Note to editors: The following statement was delivered today by Build One South Africa (BOSA) Deputy Leader, Nobuntu Hlazo-Webster MP, at a briefing in Parliament ahead of Wednesday’s Budget Speech.
Tomorrow, Finance Minister Enoch Godongwana will table the National Budget. This is the first budget of the GNU government, setting out how R1.4 trillion of your money will be spent over the next year.
It is a big moment for the GNU government. It will show the priorities of this government and will allow us the people to determine whether the GNU is a breath of fresh air, or just more hot air.
The national landscape is one of struggle. Some South Africans are barely getting by, others are not. The cost of living is soaring. Food, transport, electricity, school fees, rent— everything is more expensive.
On average, South Africans are using 65% of their net income to service debt. 76% of South Africans regularly run out of money before the end of the month, and more than half run out halfway through the month.
The Pietermaritzburg Economic Justice and Dignity Group’s Household Affordability Index for January 2025 reports the basic food basket now costs R5,433.70. This while a third of petrol costs is made up of government taxes and levies.
Household debt is rising, inflation is pushing up bond repayments and rental costs, and economic growth is stagnant.
Meanwhile, government keeps spending on debt—one loan paying off another. And our children will foot the bill for today’s mismanagement.
Instead of cutting waste, government continues spending billions on bailouts, debt repayments, and an oversized Cabinet.
While SONA is words and commitments, the budget is hard numbers and figures. The promises made by the President in last week’s State of the Nation Address will likely come to die in the budget process because there is no money.
The choices we make in this budget must reflect the urgent realities of our people. Our fiscal and spending priorities must not serve political convenience but the fundamental task of economic transformation, job creation, and social justice.
BOSA today sets out our expectations for the GNU’s first national budget:
First, we must fund economic growth that reaches at least 5% per year.
The President’s target of 3% is simply not enough. South Africa’s economy is currently shrinking at -0.3% per year, and investor confidence is at an all-time low. If we do not restore confidence, support businesses, and create real jobs, then no budget will save us from economic decline.
Last year, job creation was barely an afterthought—only R22.2 billion, less than 1% of the budget, was allocated to it. This is unacceptable.
We are calling for a R100 billion Jobs and Justice Fund and the declaration of all townships as Special Economic Zones (SEZs) to unlock investment, grow small businesses, and provide real economic opportunities where people live.
Second, we must increase spending on infrastructure-led growth.
Infrastructure investment stands at only 14% of GDP—far below the 30% target set by the National Development Plan. Without strategic investment in roads, transport networks, energy, and water systems, we are choking economic expansion before it even begins.
You cannot run a business that creates jobs without water, roads, ports and transport infrastructure. This is centred around cities, which are the heartbeat of economic activity and growth, and includes the township economy.
Johannesburg paints the story of a city floating above crumbling infrastructure that makes conducting business near impossible. A government that does not invest in growth is a government that chooses decline.
Third, there can be no new taxes or tax increases
South Africans are already overburdened. There must be no increases to VAT, which disproportionately affects the poor. As such, we reject any service delivery cuts to health, education, housing, and transport—these are the pillars of a functioning society, not optional extras.
Third, there can be no new taxes or tax increases
Debt is spiralling at R5.21 trillion—74% of GDP—and rising. The debt-to-GDP ratio has skyrocketed from 23.6% in 2008/09 to a projected 74.7% in 2024/25. This is a ticking time bomb that, if ignored, will condemn future generations to economic servitude. Government must learn to live within its means, not borrow recklessly at the expense of the people.
Fifth, we must resist the urge to extend the Social Distress Grant indefinitely.
Social spending already consumes 60% of the budget. While short-term relief is necessary, long-term reliance is a trap. The best poverty reduction strategy is jobs, not endless grants.
Instead, additional funding should go to the SIU, the NPA and SARS – critical institutions of state which are all underfunded.
Six, training and hiring of 120,000 additional police officers to strengthen capacity on the ground and ensure resources such as police vehicles, firearms, and forensic tools are well-managed and available where needed.
Finally, we must hire the thousands of unemployed teachers and doctors.
It is just not acceptable that young South Africans dedicate years to training, only to find no posts available.
When hospitals are understaffed and classrooms are overcrowded, there is no excuse for leaving qualified professionals on the sidelines. This government must prioritize the employment of those who can deliver essential services.
Plugging the shortfall
BOSA has identified key cost-saving measures that, if implemented, will free up significant public funds that can be redirected towards initiatives that stimulate economic growth, job creation, and improved service delivery.
1- Streamline the Size of Cabinet
- A leaner and more efficient government structure will reduce unnecessary expenditure while improving coordination and effectiveness. BOSA proposes:
- Merging Small Business Development with Trade and Industry, eliminating duplication and inefficiencies—saving R2.4 billion.
- Eliminating the Department of Planning, Monitoring, and Evaluation, as its functions can be integrated into existing governance structures—saving R1 billion.
- Abolishing Deputy Minister positions, which add unnecessary costs without clear benefits—saving R500 million annually.
2- Eliminate VIP Protection for Politicians
- Public officials are elected to serve, not to live above the people.
- The current VIP protection system is excessive and should be abolished, freeing up resources for real public safety initiatives—saving R2 billion.
3 – Shut Down Ineffective State-Owned Enterprises (SOEs)
- Research from think tanks highlights that SOEs’ persistent underperformance has cost South Africa an estimated R2-trillion in lost output since 2010. Additionally, SOEs have absorbed approximately R400 billion in bailouts over the same period. A systematic review must be undertaken to shut down non-essential, failing SOEs, reducing the financial burden on taxpayers.
4 – Remove Ineffective Corporate Tax Subsidies
- The Employment Tax Incentive (ETI) has not delivered the intended employment benefits and has been exploited by businesses without clear job creation outcomes. Eliminating this ineffective subsidy will save R6.6 billion.
5 – Consolidate Government Marketing Entities
- Government marketing efforts are fragmented across multiple agencies, leading to inefficiencies and overlapping functions. By merging Brand SA, SA Tourism, Trade Investment SA, Export Marketing, and DIRCO’s foreign marketing operations into a single, streamlined entity, government can significantly reduce waste—saving R5 billion.
6- Reform the Road Accident Fund (RAF)
- The RAF is plagued by financial mismanagement and fraud. Implementing stricter eligibility criteria, particularly capping payouts for high-income earners, will curb unnecessary expenditure and fraud, with a potential saving of R20 billion.
Conclusion
Tomorrow’s budget is a defining moment. Will it be business as usual, or will government finally make the tough calls.
South Africans are watching closely, hoping for a turning point. This is the GNU’s first budget, and expectations are high.
This is an opportunity to move away from the mismanagement of the past and chart a new course toward fiscal responsibility, economic growth, and a government that prioritizes the needs of its people.
If ever there was a time for bold, decisive action, it is now. Let this budget mark the beginning of real change and a brighter future for all South Africans.
Media Statement by
Roger Solomons: BOSA Acting Spokesperson
Tuesday 18 February 2025
Media Enquiries:
Roger Solomons – BOSA Acting Spokesperson – 072 299 3551