The South African government rejected a demand by public-sector workers for a 12% pay increase, saying it’s unaffordable.

Instead, the state offered a 3% raise, Frikkie de Bruin, general secretary at the Public Service Coordinating Bargaining Council said by phone Wednesday. The proposal by workers would require R140 billion ($7.83 billion) and be "totally out of budget", he said.

The government told labor unions representing state workers to "go and reconsider and relook at the position and at the demands in terms of where is it we can maybe follow a different approach", De Bruin said.

In addition to the 12% increase in the 2025/26 financial year, public servants are seeking a R2 500 increase in their housing allowance. They’ve also called for a danger allowance to be raised to R1 000 from the R597.

De Bruin added that they plan to resume talks in what is known as "marathon negotiations" from the first week of October through the middle of the month, ahead of Finance Minister Enoch Godongwana’s mid-term budget update, expected on 30 0ctober, proposed for the 30th.

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