IEJ Statement - Budget 2.0 - 13 March 2025

The Institute for Economic Justice (IEJ) critiques South Africa's 'National Budget 2.0' (13 March 2025), arguing that while it signals a shift away from strict spending cuts, it fails to reverse austerity damage and relies on regressive taxation. The IEJ advocates for a pro-poor fiscal strategy focusing on job creation, wealth redistribution, and increased funding for social grants and public services.

• The IEJ argues that the 'National Budget 2.0' continues a fiscal strategy that prioritises debt stabilisation and a primary budget surplus over public service investment and employment programmes, despite the Minister of Finance admitting that previous fiscal consolidation failed to reduce the debt-GDP ratio or spur growth.
• The budget proposes two 0.5 percentage point VAT increases over the next two fiscal years and freezes personal income tax (PIT) brackets. The IEJ contends these measures disproportionately burden poor and lower-income households, especially as social grant allocations are R15 billion lower over the medium term than in the untabled budget.
• The IEJ suggests several progressive revenue alternatives to VAT increases, including raising the Corporate Income Tax (CIT) rate back to 28%, removing tax breaks for earners above R750,000 per year, scrapping employment tax incentives, implementing wealth and inheritance taxes, and utilizing the Gold and Foreign Exchange Reserve Account (GFECRA), which contains over R300 billion.
• Expenditure for health and education is increasing but remains below pre-Covid-19 levels. Healthcare spending is projected to increase by 1.06% over the medium term (in 2019/20 rands), leaving spending per user at R3,811.62 in 2025/26, which is R469.11 below pre-pandemic levels. Education spending per learner is R657 below 2019/20 levels.
• The Social Relief of Distress (SRD) grant is frozen at R370 per month in 2025 and has no provided funding from 2026 onwards. The IEJ notes this value is R426 below the food poverty line and fails to expand access to 10 million eligible people, contradicting a Gauteng High Court ruling.
• Public employment programmes show an average real growth of 3.03% over the medium term, an improvement over the -2.6% average from 2021/22 to 2024/25. However, the Presidential Employment Stimulus (PES) is allocated only R4.3 billion, significantly lower than the R12.6 billion allocated in 2020/21.
• The IEJ criticizes the reliance on public-private partnerships (PPPs) for infrastructure, noting that average growth in public-sector infrastructure is projected to drop to 4.88% over 2025/26-2027/28 from 12.73% in the previous period. It specifically highlights that the government's commitment to independent power producers (IPPs) has created contingent liabilities of R229.5 billion while IPPs provide less than 10% of electricity consumed.

APA

Institute for Economic Justice (n.d.). IEJ Statement - Budget 2.0 - 13 March 2025. https://iej.org.za/wp-content/uploads/2025/03/IEJ-Statement-Budget-2.0-13-March-2025.pdf

Chicago

Institute for Economic Justice. IEJ Statement - Budget 2.0 - 13 March 2025. n.d. https://iej.org.za/wp-content/uploads/2025/03/IEJ-Statement-Budget-2.0-13-March-2025.pdf.

Wikipedia

{{cite press release |author=Institute for Economic Justice |title=IEJ Statement - Budget 2.0 - 13 March 2025 |url=https://iej.org.za/wp-content/uploads/2025/03/IEJ-Statement-Budget-2.0-13-March-2025.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{instituteforeconomicjusticendiej, author = {{Institute for Economic Justice}}, title = {{IEJ Statement - Budget 2.0 - 13 March 2025}}, publisher = {Institute for Economic Justice}, url = {https://iej.org.za/wp-content/uploads/2025/03/IEJ-Statement-Budget-2.0-13-March-2025.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }