Where your tax money is going this year — in plain language
Where your tax money is going this year — in plain language
Where your tax money is going this year — in plain language
Gary Oberholzer
Where your tax money is going this year — in plain language
South Africa’s latest budget is being positioned as a turning point — debt stabilising for the first time in 17 years, tax hikes withdrawn, and more than a trillion rand earmarked for infrastructure. But the picture is more nuanced. Low growth, shaky state capacity and slow reforms still limit how quickly the economy can shift gears.
Speaking on HOT Business with Jeremy Maggs, Investec economist Tertia Jacobs broke down the numbers that matter most for working households, business owners and high-earning professionals trying to read the long-term signals.
Listen to the full chat below…
Finance Minister Enoch Godongwana presents his 2026 Budget Speech.
What the budget gets right
• Debt stabilisation is credible, even with the upward revision — mainly due to pre-funding in the bond market and lower nominal GDP.
• Consolidation remains on track over the medium-term, which supports investor confidence.
• Withdrawing R20 billion in tax hikes relieves pressure on consumers already squeezed after two years of bracket creep.
• Infrastructure allocations for Transnet, public entities and national build programmes provide a clearer pipeline for private-sector participation.
Where the risks remain
• Economic growth of around 1.8% is nowhere near enough to cut unemployment or meaningfully lift incomes.
• Investment growth is narrow, centred on renewables and digital infrastructure — not broad-based expansion.
• State capacity continues to slow infrastructure rollout, even with PPP reforms on the table.
• Transnet’s recovery is critical; without efficient freight and ports, growth will stay capped.
What it means for disposable income
• Inflation-linked bracket adjustments help, but only modestly, given inflation’s drop to around 3–3.5%.
• Consumers saw far more fiscal drag in the previous two years than relief now.
The longer-term signal
• South Africa is moving toward a principles-based fiscal anchor, which may eventually be legislated — an important step for stability and predictability.
Ahmed Kajee
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