The 2026 national budget focuses on reducing debt, offers some help to households and includes important reforms, but it does not do enough to create large numbers of jobs.
This is the view of union federation Fedusa after finance minister Enoch Godongwana tabled the budget in parliament on Wednesday.
“It steadies the books, but it does not yet ignite the economy to the degree and in the manner required to provide relief to millions of South Africans,” Fedusa said.
It believed the country did not have a debt crisis but a jobs crisis.
The budget projected economic growth of 1.6% in 2026, rising gradually to 2% by 2028.
“That is movement, but it is not transformation. At these levels, unemployment will not decline meaningfully. For a country facing structural mass unemployment, jobs should dominate the budget. Instead, the dominant theme remains debt stabilisation.”
Fedusa said Godongwana indicated debt was expected to stabilise at 78.9% of GDP in 2025/26 and decline thereafter.
“That is an achievement. But debt ratios do not create work. Fiscal credibility does not employ young people.”
It said government must now accelerate labour-intensive growth in manufacturing, agriculture, infrastructure maintenance, logistics, township economies and public services.
Fiscal credibility does not employ young people.
— Fedusa
Fedusa said inflationary adjustments to personal income tax brackets and medical tax credits provided relief to workers.
It said the allocation of R292.8bn to social grants in 2026/27 and increases across major grants were necessary and welcome. With 42% of the population relying on social grants or social relief as a primary income source, protection of these allocations was non-negotiable.
“However, the planned discontinuation of the Social Relief of Distress grant from 2027 creates deep uncertainty. If SRD is to be phased out, a credible and properly funded replacement must already be designed, costed and agreed upon.”
Fedusa also welcomed allocations to border management, law enforcement and the fight against organised crime, but said implementation should be visible and measurable.
However, the planned discontinuation of the Social Relief of Distress grant from 2027 creates deep uncertainty. If SRD is to be phased out, a credible and properly funded replacement must already be designed, costed and agreed upon.
— Fedusa
It also welcomed the R26bn allocated to provinces to bolster the HIV/Aids programme following the withdrawal of PEPFAR funding by the US.
Fedusa said the legacy of austerity had left deep scars. Even reasonable allocations could not fully close the gap created by years of under-investment and service decline.
“Fedusa will continue to push for labour-intensive industrial expansion, sustainable and transparent social security reform, professional and corruption-free municipalities, stronger enforcement against illicit financial flows and decent work at the centre of economic policy.
It said South Africans did not measure success in debt ratios. “They measure it in jobs, functioning services and restored dignity and the country most certainly cannot stabilise its way out of unemployment. It must grow its way out of it.”
TimesLIVE
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.