Missing Middle: Budget’s cruel oversight

The government can credibly claim to be investing heavily in the poor and working class through NSFAS and broader post-school education funding. However, nestled between the indigent and the affluent is a growing cohort of young South Africans whose prospects are being quietly eroded by the very architecture of this funding model. FINANCE Minister Enoch Godongwana’s 2026 Budget Speech has once again laid bare an uncomfortable political truth: while the language of “pro-poor” policy remains intact, the country’s so-called missing middle is treated as an afterthought rather than a fiscal priority.

On paper, the numbers look impressive. Consolidated spending edges higher, the social wage absorbs the lion’s share of non-interest expenditure, and higher education retains its place as one of the state’s largest line items. The “missing middle” — families that earn too much to qualify for NSFAS but too little to afford tertiary fees and living costs — has been recognised by policymakers for years.

A comprehensive funding model and a new loan scheme for this group were heralded as long-awaited solutions, cobbled together from the National Skills Fund and the SETAs. Yet this was always destined to be a stopgap rather than a systemic fix. In a high-fee, low-growth environment, the loan capital available can never stretch far enough without a clear, sustained fiscal commitment and a willingness to reorder priorities.

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This Budget ducks the needed choice. There is no bold, ring-fenced allocation for the missing middle; no sign that Treasury is prepared to tilt the balance decisively in favour of broadening access beyond NSFAS’s existing means test. Instead, the government reiterates a message of “doing more with what we have”, employing technical refinements and phased roll-outs.

This may satisfy ratings agencies, but it does little for the student at a public university who falls just outside the NSFAS threshold and is now offered debt instead of a genuine opportunity. Fiscal constraints are real — debt-service costs continue to crowd out social spending, and growth remains anaemic. Yet budgets are political instruments, not mere accounting exercises.

The choice to protect certain tax expenditures, to shy away from wealth and inheritance reforms, and to leave some corporate incentives largely intact effectively represents a choice not to fully fund the aspirations of the missing middle. When the government insists that there is no room to move, it really means there is no appetite to act at the expense of better-organised interests.

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