''We agree on a range of issues and we are getting closer to each other,'' said Ndivhuwo Mabaya, spokesman for the Department of Public Service and Administration.

''Maybe we can finalise it this week.''

In mid-June the government offered a 6.5% pay increase, which infuriated the unions and led to a breakdown in negotiations.

This fuelled fears of a debilitating strike similar to that two years ago. In August 2010, more than 1.3million public servants went on strike, severely disrupting healthcare, education and other government functions.

Premature babies were left without care in state hospitals and schooling was disrupted. Several provinces announced the postponement of preliminary matric exams.

Talks have resumed but it is not known whether the government has moved closer to the unions' demand of an 8% rise.

Chris Klopper, spokesman for the Independent Labour Caucus, which represents smaller public-service unions, confirmed that progress was made last week: ''We are closer to a deal than to a strike.''

Negotiations between the SA Local Government Association and the SA Municipal Workers' Union have also moved forward.

''We have made a major breakthrough,'' said Tahir Sema, spokesman for Samwu.

The union initially wanted a 15% hike but a proposal of 6.5% in July and a further 0.5 percentage point from January next year was made this week, said Milisa Kentane, a Salga spokesman.

Samwu will take this offer to its members this week.

Though progress is being made between the department and the unions there is still no agreement over the department's proposed housing subsidy, said Klopper.

The Independent Labour Caucus regards the subsidy as problematic because it will be calculated on a sliding scale and would benefit lower-earning civil servants more than others. This would make benefits for professional posts in the public sector, such as teachers and magistrates, less attractive.

Mike Schüssler, an economist for Economists.co.za, echoed this sentiment. He believes that certain skilled jobs in the public sector, such as teachers, deserve better pay.

''But the country can't really afford to give the civil service as a whole another big pay rise,'' he said.