COSATU Call Center Number 010 002 2590

The Congress of South African Trade Unions (COSATU) has recently launched a new call center to provide much-needed assistance to workers facing labour-related challenges. This dedicated resource aims to offer support, information, and guidance to both members of COSATU-affiliated unions and unorganized workers, ensuring that they have a place to turn for help with workplace issues.

COSATU welcomes the Western Cape High Court agreement setting aside the VAT hike

The Congress of South African Trade Unions (COSATU) welcomes the Western Cape High Court’s order setting aside the proposed VAT hike of 0.5%.  This will provide relief to millions of workers who have been struggling to cope with the rising costs of living.  Working class families spend most of their income on transport and electricity whose increases far exceed CPI.  A VAT hike and not adjusting Personal Income Tax brackets for inflation would make their lives even more unbearable.

Whilst this year’s Parliamentary budget processes have been messy, we are pleased that government led by the African National Congress, has shown the humility to engage COSATU, other organisations and society, and the political maturity to respond decisively.  These are signs of a robust democracy and a signal that government must listen to the frustrations of the working-class.

What is needed now is for a simple surgical adjustment of revenue and expenditure projections over the Medium-Term Expenditure Framework (MTEF).  For the 2025/26 financial year the initial amount affected of R14 billion has already been reduced substantially by the hard work of the South African Revenue Service (SARS)’s employees exceeding tax collection by R9 billion in March.

The remaining R66 billion over the MTEF period should be sought by:

  • Reducing luxury expenditure on travel, catering, accommodation, advertising and consultants; including monies spent on Cabinet and the executives; and requiring all state institutions to tackle wastage, e.g. renting offices when government building lay empty.
  • Providing SARS, the resources it needs to boost tax compliance by at least 2% or R40 billion per annum.  This should include targeting tax evasion by high wealth individuals and companies, customs fraud, illicit trade in alcohol and tobacco related products and online gambling.
  • Engaging the Development Bank, Industrial Development and Public Investment Corporations (PIC) to take over some of the economic infrastructure projects where they can secure a return on investments, e.g. the 13 000 university beds, investments in ports, rail and electricity.
  • Holding similar discussions with the Sector Education Training Authorities, National Skills Fund and the PIC to contribute towards the costs of and expanding public employment programmes.

Treasury needs to resist the unhelpful temptation to slash the many important progressive allocations in the Budget, including the:

  • Freeze on the fuel tax and increasing social grants for above inflation as these provide relief to millions of the most vulnerable and inject additional stimulus into the economy.  It is key that the SRD Grant too be adjusted for inflation at a minor cost of R1.7 billion.
  • Allocations rebuilding public services that working class communities and businesses depend upon, including filling critical frontline vacancies and the public service wage agreement.
  • Investments in critical infrastructure in particular in passenger and freight rail, electricity, roads, ports, water, hospitals and schools; as these are key to creating economic growth and jobs.

COSATU will continue to engage Treasury, government and Parliament.  We are confident the R66 billion can be found in ways that protect the poor, capacitate the state and stimulate growth. 

Once the Budget’s adoption has been concluded, it will be critical that Parliament’s Finance Committees hold monthly engagements with SARS to ensure it is on track to substantially improve collection.

Parliament and Treasury need to utilise the period before and after the tabling of the Medium-Term Budget Policy Statement at Parliament in October, to foster a national conversation on what our expenditure priorities are and what we can do without, and what revenue options are acceptable to fund these spending commitments.  This should not be a burden left to Treasury alone, but one that we drive and own collectively as society.  This can lay the foundations for the necessary social compacts and where needed, the trade-offs.  What we cannot afford is to continue stumbling along a path of business as usual and expect different results.  Nor can we continue to normalise a 41.9% unemployment rate and pray for the 3% plus economic growth needed to reduce this ticking time bomb.

Issued by COSATU

Matthew Parks (COSATU Parliamentary Coordinator)

Cell: 082 785 0687

Email: matthew@cosatu.org.za

Kind Regards

Zanele Sabela

Cosatu Spokesperson
Mobile: 079 287 5788

Email: zaneles@cosatu.org.za