South Africa's government raised its pay offer to civil servants on Thursday to try to avert a strike by nearly a million public workers that could cripple commerce in the continent's largest economy, according to Reuters. The Public Service Ministry said in a statement it was prepared to increase salaries by 7 percent, after previously offering 6.5. The offer of a monthly housing allowance of 630 rand ($86) remained unchanged. Unions are demanding an increase of 8.6 percent -- double the current inflation rate -- and a housing allowance of 1,000 rand, which would put pressure on the state budget. The government says the unions' combined demands amount to a raise of 9 percent and would make it impossible to fulfil its commitment to bring its budget deficit down from 6.7 percent of GDP. "These are above what is affordable," Public Services Minister Richard Baloyi told a news conference, urging unions to accept the latest offer or face the prospect of cutbacks in other parts of the budget. "We have to take painful decisions," he said. A broad coalition of unions have threatened to strike next week but analysts believe a deal will be reached to avert a repeat of mass action by civil servants three years ago that dealt a severe blow to the economy. Workers who have threatened to strike include customs and immigration officers, police, healthcare workers and teachers. The latest offer suggests the ruling African National Congress (ANC) has little stomach for a fight with organised labour, with whom it has a long-standing political alliance forged in the struggle against apartheid. The ANC also does not want to see a long halt in public services which could dent support ahead of national elections early next year for almost all local government posts.
