Cosatu Calls 2025 Budget a Defining Moment for South Africa’s Democracy

The Congress of South African Trade Unions (Cosatu) has called the 2025/26 Budget a pivotal moment in the country’s democratic journey. While acknowledging ongoing fiscal and socio-economic pressures, Cosatu said this year’s budget signals a potential shift in direction—one that could either uplift working-class communities or deepen the inequalities already facing millions of South Africans.

“This is a turning point in South Africa’s democracy. It’s up to us whether it’s for better or worse,” said Cosatu General Secretary, Solly Phetoe.

A Welcome Move: No VAT Hike

One of the most applauded developments was National Treasury’s decision to abandon the proposed increase in VAT. Cosatu, alongside other civil society organisations, warned that a VAT hike would severely impact working-class households already battling rising costs of living, debt, and joblessness.

“We are pleased that government humbled itself and heeded the cries of society to withdraw the proposed VAT hike. That is a moment to be applauded,” Phetoe said.

South Africa’s Economic Reality: A Ticking Time Bomb

Cosatu highlighted a long list of national crises:

• 41.9% overall unemployment,

• Youth unemployment exceeding 70%,

• 1% GDP growth,

• Endemic poverty, inequality, crime, and corruption.

Despite these grim figures, Cosatu argues that budget discussions must shift from an obsession with balance sheets and debt ratios to a focus on inclusive economic growth and public service delivery.

A Push to Exit Austerity

Finance Minister Enoch Godongwana has hinted at the need to exit austerity budgeting—a move Cosatu strongly supports. The federation insists that budget allocations must prioritise:

• Frontline service posts (nurses, doctors, teachers, police),

• Investment in infrastructure (electricity, water, rail, ports),

• Strengthening SARS to fight tax evasion and illicit trade,

• Retaining and increasing social grant allocations for the poor and unemployed.

Public Participation Needed

Cosatu believes budget reform cannot be the responsibility of Treasury alone. A transparent and inclusive national dialogue should be initiated ahead of the Medium-Term Budget Policy Statement (MTBPS) later this year.

“Society is correct to be impatient. Mediocrity and complacency can no longer be normalised,” Phetoe stressed.

Moving Forward: From Talk to Action

Cosatu is clear—South Africa cannot afford to continue business as usual. The government must lead with urgency, and Parliament must hold institutions like SARS and municipalities accountable with regular public reporting.

While acknowledging the ANC-led government’s track record—especially its allocation of 61% of the Budget to working-class investments—Cosatu says the time has come to reassess failures and chart a bold new course.

“This discussion must be anchored in what must be done, what’s possible, and the trade-offs we’re prepared to make,” said Phetoe. “We cannot be shocked when things don’t get better if we’re not willing to change.”

{Source: IOL}

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