The South African Federation of Trade Unions (SAFTU) salutes the monumental victory of the working class and progressive forces who have succeeded in forcing the Government of National Unity (GNU) to withdraw its plan to increase VAT. This decision is not a gesture of goodwill by the ruling elite. It is the direct result of the collective action, sacrifice, and determination of workers and the poor, particularly those belonging to SAFTU and COSATU who courageously gave up two days of salary to protest austerity and the regressive tax proposals.
It is a victory earned in the streets — by thousands of workers who marched, picketed, and voiced their rejection of a tax system designed to punish the poor while sparing the rich. It is a victory of the broad anti-austerity and anti-budget cuts front, which mobilised the unemployed, informal traders, public sector workers, students, faith communities, and NGOs under one banner — the X of the Excluded.
This triumph also belongs to the millions of ordinary people who took to radio call-ins, community meetings, and social media to express their outrage at a budget that sought to load the fiscal crisis onto their shoulders. It is the voice of a nation rising to say: “We will not pay for a crisis we did not create!”
This is a powerful reminder that when workers and communities unite in action, victories are possible. But this victory must not make us complacent. It must spur us to intensify the fight. The VAT increase may have been halted — but the austerity agenda lives on.
In a country plagued by unemployment, inequality and grinding poverty the decision by the ANC-led GNU to impose a VAT increase and further erode the already meager incomes of the working class and the poor reveals its callous disregard for the marginalized in society.
Not only is VAT increase unnecessary, as there exist several sources of revenue to cover the shortfall, but it is regressive in that disproportionately affects the poor and working class. This VAT increase, which had already been voted on by parliament, would have had turned an already desperate situation into a catastrophe for the working class and the poor.
The Battle Ahead: No to Budget Cuts – Yes to a Trillion Rand Stimulus!
We have defeated the VAT hike, but budget cuts, wage freezes, and service retrenchments remain in full effect. The R247 billion cumulative cut in real per capita public spending since 2020 has left public hospitals, schools, municipalities, and railways in crisis. The austerity policy is slashing jobs in the public service, undermining delivery, and deepening inequality.
SAFTU reiterates its vehement rejection of the false dilemma presented by the minister of finance in which he claimed to have been confronted with either to increase VAT or budget cuts – opting for VAT as the lesser of the two evils. This is demonstrably false and below are several sources of revenue that SAFTU has put forward.
SAFTU reiterates our call for a trillion-rand public stimulus, financed through:
• A wealth tax and solidarity tax on the super-rich,
• Cracking down on illicit financial flows and corporate tax dodging, as exposed by the Davis Tax Committee,
• Ending tender fraud and procurement corruption, which drains hundreds of billions from the public purse.
Such a stimulus must be used to meet South Africa’s Sustainable Development Goals (SDGs) and the National Development Plan’s Goals of Society-Level Standards (GOSLS), by:
• Hiring tens of thousands of teachers, nurses, police and social workers,
• Expanding access to clean water, sanitation, and electricity,
• Investing in public housing, railways, and free education.
Unite and Mobilise: The Fight Is Not Over
SAFTU calls on all workers, unions, community organisations, faith bodies, and social movements to escalate the fight against austerity. We must now:
• Defend the public sector and fight for decent wages and jobs,
• Resist privatisation and the commodification of basic services,
• Mobilise for a People’s Budget, rooted in redistribution, justice, and dignity.
We are building a united, working-class front — grounded in the realities of township life, informal settlements, rural hardship, and exploited labour — to demand a state that serves the people, not the markets.
This victory over VAT must be a stepping stone to bigger victories.
The only path forward is one of unity, mass mobilisation, and unrelenting pressure from below.
A Statement was issued on behalf of SAFTU by General Secretary Zwelinzima Vavi.
For more details, contact the National Spokesperson at:
Newton Masuku
066 168 2157
Newtonm@saftu.org.za
