A budget for inclusive growth and development

Dear Fellow South African,

Last week, Parliament adopted the 2025 Fiscal Framework and Revenue Proposals as tabled in the Budget Speech by the Minister of Finance.

The 2025 Budget is directed at growing the economy and supporting the livelihoods of our people.

It is a critical instrument to drive development, eradicate poverty and narrow inequality. At a time of constrained economic growth and narrow fiscal space, the budget must direct sufficient resources to activities that encourage inclusive growth and lay the groundwork for sustained economic recovery.

It reflects the strategic priorities of the Government of National Unity: inclusive growth and job creation, reducing poverty and tackling the high cost of living and building a capable, ethical and developmental state.

The Budget advances Government’s commitment to uplift the material conditions of South Africans.

Once our debt repayments have been taken out, 61% of spending over the next three years has been allocated to the social wage. This includes the provision of free primary healthcare, basic and tertiary education and housing. Over the past 24 years we have implemented an indigent policy under which free water, electricity and sanitation services are provided to qualifying households.

Social grants, like the child care, old age and disability grants, are another tool for alleviating poverty. This year, the value of these grants will increase at above inflation. The Social Relief of Distress grant, which has played an important role in poverty alleviation, will also be extended for another year.

As part of improving access to healthcare, there will be a higher allocation of funding to clinics and community health centres. We are investing in the recruitment and retention of health personnel, particularly doctors and nurses, and to employ newly qualified doctors after their community service ends.

The Budget allocates substantial funds to other frontline services such as teachers, police, emergency personnel and the Border Management Authority.

Improving educational outcomes is key to community upliftment, development and producing the skills needed by our economy. Budgetary allocations have been made to support teacher training, for expanded mother-tongue bilingual education and for early reading programmes. This year sees a substantial investment in early childhood development, reflecting our commitment to establishing a solid foundation for the development of every child.

Additional funds have been allocated to public employment programmes, which play an important role in providing work opportunities at a time when economic growth is constrained.

To encourage entrepreneurship, funds have been made available to support small businesses. Adjustments are being made to the Employee Tax Incentive to further incentivise businesses to hire more young people.

South Africa’s expenditure on the social wage can only be sustained if there are higher levels of economic growth. The Budget allocates considerable resources to encourage infrastructure development, which drives growth and job creation.

Taken together, up to R1 trillion will be spent on infrastructure over the medium term. This includes the allocation in this Budget of an additional R62 billion over the next three years for road maintenance, electricity transmission lines, water and sanitation projects, school infrastructure and to support the ongoing recovery of our rail networks.

Support is also provided to other growth-enhancing measures in the medium term, including incentive programmes in automotive, business process outsourcing, special economic zones, electric vehicle production, clothing and textiles and other sectors.

The 2025 Budget makes adjustments to allocations to municipalities to enable them to address their infrastructure needs, improve service delivery and improve their revenue collection systems.

In a challenging economic environment – both locally and globally – this year’s Budget supports measures to drive growth and relieve the effects of poverty. At the same time, it aims to stabilise public finances and continue to reduce our national debt.

The Budget reflects the priorities of Government’s Medium Term Development Plan, a five-year programme of action that prioritises rapid, inclusive growth, creating a more just society and building state capacity.

At a time when our singular focus must be the South African people, we need to use the limited resources we have to work together for the common good.

With best regards,