BUDGET 2024: TREADING WATER AND GOING NOWHERE

The Institute for Economic Justice (IEJ) criticizes the 2024 South African National Budget for prioritizing debt stabilization and budget cuts over essential public services and economic growth. The IEJ highlights a projected 23% decrease in real non-interest expenditure per capita by 2026/27 and argues that the government is ignoring viable revenue sources, such as wealth and financial transaction taxes. The statement notes that social grants, including the SRD grant, are failing to keep pace with inflation and that spending on healthcare, education, and economic drivers is declining. Furthermore, the IEJ warns against the government's heavy reliance on Private-Public Partnerships for infrastructure and electricity, citing increased fiscal risks and potential environmental damage.

• The National Treasury is pursuing a strategy of budget cuts to achieve a primary budget surplus and stabilize debt, which the IEJ describes as an unsustainable path. Between 2019/20 and 2026/27, the Treasury will have cut R270 billion in main budget non-interest expenditure. Consequently, real non-interest expenditure per capita is projected to drop from R34,607 in 2019/20 to R26,496 by 2026/27, representing a 23% decrease per person over eight years.
• The IEJ argues that the government has sufficient funds to avoid austerity, noting the drawing down of R150 billion from the Gold and Foreign Exchange Contingency Reserve Account (GFECRA). The IEJ proposes several alternative revenue sources to raise funds, including a potential wealth tax (R70 - R160 billion), taxing financial transactions (over R40 billion), a sliding-scale Social Security Tax (R64 billion), and taxing retirement fund benefits for those earning above R750,000 (R65 billion).
• Social grants are failing to keep pace with inflation, with increases of 4.8-5% compared to an inflation rate of 5.6%. The Child Support Grant remains below the food poverty line, and the foster care grant is below the inflation-adjusted upper-bound poverty line. Specifically, the Social Relief of Distress (SRD) grant budget was reduced from R44 billion in 2022 to R33.6 billion in 2024, and its value remains at R350, which is nearly three times lower than the Food Poverty Line of R760.
• Spending on critical social services and economic drivers is declining. 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 will decrease from R25,130 to R24,493 over the same period. Additionally, real spending growth is falling for agriculture and rural development (-2.9%), industrialisation and exports (-1.8%), and innovation, science and technology (-5.09%).
• The government is increasingly relying on Private-Public Partnerships (PPPs) and private finance for infrastructure and State-Owned Entities (SOEs). The IEJ criticizes this approach, citing risks such as the Mokolo-Crocodile River Water Augmentation Project, which poses water contamination risks in the Waterberg and Mokolo River. They argue that private investment often guarantees profit for the private sector while the state assumes disproportionate risks.
• Regarding climate change, the government is developing a Climate Change Response Fund to be financed with US$3.3 billion through multilateral development and financial institutions for climate resilience and the just energy transition. However, the IEJ warns that the reliance on PPPs for electricity provision creates large fiscal risks for the state and may increase tariffs for businesses and consumers.

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} }