As South Africa braces for the National Budget Speech, workers are left wondering if this year's budget will truly address their pressing economic challenges. With rising inflation and stagnant growth, the stakes have never been higher.
Image: Bongani Mbatha African News Agency (ANA)
As the crucial National Budget Speech approaches on Wednesday, South African workers are left anxiously wondering: will this year's budget truly address the substantial challenges they face?
Abigail Moyo, spokesperson for the trade union UASA, painted a picture of the current economic landscape, revealing a nation where consumers are tightening their belts just to meet basic household needs, while businesses grapple with low growth, potential retrenchments, and an alarming rate of liquidations.
South Africa’s economic outlook remains bleak, and many expect Finance Minister Enoch Godongwana to present a budget that transcends mere short-term fixes, according to the trade union.
"The pressing need for a viable plan focused on job creation and long-term stability cannot be overstated. Without substantive economic growth, the spectre of high unemployment will continue to loom large," Moyo said.
UASA said it is calling on the budget speech to address critical areas for intervention.
"To stimulate industrial expansion, support small and medium enterprises, and safeguard existing jobs, the minister must outline a clear and actionable strategy. Workers cannot be expected to shoulder the cost of fiscal consolidation alone," Moyo said.
She added that high inflation remained a significant burden, eroding purchasing power and, by extension, workers' disposable income.
UASA emphasised the urgent need for measures that protect social and relief grants, as well as stabilising the costs of essential goods like food and fuel.
"Tax relief, where feasible, should also be considered to ease the financial pressure facing South Africans. The role of state-owned enterprises (SOEs) in driving economic performance and ensuring efficient service delivery cannot be underestimated. Investment in these entities must be predicated on robust governance reforms to avoid the pitfalls of financial mismanagement that have marred their contributions in the past," Moyo said.
Looking toward the future, UASA said that the foundations of long-term economic growth must rest on investments in education and skills development.
"The budget should be reflective of this need by increasing support for Technical and Vocational Education and Training (TVET) institutions, along with funding apprenticeships and workplace-based learning programmes tailored to align with industry requirements. Ultimately, UASA appeals for a budget speech that demonstrates fiscal responsibility while laying out a strategic plan to stimulate growth, reduce unemployment, and stabilise inflation. Workers are in urgent need of hope, stability, and a clear economic trajectory from their government," Moyo said.
Meanwhile, Hayley Parry, Money Coach and Facilitator at 1Life’s Truth About Money said that the number one thing consumers will be looking for in this budget is an adjustment to the personal income tax brackets, given that the last inflation related bracket adjustments were in 2022 and 2023.
"The past two budgets have effectively frozen personal income tax brackets and this resulted in explicit bracket creep. What this means for consumers is that even modest salary increases received over the past two years may have actually pushed people into a higher tax bracket depending on what they earn," Parry said.
"When that happens to consumers, it means your disposable income shrinks in real terms and your tax burden is rising without a headline tax rate increase. How this impacts your personal finances is significant because even if you're getting a raise, it doesn't feel like it because these brackets haven't been adjusted for inflation. I think that's the number one thing that consumers will be looking for in this budget to give them some relief," Parry added.
"Similarly, when we're looking at the personal finances of households and how they're going to be impacted by this budget. Another key thing in terms of how this budget affects consumers, is its impacts South African’s ability to become financially stable, financially resilient over the medium to longer term. This is also aligned with the lack of inflationary-related adjustments," Parry said.
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