The Congress of South African Trade Unions (COSATU) welcomes the postponement of the tabling of the 2025/26 Budget.  Whilst this is not the most elegant way to process budgets, the Federation is pleased that it and others’ interventions to stop a regressive 2% VAT hike bore fruit.  It is a sign of political maturity that government responded positively to these calls and stepped back from the precipice.

It is better that government experiences some badly needed humbling and goes back to the drawing board, than to have rushed a Budget that not only would have been rejected in Parliament, potentially creating a constitutional crisis and unnecessary political theatrics we could do without, but most importantly would have been an unbearable burden upon working class families who are already heavily in debt, battling to cope with the rising costs of living and whose meagre wages have frequently not kept pace with inflation.

COSATU tabled several common-sense alternatives to government to a VAT hike to ensure the state has the resources it needs to fund public and municipal services, stimulate the economy and slash unemployment.  These include providing the South African Revenue Service with an immediate additional R3 billion to boost tax compliance from 64% to 67% thus generating the R60 billion needed.  Engagements must also take place with public and private financial institutions to shoulder a greater portion of the financing required to boost infrastructure, SMMEs, industrialisation, exports and job creation than the fiscus can afford.

The Federation will continue to engage government, and in particular the Presidency and Treasury, to ensure that the many progressive allocations in the proposed Budget are retained and defended whilst simultaneously providing more sober revenue proposals that will ensure the state is able to collect the taxes already due to it without resorting to pickpocketing workers.

We are confident that if such engagements are approached from a perspective of finding solutions, then a Budget that capacitates the state, unlocks economic growth, creates jobs and protects the vulnerable can be tabled at Parliament on 12 March.  The time of ill-considered short cuts and dumping the bill for the mismanagement of the state, corruption and a struggling economy on the poor must now end.

Issued by COSATU

Matthew Parks(Parliamentary Coordinator)

Mobile: 082 785 0687

Email: matthew@cosatu.org.za