Statement: MTBPS 2025 – Turning a Corner or Walking Towards a Dead End?

The Institute for Economic Justice (IEJ) critiques the 2025 Medium Term Budget Policy Statement (MTBPS), arguing that the National Treasury's focus on debt stabilisation and fiscal stability comes at the expense of economic growth, public services, and poverty reduction. The IEJ contends that the budget maintains an austerity agenda, reduces investment in critical infrastructure and social services, and implements a restrictive new inflation target that may hinder domestic demand and investment.

• The IEJ argues that debt stabilisation in the 2025 MTBPS has been achieved through harmful spending cuts that undermine critical public services. Specifically, 80% of public schools lack laboratories and 69% lack libraries, while the number of doctors per 1,000 people decreased from 0.79 in 2019 to 0.54 in 2025.
• Main budget non-interest spending in constant prices is projected to decrease by an average of 0.71% per year over the medium term. The IEJ views this as a continuation of austerity and a retreat in government investment, contradicting official rhetoric about ending austerity.
• The Social Relief of Distress (SRD) grant has been extended until March 2027, but the IEJ notes that its value remains less than half of the current poverty food line and it only reaches half of the eligible population. The IEJ also disputes the Treasury's claim that savings from the grant will come from reducing fraud, noting that 75% of social grant fraud since 2014 was committed by government contractors and employees.
• The National Treasury has reduced the inflation target from a range of 3–6% to a target of 3% with a 1% variance allowance. The IEJ opposes this change, arguing that inflation in South Africa is driven by global shocks and administered prices rather than excessive domestic demand, and that the resulting higher repo rates constrain local investment and increase debt costs for households.
• Public sector infrastructure spending of R1 trillion over the medium term is considered insufficient by the IEJ to meet the National Development Plan's target of fixed investment as 30% of GDP. Additionally, inflation-adjusted allocations for health (-0.39%) and basic education (-0.56%) are declining over the medium term.
• The IEJ warns that the government's strategy of 'de-risking' and privatisation creates significant fiscal risks. As an example, the Renewable Energy Independent Power Producer Programme (REIPPP) has created R229.5 billion in contingent liabilities for the state while providing only 10% of the power consumed by the public.

APA

Institute for Economic Justice (2025). Statement: MTBPS 2025 – Turning a Corner or Walking Towards a Dead End? https://iej.org.za/press-room/statements/statement-mtbps-2025-turning-a-corner-walking-towards-a-dead-end/

Chicago

Institute for Economic Justice. Statement: MTBPS 2025 – Turning a Corner or Walking Towards a Dead End? 2025. https://iej.org.za/press-room/statements/statement-mtbps-2025-turning-a-corner-walking-towards-a-dead-end/.

Wikipedia

{{cite press release |author=Institute for Economic Justice |title=Statement: MTBPS 2025 – Turning a Corner or Walking Towards a Dead End? |date=13 November 2025 |url=https://iej.org.za/press-room/statements/statement-mtbps-2025-turning-a-corner-walking-towards-a-dead-end/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{instituteforeconomicjustice2025statement, author = {{Institute for Economic Justice}}, title = {{Statement: MTBPS 2025 – Turning a Corner or Walking Towards a Dead End?}}, publisher = {Institute for Economic Justice}, year = {2025}, month = nov, url = {https://iej.org.za/press-room/statements/statement-mtbps-2025-turning-a-corner-walking-towards-a-dead-end/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }