False Optimism in a Broken Economy
The Minister opened his statement by claiming that “our optimism is rooted in the progress we have made in keeping our promises, to grow the economy faster, strengthen public finances, and improve life for all South Africans.”
This optimism is false. For the majority, life has become more precarious, more unequal, and more desperate.
The South African Federation of Trade Unions (SAFTU) rejects this narrative of progress. Thirty-one years after democracy, our economy remains colonial in structure, extractive, export-oriented, and dependent on cheap, insecure Black labour. The state has preserved, not dismantled, the apartheid economy. Treasury’s fixation with “stability” and “discipline” is the language of austerity, fiscal conservatism that protects financial markets while collapsing the capacity of the state.
2. Economic Outlook Growth Without Jobs or Transformation
Outlook: Growth Without Jobs or Transformation
The Minister boasts that GDP growth will reach 1.2% in 2025, “more than double” the 2024 rate. But this is a hollow victory.
Even conservative economists agree that South Africa needs 5–6% annual growth to begin reducing unemployment. The Treasury’s forecast of 1.2% in 2025 and 1.8% by 2028 signals long-term stagnation.
Economic reality:
• Industrial output remains stagnant; manufacturing employment has fallen to under 9% of total jobs.
• Capacity utilisation in manufacturing has dropped below 76%, a sign of deindustrialisation.
• Expanded unemployment stands above 42%, and 62% of South Africans live below the upper-bound poverty line (R1,558 per month) according to UCT-SALDRU.
• Corporate surpluses exceed R2 trillion, hoarded rather than invested.
This is not “faster growth” or “better life for all”; it is the growth of inequality. Treasury’s policies serve capital accumulation, not national development.
3. Fiscal Outlook: Austerity Disguised as Prudence
The Minister claims the fiscal strategy aims to “stabilise debt,” “grow the primary surplus,” and mobilise resources for infrastructure. In reality, it represents permanent austerity.
• Between 2019/20 and 2026/27, non-interest spending will be cut by R270 billion.
• Per capita non-interest spending will collapse from R34 600 to R26 400 — a 23% decline.
• Public-sector capital expenditure has fallen by R82 billion (-29%) since 2016.
• Education and health spending face real per capita cuts of R320 per learner and R200 per patient.
• Spending growth of only 2.7% in 2025 is below inflation, translating to further real cuts.
Treasury’s obsession with surpluses and debt ratios starves public services of funds, destroys jobs, and deepens inequality.
SAFTU, a new fiscal framework that;
- Implements the Freedom Charter’s call that “the wealth of the country shall be shared among all the people.”
- Introduces a Wealth and Solidarity Tax on the rich.
- Reverses corporate tax cuts (from 27% back toward 35–40%).
- Implements the Judge Dennis Davis Tax Review recommendations, including stronger inheritance, capital-gains, and wealth taxation.
- Ends procurement theft through real-time transparency and prosecution of colluding corporations and officials.
Austerity is not discipline; it is deliberate economic sabotage of the poor.
4. Debt and Financing Strategy: The Ideological Fetish of the Rating Agencies
The Minister celebrates that debt will “stabilise at 77.9% of GDP.” Treasury presents this as success, when in reality it reflects the capture of policy by the Washington Consensus.
Globally, public debt averages over 90% of GDP. The US and UK exceed 100%, and Japan over 250%. South Africa’s ratio is not high, and historically, when the country’s debt exceeded 100% in the 1930s, it used that borrowing to build Eskom, Transnet, Iscor, and Sasol, creating jobs and growth.
The lesson is clear: Debt used productively builds nations.
What matters now is how much we owe, but what we use it for.
By cutting spending to satisfy credit-rating agencies, the Treasury repeats the colonial Logic of governing bondholders, not for citizens.
5. Revenue and Tax Measures: Strengthen SARS — Tax the Rich
SAFTU welcomes the Treasury’s recognition that the R4 billion allocated to SARS has improved enforcement. Revenue collection exceeded projections by R19.3 billion, confirming that investment in pubic institutions works.
But Treasury refuses to translate this success into a progressive tax agenda. There is no:
• Wealth or solidarity tax,
• Reversal of corporate tax cuts,
• Enforcement of capital gains or inheritance taxes
Clamping down on R2 trillion in idle corporate surpluses.
We can finance real transformation if the Treasury:
1. Implements the Davis Tax Commission recommendations.
2. Reverses corporate tax reductions
3. Tightens transfer pricing and profit-shifting regulations, and
4. Publishes an annual Illicit Financial Flows Report (South Africa loses R240 billion annually through capital flight).
Without these measures, revenue policy remains pro—rich and anti-poor.
6. Expenditure Priorities: Cut corruption and collapse the Treasury’s promise to “improve spending efficiency’’ is code for cuts and outsourcing.
Treasury’s promise to “improve spending efficiency” is code for cuts and outsourcing.
Frontline services are collapsing:
• Tens of thousands of vacant posts remain unfunded in education, health, policing, and social work.
• Local governments cannot maintain basic services due to underfunding and staff freezes.
• Consultants and tenders replace skilled public servants, eroding accountability.
Meanwhile, procurement corruption bleeds between R150–R300 billion per year (Auditor-General and SIU). Treasury’s “efficiency” drive says nothing about ending tender fraud, inflating prices, or sanctioning private companies complicit in looting.
