From Stability to Full Employment: A transformative agenda for Budget 2026

The Institute for Economic Justice (IEJ) calls for a radical shift in South Africa's fiscal policy for Budget 2026, arguing that current priorities of debt stabilization and primary surpluses fail to address mass unemployment and poverty. The briefing proposes a 'full employment agenda' driven by progressive taxation, the mobilization of public assets like the Government Employees Pension Fund (GEPF), and a significant increase in public investment in infrastructure and social services. Key recommendations include implementing a universal basic income grant, adopting a dual policy rate regime via the South African Reserve Bank (SARB) to lower capital costs for development, and pursuing climate-responsive green industrialization. The IEJ warns that without such transformative changes, the economy will not absorb the growing labour force, leaving unemployment rates above 40%.

• Current fiscal policies prioritizing debt stabilization and primary surpluses are insufficient to address structural crises, as the economy's low labour force absorption rate means that even creating 5 million jobs over 10 years would leave 2.5 million more people unemployed than today, keeping unemployment above 40%.
• The government can expand its fiscal space through progressive taxation of high-net-worth individuals and large corporations, revising the resource tax framework for climate goals and local beneficiation, and mobilizing assets from the Government Employees Pension Fund (GEPF).
• Municipal revenue collection is a significant untapped resource, with consumer debt exceeding R400 billion and collection rates averaging around 70%, well below the 95% benchmark.
• To meaningfully reduce poverty and unemployment, South Africa requires GDP growth of 5-6% for a decade, supported by at least R1 trillion in cheap development financing from the SARB and Multilateral Development Banks (MDBs).
• The South African Reserve Bank (SARB) should adopt a dual policy rate regime to balance domestic demand and lower the cost of capital for development, while being mandated to recapitalize public banks like the DBSA and IDC.
• The document advocates for a permanent, adequate basic income grant for all working-age adults to complement existing social protection, noting that 66.7% of people remain in poverty and 17.8 million are food insecure.
• Public investment has declined as a share of GDP since 2014, leading to critical shortages in health and education; for example, the number of doctors per 1,000 people fell from 0.79 in 2019 to 0.54 in 2025.
• The government should use the National Budget to drive green industrialization through local procurement, a just transition municipal package, and increased local beneficiation.

APA

Institute for Economic Justice (2026). From Stability to Full Employment: A transformative agenda for Budget 2026. https://iej.org.za/wp-content/uploads/2026/02/Briefing-Note-Pre-Budget-2026.pdf

Chicago

Institute for Economic Justice. From Stability to Full Employment: A transformative agenda for Budget 2026. 2026. https://iej.org.za/wp-content/uploads/2026/02/Briefing-Note-Pre-Budget-2026.pdf.

Wikipedia

{{cite report |author=Institute for Economic Justice |title=From Stability to Full Employment: A transformative agenda for Budget 2026 |date=23 February 2026 |url=https://iej.org.za/wp-content/uploads/2026/02/Briefing-Note-Pre-Budget-2026.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{instituteforeconomicjustice2026from, author = {{Institute for Economic Justice}}, title = {{From Stability to Full Employment: A transformative agenda for Budget 2026}}, institution = {Institute for Economic Justice}, year = {2026}, month = feb, url = {https://iej.org.za/wp-content/uploads/2026/02/Briefing-Note-Pre-Budget-2026.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }