During the 2025 Budget Speech, Finance Minister Enoch Godongwana confirmed that social grants distributed by the South African Social Security Agency (Sassa) will be increased above inflation.
The Minister explained that the increases are aimed at protecting vulnerable households against the rising cost of living.
Black Sash noted that while grant increases were above the inflation rate, several grants fell below the food poverty threshold. This includes the Child Support grant and the Social Relief of Distress (SRD) grant, the latter receiving no increment.
It is important to highlight that the Child Support Grant continues to be below the Food Poverty Line of R796 and the value of the SRD Grant has not been increased, with a limited budget allocation which does not speak to the reality of the unemployment crisis in South Africa.
The group expressed concern as despite grants being increased, they are unable to meet the basic needs of beneficiaries. They add this exacerbates food insecurity and poverty.
Minister Godongwana further proposed a Value Added Tax (VAT) increase of 1% over the next two financial years, the first 0.5% being implemented in April and the second being implemented in 2026.
Blacksash said the VAT increase places an undue burden on already struggling householders.
We categorically do not support any form of VAT increase, as it places an unfair burden on those who are already struggling to make ends meet.
The organisation called on stakeholders to consider progressive tax reforms instead of increasing VAT.
Instead, we urge the Minister and members of the GNU to explore alternative, progressive tax reforms that target wealthier individuals and corporations, who have the capacity to contribute more to the country’s fiscal needs.
They further called for improved job creation initiatives, clarity on the long-term future of the SRD grant and the introduction of basic income support.