SAFTU demands open-contracting reforms with:
- Full public disclosure of tenders and subcontractors,
- Bans on politically exposed bidders, and
- Mandatory prosecution of corrupt public corporate officials.
7. Structural Reforms (Operation Vulindlela and GAIN): Privatisation by Stealth
Treasury hails Operation Vulindlela and GAIN as engines of growth. In truth, they are engines of privatisation, transferring public wealth to private hands while transferring risk to the public.
Through these reforms;
- PPPs, unsolicited bids, and “infrastructure bonds” are expanding private control of rail, water ports, and energy.
- Households now bear the cost: tariffs for electricity, water, municipal services, and transport are skyrocketing, while private firms capture the profits
- Public investment has shrunk by 29% since 2016.
This is not “reform.” It is GEAR 4.0, neoliberal continuity under new branding.
SAFTU demands
• The publication of all IPP (Independent Power Producer) contracts,
• Full disclosure of talks between Minister Barbara Creecy and private transport investors,
• A state-led infrastructure drive built by public enterprises and workers, not tender barons.
Operation Vulindlela does not reduce risk, it socialises risk and privatises profit.
8. Public Sector Employment and Early Retirement: Retrenchment by Stealth
The Minister calls the Early Retirement Programme a plan to “rejuvenate the public service” and achieve “R3.5 billion in annual savings.”
This is misleading. It is a retrenchment disguised as renewal.
The public service is already crippled:
• Schools, clinics, and correctional facilities are short-staffed.
• Home Affairs offices and police stations are overwhelmed.
• Thousands of posts are frozen to “contain the wage bill.”
Encouraging mass exits will hollow out essential services, not rejuvenate them. The promised replacements will not materialise under continued fiscal ceilings.
SAFTU demands:
- A moratorium on early retirement schemes in critical sectors
- Immediate filling of all vacant front-line posts
- An end to outsourcing and consultant dependence
- A genuine public service rebuilding plan
9. Infrastructure PPP Framework: The Mirage of “Crowding-In”
The Minister calls infrastructure the “flywheel of growth,” yet Treasury’s own figures show the opposite:
• Public-sector capital expenditure is R82 billion lower than in 2016, a 29% decline.
• The 2024 Budget slashed R35.9 billion from PRASA and housing grants.
The new PPP framework, set to expand in 2025, hands public infrastructure to private financiers under the pretext of “mobilising investment.” This is privatisation by stealth.
SAFTU demands:
- An end to the PPP framework that socialises risk
- Transparency on infrastructure bonds and guarantees
- Local-content labour clauses in all public projects
- A state-led infrastructure programme focused on energy, rail, housing, and water under public democratic control
10. Social Security and Poverty Alleviation: Silence Amid Hunger
The MTBPS’s total silence on comprehensive social security and a Universal Basic Income Grant (UBIG) is the clearest proof of the Treasury’s anti-poor bias.
Hunger and deprivation.
• The average household food basket costs R5 400 (PMBEJD, Oct 2025).
• The SRD Grant is R370; the Child Support Grant, R530 — both far below survival level.
• 62% of South Africans live below the upper-bound poverty line (UCT-SALDRU).
• 27% of children under five are stunted; 1,000 children die every month from hunger-related causes.
Yet Treasury claims fiscal constraints prevent a UBIG, while billions are lost to corporate tax evasion, illicit outflows, and procurement theft.
Food waste and corporate impunity,
Every day, supermarkets and food processors destroy edible food while millions starve. The Treasury has no plan to compel the donation of safe surplus food.
SAFTU demands urgent legislation mandating the donation of unsold edible food to community food banks and kitchens, following examples from France and Italy.
SAFTU’s call for social justice
A Universal Basic Grant is not welfare; it is justice
It will:
- Guarantee a minimum income floor
- Stimulate local economic activity
- Begin the redistribution of wealth
We can finance it by :
- Reversing corporate tax cuts
- Implementing the Davis Tax Commission proposals
- Ending illicit financial flows
The treasury’s silence on hunger is a policy of cruelty
11 Austerity is the enemy of Transformation
The 2025 MTBPS is not a programme for growth; it is a programme for managing decline and protecting privilege. It celebrates debt ratios while hospitals collapse; it praises surpluses while children starve.
SAFTU rejects this neoliberal framework and demands a decisive break with austerity.
We call on all workers, communities, and social movements to unite behind a People’s Alternative Budget anchored in redistribution, justice, and democratic control.
“People Before Profit-End Austerity, Tax the Rich, Rebuild the State.”
SAFTU’s key Demands:
- Transform the colonial-apartheid economic structure
- Implement the Freedom Charter principle that the wealth of the country shall be shared among the people.
- Implement the Davis Tax Commission recommendations and introduce a wealth and solidarity tax.
- Reverse corporate tax cuts and increase taxes on profits and dividends.5
- Legislate against the destruction of edible food and support community food banks.
- 6. Implement a Universal Basic Income Grant and build a comprehensive social security system.
- End procurement theft through open-contracting reforms.
- Massively expand state-led public investment in infrastructure and services.
9. Fill all vacant public-service posts and halt headcount cuts.
10. Democratise the economy under worker and community control.
Until these steps are taken, South Africa will remain a land of plenty for the few and of hunger for the many, a democracy without social justice.
A statement was issued on behalf of SAFTU General Secretary Zwelinzima Vavi.
For Media enquiries, contact the National Spokesperson at:
Newton Masuku at:
078516 4094
Media officer
Asive Dyani
0719019564
