S.Africa government, strikers brace for new wage talks

By Jon Herskovitz and Peroshni Govender

JOHANNESBURG (Reuters) - Striking South African state workers held small-scale protests on Friday as union and government negotiators prepared for bargaining next week aimed at ending the three-week walkout by about 1.3 million.

The unions rejected a government offer of 7.5 percent pay raises, nearly double inflation, and 800 rand a month for housing, with workers demanding a better offer.

The parties have a bargaining session planned for Monday where they will try to find a way to end the strike that has been the biggest in terms of lost man days in three years.

The strike has hit hardest the legions of poor who depend on state services to live and has quashed the euphoria the country felt after hosting the June-to-July soccer World Cup.

"It can go either way on Monday. But whatever the outcome it will be a united position from COSATU and the independent unions," said a union spokesman who did not want to be named.

The unions, who represent court clerks, prison guards, customs officials and nurses, are seeking pay rises of 8.6 percent and 1,000 rand a month for housing. Most are affiliated with COSATU, the country's largest labour federation.

"Both parties have dug themselves into supposed final positions, which to some extent will become an obstacle to bringing the strike to an end," said labour lawyer Tony Healy.

Government officials said the state cannot afford the offer it has already put on the table and there is no more room in the budget to increase its offer, which would swell state spending by about one percent.