12 November 2025
The Federation of Unions of South Africa (FEDUSA) notes the tabling of the 2025 Medium-Term Budget Policy Statement (MTBPS) by Finance Minister Enoch Godongwana and expresses serious concern that, despite marginal improvements in debt and revenue performance, the statement fails to address the deepening crisis confronting the working class and the poor. While the Minister celebrates the stabilisation of public debt at 77.9 percent of GDP and an improved fiscal outlook, this budget continues to prioritise consolidation over compassion and financial discipline over social justice.
FEDUSA acknowledges the progress made through Operation Vulindlela in addressing inefficiencies within the energy, water, and logistics sectors. However, these reforms must be judged not by technical progress but by their impact on jobs, wages, and livelihoods. The federation cautions that the restructuring of state-owned enterprises (SOEs) and parastatals must not come at the expense of job security and workers’ rights. Workers at Eskom, Transnet, and PRASA have endured years of uncertainty, restructuring, and wage restraint under the pretext of reform. True reform must protect employment, preserve collective bargaining, and build state capacity instead of paving the way for privatisation and outsourcing.
While the Minister claims that government is “choosing growth, stability and reform,” this MTBPS offers little to those who live on the edge of survival. The working class continues to face rising transport fares, food inflation, unaffordable electricity, collapsing municipal services, and stagnating real wages. The poor remain excluded from meaningful participation in the economy, trapped in communities where infrastructure is decaying and where public investment has been eroded by austerity. Fiscal consolidation, when disconnected from social imperatives, deepens inequality and weakens the state’s ability to meet its constitutional obligations.
FEDUSA welcomes the modest increase in allocations for health, education, and social protection, but these do not go nearly far enough to repair years of underfunding and neglect. The announcement of “Targeted and Responsible Savings” masks the reality that cuts and reallocations are being made in areas that most affect the working class and the poor. While the Minister argues that the scaling down of the Public Transport Network Grant responds to inefficiencies in some cities, FEDUSA cautions that this decision risks undermining the very goal of building an integrated and affordable transport system. An efficient public transport network is essential to connect workers to opportunities, reduce household costs, and enable economic participation.
The federation notes the progress at PRASA in increasing passenger numbers but warns that such gains will not be sustained if urban transport budgets are reduced before a comprehensive, accessible system is in place. The cost of mobility remains a defining pressure on the working class, particularly for women and youth, and cannot be resolved through cuts disguised as savings.
The federation notes the launch of the government’s Procurement Payments Dashboard and ongoing efforts to strengthen the South African Revenue Service (SARS) as steps toward greater transparency and improved revenue mobilisation. However, these measures will only be meaningful if accompanied by a deeper renewal of the public service based on fairness, capacity, and stability.
FEDUSA notes the government’s intensified focus on eliminating so-called “ghost workers” and implementing a data-driven payroll verification system in collaboration with the Department of Public Service Administration and Home Affairs. While the federation supports efforts to enhance accountability and curb fraud, it cautions against equating fiscal discipline with workforce reduction. The proposed Early Retirement Programme and the anticipated R3.5 billion in savings risk further hollowing out essential state capacity and eroding institutional memory. Rejuvenating the public service must not become a euphemism for downsizing or casualisation. A professional, ethical, and capable state will only emerge through investment in its workforce by ensuring fair remuneration, filling critical vacancies, and retaining skilled public servants who are the backbone of service delivery and the guardians of public trust.
Improved revenue through strengthened debt collection measures by SARS is welcomed by FEDUSA, following the increased allocation in the 2025 Budget. However the notion by the Minister to possibly consider the withdrawal of the additional allocation in 2026 is short – sited, and only serves to weaken and frustrate efforts to advance the effectiveness of collections. Considering the improved efficiencies at the ports to move cargo, Minister Godongwana should instead reroute this budgetary allocation within SARS to strengthen the inspections mandate, as the control of goods entering and leaving ports is nonexistent, creating breeding grounds for illegal imports, under invoicing and corruption.
The decision to lower the inflation target to 3 percent is deeply concerning. While the Minister argues that this will ultimately reduce borrowing costs, the short-term effect will be to constrain monetary policy further and tighten household finances. This decision is out of step with the reality facing millions of South Africans who are already battling food and energy inflation, stagnant wages, and job insecurity. Lowering the target risks entrenching economic stagnation and worsening the material conditions of the working class and the poor.
FEDUSA is disappointed that the Minister once again failed to announce progressive tax measures that would redistribute wealth more equitably. The federation reiterates its long-standing call for the introduction of a wealth tax, a windfall tax on excess corporate profits, and stronger enforcement to curb illicit financial flows. Fiscal justice requires that those with the greatest means shoulder a fairer share of the burden. The current tax structure continues to favour the wealthy while overtaxing labour and consumption. A fair and worker-centred tax regime is essential to closing inequality gaps and financing inclusive growth.
FEDUSA further notes the emphasis on infrastructure investment, including the R15 billion infrastructure bond and the creation of the Infrastructure Finance and Implementation Support Agency. While these measures signal intent, the federation insists that infrastructure development must be labour-intensive, locally sourced, and aligned with job creation. The state cannot outsource its developmental mandate to the private sector. Public–private partnerships must not become a vehicle for profiteering at the expense of workers or the poor.
The federation welcomes the stated commitment to professionalise local government, but the credibility of such commitments will depend on whether municipalities receive adequate resources to restore basic services such as water, sanitation, and electricity. Years of fiscal neglect, corruption, fraud, and the appointment of unfit staff have crippled municipalities, leaving workers and communities in a daily struggle for survival amid broken infrastructure and administrative decay.
The working class and the poor cannot be expected to absorb the costs of fiscal restraint while corruption, inefficiency, and wealth inequality go unchecked. FEDUSA calls for a decisive policy shift that places social investment at the heart of fiscal planning. The federation demands:
- A pro-growth, pro-worker fiscal framework that expands employment and protects the real value of wages.
- Job security and protection of workers’ rights in all state-owned enterprises and reform processes.
- Immediate relief for working-class households through targeted transport subsidies, energy price stabilisation, and affordable access to basic services.
- Introduction of a progressive wealth and windfall tax to ensure equitable burden-sharing.
- Investment in a just transition that supports reskilling, local manufacturing, and sustainable jobs in the green economy.
- Meaningful social dialogue through NEDLAC and other tripartite structures to ensure that workers’ voices shape the country’s economic direction.
FEDUSA acknowledges that the Minister has succeeded in stabilising the fiscal outlook, but the social cost of this achievement remains too high. Stability cannot substitute for equity, and growth without justice will not endure. The working class and the poor continue to pay for the state’s failures through job losses, wage stagnation, and the erosion of public services. FEDUSA calls on government to abandon austerity and to embrace a developmental agenda rooted in fairness, employment creation, and the protection of human dignity.
END.