BUDGET 2024: TREADING WATER AND GOING NOWHERE

The 2024 National Budget continues a decade-long trend of budget cuts to achieve a primary budget surplus and stabilise debt, despite high levels of poverty and unemployment in South Africa. The IEJ argues that the National Treasury's claim of insufficient funds is contradicted by the drawdown of R150 billion from the Gold and Foreign Exchange Contingency Reserve Account (GFECRA). The document highlights real-term declines in per capita non-interest expenditure, social grant values, and spending on healthcare and education. It proposes alternative revenue sources, such as wealth taxes and taxing financial transactions, to fund essential services and job creation. The IEJ criticises the reliance on Public-Private Partnerships (PPPs) for infrastructure and electricity, warning of fiscal risks and potential tariff increases.

• Between 2019/20 and 2026/27, the National Treasury is projected to cut R270 billion in main budget non-interest expenditure. Per capita non-interest expenditure is expected to drop from R34,607 in 2019/20 to R26,405 by 2026/27, representing a 23% decrease per person over eight years.
• The government's fiscal strategy prioritises debt stabilisation over social needs, aiming for a debt-to-GDP ratio of 75.3% by 2025/26, compared to a previous target of 88.9%. The IEJ argues this is unnecessary as South African debt levels are consistent with emerging and middle-income peers, which averaged 69% in 2023.
• The IEJ identifies several untapped revenue sources to replace austerity, including a potential wealth tax (R70 - R160 billion), taxing financial transactions (over R40 billion), a sliding-scale Social Security Tax (R64 billion), and retirement fund benefits for those earning above R750,000 (R65 billion).
• Social grants are failing to keep pace with inflation. The Child Support Grant is currently below the food poverty line, and the foster care grant is below the inflation-adjusted upper-bound poverty line. Additionally, the budget for the Social Relief of Distress (SRD) grant was reduced from R44 billion in 2022 to R33.6 billion in 2024.
• Spending on critical social services is declining in real terms. Public healthcare spending per user is projected to fall from R5,381 in 2023/24 to R4,864 by 2026/27, and basic education spending per learner is expected to decrease from R25,130 in 2023/24 to R24,493 in 2026/27.
• Real spending growth on economic drivers is falling, with declines in agriculture and rural development (-2.9%), industrialisation and exports (-1.8%), and innovation, science and technology (-5.09%).
• The government is pursuing a Climate Change Response Fund targeted at US$3.3 billion through multilateral institutions for climate resilience and the just energy transition. However, the IEJ warns that the reliance on Public-Private Partnerships (PPPs) for electricity creates fiscal risks and may increase tariffs.

APA

Institute for Economic Justice (2024). BUDGET 2024: TREADING WATER AND GOING NOWHERE. https://www.iej.org.za/wp-content/uploads/2024/02/IEJ-STATEMENT-Budget-2024-February-2024.pdf

Chicago

Institute for Economic Justice. BUDGET 2024: TREADING WATER AND GOING NOWHERE. 2024. https://www.iej.org.za/wp-content/uploads/2024/02/IEJ-STATEMENT-Budget-2024-February-2024.pdf.

Wikipedia

{{cite press release |author=Institute for Economic Justice |title=BUDGET 2024: TREADING WATER AND GOING NOWHERE |date=22 February 2024 |url=https://www.iej.org.za/wp-content/uploads/2024/02/IEJ-STATEMENT-Budget-2024-February-2024.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{instituteforeconomicjustice2024budget, author = {{Institute for Economic Justice}}, title = {{BUDGET 2024: TREADING WATER AND GOING NOWHERE}}, publisher = {Institute for Economic Justice}, year = {2024}, month = feb, url = {https://www.iej.org.za/wp-content/uploads/2024/02/IEJ-STATEMENT-Budget-2024-February-2024.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }