21 May 2025, Johannesburg – Budget 3.0, the first presented under the Government of National Unity (GNU), marks a significant shift from years of harsh austerity. While not without gaps, this budget reflects pressure from communities and civil society to put the people of South Africa at the centre of South Africa’s budget priorities.
After successive years of fiscal consolidation characterised by painful defunding of our schools, clinics and hospitals, Budget 3.0 attempts to restore funding for critical infrastructure, personnel, and frontline services in schools and clinics. The reversal of the VAT hike, alongside real increases in funding for basic education and health care, offers much-needed relief for poor households. However, this is only the first step towards building a public sector that truly works for all. For Budget 3.0 to mark a real turning point, its promises must be delivered – especially at the provincial level where services are meant to reach people. Against the backdrop of ongoing social pressures, Budget 3.0 makes space for some real improvements in the social wage. However, the lack of meaningful fiscal buffers and a reduced contingency reserve remains a concern.
Education and Health: A Return to Real Investment
The education sector has experienced chronic underfunding, with per-learner spending declining in real terms over the past decade. This year’s allocation to Basic Education rises from R325 billion to R347 billion – a 6.7% nominal increase, translating to a real increase of 2.6% after inflation. While we welcome this as the largest basic education increase in years, it follows a period of sustained underfunding. As a result, this allocation alone is not enough to fully address overcrowded classrooms, infrastructure backlogs, and chronic teacher shortages in public schools.
Per learner, government spending will increase nominally from 2024/25’s R24,230.58 to R25,669.53 in 2025/26. However, once adjusted for inflation, per learner spending will actually decline to R23,755.34 in 2025/26 – highlighting the ongoing erosion of real investment.
Notably, Early Childhood Development (ECD) emerges as the biggest winner, with a 17.7% real increase in allocation, aimed at raising the per child subsidy from 2024/25’s R17 to R24 per day in 2025/26. This is a critical step in investing in children and breaking the cycle of intergenerational poverty currently plaguing our society.
Direct infrastructure allocations to provinces also receive a 4.9% real increase, totalling R15.2 billion for 2025/26 – a crucial intervention for repairing and expanding school facilities. This must not be lost to chronic underspending and waste.
For the first time since the COVID-19 pandemic, the health sector receives a real increase in funding, a long-overdue boost. Total health spending grows from 2024/25’s R277 billion to R296 billion in 2025/26, or 2.5% in real terms. This equates to R5 460.71 per healthcare user in nominal terms, but a reduced R5 053.50 in real terms, reflecting that while the budget grows, it still lags behind increasing demand for services.
We welcome targeted allocations to improve public hospitals and clinics, but caution that these may still fall short given the scale of infrastructure collapse and the healthcare system’s burden. Cuts to HIV & AIDS (-3.1%) and Emergency Medical Services (-2.4%) in real terms are deeply concerning. While the HIV budget reduction reflects savings in procuring Anti-Retroviral Treatment (ART), we urge Treasury to reconsider in light of USAID’s recent decision to reduce support to South Africa. Any savings must be reinvested into strengthening the HIV response, including treatment literacy, support systems, services targeted at key populations, and improved health information infrastructure.
While above-inflation budgeting is a step in the right direction, to protect the real value of social spending, future allocations should be guided by sector-specific benchmarks like education, health, and food price inflation.
A Mixed Picture for Education and Health Grants
The Education Infrastructure Grant (EIG) sees a R15.29 billion boost in 2025/26 (9.2% increase in nominal terms), while the historically poor-performing School Infrastructure Backlogs Grant (SIBG) continues its decline and is set to be absorbed into the EIG after 2025/26. The National School Nutrition Programme (NSNP) receives a marginally above-inflation increase of 5.3% from 2024/25’s R14.0-billion to R15.3-billion in 2025/26. However, given that food inflation consistently outpaces general CPI, we are concerned that this allocation may be eroded by rising food prices, potentially undermining the programme’s ability to meet learners’ nutritional needs.
Unfortunately, the Health Facility Revitalisation Grant, which funds critical infrastructure in the health sector, receives only a 1.3% nominal increase in 2025/26. While this marks a welcome shift from years of nominal cuts, it still amounts to a 2.75% real-terms reduction – a disappointing outcome in the face of growing infrastructure backlogs and urgent service delivery needs.
Gender Responsive Budgeting: A Tentative Step
For years, gender-responsive budgeting (GRB) has been promised but not meaningfully delivered. Budget 3.0 includes a Gender Budget Statement that acknowledges the economic hardships faced by women and girls – a welcome move.
However, our view is that more is needed. True GRB must be embedded in sectoral allocations, particularly in education and health, where women bear disproportionate burdens as unpaid carers, early childhood educators, and overworked health professionals. A gender lens can ensure targeted investments that respond to school dropout due to teenage pregnancy, youth unemployment, and the unequal division of unpaid care work.
Accountability and Reform Are Now Urgent
SECTION27 calls on government to pair these budgetary shifts with systemic reforms that ensure that every single Rand allocated to schools and clinics reaches the frontline. Without better planning, accountability, and oversight, especially at the provincial level, these gains risk being eroded by inefficiency and delay. The downward revision of economic growth projections is concerning. For South Africa to sustainably fund education and health, economic policy must work in concert, aligning industrial, fiscal, and monetary strategies to drive job creation, expand participation, and grow the revenue base.
We urge Treasury and Parliament to:
- Allocate savings towards HIV spending towards bolstering ART-retention: Any savings must be reinvested into strengthening the HIV response, including treatment literacy, support systems, and improved health information infrastructure.
- Pursue real investment in health infrastructure, emergency medical services, learning materials and HIV/AIDS services.
- Consider using sector-specific measures such as education inflation, health price inflation, and food price inflation to better guide future allocations and protect the real value of social spending.
- Recognise the rising demand for public education and health care services; and allocate funding to reflect that to ensure that per health care user and per learner investment is sufficient for all South Africans.
- Strengthen provincial capacity and accountability: Address chronic underspending and corruption by reinforcing planning, procurement, and implementation support, while enforcing consequence management.
- Pursue progressive revenue measures: Government must pay more than lip service to commitments to tackling illicit financial flows, improving tax compliance.
- Ensure transparency through participatory human rights impact assessments, especially for budget decisions affecting marginalised communities, women and youth.
- Advance GRB in practice, not just rhetoric: Prioritise public investments that redress unpaid care burdens and create economic opportunities for women and girls.
Budget 3.0 shows what is possible when the state prioritises people over rigid fiscal targets. It is a welcome shift from the harsh austerity of cost-containment measures, but one budget cannot undo a decade of erosion in public services. Let this be the first step in a sustained commitment to restoring the promise of dignity, equality, and access to services for all, in line with our Constitution and the G20 theme of solidarity, equality and sustainability. SECTION27 will continue to monitor the implementation of these commitments, working with communities to ensure this budget is not just words on paper, but a real step toward a nation that works for all.
For media enquiries please contact:
Pearl Nicodemus | 082 298 2636 | nicodemus@section27.org.za
About SECTION27
SECTION27 is a public interest law centre using legal, advocacy, and research strategies to promote and advance human rights in South Africa. Our work focuses on the rights to health care and basic education, ensuring that constitutional obligations are met and that all South Africans have access to quality public services.
The European Union funding supports SECTION27 and the Centre for Child Law’s work in enhancing accountability in health and education in South Africa.
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