Treasury’s Budget revisions may leave health and education under strain — civil society

The National Health Council has approved R1.78bn in spending to hire 1,650 public health workers. (Photo: Felix Dlangamandla)

By Siyabonga Goni and Tamsin Metelerkamp

22 May 2025

Finance Minister Enoch Godongwana’s latest Budget slashes billions from proposed education and health funding, raising alarm among experts. With teaching posts at risk and hospitals under pressure, civil society says the Budget fails to meet the urgent demands of two of South Africa’s most critical public sectors.

Minister of Finance Enoch Godongwana’s 2025 Budget speech 3.0, delivered on Wednesday, 21 May 2025, seemed to emphasise covering funding shortfalls in the public health and education systems. However, allocations for both sectors have been cut down from those proposed in March.

While civil society leaders from the health and education sectors are cautiously optimistic about some funding priorities in the 2025 Budget, there remain concerns about whether the allocations address longstanding constraints and structural problems in these key service areas.

Godongwana on education

Godongwana has trimmed the basic education allocation for 2025/26 to R329.2-billion, down from the R332-billion proposed in March. The broader learning and culture sector also sees a cut, dropping from R508.7-billion to R505.6-billion. These reductions come at a time when public schools continue to grapple with overcrowding, infrastructure decay, and poor learning outcomes.

Provincial education departments, already stretched thin, are now under even more pressure as funding for teaching posts is slashed to R9.5-billion — less than half of the R19.1-billion initially earmarked to support 11,000 positions. KwaZulu-Natal faces the threat of losing up to 19,000 posts, while the Western Cape began the year with more than 2,400 contract teachers cut.

Read more: Call to action against Western Cape teacher job cuts, while MEC Maynier says situation is ‘critical’

An additional R10-billion that was allocated in the previous Budget remained unchanged for Early Childhood Development (ECD) that will see an increase of the subsidy from R17 to R24 per day per child.

Other allocations that remain the same for the 2025/26 Budget expenditure on education is as follows:

4-billion for the National Student Financial Aid Scheme (NSFAS).

4-billion for university transfers.

9-billion for the skills development levy.

6-billion for education administration.

2-billion for technical and vocational education and training.

Reaction on teacher posts

Education experts who spoke to Daily Maverick welcomed parts of the Budget but warned it would negatively affect teacher posts, leading to larger classroom sizes due to the reversal of the allocation proposed in March.

SECTION27’s Budget researcher, Mduduzi Nkosi, told Daily Maverick that South Africa already has a high teacher-to-learner ratio.

“This is especially in urban areas due to the migration some provinces are experiencing. This means those provinces will have no resources to cover the shortage of teachers they were initially meant to cover with the March Budget... There are not going to be many hirings in the sector, and that is a problem — the Treasury could have done better,” said Nkosi.

Mary Metcalfe of the National Planning Commission said the cuts were expected and that they would affect class sizes.

“Provinces would have been anticipating these reductions. It is unfortunate that this will have implications for class size, but what is essential is that we do not further reduce the number of teachers employed in the foundation phase of schooling, where class sizes are the highest,” she said.

Health There remain concerns about whether the Budget allocations address longstanding constraints and structural problems in the health sectort. (Photo: Felix Dlangamandla)

Metcalfe said that this was the time for the education department to plan rigorously and resolve internal efficiencies.

“The failure to properly report the development of literacy and numeracy in the foundation phase by investing in material and teacher support results in more learners proceeding into the intermediate phase and senior phase without skills, which contributes to failure.”

She added that the unchanged R10-billion allocation for ECD remained crucial in supporting children under six years old in centres mostly run by women with community support.

“It is critical that the subsidy is increased from what it was, which is R17 per child to R24 per child. The children that receive the subsidy are the most vulnerable, and so, in terms of ECD, this is needed,” said Metcalfe.

Nkosi also welcomed the subsidy increase to R24 per child per day, calling it a good start for a sector that had long been underfunded. He said this would go a long way in improving the nutritional and material needs of young children.

Higher education

The Department of Higher Education continues to face major setbacks, especially around student housing and wasteful expenditure. Earlier this year, protests erupted across campuses over accommodation shortages, made worse by NSFAS delays in paying both students and landlords.

Nkosi told Daily Maverick that more funding should have been allocated to higher education.

“The Treasury could have done better in allocating money, especially for the Funza Lushaka bursary, which has implications for basic education. So, the amounts allocated to this portfolio are not enough to cover the needs of the sector as it is,” he said.

