The postponement of the national budget speech in February allowed the government to find better ways to promote development in this country. Equal Education (EE) and other progressive forces called on government to tax the rich, fully fund public services, and stimulate our economy to confront obscene inequality in our education system and society directly. Today’s budget, tabled on 12 March, did not heed that call. Instead, it presented a diluted concoction of austerity budgeting that we have grown used to expect from the national treasury.
The watering down of the proposed VAT increase remains a VAT increase nonetheless. Real increases to basic education spending remain too low to meet the needs of the millions of learners in our education system. The government urgently needs to change its strategy to drive the structural change that our economy desperately requires.
In his attempt to justify continued austerity, Minister Enoch Godongwana had the gall and audacity to quote the revolutionary socialist leader Amilcar Cabral in his budget speech today. We respond in kind.
“Hide nothing from the masses of our people. Tell no lies. Expose lies whenever they are told. Mask no difficulties, mistakes, failures. Claim no easy victories”
Godongwana has hidden alternative revenue-generating measures from the budget. His holy grail of a primary budget surplus conceals the tremendous damage that this inflicts on poor communities without access to basic education services, jobs, and dignity. His stubborn commitment to austerity budgeting as a means to promote economic growth has consistently failed, and the treasury has again revised its growth estimates downwards. Reforms to de-risk private investment in public goods are claimed as victories despite the significant risks and costs it imposes on poor working-class consumers.
We continue to oppose lazy, regressive tax increases
VAT is set to increase by 0.5 percentage points this year and another 0.5 points in the next. While we welcome zero-rating, there is no guarantee that these reduced costs will be passed down to consumers. Poor and working-class communities will continue to bear the brunt of increased prices in a context where the cost of living is unaffordable to many.
No changes to Personal Income Tax brackets mean that income earners will be effectively paying more tax on their limited income. This will be especially painful for those in low tax brackets, whose livelihoods are often entirely dependent on their next paycheck. We contrast this with the government’s empathetic approach to businesses paying corporate tax. Minister Godongwana is quick to deploy rhetoric about how this tax would burden corporations, but relatively aloof about the effect of this budget on the poor working-class who bear the worst of its brunt. This attitude highlights the cold prioritisation of corporate interests over ordinary households.
There are many other progressive options available to increase government revenue that do not appear to be considered by the minister. The Government Employees Pension Fund is funded at 110% of its obligations and has massive surpluses every year. Pausing government contributions to the fund this year could free up R59 billion to spend. A wealth tax on the top 1% richest in our country could also raise around R59 billion. Drawing down on the Gold and Foreign Exchange Contingency Reserve can be used to alleviate spending pressures. Eradicating illicit financial flows could bring in up to R100 billion in taxes each year. None of these means were considered by the minister in the budget speech.
We tentatively welcome education spending increases, but these are still too little to alleviate enormous budgetary pressures faced by education departments.
Nominal spending on basic education is expected to grow by R61 billion in the next three years, from R325 billion last year to R386 billion in 2027/28. R19 billion of this increase is meant to cover teacher wage costs and almost R10 billion will be to expand and promote Early Childhood Development programmes. Unfortunately, this is not enough to reverse the onslaught that over a decade of austerity has waged on the basic education sector. The Department of Basic Education (DBE) reported estimates of budgetary pressures of up to R140 billion over the next three years.
Most concerning is the apparent lack of funding to implement the BELA Act, which has made Grade R compulsory. Currently, Grade R is funded at just 70% of its requirement, and provinces have reported needing approximately R45 billion in additional funds over the next three years to implement BELA. This is a responsibility that the government is constitutionally obligated to meet. Treasury fails in this obligation by depriving the public education sector of the necessary resources to provide schools with the teachers and infrastructure that they need. The continued compromising of the foundation phase is a great injustice to children’s right to education; and a debt to the system in the child’s future schooling years.
A second key concern relates to the continued underfunding of school infrastructure. Nominal increases to spending on education infrastructure are largely driven by allocations to the Western Cape and Gauteng from the Budget Facility for Infrastructure (BFI) blended finance mechanism. Meanwhile, schools in rural provinces must still contend with critical backlogs that leave children without safe and dignified water and sanitation.
The planned phasing out of the School Infrastructure Backlogs Grant (SIBG) is worrisome, particularly given the Department of Basic Education’s probable failure to meet yet another self-imposed deadline to eradicate pit latrines in all schools by the end of March. The SIBG only targets 50 schools to be provided with sanitation facilities per year, despite the DBE yesterday reporting a backlog of approximately 236 schools who remain entirely reliant on plain pit latrines.
Ending corruption and ineffective spending
According to 2023/24 annual reports, Provincial Education Departments and the Department of Basic Education collectively incurred R1.5 billion in irregular expenditure and R22.4 million in fruitless and wasteful expenditure. We urge treasury and education departments to strengthen safeguards and public participation in the budget process to ensure greater transparency and accountability in public spending. Consequence management also needs to be strengthened. The government must act decisively against poor performing implementing agents and contractors- black list them now! Not only will this help to ensure that public money serves the public, but it will also strengthen safeguards against corruption and capture in a vulnerable environment.
Conclusion
No budget is perfect, but they are required to meet their constitutional obligations. Minister Godongwana acknowledged as much in his speech. We thus call on parliament to amend the budget to ensure that basic education, which is an immediately realisable right guaranteed by our constitution, is provided for. The budget must provide adequate funding to meet its obligations to Grade R learners; deal with critical backlogs at schools that are not compliant with the Minimum Uniform Norms and Standards for Public School Infrastructure; ringfence education funding to ensure that provinces meet their obligations to schools; and include necessary safeguards to ensure that spending by education departments is efficient, transparent, and free from corruption.
Communication Manager: Ayanda Sishi-Wigzell
Contact details: 076 879 3017
Email: ayanda@equaleducation.org.za
