FINANCE Minister Nhlanhla Nene fired the first salvo — or maybe the second, as he has previously warned that large salary increases will lead to job cuts — in the upcoming round of public sector wage negotiations in his first medium-term budget policy statement.

The wage talks will be coloured by a number of factors, many of them political. They are likely to amplify the deepening ideological differences between the government, led by the ANC, and its labour allies in Cosatu.

The public sector wage bill poses a risk to the fiscal framework outlined by the Treasury. Unions have already put their demand for a 15% increase on the table — for a one-year deal. This is weighed against the government budgeting for a 6.6% average annual increase for the next three years.

The labour and political environments in which the wage talks will take place are worth considering. First, the mining and metals sector has already secured double-digit increases. The unions that managed this feat, the Association of Mineworkers and Construction Union (Amcu) and metalworkers union Numsa, are both at odds with the alliance status quo.

We have also recently emerged from an election in which public sector unions such as the South African Democratic Teachers Union (Sadtu), the National Education Health and Allied Workers Union (Nehawu) and the Police and Prisons Civil Rights Union contributed financial resources and manpower to the ANC’s campaign.

Then there is the ANC’s manifesto promise of a "radical socioeconomic transformation". This has shifted workers’ expectations of what is achievable in the wage talks.

The public sector wage bill poses a risk to the fiscal framework outlined by the Treasury. Unions have already put their demand for a 15% increase on the table — for a one-year deal. This is weighed against the government budgeting for a 6.6% average annual increase for the next three years.

Another potential headache for the ANC-led government — during which it has to tread carefully and keep its allies close — is the local government elections in 2016. This is likely to be the reason the ANC task team report on the crisis in Cosatu did not go as far as expected in tackling Numsa’s approach to the ANC and the alliance.

Internal union dynamics will also play a role.

Nehawu saw the bulk of its top leadership heading off to the government after the elections — including arguably its strongest general secretary to date, Fikile Majola, who is now chairman of Parliament’s portfolio committee on energy. The new leaders are largely untested and would be itching to prove their worth in the wage talks.

On the labour front, public-sector unions are approaching the table with an expectation that their concession of a three-year agreement in the previous round of talks would have borne some fruit. The three-year agreement was arrived at with an understanding by the unions that outstanding issues such as a housing subsidy and a review of performance management systems would have been concluded by the state in the time allocated. These issues have largely not been dealt with.

Another factor is that the move to form a competing public sector union is gaining momentum. Sadtu recently expelled president Thobile Ntola, who is aligned to Numsa and Cosatu general secretary Zwelinzima Vavi. Former Nehawu deputy general secretary Suraya Jawoodeen now works for Numsa. Both of these former leaders have intimate knowledge of the workings of the two powerful public-sector unions. They have not been formally linked to the attempt to create an alternative union but insiders are concerned about their possible role and their close ties to Numsa.

Over the past weekend Numsa launched five structures towards the national launch of its "United Front". With Numsa likely to be outside the Cosatu fold during wage talks, it, or its United Front, is likely to move into the public sector space.

Numsa was under threat of expulsion from the union federation yesterday after a heated three-day central executive committee meeting.

The government’s approach to the talks will be fascinating to watch in light of the balancing act which it will have to perform.

The role of Cosatu in the talks will also show the kind of federation it has morphed into in the aftermath of its long-running factional battles.

The talks are going to be quite educational.

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