Before it moves to raise taxes to foot the vaccine bill, the government has to begin looking inwardly for a solution to SA’s financial crisis. One aspect of this is finally addressing the public sector wage bill. It is at the heart of government’s failure to rein in spending, along with bailing out poorly managed and, in some cases, corruption-riddled state-owned companies.
It is going to take courage and creativity to deal with the wage bill, as labour is expected to dig in its heels. Sadly, these are two attributes the government completely lacks.
Late last year, the court found in favour of the government, effectively permitting it to renege on the last leg of its 2018 wage deal with public servants.
But this was just the first hurdle it is set to face. The next is the Constitutional Court appeal which is set to be launched by labour. Even more importantly, the next round of wage talks is set to commence in April. This round will be the toughest yet, politically and economically.
The government’s failure to implement the third round of the 2018 wage deal has set the stage for an antagonistic, hostile process characterised by distrust.
Another factor which is set to complicate the process is disunity among unions. There is already talk of various unions making varying demands, when in the past unions would agree on a consolidated position.
As unions seek to outdo each other to retain members in a tough economic climate, each may seek to appear more radical than the others. This competition is not only taking place between unions from different federations, but also among sister unions.
For instance, the long-standing irritations between the SA Democratic Teachers’ Union and the National Education Health & Allied Workers’ Union may complicate matters. The two have been at loggerheads for some years over members organised by both at training colleges. While Sadtu believes these workers are meant to fall under its banner, Nehawu has also been organising in these areas.
With the largest public-sector unions at odds with one another, the government is going to face an uphill battle as they seek to use the wage talks to outdo each other. The differences between unions and federations were already on full display last year, with some proposing arbitration as a solution to the impasse with the government over the 2018 wage deal and others pushing for the now-failed court route.
Internally, Nehawu’s leadership core is up for re-election later in 2021.
How the current union leaders handle the wage talks will be a factor in their potential re-election to their posts. Also, politically, it is an election year for the ANC. It would not want to alienate its labour allies — as a bargaining tool, Cosatu-aligned unions will naturally make use of their ability to rally workers behind the party in elections.
Perhaps Cosatu is not as persuasive as it was for workers in the private sector when it comes to rallying support and rounding up resources for the ANC during elections, but its public-sector unions remain decidedly relevant.
At present, say unionists in the public sector, there is little which is “attractive” about the current ANC to sell to members. The party will have to ensure it rallies workers behind it and unions would be simply stupid not to make use of electoral support as a bargaining tool.
But the overriding difficulty for labour and the government is that there simply is no money.
In the end, a political solution is probably going to be what is required to resolve the impasse between a government which needs to retrench workers and labour leaders who will be making radical demands to prove their worth. This is where the creativity part will come in — solutions raised by some unionists include items such as allowing workers to borrow or withdraw from their retirement savings, tax-free.
It is going to be a tough round of talks, set to have a significant impact on the fiscus, either way. It will require guts, transparency and leadership par excellence — again, unfortunately, these are attributes sorely lacking in SA’s weak state.
Creative leadership needed
Financial Mail deputy editor & columnist
Before it moves to raise taxes to foot the vaccine bill, the government has to begin looking inwardly for a solution to SA’s financial crisis. One aspect of this is finally addressing the public sector wage bill. It is at the heart of government’s failure to rein in spending, along with bailing out poorly managed and, in some cases, corruption-riddled state-owned companies.
It is going to take courage and creativity to deal with the wage bill, as labour is expected to dig in its heels. Sadly, these are two attributes the government completely lacks.
Late last year, the court found in favour of the government, effectively permitting it to renege on the last leg of its 2018 wage deal with public servants.
But this was just the first hurdle it is set to face. The next is the Constitutional Court appeal which is set to be launched by labour. Even more importantly, the next round of wage talks is set to commence in April. This round will be the toughest yet, politically and economically.
The government’s failure to implement the third round of the 2018 wage deal has set the stage for an antagonistic, hostile process characterised by distrust.
Another factor which is set to complicate the process is disunity among unions. There is already talk of various unions making varying demands, when in the past unions would agree on a consolidated position.
As unions seek to outdo each other to retain members in a tough economic climate, each may seek to appear more radical than the others. This competition is not only taking place between unions from different federations, but also among sister unions.
For instance, the long-standing irritations between the SA Democratic Teachers’ Union and the National Education Health & Allied Workers’ Union may complicate matters. The two have been at loggerheads for some years over members organised by both at training colleges. While Sadtu believes these workers are meant to fall under its banner, Nehawu has also been organising in these areas.
With the largest public-sector unions at odds with one another, the government is going to face an uphill battle as they seek to use the wage talks to outdo each other. The differences between unions and federations were already on full display last year, with some proposing arbitration as a solution to the impasse with the government over the 2018 wage deal and others pushing for the now-failed court route.
Internally, Nehawu’s leadership core is up for re-election later in 2021.
How the current union leaders handle the wage talks will be a factor in their potential re-election to their posts. Also, politically, it is an election year for the ANC. It would not want to alienate its labour allies — as a bargaining tool, Cosatu-aligned unions will naturally make use of their ability to rally workers behind the party in elections.
Perhaps Cosatu is not as persuasive as it was for workers in the private sector when it comes to rallying support and rounding up resources for the ANC during elections, but its public-sector unions remain decidedly relevant.
At present, say unionists in the public sector, there is little which is “attractive” about the current ANC to sell to members. The party will have to ensure it rallies workers behind it and unions would be simply stupid not to make use of electoral support as a bargaining tool.
But the overriding difficulty for labour and the government is that there simply is no money.
In the end, a political solution is probably going to be what is required to resolve the impasse between a government which needs to retrench workers and labour leaders who will be making radical demands to prove their worth. This is where the creativity part will come in — solutions raised by some unionists include items such as allowing workers to borrow or withdraw from their retirement savings, tax-free.
It is going to be a tough round of talks, set to have a significant impact on the fiscus, either way. It will require guts, transparency and leadership par excellence — again, unfortunately, these are attributes sorely lacking in SA’s weak state.
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