Johannesburg - Poverty and inequality in South Africa were still at high levels, Cosatu general secretary Zwelinzima Vavi said on Tuesday.
There had been an increase in casual worker employment in 2011 and the numbers of poor workers were still expanding.
"Given the stagnation in the economy, continued high unemployment and casualisation of employment, there has been no improvement in South Africa's huge level of poverty and inequality," Vavi told a briefing in Johannesburg to mark the union federation's end of year statement.
He said it was only thanks to social grants that the country had not been plunged into chaos.
"If the ANC government had listened to liberals and ideologues there would be riots in the streets in the country if there were no social grants."
He said while social grants were one of the ANC government's "finest" achievements, it was intolerable that so many South Africans had no other source of income and needed decent jobs.
"Fifty percent of South African population lives on eight percent of national income. This means for every R100 of national income earned, almost 25 million people share just R8 of that money a day."
Vavi said radical economic programmes needed to be considered to "reverse the catastrophe".
This included scrapping the funding to provinces that were abusing resources.
"We propose that we scrap this bureaucratic layer of government - the provinces - who instead of facilitating development have just been guzzling resources needed to build strong local government," he said.