While the National Treasury had to scale back funds it hoped to allocate to various programmes in this year’s budget, it managed to squeeze through enough to keep economic development spending at R289.8bn, with R1-trillion for infrastructure over the medium term.
Finance minister Enoch Godongwana on Friday told a joint sitting of parliament’s standing and select committees on both finance and appropriations that the 2025 budget focused on economic development.
The budget is very redistributive. If you look at the amount of non-interest spend in goods to social needs, it is at 61% ... We are changing the composition of expenditure towards infrastructure and in that way stimulating growth
— Enoch Godongwana, finance minister
“The budget is very redistributive. If you look at the amount of non-interest spend in goods to social needs, it is at 61% ... We are changing the composition of expenditure towards infrastructure and in that way stimulating growth,” he told members of the four committees.
Compared to his budget spending proposals in February, various programmes — including basic education, the old-age grant, public transport and district health services — now have lower additions to their funding.
This week’s tabling was Godongwana’s third attempt at a budget, after two previous ones were scuppered by opposition parties objecting to a proposal to increase VAT.
On Wednesday the minister said infrastructure was a rich source of employment and skills — through construction, engineering and related industries.
“Public infrastructure spending over three years will exceed the R1-trillion mark. This spending will focus on maintaining and repairing existing infrastructure, building new infrastructure and acquiring equipment and machinery,” he said.
National Treasury director-general Duncan Pieterse said R1.03-trillion will be allocated to public infrastructure over the medium term, with R402bn to roads, R219.2bn to energy, and R156.3bn to water and sanitation.
“The main budget also adds R33.7bn for infrastructure projects over the medium term. A component of that is the additions to Prasa for signalling, so that we can start running trains more frequently; and expanding access to public transport, in particular to working class, low-income households.”
He said a structure will be established this year to co-ordinate state participation in project preparation and planning, public-private partnerships (PPPs), funding and credit guarantees.
“It will consolidate two units that are now in the GTAC [government technical advisory centre], which is a government component that reports to the minister of finance, that co-ordinates PPPs and capital appraisals with the infrastructure fund in the DBSA [Development Bank of Southern Africa].”
Pieterse said changes to PPPs — which take effect next month — will reduce approval requirements for projects below R2bn. The Treasury had also established a framework to receive and process unsolicited bids from the private sector, he said.
“SOEs [state-owned enterprises], public entities and municipalities will fund about 72% (R748.5bn) of total public sector capital investment from the budget ... The BFI [budget facility for infrastructure] has approved nine projects [total value: R55bn].”
This comes as minister of trade, industry & competition Parks Tau gazetted provisions relaxing competition law requirements for businesses looking to participate in the logistics sector.
“Firms in the ports, rail and feeder road corridors that wish to enter into agreements ... must first seek confirmation from the [competition] commission in writing whether the agreement or practice falls within the scope of these regulations before implementing,” Tau said in the notice.
ANC MP Molapi Lekganyane called on the Treasury to improve the quality of infrastructure projects, as well as ensure entities and municipalities had the capacity to deliver them on time.
MK Party MP Brian Molefe said it was vital the four committees monitored whether the aims of the previous year’s budget were achieved, to ensure that parliament was not relegated to rubber-stamping the process.
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