
UASA Media Release: 21 May 2025
Image source: Mail & Guardian.
Statement by Abigail Moyo, spokesperson of the trade union UASA:
The third version of the 2025/26 budget, presented by Finance Minister Enoch Godongwana, reveals a worsening debt outlook, indicating that South Africa is still struggling to control its debt.
This escalating debt burden, compounded by a reduced GDP growth forecast of 1.4%, threatens job creation and economic sustainability. Slower growth and increasing debt costs restrict the government’s ability to invest in infrastructure and social services, key drivers of employment, while raising the likelihood of future tax hikes for the citizens of South Africa.
Although the Value Added Tax (VAT) increase has been reversed, the government has raised the general fuel levy by 16 and 15 cents for petrol and diesel, respectively, effective 04 June. Additionally, the expansion of the zero-rated basket, which was intended to alleviate the impact of the VAT increase on poorer households, has been removed.
Unfortunately, the challenges are not yet over. The minister has noted that the 2026 budget will need to introduce new tax measures to raise R20 billion, which could further burden consumers and taxpayers.
Moreover, without a practical plan for job creation within the financial year, this situation translates to fewer opportunities and less room for business investments, leading to slow economic growth and a lack of structural reforms.
Outside of much-needed spending allocations for health services, education, state-owned enterprises (SOEs), the security cluster, SASSA grants, and
COVID-19 social relief measures, the Budget does not offer any new or practical solutions beyond what has been presented in the previous versions.
The real economic challenges persist without tangible solutions for South Africans. Where are the promised jobs, given that the unemployment rate remains high? There was a promise of economic transformation and a turnaround for SOEs to become functional again, yet years have passed without progress.
Will we face the medium-term budget later this year, entering the new financial year with the same challenges, with tax hikes threatening consumer income and plans to manage national debt?
Minister, we continuously call for viable solutions, but the answers remain elusive, like the hopes for job creation or the essential economic transformation our people desperately seek.
UASA urges the minister to confront the real challenges facing our country. Without a definitive action plan, we cannot rely solely on hope for a better tomorrow.
We must see concrete efforts and results from the government.
For further enquiries or to set up a personal interview, contact Abigail Moyo at 065 170 0162.