2025 Budget Speech
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Economic Growth: The government aims to achieve faster economic growth
through macroeconomic stability, structural reforms, improved state capability, and
accelerated infrastructure investment. GDP growth is projected to average 1.8% over
the medium term ¹.
•
Tax Proposals: To fund pressing spending needs, the government proposes
increasing the VAT rate by half a percentage point in 2025/26 and another half a
percentage point in 2026/27, bringing the VAT rate to 16% ¹.
•
Infrastructure Development: Public infrastructure spending will amount to over
R1 trillion over the next three years, focusing on transport, energy, and water
sectors. The government aims to leverage private sector participation and alternative
financing arrangements ¹.
•
Social Protection: The budget allocates additional funding for social grants,
early childhood development, and basic education. The subsidy for early childhood
development will increase from R17 to R24 per day per child ¹.
•
Debt Management: The government aims to stabilize debt at 76.2% of GDP in
2025/26 and reduce debt-service costs as a proportion of revenue. A credit
guarantee vehicle will be launched in 2026 to mobilize private sector capital ¹.
the following aspects were
repeated several times:
1.
Fiscal Discipline: The Minister emphasized the importance of maintaining
fiscal discipline to achieve economic stability and reduce debt.
2.
Investment in Infrastructure: The need to invest in infrastructure development,
particularly in transport, energy, and water sectors, was highlighted multiple times.
3.
Economic Growth and Job Creation: The Minister reiterated the government's
commitment to promoting economic growth and job creation, particularly for youth
and women.
4.
State-Owned Enterprises (SOEs) Reform: The importance of reforming SOEs
to improve their efficiency and reduce their reliance on state funding was
emphasized.
5.
Private Sector Participation: The Minister encouraged private sector
participation in the economy, particularly in infrastructure development and SOE
reform.
6.
Reducing Inequality and Poverty: The government's commitment to reducing
inequality and poverty through social protection programs and economic
empowerment initiatives was repeated throughout the speech.