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Municipal trade unions and the South African Local Government Bargaining Council have now signed a five-year wage deal which secures above-inflation wage increases for municipal workers each year between now and 2030.

Municipalities, with few exceptions, seem to have embraced the deal. Only 12 municipalities in South Africa rejected it, including the City of Cape Town. But because of the way centralised bargaining works in South Africa, the agreement now applies to all municipalities, whether they supported it or not. We can demur, but if the majority sign it off, then it is locked in for everyone.

In talking to a few other mayors, my sense is that most municipalities have signed the deal mainly because it is a rare five-year agreement, which allows for slightly longer-term financial planning. Also, the agreed increase in the first year (this year) is a reasonable 5% average, which is more or less inflation-linked.

We in Cape Town have not been so enthusiastic in welcoming this deal, because of what it means for the rate-paying public in the years to come, and for municipal financial sustainability.

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