South Africa's burgeoning public sector wage bill could push tax tolerance to the edge. Late on Friday the government and unions agreed on a three-year wage deal, the details of which will only be disclosed tomorrow. Taxpayers are already footing the bill for cash-strapped state-owned companies, a rise in sovereign debt and the debt servicing costs that go with that, and commitments to social grants and infrastructure. Wage talks began in September last year ahead of the end of the three-year sectoral wage agreement that expired in March this year. After several rounds of negotiations the government and public service unions agreed to a 7% salary increase for those in pay grades 1 to 7 and a 6.5% increase for pay grades 8 to 10 in the first year. Employees on level 11-12 get 6%. Increases for the next two years of the wage agreement would be disclosed tomorrow. Public sector unions were demanding an increase of CPI plus 2% for the lowest levels and CPI plus 1% for higher-ranking off...
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