By Simon Nare
The Medium-Term Budget Policy Statement (MTBPS) drew mixed reactions from political parties and trade unions on Wednesday, with the ANC and DA welcoming it, while the EFF and labour federations raised concerns about economic growth, unemployment and spending priorities.
The senior partners in the Government of National Unity were largely in agreement in welcoming the budget, although the DA said faster and more far-reaching economic reforms were urgently needed.
It said it supported the steps taken by National Treasury, particularly the commitment to a fiscal anchor, the continued growth of the primary budget surplus, and the projected stabilisation of government debt for the first time in nearly two decades.
“These are important steps towards restoring confidence in South Africa’s public finances after the fiscal deterioration from 2008 to 2024. However, fiscal stability must be the foundation for economic growth, not the limit of government’s ambition,” it said.
It said that a binding, legislated rule with a numerical target to prevent debt from crowding out economic growth and essential services was needed.
It said Treasury’s economic growth projections remained too weak to address South Africa’s unemployment crisis.
“With growth reaching only 2% by 2029, the economy cannot create jobs at scale. South Africa cannot tax, borrow or redistribute its way to prosperity. We must grow our way there,” it said.
The ANC hailed the MTBPS as a “people-first budget”.
“The MTBPS speaks directly to the worker and the pensioner, the mother waiting in a clinic queue, the young person seeking a first job, the taxi driver, the small trader and every household that must stretch each rand to the end of the month.
“As the mid-year account of how government manages the nation’s money, it demonstrates how responsible stewardship can translate into practical relief and sustained support for those who need it most. In a difficult year, this budget reaches into the pocket of the working family and leaves a little more there,” it said.
It welcomed the R10 billion in temporary fuel levy relief, the protection of social grants, increased spending on the social wage, local government’s growing share of non-interest government expenditure and the projected turning point in the country’s debt trajectory.
The fuel levy relief is scheduled to run from 4 November 2026 to 5 January 2027.
“The pump, the plate, the pension and the place where people live are at the heart of this budget,” the ANC said.
But the Economic Freedom Fighters (EFF) condemned the MTBPS as incoherent and out of touch with the working class and households struggling with rising electricity and food prices and a deepening jobs crisis.
The party said it had been vindicated after questioning Finance Minister Enoch Godongwana’s February forecast of 1.6% economic growth for 2026.
National Treasury has since revised its growth forecast down to 1.2%, while the International Monetary Fund expects growth of about 1%.
“(W)e warned that the number was not credible. National Treasury has now cut its own forecast to 1.2%, the International Monetary Fund (IMF) expects just 1%, and by yearend growth may well sit at 1% or lower.
“Forecasts meant to guide municipalities, investors and households are revised down year after year because National Treasury plans around growth that does not exist while squeezing spending below inflation,” it said.
The South African Federation of Trade Unions (SAFTU) said the medium-term budget continued to impose “neoliberalism” and “austerity” on a society already being torn apart by unemployment, poverty and inequality.
“These policies reinforce the same economic structure that has driven deindustrialisation, a bloodbath of job losses and persistently low growth. They shrink the public resources needed to meet social needs, while leaving the concentration of wealth and economic power largely untouched,” said the federation.
“This is not a path to inclusive growth. It is a continuation of policies that protect the interests of capital while workers and the poor carry the burden,” it said.
The ANC’s alliance partner, the Congress of South African Trade Unions (COSATU), also expressed disappointment with the budget, although it welcomed several measures announced by Treasury.
These included the temporary fuel levy relief, infrastructure allocations and funding for additional social workers and frontline personnel.
However, the federation said that while there were many competing demands facing the state, it remained “deeply disappointed that once again Treasury and government collectively missed the opportunity to table a bold package of interventions”.
COSATU said it had expected a package that would tackle the fundamental crises of a “staggeringly high 43.8% unemployment rate”, referring to the expanded unemployment measure, weak economic growth averaging 1% for more than a decade, entrenched poverty and inequality, and the deterioration of public and municipal services.
“Whilst it is important to place the budget’s debt and deficit on a sustainable trajectory, this cannot be at the expense of stimulating the very economic growth and job creation essential to South Africa’s long-term recovery.
“An unhealthy obsession with neo-liberal austerity budget cuts or in the case of the MTBPS, prioritising early retirement packages, is not a sustainable path to unlocking economic growth and slashing unemployment,” it said.
COSATU also expressed disappointment that no further allocations had been made to boost Public Employment Programmes, which it said could provide hope to the country’s 12 million unemployed people.
It criticised the failure to provide additional relief to recipients of the Social Relief of Distress (SRD) grant, despite Treasury identifying R13 billion in potential savings from measures to reduce social grant fraud over the medium term.
“It is beyond shameful that despite R13 billion worth of savings in social grants, yet again there is no inflationary relief for the 8 million destitute SRD Grant recipients,” it said.
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