Budget Speech 2025

Madam Speaker, the revenue proposed through the tax measures announced in this Budget will contribute largely to us providing R232.6 billion in additional funding to key programmes over the medium term.

This amounts to R102 billion in 2025/26, R68 billion in 2026/27, and R62 billion in 2027/28.

The funding is for spending pressures for infrastructure investments, social protection, a higher-than-anticipated public-service wage agreement, and provisional allocations for critical frontline services.

Honourable members, in the last year alone public sector health system lost close to 9,000 health workers. We did not have the money to retain or replace them even after reprioritising funds budgeted for consumables and medicines.

Accruals in the sector, which is the money owed by departments to vendors for services already provided, also ballooned to nearly R22 billion.

This means that the money allocated to departments ends up paying for previous services and goods rather than for the current needs, setting off a vicious cycle of budget shortfalls, unpaid invoices, and a crisis in cashflow and the planning and predictability of budgets.

This is an untenable situation that we could not leave unresolved.

As a result, consolidated spending, which excludes interest payments, increases from R2.4 trillion in 2024/25 to R2.83 trillion in 2027/28.

Provinces will receive R2.4 trillion over the MTEF period. This budget includes additional allocations to support critical provincial functions related to health and education.

We trust that the allocations will be used for their intended purposes.

The local government equitable share will increase from R99.5 billion in 2024/25 to R115.7 billion in 2027/28. This is to fund increases in the cost of bulk water and electricity costs provided for free to needy households.

In 2025/26, 83 per cent of the local government equitable share provides a free basic services package of R610 per month to 11.2 million poor households.

Honourable Members, this package of free municipal services continues to be a key tool for reducing poverty and inequality, raising living standards and facilitating access to greater economic opportunities.