As Build One South Africa (BOSA), we today set out our expectations for the upcoming Medium-Term Budget Policy Statement (MTBPS) to be delivered by Finance Minister, Enoch Godongwana, before Parliament tomorrow.
The MTBPS is half time in the budgeting sense, a mid-year adjustment to the national budget passed by Parliament in the first half of this year. It presents a vital opportunity for government to course-correct what isn’t working and reallocate funds toward priorities that can drive growth and protect the most vulnerable citizens.
South Africa faces a challenging macroeconomic environment, with average economic growth stagnating at just 1% over the past decade and a growing national debt that threatens long-term fiscal stability. Economic growth and citizen inclusion in the economy have shown little to no measurable improvement despite repeated promises of reform.
Entrenched unemployment has not budged, with 12.6 million South Africans able and willing to work but unable to find employment. The unemployment line grows by roughly 500 000 people each year – now stretching 6300 kms from Johannesburg to Cairo.
The expanded definition of unemployment has now reached an alarming 42.9%, among the highest rates in the world. Particularly concerning is the impact on young people aged 15 – 34, with nearly half of this demographic currently jobless.
It has now been 16 months since the formation of the Government of National Unity (GNU). What citizens have been subjected to is a period characterised by political infighting, blurred accountability, and a lack of any standout flagship achievement. While politicians squabble over positions and power, South Africans continue to shoulder the burden of rising costs, poor service delivery, and an economy stuck in neutral.
In terms of rands and cents, it is our duty to warn the people of South Africa of the tight fiscal rope we are walking as a country, balancing the triple demands of social spending, high taxation, and debt servicing costs.
For every R100 spent by government, over R60 goes to the social wage and R20 to paying off national debt. There is little room for manoeuvre. While young people remain unemployed and miseducated, the funding available to unlock growth and opportunity continues to shrink each year.
Government cannot continue to ask the shrinking and overburdened middle class to foot the bill for its failures, while the rich get richer and the poor get poorer. This growing inequality threatens long-term stability, and without bold fiscal reform, South Africa’s tax base will continue to dwindle.
This year must mark a break from tried and failed strategies. The GNU cannot spend its way to prosperity without reform. It cannot tax our country to growth when South Africans are already overburdened. And it cannot burden future generations by borrowing its way out of the crisis when debt servicing costs are projected to reach R440.2 billion in 2026/27.
If we are to turn the ship around, the Minister of Finance must begin working towards next year’s budget to fund for growth, which is at the heart of BOSA’s Plan for Prosperity. We call on the government to take decisive steps that strengthen South Africa’s fiscal health and create space for investment in our people and our future.
First and foremost, there can be no cuts to frontline services.
BOSA is deeply concerned by reports that the education budget may face further subsidy cuts, and that there will be no increase in funding for policing. Budgets for education, policing, healthcare, and infrastructure must be protected and increased where necessary. Classrooms are overcrowded, hospitals and clinics are understaffed and face material shortages, and our streets are the playgrounds for criminals and gangsters. To grow the economy requires a stable society.
At the same time, cutting administrative waste and political luxuries must be a top priority. There is a R2 billion bill for VIP protection for politicians in government. Given the current economic strain, South Africa cannot afford unnecessary bureaucratic spending. These funds should be redirected towards essential services and infrastructure development, which are vital for sustainable growth and job creation.
We are calling for targeted measures to support small and medium enterprises, catalyse investment in energy, transport, and digital infrastructure, and to create a more predictable environment for long-term planning.
BOSA calls on the government to address inefficiencies by consolidating departments and cutting excessive political perks in the MTBPS. Specifically, dissolving the Department of Small Business Development and moving its functions to the Department of Trade, Industry and Competition would save R2.4 billion, while eliminating the Department of Planning, Monitoring and Evaluation could save an additional R1 billion.
Furthermore, abolishing costly Deputy Ministerial roles, along with their associated staffing and perks, could save R500 million annually. Finally, cutting VIP protection for politicians would free up approximately R2 billion. These savings could be redirected to hire more teachers, nurses, and police officers where they are desperately needed.
Redirecting SETA funding to education is an option to increase revenue for schools. Skills Education Training Authorities (SETAs) should be privately funded, redirecting R15 billion to basic education.
Further cuts can be pursued in reviewing the mandates of the over 700 state-owned enterprises and entities in our country, and scrapping those that are unjustified and add little value.
In terms of additional revenue, we have long proposed the introduction of a 6% national “sin tax” on online gambling to be charged against online gambling companies. We suggested this earlier this year as an alternative to new tax increases, including VAT.
This will bring about fairness in line with how alcohol and tobacco are taxed. Key measures include:
- Extending the current 6% horseracing levy to cover online betting platforms
- Creating a unified national gambling tax regime that includes a 10–15% withholding tax on large wins above a set threshold
- Classifying online gambling under Treasury as a “sin-tax industry”
- Earmarking a portion of all gambling revenues for prevention, rehabilitation and youth upliftment programmes.
On infrastructure, our party strongly supports the establishment of a dedicated fund for infrastructure development. South Africa urgently needs to invest in growth-oriented projects that stimulate the economy, create jobs, and modernize national infrastructure. We hope to see a comprehensive plan that allocates sufficient resources to this essential sector.
Finally, BOSA advocates for the development of township manufacturing hubs as part of a broader industrial policy. Our townships have untapped potential to become centres of production and innovation, providing employment and economic empowerment to local communities. Establishing Special Economic Zones (SEZs) in every township should be a core priority of the MTBPS.
Tomorrow presents yet another opportunity for the GNU to end the lip service and offer a shift to fiscally responsible, growth-oriented policies that create real change for South Africans. This is what citizens both need and deserve.
Media Enquiries:
Roger Solomons
BOSA Spokesperson
072 299 3551