoke on condition of anonymity because they aren’t authorised to comment. Leaders of Cosatu and the South African Communist Party, which form part of the country’s ruling coalition, will later join the talks, they said.

The plans to curb personnel costs came as a surprise to many within the ANC, who fear the move will cost the party support in next year’s municipal elections, the party members said. ANC spokesman Pule Mabe confirmed the committee meeting, but declined to say what would be discussed.

Mathew Parks, Cosatu’s parliamentary coordinator, confirmed that the federation will attend the meeting. He said the matter will also be raised at a meeting of the executives of Nedlac, a forum for business and labour to discuss matters with government, and the treasury on Friday.

Lower increases

“Gloves are off if necessary,” he said.

South Africa’s state wage bill has surged 40% more than inflation over the past 12 years and accounts for more than a third of total government spending. National treasury director-general Dondo Mogajane said on Wednesday the plan to cut the state wage bill is expected to result in lower pay increases, rather than reduced remuneration.  — Reported by Paul Vecchiatto, with assistance from Mike Cohen and Antony Sguazzin, (c) 2020 Bloomberg LP