Budget: What It means for you and the economy

The address was postponed at the last minute in February after parties in the Government of National Unity disagreed on a proposed VAT hike.  

Following at least three special cabinet meetings and an interim ministerial task team, Godongwana is now set to table the revised budget.  

In the last cabinet meeting, Godongwana was urged to balance South Africa’s fiscal constraints while protecting lower and middle-income households and supporting economic growth, aligning with the Public Finance Management Act.  

President Cyril Ramaphosa chaired another special cabinet meeting on Wednesday morning as parties in the Government of National Unity struggled to find common ground on the budget.  

The budget speech is the most important financial address by a government minister.

 It outlines how funds will be allocated to government departments and programs for the next fiscal year.  

It also details how revenue is distributed between national, provincial, and local governments.  

Beyond government spending, the budget gives insight into South Africa’s economic outlook, covering income, spending, debt levels, and growth projections.  

It influences how investors and international lenders perceive the country and directly impacts citizens through tax changes and the prices of goods like tobacco and alcohol.  

Godongwana also uses the speech to announce pension, child support, and disability grant increases.

It also outlines changes in VAT, fuel levies, and personal income tax that directly impact salaries and the cost of living.

However, the budget remains a proposed spending plan until it receives the green light from the National Assembly and the National Council of Provinces.

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