Cape Town not in favour of above-inflation municipal wage increases

26 August 2024

Following recent national wage negotiations, a facilitator’s report to South African Local Government Bargaining Council (SALGBC) stakeholders proposes that municipal wages be increased by roughly 5% on average in 2024/25.

The report proposes this be followed by increases above the Consumer Price Index (CPI) forecast for the four years 2025/26 – 2028/29. Wages would increase by CPI+0.75 for the first two years, and by CPI+1,25% for the final two years of the agreement period.

The City has calculated a R2,06bn cumulative budget shortfall for the four-year period of above-inflation increases from 2025/26 – 2028/29, based on the Bureau for Economic Research (BER) inflation forecast published in July 2024.

The shortfall is not sustainable for the City, which has today rejected the facilitator’s proposal, recommending to SALGA that the proposal for years two to five must rather be linked to CPI with no additional percentage increases. This is so as to align with the City’s affordability and long-term sustainability.

SALGA is currently consolidating feedback from its provincial structures before formulating a national position on the wage proposals in the facilitator’s report.  

The City is hopeful that fiscal prudence will prevail and any increase that is agreed aligns with municipal  and rate- payer affordability over the outer years of this agreement.

Issued by Media Office, City of Cape Town, 26 August 2024