{"id":825066,"date":"2025-05-21T15:43:49","date_gmt":"2025-05-21T13:43:49","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=825066"},"modified":"2025-05-21T15:47:14","modified_gmt":"2025-05-21T13:47:14","slug":"the-biggest-winners-and-losers-in-south-africas-budget-3-0","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/budget-speech\/825066\/the-biggest-winners-and-losers-in-south-africas-budget-3-0\/","title":{"rendered":"The biggest winners and losers in South Africa’s Budget 3.0"},"content":{"rendered":"\n

South African Finance Minister Enoch Godongwana presented a third version of the national budget to lawmakers in Cape Town on Wednesday after months of wrangling over tax increases. <\/p>\n\n\n\n

Godongwana cut spending, forecast slower growth and saw debt peaking at a slightly higher level in his third stab at a budget that had threatened the stability of the nation\u2019s governing coalition.<\/p>\n\n\n\n

He told lawmakers in Cape Town on Wednesday that the economy is likely to expand 1.4% this year, versus 1.9% seen in March when he tabled the budget for the second time. <\/p>\n\n\n\n

Headwinds included the fallout from President Donald Trump\u2019s trade war.<\/p>\n\n\n\n

\u201cVersion three of the 2025 budget is more sensible and depicts a stark picture of South Africa\u2019s finances,\u201d said Jee-A van der Linde, senior economist at Oxford Economics. \u201cMarkets will welcome the Treasury\u2019s commitment to fiscal consolidation.\u201d<\/p>\n\n\n\n

The rand was largely unmoved after the budget details were released, trading around 17.91 against the dollar at 14h35 in Johannesburg, while yields on 10-year South African government bonds dipped three basis points from a session-high to 10.45%.<\/p>\n\n\n\n

While the removal of the VAT hike was a clear with for South African consumers and the Democratic Alliance which championed its axing, the trade-offs spell some bad news for others.<\/p>\n\n\n\n

Here\u2019s a rundown of how South Africans may be impacted by his latest proposals:<\/p>\n\n\n\n

Budget 3.0 Winners<\/h2>\n\n\n\n
\"\"<\/a>
The DA’s Mark Burke took on the VAT hike directly and won.<\/figcaption><\/figure>\n\n\n\n

Consumers<\/strong><\/p>\n\n\n\n

The National Treasury walked back plans to raise value-added tax after objections from within the country\u2019s governing alliance. <\/p>\n\n\n\n

The concessions should help contain inflation and shore up consumer spending, a boon for retailers and manufacturers.<\/p>\n\n\n\n

The Democratic Alliance<\/strong><\/p>\n\n\n\n

The country\u2019s second-biggest party led the fight against the VAT increase, going so far as to challenge it in court. <\/p>\n\n\n\n

Its success in getting the hike overturned will wash well with voters and prove that it wields real clout within the government.\u00a0<\/p>\n\n\n\n

Bond Investors<\/strong><\/p>\n\n\n\n

Despite the Treasury revising its economic-growth and revenue-collection forecasts downward since it presented the last iteration of the budget on March 12, it nonetheless anticipates borrowing to be slightly less over the next three years than previously projected. <\/p>\n\n\n\n

That should be supportive of government bonds.<\/p>\n\n\n\n

\n\n\n\n

Budget 3.0 Losers<\/h2>\n\n\n\n
\"\"<\/a>
Motorists will have to cough up a few more cents per litre to make up for the VAT hike withdrawal.<\/figcaption><\/figure>\n\n\n\n

Motorists and Commuters<\/strong><\/p>\n\n\n\n

The Treasury raised levies on gasoline by 16 cents ($0.01) per liter and on diesel by 15 cents a liter to help offset lost revenue from the withdrawal of the VAT rate increase. <\/p>\n\n\n\n

A recent drop in international oil prices should help blunt the impact.<\/p>\n\n\n\n

The Passenger Rail Agency of South Africa <\/strong><\/p>\n\n\n\n

The March budget earmarked R19.2 billion over three years to fund a turnaround at the beleaguered commuter rail company. <\/p>\n\n\n\n

That allocation has now been cut to R12.3 billion, part of an effort to reduce spending.\u00a0<\/p>\n\n\n\n

Welfare-Grant Recipients<\/strong><\/p>\n\n\n\n

The Treasury had planned to increase monthly stipends paid to pensioners and other vulnerable people by more than the inflation rate to shield them from higher consumption taxes. <\/p>\n\n\n\n

While grants will still be increased above inflation in 2025\/26, the outer year increases have been scrapped, saving the government R6.6 billion over three years.<\/p>\n\n\n\n

Travelers, School Pupils, Teachers and Doctors<\/strong><\/p>\n\n\n\n

The home affairs department\u2019s three-year budget for a digitization program was cut by R2.3 billion, a setback to its efforts to make the process of getting identity documents, passports and other documentation more efficient. <\/p>\n\n\n\n

The education department\u2019s three-year budget to expand access to early childhood development and compensate employees at provincial level was reduced by R9.5 billion, while an allocation to the health department that was earmarked for salaries, hiring unemployed doctors and buying supplies, was curbed by R8.2 billion.<\/p>\n","protected":false},"excerpt":{"rendered":"

While the removal of the VAT hike was a clear with for South African consumers and the Democratic Alliance which championed its axing, the trade-offs spell some bad news for others.<\/p>\n","protected":false},"author":59,"featured_media":816531,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13716],"tags":[16618],"class_list":["post-825066","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budget-speech","tag-budget-speech"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/825066","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=825066"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/825066\/revisions"}],"predecessor-version":[{"id":825081,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/825066\/revisions\/825081"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/816531"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=825066"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=825066"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=825066"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}