The Congress of South African Trade Unions (COSATU) hopes government will not disappoint workers and the nation when it tables the revised 2025/26 Budget at Parliament on 21 May.  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 that 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 services which the working class require to survive.  Nor should we delude society into thinking that inflicting pain upon the poor and the working class is a path to economic growth and prosperity.  Neither should we fool 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 are 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 travelling to work and thus boosting the urban economy.
• Put in place urgent measures to stabilise and fix 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 constitutional mandates, including filling critical vacancies.
• Accelerate the roll out of the public infrastructure programme and tackle blockages to it, in particular criminality.
• Urgently develop a new mass industrial financing programme mobilising resources from both the public and private sector for SMMEs, industrialisation and export investments.
• Drastically 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 tax increases upon the working class, in particular VAT or personal income tax for low-income earners.  Such increases plunge workers who are already bleeding from the rising costs of living and a 400 basis points hike in the repo rate, deeper into debt. Such hikes take money out of the economy when it is most needed to stimulate growth.  The tax regime must ensure those who earn the least, pay the least, and the rich pay their fair share.

Revenue must be secured by providing the South African Revenue Service the resources (a worthwhile R20 billion) it needs to tackle tax evasion and customs fraud.  SARS must be empowered and tasked to raise tax compliance from 64% to 70% generating over the Medium-Term Expenditure Framework, thus raising additional R120 billion annually in revenue owed to the state.  It makes no sense to bleed those who pay their taxes and ignore those who don’t.

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 must reach.  We simply cannot afford another limp budget.  An aggressive pro-growth focus is more critical than ever as the world, including South Africa, navigates turbulent trade and tariff regimes which may take a heavy toll on our export sectors.

Once Parliament has concluded the Budget’s passage, it is critical that it with government initiate a national discussion on what our expenditure priorities and what we can live without, and what are the acceptable and unacceptable revenue streams to fund these.  This will enable a much more meaningful debate when Treasury tables the Medium-Term Budget Policy Statement at Parliament in October and a more progressive, decisive, pro-growth and jobs Budget in 2026.

Issued by COSATU

Matthew Parks (COSATU Parliamentary Coordinator)

Cell: 082 785 0687

Email: matthew@cosatu.org.za