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Public Service Minister Lindiwe Sisulu says salaries will cost the state R30b this financial year, R1.8 billion rand more than what has been budgeted for.
Addressing journalists in Pretoria on Tuesday, Sisulu said Government will have to dig into its reserves to pay the salaries.
Sisulu said the government had offered public service workers a 9% increase made up of a 6.5% salary increase and a 2.5 % benefits increase.
Labour was demanding an 8% salary increase.
Negotiations between the two broke down last week when the government made its final offer.
