Consolidated government spending is expected to increase from R2.4 trillion in 2024/25 to R2.83 trillion in 2027/28, at an annual average of 5.6%.
Consolidated expenditure will reach R2.59 trillion in 2025/26.
This according to National Treasury’s 2025 Budget Review document.
The majority of that spend will fund the social wage, which includes spend on health, education, social protection (grants), community development and employment programmes.
“Over the medium-term, economic development is the fastest-growing function at an annual average rate of 8.1%, driven by higher allocations to infrastructure projects.
“Spending is highly redistributive, with the social wage making up 61% of total consolidated non-interest spending over the next three years,” the Budget Review read.
Consolidated government expenditure by function is as follows:
- Learning and Culture: R508.7 billion
- Health: R298.9 billion
- Social Development: R422.3 billion
- Community Development: R286.6 billion
- Economic Development: R289.8 billion
- Peace and Security: R266.1 billion
- General Public Services: R78.7 billion
- Contingency Reserve: R5 billion
Spending pressures
The 2025 Budget will fund spending pressures of R232.6 billion over the Medium-Term Expenditure Framework (MTEF) period, including “provisional allocations for frontline service delivery departments amounting to R70.7 billion”.
“These spending additions are partially offset by drawdowns on provisional allocations and contingency reserves, resulting in a net increase in non-interest expenditure of R142 billion.
“The main spending additions are for critical infrastructure investments, social protection and a higher-than-anticipated public-service wage agreement, alongside provisional allocations for critical frontline services,” the Budget Review said.
Spending additions over the medium-term are attributed mainly to:
- R46.7 billion for infrastructure investments.
- R35.2 billion to extend the COVID-19 social relief of distress grant until March 2026.
- R23.4 billion for the costs of the 2025 public service wage agreement.
- R8.2 billion to increase the value of social grants by more than inflation.
- R11 billion to implement early retirement measures in 2025/26 and 2026/27.
- R5 billion for the carry-through costs for the deployment of South African National Defence Force (SANDF) troops in the Democratic Republic of Congo.
- R4.6 billion in 2025/26 for public employment programmes.
- R3.2 billion in 2025/26 for national government’s share of the debt repayment for the South African National Roads Agency Limited (SANRAL). Gauteng province will pay R13.4 billion for its share of the debt repayment to SANRAL.
Addressing government debt
During the Budget Speech on Wednesday, Finance Minister Enoch Godongwana said government debt is expected to stabilise at 76.2% of gross domestic product in 2025/26, with the consolidated budget deficit expected to narrow to some 3.5% by 2027/28.
“[As] debt stabilises, a growing primary surplus will enable government to reduce debt-service costs as a proportion of revenue.
“Debt service costs will amount to R389.6 billion in the current financial year. This translates to 22 cents of every rand we raise in revenue. It is more than what we spend on health, the police and basic education.
“We must reverse this trend and prevent the cost of debt from taking away resources that could otherwise be spent on our pressing social needs, or to invest in growth. In this regard, our fiscal strategy stabilises debt service costs as a percentage of revenue in 2024/25 by maintaining a primary budget surplus,” he said. – SAnews.gov.za
