The 2026 national budget focuses on reducing debt, providing some help to households and includes important reforms, but it is not enough to create a large number of jobs.
This is the view of Union Federation Fedusa after Finance Minister Enoch Godongwana presented the budget in Parliament on Wednesday.
“It stabilizes the balance sheets, but it still has not ignited the economy to the extent and in the manner that is needed to provide relief to millions of South Africans,” Fedusa said.
He believed that the crisis in the country was not of debt but of jobs.
Budget Economic growth is projected at 1.6% in 2026, which will gradually increase to 2% by 2028.
“That is movement, but it is not change. At these levels, unemployment will not fall meaningfully. For a country facing structural mass unemployment, jobs must dominate the budget. Instead, the key theme remains debt stabilization.”
Fedusa said Godongwana indicated that the debt was expected to stabilize 78.9% of GDP in 2025/26 and decline thereafter.
“That's an achievement. But the debt ratio doesn't create work. Fiscal credibility doesn't create jobs for young people.”
It said the government should now accelerate labour-intensive growth in manufacturing, agriculture, infrastructure maintenance, logistics, township economies and public services.
Fiscal credibility does not provide employment to the youth.
— Fedusa
Fedusa That said, inflation adjustments in individual income tax brackets and the Medical Tax Credit have provided relief to workers.
It said the allocation of R292.8 billion for social grants in 2026/27 and an increase in core grants were necessary and welcome. With 42% of the population dependent on social grants or social relief as their primary income source, the security of these allocations could not be compromised.
“However, the planned end of the Social Crisis Relief grant from 2027 creates deep uncertainty. If the SRD is to be phased out, a credible and appropriately funded replacement must already be designed, costed and agreed.”
FEDUSA also welcomed allocations for border management, law enforcement and the fight against organized crime, but said implementation must be visible and measurable.
However, the planned end of social crisis relief grants from 2027 creates deep uncertainty. If SRDs are to be phased out, a reliable and appropriately funded replacement must already be designed, costed and agreed upon.
— Fedusa
It also welcomed the R26bn allocated to provinces to boost HIV/AIDS programming after the US withdrew PEPFAR funding.
Fedusa said the legacy of austerity has left deep wounds. Even reasonable allocations could not fully bridge the gap created by years of underinvestment and service degradation.
“Fedusa will continue to emphasize labour-intensive industrial expansion, sustainable and transparent social security reforms, professional and corruption-free municipalities, strong enforcement against illicit financial flows, and decent work at the center of economic policy.
It said South Africans did not measure success in debt ratios. “They measure it in jobs, functioning services and restored dignity and the country certainly cannot freeze its way out of unemployment. It has to grow its way out of it.”
Times Live