At the third time of asking, on Wednesday, 11 June, Parliament considered, debated and voted for the 2025 Fiscal Framework, the basis for the Government of National Unity’s (GNU) very first budget.
To paraphrase former US congressman and economist Phil Gramm, passing a pro-growth budget is like going to heaven – everybody wants to do it, but nobody wants to do what you have to do to get there.
Unfortunately, the GNU was not willing to do what it takes, and instead pushed through a budget that will not produce the rapid investment and growth required to begin our journey out of the economic doldrums.
Growth flat, investment dried up, and taxes on the rise. We will be back here next year, facing another round of tax increases, because there will have been little to no investment. A budget ought to be a blueprint for progress. A reflection of our values, our priorities and our path forward as a country.
The 2025 Fiscal Framework was preceded by the GNU’s 31 priorities in its Medium-Term Development Plan, a bold promise of reform and delivery. Yet the Fiscal Framework tabled in Parliament offers no clear roadmap for achieving those priorities. There is no strategic alignment between what the government says it wants to do and what it is willing to fund.
Without that alignment, these priorities are reduced to political rhetoric.
We’ve seen this playbook before. The National Development Plan (NDP), hailed over a decade ago as the blueprint for South Africa’s long-term development, now serves more as a reminder of broken promises than a source of policy coherence. Most of its targets on jobs, education, crime reduction and infrastructure remain unmet.
Over the past 10 years, our economy has grown at an anaemic average of less than 1% per year. In the most recent quarter, growth was a paltry 0.1%. The only sector showing sustained growth is financial services.
Meanwhile, real economy, labour-absorbing sectors such as agriculture, mining, manufacturing, construction, trade and transport have all declined in their contribution to GDP. These are precisely the sectors that should be powering inclusive growth and job creation.
Gross fixed-capital formation, which is the clearest indicator of future growth and productivity, remains stagnant at 4.2%. These numbers are warnings. And they are being ignored.
The diplomatic disaster last month at the White House only confirmed what many investors already suspect: South Africa is becoming uninvestable. And we are seeing the consequences.
I recently visited Accra, the capital of Ghana, and you can feel the difference in the air. Cranes fill the skyline, a clear signal of construction, investment and progress. How many cranes are visible in Johannesburg, Cape Town or Durban today?
We cannot tax our way out of this crisis. We must invest our way out. And that means fundamentally rethinking how we use the public purse.
We must prioritise investments that unlock growth – in infrastructure, digital connectivity and efficient public transport systems. We need to fast-track the rollout of modern special economic zones, backed by genuine incentives.
Instead of bold reforms or pro-growth investments, the Budget leans on familiar and increasingly regressive tactics: raising taxes on the already-overburdened middle class and borrowing more from international lenders without a clear plan for debt repayment or structural reform.
This year’s tax increase comes disguised as “bracket creep” in personal income taxes, effectively taxing South Africans more without explicitly changing the rates. Next year, there are already whispers of additional taxes on the horizon. The government is milking a shrinking base instead of expanding the economic pie.
Years ago, when VAT was raised, we were promised serious spending reforms and a leaner, more effective state. That promise, too, has faded. The state remains bloated, with an oversized Cabinet and a civil service often rewarded more for loyalty than for performance.
There are still no performance scorecards linked to Cabinet roles. There has been no movement on taxing high-turnover, high-risk sectors such as online gambling. And crucial functions such as policing and justice remain underfunded and underperforming. The human cost of this drift is staggering.
Education budgets in key provinces such as Free State, KwaZulu-Natal and North West are taking a hit, on track to run out of funds to support teachers. Our doctor-to-patient ratio now stands at 1 to 3,000, a clear sign of a healthcare system under collapse.
The National Prosecuting Authority continues to buckle under the weight of its mandate, unable to bring criminals to justice in a country overrun by corruption and violent crime.
There are small signs of momentum. Minister Barbara Creecy’s commitment to rail and transport reform is welcome. Fixing our logistics network is essential for reigniting growth in key sectors such as agriculture and manufacturing. But isolated reforms are not enough. We need a coherent, national strategy backed by real budgetary commitments.
I reject the idea that this is the best we can do. South Africa does not need more fiscal tinkering. We need structural reform and moral courage.
I am proposing three immediate steps to be pursued in round two and three of the budget process , asParliament considers the Appropriations Bill and the Division of Revenue Bill.
First, cut wasteful spending. Initiate independent, sector-wide spending reviews to reduce inefficiencies, and reallocate funds to frontline services.
Second, legislate for investment. Pass laws that make South Africa the easiest place in Africa to do business. Prioritise local businesses with the same urgency we show global ones such as Starlink.
Third, track the right outcome.: Adopt a national performance scorecard based on two metrics: how much investment we are attracting, and how many jobs are being created.
It is time to act with clarity and urgency. Time is running out. DM