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

This briefing note by the Institute for Economic Justice (IEJ) argues that the 2026 National Budget should pivot from a narrow focus on fiscal stability and debt reduction toward a 'full employment agenda.' The IEJ contends that current macroeconomic policies are insufficient to address mass unemployment and poverty, proposing instead a developmental strategy based on increased public investment, progressive taxation, and the rebuilding of state capacity to drive structural economic change.

• South Africa faces a critical unemployment crisis where over 12 million people are unemployed, representing 42.1% of the labour force. Among those aged 15-34, 45.1% are not in employment, education or training (NEET), with women experiencing higher levels of exclusion.
• The IEJ argues that the National Treasury's current focus on 'stability'—defined by lower debt, lower inflation, and private sector participation—is inadequate. The document suggests that if the economy creates 5 million jobs over the next 10 years with a 2.6% annual labour force growth rate, there would still be 2.5 million more unemployed people than currently exist, leaving the unemployment rate above 40%.
• To fund a transformative agenda, the IEJ proposes several revenue mobilisation strategies: implementing more progressive taxation on high-net-worth individuals and large corporations, revising the 2010 resource tax framework, and removing tax breaks for retirement and medical aid for high-income earners. Additionally, it suggests channeling assets from the Government Employees Pension Fund (GEPF), which has over a trillion rand in assets, into public developmental bonds.
• Municipal revenue collection is identified as a significant area for improvement. While municipal consumer debt exceeds R400 billion, collection rates average around 70%, falling short of the 95% benchmark. The IEJ recommends focusing on fixing revenue collection rather than raising tariffs.
• The document calls for a proactive macroeconomic policy to achieve 5-6% pro-employment GDP growth for a decade. This would require at least R1 trillion in cheap development financing from the South African Reserve Bank (SARB) and Multilateral Development Banks (MDBs) to support sectors like transport, logistics, energy, water, and digital infrastructure. It also suggests using R140bn from the Unemployment Insurance Fund (UIF) and R60bn from sector education and training authorities (SETAs) to provide 1.8 million work opportunities in 2026.
• The IEJ advocates for a permanent, adequate basic income grant for all working-age adults to address the fact that 66.7% of people remain in poverty and 17.8 million are food insecure. It suggests the current Social Relief of Distress (SRD) grant of R370 is too low and excludes too many people.
• Public investment has declined as a share of GDP since 2014, which the IEJ describes as 'procyclical fiscal policy.' The document states that the current medium-term provision of R1 trillion is insufficient, asserting that a minimum of R800 billion per year is needed to meet the National Development Plan (NDP) investment target of 10% of GDP.
• Fiscal consolidation has led to a decline in public service staffing and infrastructure. Between 2019 and 2025, the number of doctors per 1,000 people fell from 0.79 to 0.54. Furthermore, 80% of public schools lack laboratories and 69% lack libraries.

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} }