Budget 2.0: An opportunity for Parliament to work towards a pro-poor budget

The Institute for Economic Justice (IEJ) criticizes the 2025 National Budget for maintaining a fiscal strategy focused on debt stabilization and regressive taxation, specifically the proposed VAT increases and personal income tax bracket freezes. While acknowledging a shift away from explicit spending cuts, the IEJ argues that expenditure increases in health, education, and social grants remain insufficient to restore pre-pandemic service levels or address food insecurity. The statement calls for Parliament to amend the budget by increasing corporate tax, removing tax breaks for high earners, and expanding the Social Relief of Distress (SRD) grant.

• The National Budget 2.0 continues a regressive revenue strategy by proposing two 0.5 percentage point VAT increases over the next two fiscal years and freezing personal income tax (PIT) brackets, which the IEJ argues disproportionately burdens poor and lower-income households.
• Despite a deceleration in austerity, per capita government spending on health and education remains below pre-Covid-19 levels. Healthcare spending per user for 2025/26 is R3 811.62, which is R469.11 below pre-pandemic levels, while spending per learner is R657 below 2019/20 levels.
• The Social Relief of Distress (SRD) grant is critically underfunded, with its value frozen at R370 per month in 2025 and no funding provided from 2026 onwards, despite the grant supporting over 8 million beneficiaries.
• The IEJ proposes several progressive revenue alternatives to VAT increases, including raising the Corporate Income Tax (CIT) rate back to 28%, removing tax breaks for those earning above R750 000 per year, and utilizing the Gold and Foreign Exchange Reserve Account (GFECRA), which contains over R300 billion.
• The government's reliance on public-private partnerships (PPPs) and private sector 'de-risking' is criticized, noting that the commitment to purchase renewable energy from independent power producers (IPPs) has created contingent liabilities worth R229.5 billion while IPPs provide less than 10% of consumed electricity.
• Public employment programmes show a medium-term average real growth of 3.03%, but the Presidential Employment Stimulus (PES) is significantly underfunded at R4.3 billion compared to its initial R12.6 billion allocation in 2020/21.

APA

Institute for Economic Justice (2025). Budget 2.0: An opportunity for Parliament to work towards a pro-poor budget. https://iej.org.za/wp-content/uploads/2025/03/IEJ-Statement-Budget-2.0-13-March-2025.pdf

Chicago

Institute for Economic Justice. Budget 2.0: An opportunity for Parliament to work towards a pro-poor budget. 2025. 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=Budget 2.0: An opportunity for Parliament to work towards a pro-poor budget |date=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{instituteforeconomicjustice2025budget, author = {{Institute for Economic Justice}}, title = {{Budget 2.0: An opportunity for Parliament to work towards a pro-poor budget}}, publisher = {Institute for Economic Justice}, year = {2025}, month = mar, 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} }