Budget 3.0 marks a shift toward fiscal responsibility
The 2025 budget signals a shift toward fiscal realism, cutting excess while preserving crucial social support.
Finance Minister Enoch Godongwana at the presentation of the Budget for the 2025/26 financial year at Cape Town International Convention Centre on 21 May 2025 in Cape Town. Picture: Gallo Images/Jeffrey Abrahams
Finance minister Enoch Godongwana must have been looking over his left(ist) shoulder to see if his revolutionary comrades were buying his message yesterday that the 2025 budget was a 'redistributive' and not 'austerity' one.
He and his colleagues in the department and in the Treasury are repeatedly accused by the socialists and wannabe Marxists of selling out to capital and embarking on 'neoliberal' programmes which only extend the free market status quo.
On the other hand, the very people he is supposed to be kowtowing to – the capitalists – accuse him and the ANC, which is the leading party in the government of national unity (GNU), of embarking on the road to communism.
Of course, no-one who has a basic understanding of economics, or of the situation on the ground in South Africa, would agree with either or these sentiments because, like the country itself, the economic policy currently being followed has a bit of everything.
What is apparent, though, in the financial plan handed down by Godongwana is that, perhaps, at last, the powers-that-be (read the ANC majority in the GNU) are coming to the realisation that South Africa cannot continue to spend like the proverbial drunken sailor and should start cutting its simple coat to suit its lessthan-lavish cloth.
There is a strong case to be made for the retention of social grants in a country beset by poverty.
ALSO READ: Sensible or underwhelming? Economists react to Godongwana's Budget 3.0
However, given the abuse of systems like the National Student Financial Aid Scheme, can we afford to subsidise tertiary education just to produce hordes of dropouts or graduates for whom there are no jobs?
Can we afford to pour money into the bottomless pit of state-owned enterprises, either?
They – and the civil service itself – have been a safe haven for ANC cadres.
All that has to end.
Hopefully, Godongwana has started that process.
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