How the 2025 Budget Speech Will Impact your Wallet and Daily Life
Finance Minister Enoch Godongwana has delivered the 2025 Budget Speech, outlining key financial plans that will impact households, businesses, and everyday South Africans—particularly women, who bear the brunt of rising costs and economic challenges.
The biggest talking point? A VAT increase. From April, VAT will rise from 15% to 15.5%, and again to 16% in 2026. While this means higher prices for basic goods and services, the government is expanding the list of zero-rated foods to help offset the impact on struggling families.
Items like canned vegetables, dairy blends, and certain organ meats will now be exempt from VAT, providing some relief to those managing household budgets.
Boosting Socia Support and Healthcare
For working mothers and caregivers, social spending sees a boost. The Child Support Grant increases to R560 per month, and the old age and disability grants rise by R130 to R2,315 per month. Additionally, Early Childhood Development (ECD) funding has been increased to improve access and quality, a win for parents relying on affordable daycare.
Healthcare also gets a much-needed boost, with R28.9 billion allocated to retain 9,300 healthcare workers, ensuring that clinics and hospitals remain operational. This will particularly benefit women, who make up most caregivers and health workers in the country.
How the Budget Speech Aims to Drive Jobs and Economic Relief
In terms of job opportunities, infrastructure investment remains a key focus, with over R1 trillion earmarked for projects in transport, energy, and water. While these are typically male-dominated sectors, there is hope that government projects will include employment opportunities for women, especially in skilled trades and construction.
The Budget balances economic recovery with tough trade-offs. While the VAT hike is a burden, increased social and healthcare spending offers some relief to millions of women who are the backbone of their families and communities.
Read More: How the GNU’s rejection of tax hikes is shaping the 2025 Budget
Here are five key increases from the 2025 Budget Speech that will have the biggest impact on the average consumer’s pocket:
VAT increase
VAT will increase from 15% to 15.5% in April, and to 16% in 2026. This means most everyday goods and services—including groceries, clothing, and utilities—will cost more.
No inflation adjustment on personal income tax brackets
While salaries may increase with inflation, tax brackets remain unchanged, meaning more people will pay a higher effective tax rate. This reduces take-home pay for many taxpayers.
Fuel prices – no general fuel levy Increase, but rising costs persist
While there’s no increase in the fuel levy, fuel costs remain high due to global oil prices and supply chain issues. This will continue to affect transport costs, food prices, and general inflation.
Social grants increase (Impacts on low-income households and pensioners)
The Old Age and Disability Grants increase by R130, bringing them to R2,315 per month. The Child Support Grant increases to R560 per month.
While this provides some relief, it may not fully offset rising costs.
‘Sin taxes’ on alcohol and tobacco
The excise tax on alcohol and cigarettes will go up again, making items like beer, wine, spirits, and tobacco more expensive. Smokers and drinkers will feel this hike immediately.
Final Thoughts
From a VAT increase that affects everyday expenses to more social spending and infrastructure investment targeted at long-term economic recovery, the 2025 Budget Speech offers a range of opportunities and a mix of challenges. Targeted assistance for women, families and care givers provides some much-needed respite despite the ongoing increase in living expenses.
Tune in to the podcast below and listen to Jeremy Maggs give a 60 second budget speech overview and listen to Hot business for more news on the current state of our nation.
Listen to Jeremy Maggs' budget overview in 60 seconds:
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