Budget 2026: COSATU Laments Missed Opportunity for Economic Growth

Matthew Parks

The Congress of South African Trade Unions (COSATU) notes with extreme disappointment the lacklustre 2026/27 Budget and Medium-Term Expenditure Framework tabled at Parliament by the government.  

Whilst appreciating that there are some progressive and important allocations that COSATU campaigned for included in the Budget, as an overall package it fails to respond decisively to the fundamental crises facing the working class and the economy, in particular a 41.1% unemployment rate, economic growth far below the 3% needed to create jobs, struggling public and municipal services and State-Owned Enterprises (SOEs), entrenched levels of poverty and inequality, and endemic crime and corruption.  

Tragically, the Budget is focused on balancing the books, not on aggressively kickstarting economic growth or tackling unemployment. The key to providing an environment where the economy can take off and the lives of the working class can be improved is to ensure that frontline public services have the resources needed to fulfil their constitutional and developmental mandates.  

We welcome above inflation increases for health, education and social security as well as R18 billion allocations to enroll 300 000 Grade R learners; R7.8 billion for the National Health Insurance Grants plus R24 billion for revitalising public healthcare, R92 billion for district health programmes, the building of seven new provincial hospitals and R21 billion for the employment of doctors over the MTEF; plus the recruitment of 3 000 staff to digitise civic services at Home Affairs.

Progress made in eradicating over 4,323 ghost posts, as well as plans to digitise public procurement, will help free funds for frontline services.  We are deeply worried that no funds appear to have been allocated to the employment of the additional 10,000 permanent labour inspectors pledged in the State of the Nation Address (SONA). 

Local government remains the Achilles ’ heel of the state, with more than 60% of municipalities in financial distress and many struggling to provide basic services or pay staff.  The allocation of R27 billion to improve metros’ abilities to provide basic services and bill correctly is critical, as are plans to strengthen the national government’s ability to timeously intervene in and hold failing municipalities accountable.  

Plans to connect over 320,000 houses to electricity and roll out 258,000 smart meters are welcome.  We are concerned that these interventions do not go far enough to capacitate often highly dysfunctional municipalities, tackle rising municipal debt or deal with corrupt and incompetent municipal management. 

COSATU commends the substantial progress made in stabilising and rebuilding key SOEs.  More must be done to enable Eskom to reduce the price of electricity, return Transnet and Metro Rail to full capacity to unlock mining, manufacturing and agricultural jobs, as well as to provide efficient public transport for urban workers.  

The substantial infrastructure investments over the MTEF of R1.07 trillion, in particular for energy, rail, ports, water, roads and airports, will help boost badly needed economic growth and jobs over the long term.  We are dismayed by the lack of real turnaround plans to set Denel, the South African Broadcasting Corporation, Post Office and Postbank on the path to recovery.

SONA committed the government to a Marshall Plan to tackle our unacceptably high levels of crime and corruption, yet no new meaningful allocations have been provided for the Police, the Prosecuting Authority, Hawks or Judiciary to ensure they have the personnel, skills or infrastructure capacity to win this existential war.  

Additional allocations for the Border Management Authority, as well as for the South African National Defence Force, are important boosts, but the latter falls short of ensuring our military personnel receive the full support they require, in particular, three meals a day. 

Whilst appreciating a 5.8% increase in funding for economic development, the woeful monies allocated for small businesses, industrial and export sectors, let alone providing the bold stimulus package the economy needs, is deeply worrying.  

COSATU applauds the 9.6% above inflation increase for social grants.  We are, however, deeply angered that yet again, not even an inflationary adjustment has been provided for the 8 million SRD Grant recipients.  Parliament must correct this shameful failure and transfer the salary increases for politicians to these destitute grant holders.  It is equally painful that allocations for the NSFAS threshold have not been adjusted for inflation.

It is disappointing that the Presidential Employment Stimulus has not been increased despite SONA’s commitment to do so. We welcome relief provided to working and middle-class families by adjusting for the first time in three years, tax brackets for inflation.  We are bewildered that more resources to capacitate the South African Revenue Service to boost tax compliance have not been provided beyond a measly 2% annual adjustment.  

The R31 billion allocation from currency reserves to boost the fiscus is supported. Although there are important allocations for some frontline and relief measures, COSATU is extremely frustrated that Treasury and government collectively, have once again reduced the Budget to balancing books and missed the opportunity to table a bold stimulus package that would fix public and municipal services, spur economic growth, boost employment, provide relief for the poor and unemployed, and ramp up tax compliance.  

COSATU will be seeking urgent engagements with Treasury and government, as well as Parliament, to ensure that these failures are addressed.  We cannot afford to continue to normalise 1% economic growth nor 41.1% unemployment.  The patience of the working class and society is not unlimited.

* Matthew Parks is COSATU's Parliamentary Coordinator.

** The views expressed do not necessarily reflect the views of IOL, Independent Media or The African.