SECTION27 notes the tabling of the 2025 Medium-Term Budget Policy Statement (MTBPS) at a time when the consequences of prolonged austerity are visible across schools, clinics and households. This year’s mini-budget offered little in the way of a meaningful shift away from the status quo that has hollowed out essential services and undermined constitutional rights for millions of learners and healthcare users. Instead, the mini-budget reinforced a path of slow growth, constrained resources and limited ambition for the public sector. In a context of failing service delivery, the mini-budget reflects a reactive state rather than one confronting challenges proactively to build a public sector that can, in turn, uplift our communities.
The decision to proceed with an inflation target of 3% is presented as a commitment to price stability. However, this shift has predictable consequences for ordinary people. Meeting the lower target will likely require the Reserve Bank to maintain higher interest rates for longer. Slower growth reduces tax revenue, which limits the space required to invest in education and health. Treasury itself expects lower non-interest expenditure over the MTEF by R6.2 billion in 2026/27 and R14.2-billion in 2027/28 because of the revised target. These reductions come at a time when public services are already under strain. Without people-centred tools such as human rights impact assessments and fully capacitated gender responsive budgeting systems, monetary policy decisions of this nature will become the new driver of austerity in the years ahead.
Alongside this, the Targeted Accelerated Responsible Savings (TARS) programme continues to cut or shift funds away from areas that carry high social importance. While, government presents these adjustments as efforts to improve efficiency, in practice, they transfer the cost of government failure onto ordinary people. Many of the programmes affected are not inefficient in their purpose. They underperform because departments lack adequate staffing, technical support, planning systems and oversight. Instead of building that capacity, TARS withdraws resources from programmes that millions rely on. A functional TARS programme would prioritise removing duplication, strengthening financial management, and encouraging value for money, which requires investment in building a capable state. It should not be used to cut funding from high-impact social programmes simply because the system fails to support them.
The decision to cut the School Infrastructure Backlogs Grant (SIBG) to fund other priorities in the education portfolio, including workbooks and infrastructure assessments, places further pressure on essential programmes. New national projects should not be funded through reductions to infrastructure grants that are already not meeting urgent needs. Cuts to the SIBG affect learners waiting for safe classrooms, decent toilets and functional school buildings. Cuts to health grants have similar consequences. They reduce the availability of staff, delay infrastructure repairs and weaken services in provinces that already experience heavy demand. These adjustments may appear prudent from a financial perspective, but communities carry the consequences of failures they did not cause.
The Provincial Equitable Share (PES) has been adjusted to respond to data updates that left the Free State, Gauteng and the North West with significant reductions in their original 2025 allocations. R4.6 billion has now been added to compensate for this. The Free State receives R215 million, Gauteng receives R2.6-billion and the North West receives R1.8 billion. These adjustments are welcomed in better positioning the state to deliver quality basic education and healthcare services. However, these adjustments also highlight the uneven effects of the PES formula revisions and the vulnerability of provincial budgets to demographic and economic shifts. In particular, provinces like the Eastern Cape and Gauteng that are not meeting the minimum norms and standards for school funding should use these increases to do so and meet this legal obligation.
Welcomed additions include R644 million for provincial infrastructure disaster recovery in the Eastern Cape and KwaZulu-Natal. Of this, R454 million goes to the Education Infrastructure Grant (EIG) to repair damaged classrooms and school facilities, R40 million to the Health Facility Revitalisation Grant and R150 million to the Provincial Roads Maintenance Grant. While this funding is welcomed, past experience and recent Auditor General reports show that provinces often take far longer than necessary to complete refurbishments.
The poor-performing though high social impact SIBG is one of the largest casualties of this MTBPS, losing R342.5 million. All provinces face cuts except the Eastern Cape. These funds have been shifted to national projects, including R300-million for the workbooks programme and R43 million for infrastructure assessments. Although these priorities are important, and the SIBG’s poor performance continues to alarm us, the need to eradicate unsafe school infrastructure does not go away. Instead, this reallocation reduces the resources available to do so, entrenching unsafe infrastructure, overcrowded classrooms and basic water and sanitation backlogs. Funding for new priorities should have come from the expanded emergency contingency reserve, which is better placed to support additional spending without undermining constitutional obligations.
The EIG receives R100 million for the Eastern Cape and R354 million for KwaZulu-Natal to rehabilitate infrastructure damaged by climate events. This is positive, though it does not address the long-standing concern that EIG-funded projects take far too long to complete. Provinces struggle to deliver even routine infrastructure upgrades within reasonable timeframes, which leaves schools vulnerable when extreme weather events occur. South Africa needs a robust, non-fragmented, and forward-looking response to climate change and school infrastructure resilience, not yearly ad hoc increases triggered by disasters.
In healthcare, the pattern is clear: when provincial departments fail to plan, hire and manage projects, it is patients who suffer. Communities do not control procurement delays, vacant posts, stalled infrastructure builds or weak financial management, yet they carry the full cost when funds are withdrawn. The Eastern Cape loses R15 million from the National Tertiary Services Grant and the North West loses R25 million, while the Western Cape receives an additional R40-million. These cuts are driven by underspending and delays in project preparation rather than a lack of need. The Eastern Cape faces severe backlogs in oncology services, which has forced staff to ration chemotherapy for paediatric oncology patients whose lifesaving care depends on the NTSG. Patients bear the consequences of provincial systems that fail to spend allocated funds.
The Health Facility Revitalisation Grant sees welcomed upward adjustments of R40-million for the Eastern Cape and R54-million for the Western Cape, while the NHI indirect grant loses R32-million in total. These shifts will support the rebuilding of flood-damaged infrastructure and the completion of overdue regional hospital projects. However, the underlying weaknesses that undermine infrastructure delivery remain unchanged and will continue to affect communities.
The consequences fall entirely on public healthcare users. A clinic roof that has leaked for years will now wait longer for repairs. A patient who depends on a tertiary hospital for specialist treatment will spend more months on a waiting list. Provinces already struggling to meet demand will fall further behind. Low-income patients and families experience the most severe effects of these decisions.
This MTBPS should have charted a path out of austerity. Instead, it reaffirmed a macroeconomic stance that prioritises containment rather than recovery. Price stability and responsible budgeting matter, but not at the cost of the state’s ability to deliver basic rights. South Africa needs a fiscal framework that places ordinary people at its centre, rebuilds provincial and local capacity and invests in the public services that build our shared future. Confidence in government delivery declines when programmes that have a direct effect on people’s lives lose funding.
SECTION27 calls on the government to use the upcoming Budget 2026 process to develop a genuine recovery plan for education and health, supported by real investment, improved accountability and clear commitments to constitutional rights.
For media enquiries please contact:
Gillian Pillay | 082 772 0052 | pillay@section27.org.za
About SECTION27: SECTION27 is a public interest law centre using legal, advocacy and research strategies to advance human rights in South Africa, with a focus on the rights to basic education and healthcare.
The European Union funding supports SECTION27 and the Centre for Child Law in strengthening accountability in health and education in South Africa.
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