During a workshop in Cape Town in April 2025 on challenging austerity and defending public services in South Africa, hosted by the Alternative Information and Development Centre (AIDC) together with PSI, Thokozile Madonko from the Wits University’s Southern Centre for Inequality  Studies, delivered a sobering analysis of how South Africa’s fiscal strategy is eroding the public infrastructure that sustains life, care, and dignity. Drawing on feminist economics and grounded in the lived realities of care workers, the presentation and discussion highlighted the urgent need to reframe care not as a cost, but as the backbone of a just society and thriving economy.

Reframing the Care Economy

Madonko challenged narrow, technocratic definitions of the care economy. In contrast to national accounts that limit care to health, education, and childcare spending, feminist economists call for a more expansive view, one that includes unpaid care work, public infrastructure, and services that enable care across the life course.

“The work that enables all other work is care, it is mostly done by women and continues to be invisible in our economic planning,” she explained. “Vulnerability is a fact of life, not an exception, and we need to respond by ensuring people are cared for from cradle to grave. This requires both valuing care and rebalancing its distribution between households, the state, and the market.”

 A well-functioning care economy, she argued, should be built on principles of equity, interdependence, and dignity.

The Devastating Impact of Austerity

The discussion exposed the stark consequences of South Africa’s post-COVID fiscal consolidation. Since 2019, real per capita core public spending has declined by 7.6%—the deepest austerity in the country’s democratic history. While government narratives portray this as a necessary path to stabilizing debt, in practice, it has meant job cuts, declining service quality, and weakened public sector capacity.

Compensation spending—the wages that fund nurses, teachers, social workers—has fallen in real terms for four consecutive years. Treasury projections suggest the public sector could shed up to 30,000 workers due to underfunding of the wage bill. “When they talk about compensation ceilings,” Madonko noted, “what they are really doing is locking in underfunding of public services.”

Austerity as Class Warfare

Participants strongly rejected the notion that austerity is neutral or necessary. Instead, it was described as a form of class warfare—one that protects capital and burdens the working class, especially women.

The continued exclusion of community health workers (CHWs) from formal employment, despite resolutions to insource them, was flagged as emblematic of the state’s strategy to cut costs at the expense of workers.

There Are Alternatives

Madonko closed with a reminder that austerity is a political choice—not an economic inevitability. Citing research by economists Ozlem Onaran and Cem Oyvat, she shared findings that a modest 1% increase in public spending in care, green jobs, and infrastructure could increase GDP by 28% and employment by 57%, creating up to 9 million new jobs.

 “This isn’t about handouts,” she said. “This is about building an economy that works for everyone. One that recognises care as a public good and something worth investing in.”

The Path Forward

This session reaffirmed PSI’s commitment to placing care at the centre of public policy and economic planning. As outlined in the global Care Manifesto, we must Recognise, Reward, Reduce, Redistribute, and Reclaim care work. That means fair wages, safe working conditions, investment in public systems, and the political will to see care as essential infrastructure and not a private burden.

The fight for the care economy is ultimately a fight for democracy, dignity, and justice. It's time to build economies that care for everyone.