Public Service and Administration Minister Richard Baloyi said on Friday he is confident unions will accept government’s latest wage offer.

Negotiators met with unions on Thursday where the offer was explained to them.

Baloyi said the budget of R23 billion for wage increases is above inflation.

The public servants are demanding an 8.6 percent wage hike, R1000 housing allowance and a medical subsidy.

He said government’s offer addresses these demands.

“Our position in terms of total spending is 8.5 percent and is broken down into three components,” Baloyi said, adding the offer includes a 6.5 percent wage hike, 0.5 for housing allowances and the workers will be given 1.5 percent as part of a pay progression increase.

Meanwhile, government employees have handed over a memorandum with their demands at the Union Buildings in Pretoria.

The Department of Public Service and Administration’s acting Director General Kenny Govendor accepted the memorandum on behalf of government.

Govendor said he is confident a settlement will be reached in the middle of next week.

But state employees said Thursday’s R10 increase on the housing allowance is an insult, adding government must understand they do not stay in shacks.