Read more: Protests continue at UCT and Wits as students unite against housing and financial exclusion challenges

Godongwana on health

Godongwana emphasised the importance of addressing shortcomings in the health system in his Budget 3.0 speech, referencing an open letter by UCT medical student Sarah Stein on the emotional toll of working day after day in public hospitals without the basic resources needed to help people.

Read more: In the face of death amid a failing system — a student on what they don’t teach in medical school

“It is the reality that all of our efforts, as political parties, and as a government, must be concerned with, above all else,” said Godongwana.

The 2025 Budget has allocated a provincial health sector budget of R845-billion over the medium term.

“This budget will be increased by R20.8-billion over three years to employ 800 post-community service doctors and essential goods and services and reduction of accruals,” said Godongwana.

SECTION27 noted that for the first time since the Covid-19 pandemic, the health sector received a “long-overdue boost” in the form of a real increase in funding in the 2025 Budget.

The Budget shows an increase in total health spending from R277-billion in 2024/25 to R296-billion in 2025/26, growth of 2.5% in real terms.

“This equates to R5,460.71 per healthcare user in nominal terms, but a reduced R5,053.50 in real terms, reflecting that while the Budget grows, it still lags behind increasing demand for services,” said SECTION27.

“We welcome targeted allocations to improve public hospitals and clinics, but caution that these may still fall short given the scale of infrastructure collapse and the healthcare system’s burden.”

SECTION27 said that while above-inflation budgeting was “a step in the right direction”, future allocations should be guided by sector-specific benchmarks like education, health, and food price inflation to protect the real value of social spending.

“Unfortunately, the Health Facility Revitalisation Grant, which funds critical infrastructure in the health sector, receives only a 1.3% nominal increase in 2025/26. While this marks a welcome shift from years of nominal cuts, it still amounts to a 2.75% real-terms reduction — a disappointing outcome in the face of growing infrastructure backlogs and urgent service delivery needs,” SECTION27 said.

In the retracted Budget announced in March this year, health spending would have increased to R298.8-billion in 2025/26.

‘A Budget for the moment’

Russell Rensburg, director of the Rural Health Advocacy Project (RHAP), described Godongwana’s 2025 Budget as “a budget for the moment”, but said he would have welcomed more detail on how broader, structural issues within the health system would be addressed.

“I think the Budget does well in addressing some of their near-term priorities… (including) funding the public sector wage bill. Part of the problem that we have with provincial implementation at the moment has been triggered by the underfunding of previous wage increases… We recognise that at least now, going forward, they’ve allocated money to fund the increase,” said Rensburg.

“We welcome all the initiatives announced in the Budget — the increase for addressing the gaps in the CCMD (Central Chronic Medicines Dispensing and Distribution) programme; continuing to invest in single patient view and an electronic patient record, because these are critical to ensuring efficacy of spend and governance.

“We welcome the additional (human resources) that have been allocated, and as RHAP we hope that rural district hospital (community service placements) will be prioritised, because often those are the hardest posts to fill.”

However, Rensburg said that RHAP remained concerned about the lack of guidance on how the state would tackle the elimination of waste in the public health sector, particularly when it came to irregular, wasteful and fruitless expenditure.

“They spoke a lot about expenditure reviews, but there’s nothing in the Budget on how to approach expenditure reviews, and to what extent… We’ll look to the October Budget for future guidance,” he said.

‘Elephant in the room’

In his speech, Godongwana noted that despite additional allocations for frontline services in education, health and infrastructure, there were some “long-standing spending pressures” that couldn’t be funded within the current Budget envelope.

Among the spending pressures he said might require funding later in the year was the gap left by the withdrawal of the US President’s Emergency Plan for Aids Relief (Pepfar) funding, particularly through United States Agency for International Development (USAid).

Read more: ‘The axe has fallen’ — Trump’s USAid issues notices to terminate funding for key health programmes across SA

“Then the elephant in the room is the Pepfar withdrawal. Despite five months of negotiations and engagement, we’re nowhere close to a funded plan (to address it), and while the funding pressures are recognised, the (finance) minister doesn’t give us a date (for a funding allocation). He just says later in the year,” said Rensburg.

SECTION27 also flagged the lack of funding for the Pepfar gap as a problem, adding that cuts to HIV/Aids spending by 3.1% and Emergency Medical Services spending by 2.4% in the Budget were “deeply concerning”.

“While the HIV budget reduction reflects savings in procuring antiretroviral treatment, we urge the Treasury to reconsider in light of USAid’s recent decision to reduce support to South Africa. Any savings must be reinvested into strengthening the HIV response, including treatment literacy, support systems, services targeted at key populations, and improved health information infrastructure,” said SECTION27. DM

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