The Congress of South African Trade Unions (COSATU) notes Government’s Medium-Term Budget Policy Statement (MTBPS). Whilst appreciating the many competing demands facing the state, we remain deeply disappointed that once again Treasury and government collectively missed the opportunity to table a bold package of interventions that would tackle the fundamental crises of a staggeringly high 43.8% unemployment rate, weak economic growth averaging 1% for over a decade, entrenched levels of poverty and inequality, high rates of crime and corruption, embattled public and municipal services.
Whilst it is important to place the budget’s debt and deficit on a sustainable trajectory, this cannot be at the expense of stimulating the very economic growth and job creation essential to South Africa’s long-term recovery. An unhealthy obsession with neo-liberal austerity budget cuts or in the case of the MTBPS, prioritising early retirement packages, is not a sustainable path to unlocking economic growth and slashing unemployment. The fact that the MTBPS forecasts only reaching the 3% economic growth needed to see unemployment fall in 2034 is beyond depressing. Unemployment has risen 2.2% this year alone.
We do however welcome efforts that have secured R18 billion worth of investments in industrial projects and R1 billion to boost local pharmaceutical and vaccine manufacturing, helping to create over 5200 jobs. R217 billion approved allocations for 32 infrastructure projects will have a massive impact.
COSATU appreciates government’s heeding its call for badly needed relief to the working class and the economy with a R10 billion Fuel Levy holiday for November and December. This will ease the burden on commuters, inject money in the economy, lower inflation and hopefully prevent a November repo rate hike. An overhaul of the fuel taxes and levy is needed, including fixing the Road Accident Fund.
It is extremely disappointing that no further allocations have been made to boost the Public Employment Programmes to give hope to 12 million unemployed. It is beyond shameful that despite R13 billion worth of savings in social grants, yet again there is no inflationary relief for the 8 million destitute SRD Grant recipients.
Whilst COSATU remains worried about the loss of skills with the early retirement packages offered to public servants, we welcome government’s commitment to utilise these savings to hire young recruits and fill an additional 7 101 frontline service posts. R3,8 billion to fund 3 500 social workers will make a positive difference towards protecting the most vulnerable. We are however extremely disappointed that despite President Cyril Ramaphosa’s 2026 State of the Nation Address commitment to appoint 10 000 labour inspectors, Treasury and the Department of Employment and Labour have failed once again to allocate a single cent to this.
Additional allocations of R556 million for HIV/AIDS, R3,8 billion for District Health Programmes plus R1,6 billion for pregnancy and child nutrition are welcome. We are, however, worried that the Department of Health has only met 56 of its 500 health facilities’ maintenance and refurbishment targets for the year. Similar concern must be raised that the Department of Human Settlements has only achieved 13 000 out of its 62 000 new houses and 20 000 out of its 83 000 serviced sites annual targets.
The state of local government remains extremely worrying and is worsening each year. The R28 billion interventions to restore billing capacity in the metros, R3,5 billion to roll out 250 000 electricity smart meters, R60 billion investments in water infrastructure and R21 billion for free basic services are important interventions. However, these do not go far enough. Debt owed to municipalities has passed R480 billion with local government owing Eskom over R120 billion. Much bolder actions are needed to stablise and rebuild local government.
The R6,2 billion towards infrastructure repairs including R1,46 billion for roads and R3,5 billion for municipal infrastructure are positive. It is dismal that no new electricity sub-stations have been built and only 741 out of an annual target of 15 000 new household connections to the grid have been achieved.
COSATU is encouraged by additional funding to boost the war against crime and corruption with R810 million allocated to provide the Police with working vehicles, R823 million to deploy the SANDF in support of SAPS, R186 million for forensics and investigations, an injection of R2,2 billion to the judiciary, nearly doubling sexual offences courts to 101, and over R1,25 billion to boost Border Management, including R305 million for deportations. We are pleased that Treasury intervened to provide R560 million to stablise the Regular Force Medical Continuation Fund covering former SANDF members.
We are very worried by the impact under funding is having on the SANDF’s ability to maintain its capacity to fulfill its constitutional mandates. It is equally concerning that SAPS are not being provided with the necessary funds to employ additional personnel, in particular detectives and forensic investigators.
Additional guarantees of R1 billion each for Denel and SAA to enable them to continue on their path to recovery are supported. The turnaround of the Land and Agricultural Development Bank must be commended. The recovery of Metro Rail and the doubling of passenger numbers is encouraging. More support must be given to rebuilding and expanding passenger rail. It is deeply disturbing that yet again no support is being provided to help the Post Office and Postbank recover and effect their turnaround strategies.
We are encouraged by the efforts of SARS’ employees who have done well to continue cracking down on tax evasion and customs fraud, especially by the wealthy and illicit networks. We welcome the additional R4,5 billion allocation to SARS. Government must now begin to reduce the increasingly suffocating tax burden upon the working class.
Whilst there are positive parts to the MTBPS, including matters that COSATU fought for, as an overall package it fails to respond decisively to the dire crises facing the working class and the economy; our 43.8% unemployment rate and stagnant economic growth. Reducing the debt and the deficit is not a path to growth. COSATU will be seeking urgent engagements with government to ensure that a bold and progressive Budget that will invest in public and municipal services, stimulate economic growth and jobs, tackle crime and corruption, and provide relief and hope for the poor is tabled at Parliament in February.
Issued by COSATU
Matthew Parks (COSATU Parliamentary Coordinator)
Mobile: 082 785 0687
Email: matthew@cosatu.org.za