South Africa on brink of public sector shutdown

Johannesburg: South African public sector unions Tuesday rejected a revised government wage offer and said they planned a mass strike starting today that will bring public services to a halt in Africa's largest economy.

Analysts however expect a deal to be reached before a coalition of unions, representing 1.3 million civil servants including police, customs officials, teachers and health workers, stages a prolonged stoppage that could deal a blow to commerce and trade.

"From tomorrow there will be a total shutdown and the beginning of a protracted strike and we will only stop when government responds," said Thobile Ntola, president of the SADTU teachers union, a part of the labour coalition.

The strike threat by unions in the country's largest umbrella labour group, COSATU, increases pressure on the government to improve its terms or risk what could be the worst strike by state workers for three years.

Economists worry that whatever deal is reached will swell state spending as the government tries to bring its deficit down from 6.7 per cent of gross domestic product.

Last week the government offered to increase the monthly housing allowance to 700 rand (Dh351.8) from a previous offer of 630 rand, but refused to increase its wage rise offer of 7 per cent.

The housing allowance alone would be equal to about 1 per cent of government spending. The unions are demanding an 8.6 per cent pay rise, more than double the inflation rate, and 1,000 rand for housing.

A one-day strike last week did little to hurt the economy. Union sources said there are cracks in the labour coalition with some groups looking favourably on the latest offer, which could diminish the impact of any potential strike.