As South Africa’s budget presentation approaches, Finance Minister Enoch Godongwana has drawn criticism over his claim that the government lacks the funds to sustain the Social Relief of Distress (SRD) grant.

In an interview on Newzroom Afrika, Senior Policy Specialist and co-founder of the Institute for Economic Justice Neil Coleman refuted this claim, arguing that the SRD grant was already accounted for in the 2025 budget baseline and accusing the Treasury of misinformation.

“He actually, I’m afraid to say, is misleading the country deliberately, misinforming the country,” Coleman said. He pointed out that in Parliament on October 31, 2023, the director-general of the Treasury confirmed that the SRD grant was included in the medium-term budget policy statement under a provisional item.

“So there’s no trade-off,” Coleman insisted, rejecting Godongwana’s suggestion that increased VAT might be necessary to sustain the grant.

Coleman further dismissed claims that financial shocks, such as the United States (US) government’s decision to cut the President’s Emergency Plan for Aids Relief (Pepfar) funding, contributed to budget shortfalls.

“It’s not fair to say that. This is just incompetence on the part of the minister and Treasury. They failed to budget for items that were easily anticipated.”

He argued that revenue had exceeded projections in 2024 and that social spending had already been cut significantly in recent years.

The discussion also touched on broader fiscal management, with Coleman emphasising that alternatives exist for raising revenue and reducing wasteful spending.

“Trade-offs, as you call them, are being made in ways which disadvantage the poorest and most vulnerable in society,” he asserted, highlighting that policymakers are protecting wealthier interests at the expense of the poor.

The upcoming budget presentation is expected to be contentious. “I anticipate that when the budget is presented on Wednesday by the Minister, it is going to be a robust debate, and it’s not going to be smooth sailing,” Coleman said.

The conversation also raised the potential for zero-based budgeting, which Coleman acknowledged could be valuable if conducted transparently and based on expert analysis.

“It must be based on objective scientific evidence. And what you will find is that once you do that exercise, there are certain areas where a very significant increase in spending is required, particularly in critical public services,” he argued.

While wasteful expenditure should be cut, Coleman stressed that austerity measures have already harmed essential services. “There has to be a recognition that there is a serious impact that austerity over the number of years and the cutbacks have had on services for the majority,” he said.

Godongwana is expected to table the budget on Wednesday, March 12.

hope.ntanzi@iol.co.za

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social relief of distress

'This is just incompetence': Neil Coleman slams Treasury over budget shortfalls