How government spends every R100 it takes from you

South Africa’s government spending landscape has undergone a significant transformation, reflecting a shift in how taxpayer funds are allocated by increasingly prioritising debt repayment and tightening its belt in other areas.

According to the 2024/25 budget allocation from the National Treasury, for every R100, the South African government would spend it in the following ways (approximately):

• Education and Culture: R20.30
• Social Development: R16.30
• Debt Repayment: R16.10 (a significant increase in recent years)
• Health: R11.50
• Community Development: R11.20
• Economic Development: R10.80
• Peace and Security: R10.30
• Other Government Services: R3.40 (This includes general public services and a contingency reserve)

Note that salaries are included within these clusters.

A detailed breakdown can be found below:

This outline of the 2024/25 budget allocations is quite different to what it looked like 10 years ago.

The National Treasury’s budget allocations for clusters have shifted in the following ways over the past 10 years, with each R100 budgeted going to:

However, this is based on government expenditure allocation predictions, which greatly differ from the revenue generated from the tax.

Although there is no readily available information on the exact proportion of revenue (taxes) dedicated to various expenditure, Finance Minister Enoch Godongwana gave a hint into this, saying in his recent budget speech that “debt-service costs will absorb more than 20 per cent of revenue.”

This means that it around R20 of every R100 paid in taxes will go to servicing debt.

“To put this into perspective, spending on debt-service costs is greater than the respective budgets of social protection, health, or peace and security,” said Godongwana.

What takes up most of your taxes

Education and culture and social development still take up the most significant portion of the budget, maintaining their top two spots.

While learning and culture’s allocation remained unchanged, social development allocations saw a slight increase. However, inflation might have reduced the real value of these allocations.

The biggest change is in debt servicing costs, which have jumped nearly 7% in recent years. This is now the third-largest spending area, reflecting the government’s focus on managing its debt.

This rise in debt payments has come at the expense of other areas. Budget allocations for peace and security and economic development for example have shrunk by over 2%.

According to StatsSA, “the focus of government spending has shifted away from non-financial assets (which includes investment in infrastructure) and goods and services, and towards social benefits and interest payments on debt.”

South Africa’s gross debt stock is hefty and is expected to increase from R5.21 trillion (73.9% of GDP) in 2023/24 to R6.29 trillion in 2026/27 (74.7% of GDP).

President Cyril Ramaphosa and National Treasury have highlighted that the country’s “rapid growth in debt‐service costs chokes the economy and the public finances,” but emphasise that the subsequent focus on servicing it is essential.

“Over the past fifteen years, our debt burden has grown to a point where we are spending more on interest payments than we are on (sectors of) education or health care services,” said Ramaphosa in a weekly letter to the nation.

Ramaphosa added that South Africa’s economy “has been weighed down by more than a decade of low growth and rising debt.”

“High and rising government debt hampers service delivery and investment by draining ever-larger amounts of taxpayer resources for debt service,” said National Treasury.

Treasury predicts that “debt will stabilise in 2025/26.”

Read: Government left juggling South Africa’s biggest economic problem