For the families who queue at local clinics, the parents counting the cost of school supplies and the millions of households feeling the squeeze of rising prices, the figures presented in Parliament last week may have seemed distant. But the Medium-Term Budget Policy Statement, delivered by the Minister of Finance, is ultimately about the things that shape daily life: whether a clinic works, whether a road holds up, whether a young person can find a job.
That is the argument at the heart of the government’s message. The decisions made about how public money is raised, spent and managed, it says, determine whether children get a decent education, whether hospitals and clinics function properly, and whether the economy can create the jobs people so desperately need.
The path to this point has not been easy. Over the past few years, the country has had to stabilise its public finances while confronting high levels of poverty and unemployment. The legacy of state capture weakened institutions, hurt economic growth and drove public debt upward. Then came the COVID-19 pandemic, which forced government to implement a stimulus package to protect workers, communities and businesses from the worst effects of the economic contraction that followed.
As debt rose, so did the cost of servicing it. Every rand spent on interest was a rand that could not go toward building a school, building houses, equipping a hospital, fixing a road or providing essential services. Government concluded that this could not continue indefinitely.
There are now signs of a turn. For the first time in nearly two decades, public debt has stabilised and is beginning to decline. Since 2023, the country has maintained a primary budget surplus, meaning that, excluding debt service costs, government has been spending less than it earns. This makes it possible to reduce debt further, lower borrowing costs and build confidence in the economy.
Meanwhile, the fiscal improvement sits within a broader recovery. The end of load shedding, the stronger fiscal position and South Africa’s removal from the Financial Action Task Force grey list have all contributed to rising public confidence and the country’s first sovereign credit rating upgrade in more than 16 years. The recovery of the South African Revenue Service after the era of state capture has also enabled better collection rates.
The point of that revenue, the government argues, is what it delivers to people: more schools and clinics, improved public services, social grants and investment in the public infrastructure that communities rely on.
Some of the spending is directed at those facing the greatest danger. More funds are being allocated to combat gender-based violence and femicide, including money to hire more than 3 500 social workers and to strengthen forensic and investigative services so that cases result in successful prosecution and conviction.
The social wage, which covers health, education, social development and services for low-income households, accounts for around 60% of non-interest spending. It funds free basic services for over 11 million households, school meals, and grants to more than 18 million beneficiaries. Recognising the strain that the rising cost of living places on households, the Minister also announced a temporary reduction in the fuel levy as a form of relief.
The healthier fiscal position also allows greater investment in infrastructure, described as an essential driver of inclusive economic growth and job creation. Payments for capital assets are the fastest-growing item in the budget, and new measures have been introduced to increase private sector investment in infrastructure. These efforts are supported by a fundamental reform of the budgeting process, changing how public money is spent, monitored and accounted for.
Fixing the finances, the government stresses, is not only about collecting more tax or cutting debt. It is about ensuring every rand is spent wisely, honestly and effectively. Programmes that perform badly or lack clear outcomes are being phased out, and more than R11 billion in savings has been identified in the medium term from rationalising low-priority programmes. The approach is targeted savings rather than indiscriminate cuts to departmental budgets. As part of this, the Infrastructure Conditional Grant is being reviewed to assess why provinces and municipalities underspend, why projects miss deadlines and budgets, and why the quality of deliverables is often poor. The aim, officials say, is not to spend less but to spend smarter.
Beyond the funds dedicated over the next three years to growing the economy, creating jobs and fighting poverty, the statement is framed as a signal of confidence and stability, and of a commitment to stay on the path of recovery.
The government is candid about the limits of that progress. Many South Africans have not yet felt the benefits of the recovery. Unemployment remains far too high, too many families are struggling to get by, and too many communities contend with poor services. Financial stability, the message warns, should not be mistaken for the end of the road; there is still much work to do.
Even so, there is a case for recognising how far the country has come. A country that manages its money responsibly, the argument runs, is better equipped to protect its most vulnerable citizens, withstand economic shocks, attract investment and build for the future. The progress gives confidence that the direction is right, and it places a bigger responsibility on government to turn financial gains into improvements people can actually see and feel.
That, in the end, is what the government says responsible management of public money is about: not just a healthier balance sheet, but a better life for the people of South Africa. Whether the families still waiting in those clinic queues feel that difference in the year ahead remains the open question the statement leaves behind.