Ahead of South Africa’s Medium-Term Budget Policy Statement (MTBPS) scheduled for October 30, the Congress of South African Trade Unions (Cosatu) has urged the government to deliver a bold and progressive fiscal strategy that decisively tackles South Africa’s socio-economic challenges.
This call comes amid stagnant economic growth at a mere 1%, rampant youth unemployment at over 42.6%, and entrenched poverty and inequality.
With municipal and public services under strain and crime levels high, Cosatu has warned that “a tepid business-as-usual approach” is no longer an option.
Cosatu agrees that managing public debt is essential, but believes a focus on austerity and budget cuts, which have been the “neo-liberal approach doggedly pursued by Treasury for years” would only worsen the situation.
Instead, Cosatu argues, sustainable debt reduction can best be achieved through stimulating economic growth, job creation, and effective public services.
Cosatu emphasises that a “growing economy and workers in jobs will generate the tax revenue the state requires” to fulfil its developmental goals while reducing debt levels.
The trade federation has outlined several “high-impact interventions” that it hopes will guide the government’s budget policy.
These include ramping up infrastructure investment, providing critical support for State-Owned Enterprises (SOEs) like Eskom and Transnet, and revitalising struggling sectors, including mining and agriculture.
To address essential services, Cosatu calls for additional resources for schools, hospitals, law enforcement, and the National Prosecuting Authority (NPA), with the aim of improving the quality and reach of these services.
The federation also criticised what it described as the “offensive myth” that the public sector is bloated. It argued that austerity measures have left key services such as education, healthcare, and policing dangerously understaffed.
“None should be surprised when Home Affairs is overwhelmed when it is battling a 60% vacancy rate,” said Cosatu, noting that staff reductions have contributed to a “brain drain” of skilled workers from the public sector.
Key to Cosatu’s recommendations is ensuring that the government’s R943 billion infrastructure program is effectively deployed.
The federation emphasised the need for “substantially increased funding” for industrial development and small- to medium-sized businesses (SMMEs) to stimulate economic growth.
It also called for targeted relief to Eskom to avoid future unaffordable price hikes and for strategic interventions to improve Transnet and Metro Rail, which would in turn “unlock the mining, manufacturing, and agricultural sectors”, while alleviating inflationary pressures on food and transportation.
With youth unemployment at unprecedented levels, Cosatu stressed the importance of government programs that provide skills development and job opportunities for young people.
To that end, it recommended a significant expansion of the Presidential Employment Stimulus, which it hopes will provide both work experience and income opportunities to unemployed youth.
The fight against corruption is another critical area, and Cosatu calls for strengthened support for law enforcement and judicial bodies to address this issue decisively.
Additionally, it has advocated for boosting the South African Revenue Service’s(Sars) capacity to enhance tax compliance, especially among high-income earners.
This would, Cosatu argues, “enable the state to provide the quality public services the working class depends upon”.
Moreover, Cosatu believes that South Africa’s economic future depends on a courageous shift in fiscal strategy, arguing, “We do not have limitless time and should not simply pray for better times”.
Instead, the federation urges the government to use the MTBPS and the upcoming 2025/26 Budget as pivotal moments to drive economic growth, reduce unemployment, and rebuild South Africa’s public services and SOEs.
IOL Politics