Our Viewpoint | 2026 Budget

South Africa’s 2026 budget offers measured relief for the poor and working class while attempting to work within tight fiscal limits. For millions of vulnerable households, the higher social grants will offer some relief, with old age, disability and care dependency grants rising to R2 400 and the system continuing to support more than 26 million people. Yet these increases are modest against the daily pressures facing the poor, who are the first to feel the effects of unemployment and food inflation.

The R20 increase in the child support grant is particularly inadequate given the rising cost of basic nutrition. In a country marked by deep inequality and persistent joblessness, these grants remain the most direct defence against poverty and hunger. While the constraints on the fiscus are understood, it is the poorest who carry the heaviest burden of the economic slowdown.

Debt-service costs and limited fiscal space explain the restraint, but they do not lessen the reality that greater support was needed for those most exposed to hardship. There are also concessions for the squeezed middle. Personal income tax brackets have been adjusted for inflation, preventing bracket creep, while higher tax-free investment and retirement contribution limits encourage savings and longterm financial resilience.

[paywall]

Small businesses gain from a higher VAT registration threshold and enhanced capital gains relief, easing compliance pressures and supporting entrepreneurship. The trade-offs are evident. Excise duties on alcohol and tobacco increase, fuel levies rise, and spending restraint continues through targeted savings and tighter programme evaluation.

The scaling back of underperforming grants and stricter grant verification signal a shift towards efficiency but also highlight fiscal pressure. Government debt, although stabilising, remains elevated, and municipalities continue to face service delivery and financial management challenges. The budget’s credibility rests on disciplined public finances and structural reform.

Debt is projected to stabilise at about 78,9% of GDP and decline gradually, with deficits narrowing over the medium term. Infrastructure investment, logistics reform and energy market changes are positioned as the levers for growth.

[/paywall]