The National Education, Health and Allied Workers’ Union (NEHAWU) has issued a strong rejection of the 2025 Medium Term Budget Policy Statement (MTBPS), arguing that the statement entrenches an “arrogant Treasury’s imposition” of contractionary neoliberal macroeconomic policies that will deepen poverty and further dismantle the public sector.

The union’s critique is framed against the backdrop of persistent socioeconomic stagnation, with a $\text{1.4%}$ economic growth forecast for 2025 and an unemployment rate at a “crisis proportion” of about $\text{43%}$ ($\approx 12$ million people).

Macroeconomic Policy: Lower Inflation Target and Fiscal Anchor

NEHAWU explicitly rejects the Treasury’s fiscal stance of pursuing a primary fiscal surplus while relying on dollar-denominated World Bank loans, including $\text{R}40$ billion this year, despite years of austerity devastating public services.

The union vehemently opposes two major policy shifts announced:

1. New Inflation Target: The shift from the $\text{3-6%}$ inflation-target range to a rigid $\text{3%}$ target with a $\text{1%}$ tolerance band.

2. Formal Fiscal Anchor: The announcement of considering options for a formal fiscal anchor designed to consolidate Treasury’s supremacy over Parliament.

NEHAWU views these changes as a “doubling-down” on contractionary Neoliberal policies, which the Treasury itself admits will result in a “lower nominal GDP and revenue growth.” The union demands that monetary policy be balanced with targets for employment creation and economic growth rate, not just inflation.

Public Service: Undermining Collective Bargaining and TARS

NEHAWU views the MTBPS as continuing the anti-collective bargaining posture of the previous administration.

• Wage Policy: The union rejects the statement that “any future wage agreements beyond $\text{2027/28}$ will have to be aligned with inflation,” seeing it as an attempt to undermine collective bargaining by linking it directly to the inflation rate and keeping the wage bill below a third of the consolidated budget.

• Targeted and Responsible Savings (TARS): NEHAWU is concerned that the TARS initiative is being used as a guise to further dismantle the public service and underfund essential services.

• Vacancies and Exodus: The union highlights the existence of massive vacancies, including $\text{31,811}$ educator and $\text{27,523}$ healthcare worker posts, arguing that the Early Retirement Scheme only encourages the exodus of experienced and skilled personnel.

Social Protection: Basic Income Grant Rejected

The union welcomes the extension of the COVID-19 Social Relief of Distress Grant (SRD Grant) for another financial year but strongly rejects the policy proposals concerning its future.

• Disgraceful Avoidance: NEHAWU calls the Treasury’s work on “proposals to link the working age population to skills development and employment programmes” a “disgraceful avoidance” of the ANC’s mandate to establish a universal Basic Income Grant.

• Job-Seekers Grant: The union rejects this policy as an adoption of the “discredited ‘job-seekers grant’ of the Democratic Alliance,” believing it is an attempt to reduce SRD beneficiaries through burdensome and wasteful administrative bureaucracy, given the deep-seated structural unemployment.

• Transport Subsidies: The “scaling down” of the Public Transport Network Grant (PTNG) is rejected, as public transport subsidies have been consistently cut, escalating transport costs for working-class households.

Post-school Education (PSET) and Healthcare

PSET Shortfalls

NEHAWU notes that the Treasury continues its policy of scaling down allocations to the National Student Financial Aid Scheme (NSFAS). The union highlights a $\text{R}12$ billion shortfall for universities and TVET colleges in 2025, amidst $\text{R}14$ billion indebtedness.

• The allocation for university education is set to grow from $\text{R}96$ billion in 2025 to $\text{R}100.4$ billion in 2026, but the total PSET funding will only grow by $\text{4.6%}$ over the medium term, which is deemed insufficient to meet growing demand and overcome existing deficits.

Healthcare Allocation

• Welcome but Insufficient: The union welcomes the provisional allocation of $\text{R}20.8$ billion to cover compensation and essential services, which includes funding for the employment of $\text{800}$ doctors who have finished community service, safeguarding $\approx 4,700$ health posts, and addressing medical shortages. $\text{R}560$ million is also welcomed to cover the shortfall in HIV/TB services.

• Rejection of Privatization: NEHAWU rejects the public-private partnership health technology at Tygerberg Hospital.

• Medical Tax Subsidies: The union holds that any abolishment of medical tax expenditure subsidies must be phased in, starting with the top $\text{10%}$ of the income distribution. These resources must be ring-fenced to fund the National Health Insurance (NHI), focusing on upgrading infrastructure, medical equipment, and the employment of clinical and support staff.