The Congress of South African Trade Unions (COSATU) hopes that government will not disappoint workers and the nation when it tables the 2025/26 Budget at Parliament on 12 March.  The working class and the country at large are battling numerous dire socio-economic crises and need government to table a bold, progressive budget that will capacitate the state to deliver the quality public services society and the economy depend upon, to stimulate badly needed growth and slash unemployment to generate the revenue the state requires, and to provide relief to the unemployed whilst the economy picks up. 

We cannot afford a return to the brutal austerity budget cuts inspired by a misplaced belief in neo-liberalism that has crippled frontline public service which the working class requires to survive.  We should not fool ourselves into thinking that inflicting pain upon the poor and the working class is a path to economic growth.  Neither should we delude ourselves into believing that tinkering at the sides will make a difference. 

If we are to turn South Africa around, then we need to:

• Ramp up support for Eskom to ensure loadshedding and load reduction is a thing of the past and that consumers and industries have reliable and affordable electricity.
• Intensify interventions at Transnet and Metro Rail to ensure they are returned to full productivity as these will unlock the mining, manufacturing and agricultural sectors; major sources of revenue and jobs; as well as providing safe and cheap transport to commuters for going to work and thus boosting the urban economy.
• Put in place urgent measures to stablise the increasing numbers of dysfunctional municipalities and shift towards a new funding and District Development model.
• Provide frontline public services in particular education, law enforcement, health, home affairs amongst others the resources they require to fulfil their mandates, including filling critical vacancies.
• Accelerate the roll out of the public infrastructure programme and tackle blockages to it, in particular criminality.
• Develop a new mass industrial financing programme mobilising resources from both the public and private sector for SMMEs, industrialisation and export investments.
• Expand public employment programmes to provide the skills, training and experience participants need to find permanent work.
• Provide relief for the unemployed by protecting the SRD and other social grants from inflation, and linking their recipients to skills and employment opportunities, as well as by not adjusting the fuel price levy.

The economy will grow if we fix the state, stimulate growth and slash unemployment.  It will not grow by squeezing already badly under resourced public services further. 

COSATU remains deeply opposed to any increase on taxes upon the working class, in particular VAT or personal income tax for low-income earners.  Such increases would plunge workers and their families who are already bleeding from the rising costs of living and a 400 basis points hike in the repo rate, deeper into debt. A VAT increase will stoke inflation.  Such hikes would suck money out of the economy when it is most needed to stimulate growth.  It would send a message to the poor that government cares more about balancing tables and graphs then workers being able to put food on the table and pay for electricity.  This is a message that politicians would be very wise to listen to as we head towards the highly contested 2026 local government elections, in particular our ally, the African National Congress.

Revenue must be secured through investing in the South African Revenue Service by providing it the resources it needs to tackle tax evasion and customs fraud.  An additional R2 billion annual injection into SARS will enable it to boost tax compliance from 64% to 67% generating an additional R60 billion in revenue owing to the state.  It makes no sense to bleed dry those who pay their taxes and ignore those who don’t.  Tax loopholes that favour the rich must be removed and additional taxes for the wealthy, including companies, be introduced as an alternative to a VAT hike.

Government has a choice, we can continue upon the path that squeezes the poor and starves public services and somehow hope that will spark an economic recovery or we can be sober and fix the state and ensure it has the resources it requires, stimulate growth and slash unemployment, and in particular give SARS the tools it requires to collect the funds the fiscus desperately needs. 

COSATU will reject any attempt to dump the bill upon workers and the poor.  Now is the time when government needs to rise to the occasion and deliver the Marshall Plan that will finally take our economy to the 3% growth we need.  We simply cannot afford another limp budget let alone one that pickpockets workers through VAT or personal income tax hikes.

Issued by COSATU

Matthew Parks (Parliamentary Coordinator)

Mobile: 082 785 0687

Email: matthew@cosatu.org.za