Gallo
"This is R8.1 billion over what we have budgeted for," she told reporters in Pretoria.
"We will need to go into our reserves."
She said the public service wage bill had risen from R211 billion in 2008/2009 to R314.9 billion in 2010/1011. It now constituted 38.7 percent of consolidated non-interest spending.
Sisulu said government had offered public service workers a nine percent increase made up of a 6.5 percent salary increase and a 2.5 percent increase in benefits.
Labour was demanding an eight percent salary increase.
The offer from government also included the recognition of long service, an increase in night shift allowance, a cash bonus of 10 percent of employee's salary on improvement of qualifications, and an increase in shop steward, family responsibility, and pre-natal leave.
It also offered an increase in the monthly allowance for housing from R800 to R900 with the allowance to be converted into a subsidy towards a bond at the introduction of the government employees housing scheme, said Sisulu.
Negotiations between the two parties broke down last week when government made its final offer. The unions have declared a wage dispute.
Sisulu said Treasury had budgeted for only a five percent increase.
"Government [is] in a situation where nine percent is way above what it has budgeted for," she said.
Salary increases higher than the rate of inflation would be unsustainable.
Sisulu said government was inviting labour back to the negotiating table.
"They will be surprised that I have no horns and there is no devil in me," Sisulu told reporters in Pretoria.
"It is in their interest that we find an amicable solution."
She said government wanted to prevent workers from going on strike.
"Right here and now we have what in my language we might call "clear and present dangers" -- that of a looming potential wage dispute," said Sisulu.
"The state of [the] global economy, the reality of our own limited budget, our own credit rating and credibility, makes me hope and believe that labour and ourselves as government have no appetite for a dispute and worse, a strike."
The Independent Labour Caucus (ILC), which declared a wage dispute with the state after public sector pay talks broke down, was not immediately available for comment.
Sisulu denied reports that she was a "union basher".
This related to her stance on unions within the SA National Defence Force.
"As far as the ruling party [ANC] is concerned, and the policy of the defence force, there is no place for unions in the defence force," said Sisulu.
"There is no place in the defence force for ill-discipline."
She was referring to striking defence force officers who went on the rampage at the Union Buildings in Pretoria in 2009.
Sisulu was moved from defence to public service by President Jacob Zuma during a Cabinet reshuffle last week.
She said that, on average, seven months a year were spent negotiating with public service workers.
"I don't believe this is right."
Sisulu said it would be in labour's favour to have an amicable resolution at the earliest possible time.
It would also allow her as minister to build a relationship with labour which would culminate in a service delivery charter.
"A service charter where we will both develop principles governing increases in remuneration conditions... a service charter where salary increases are based on productivity and performance improvements," she said.
The charter would be necessary for government to function properly.
"We cannot go on like this with a wage bill that is unaffordable.
"After a series of negotiations we are at a point where we can influence and talk to labour so that we can find each other," said Sisulu.
