The Budget Justice Coalition (BJC) has made a submission on the 2025 Division of Revenue Bill. The coalition welcomes the modest increase in social spending in the 2025 Budget, including health, education and early childhood development. However, these gains are overshadowed by the regressive VAT hike and a continued pattern of underfunding, poor implementation, and weak accountability. The BJC’s submission draws on budget analysis and community engagements in Limpopo, where participants raised serious concerns about rising costs, service failures, and lack of opportunities for young people. You can read the full submission here or read our summary below.
Key Concerns
- VAT Increase: The proposed VAT hike will worsen poverty and inequality, disproportionately affecting low-income and women-headed households. It also undermines the real value of key grants, such as the Child Support Grant and the National School Nutrition Programme.
- Conditional Grants and Education Infrastructure: While the Education Infrastructure Grant receives a real increase, the School Infrastructure Backlogs Grant has been absorbed into it. This merger risks diluting the backlog grant’s original purpose of eradicating unsafe schools. Parliament must ensure accountability and clear safeguards under the new structure.
- Health Funding: The Health Facility Revitalisation Grant receives only a marginal nominal increase, representing a real-term cut. This is inadequate given widespread infrastructure backlogs and recent climate-related damage. The District Health Programmes Grant’s HIV component sees a real cut of 2.5%, raising concerns about the sustainability of South Africa’s HIV response following donor withdrawals.
- Social Grants: The SRD Grant remains at R370, far below the Food Poverty Line (R796), and is arbitrarily capped, excluding millions. The Child Support Grant, now at R560, continues to fall short of meeting a child’s basic nutritional needs. These grants must be expanded, adjusted for inflation, and aligned with real costs of living.
- Youth and Employment: Youth unemployment remains staggeringly high, yet public employment programmes and higher education have faced severe cuts. The Presidential Employment Stimulus receives increased funding, but other programmes like the Community Works Programme remain underfunded.
- Gender Responsive Budgeting (GRB): While the budget includes a Gender Budget Statement, most departments lack gender-sensitive planning, data, or performance indicators. Care work remains unrecognised and underfunded. GRB must be institutionalised with accountability and transparency.
- Climate Responsiveness: Despite the Climate Change Act, the budget lacks a dedicated climate grant or robust integration of climate adaptation across conditional grants. Rural and climate-vulnerable municipalities are particularly under-resourced.
- Public Participation and Data Gaps: Community members in Limpopo were unaware of public hearings on the budget, reflecting the ongoing exclusion of rural communities from fiscal processes. Key budget decisions were made without up-to-date data due to delays in the release of the Income and Expenditure Survey and high vacancy rates at Stats SA.
Recommendations
The BJC is advocating for Parliament to ensure that:
- Social grants are increased to meet nutritional and poverty thresholds.
- Infrastructure grants prioritise backlog eradication with strong oversight.
- SRD is expanded, made permanent, and linked to a broader income support system.
- Personnel funding translates into actual frontline staff hires.
- Gender and climate considerations are mainstreamed across all budget allocations.
- Public participation mechanisms are improved across the entire budget cycle.
About the BJC
The purpose of the BJC is to collaboratively build people’s understanding of and participation in South Africa’s planning and budgeting processes – placing power in the hands of the people to ensure that the state advances social, economic and environmental justice, to meet people’s needs and wellbeing per the Constitution.
The organisations that make up the BJC are: The Alternative Information and Development Centre, the Children’s Institute at UCT, Corruption Watch, Equal Education, Equal Education Law Centre, HEALA, Legal Resources Centre, the Institute for Economic Justice, Oxfam SA, Pietermaritzburg Economic Justice and Dignity Group, the Public Service Accountability Monitor, the Rural Health Advocacy Project, SECTION27, Ilifa Labantwana, Treatment Action Campaign, Centre for Child Law, 350.org, Open Secrets, Social Policy Institute, Public Affairs Research Institute, Youth Capital, Amandla.mobi, Black Sash, My Vote Counts as well as friends of the coalition. Some contributions from the steering committee of the Climate Justice Coalition are included in this submission.
