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S.African civil servants want 12.4 pct wage hike

By Lucia Mutikani

JOHANNESBURG, June 29 (Reuters) - South Africa's civil servants are demanding a 12.4 percent salary hike for 2004 -- way above the country's inflation target band -- to align their wages with those of the private sector, unions said on Tuesday.

This is the latest is a series of wage demands exceeding the three to six percent inflation target. The CPIX index, tracked by the Reserve Bank for monetary policy, rose an annual 4.4 percent in May.

"It is a joint union demand. All eight unions are demanding a salary increase this year of CPIX plus eight percent," Public Servants Association spokesman Anton Louwrens told Reuters.

"We are also working towards a three-year agreement which means next year CPIX plus nine (percent) and in the third year CPIX plus 10 percent."

The eight unions represent about one million workers. The government is offering a salary increase of 5.4 percent from July this year -- based on projections that the CPIX index will average that rate in 2004.

It is offering CPIX linked raises over the next two years. The latest Reuters Econometer forecast CPIX, which excludes home loans, averaging 5.57 percent in 2005 and 5.20 percent in 2006.

The central bank has repeatedly cautioned against above inflation salary increases, which are seen stoking price pressures.

In its June quarterly bulletin, it said nominal wage growth per worker in the formal non-agricultural sector slowed to 8.6 percent in 2003 from 9.6 percent in 2002.

But Louwrens said the unions' wage demands were justified given the higher packages offered in the private sector.

The average monthly salary in the public sector is 5,000 rand before deductions, compared to 7,000 in the private sector, he said.

"We are dealing here with salary backlogs, against adjustments and salary increases in the public service and these go back a number of years," said Louwrens.

"What we are actually asking is just to have the position rectified as against that of salary increases in the private sector. We have worked out the increases on the basis of surveys done by a number of institutions."

The unions and the government are due to meet on Thursday. Other workers seeking above inflation salary increases include those in car manufacturing, who want a nine percent increase.

Wage negotiations in the country are rarely concluded without threats of strikes or industrial action taking place.

July is a traditional a month for strikes and employers such as those in the automobile sector, one of the country's biggest exporters, are already braced for labour unrest.