South Africa's Finance Minister Enoch Godongwana prepares to present the 2026 national budget at Cape Town City Hall today at 14:00 SAST. Coalition partners in the government of national unity (GNU) have voiced clear expectations, focusing on avoiding tax hikes and prioritizing efficient spending. This follows last year's negotiations, where a proposed 2% VAT increase was ultimately dropped after multiple budget drafts.

Parties stress the need for fiscal discipline amid rising debt costs and economic pressures. The Democratic Alliance (DA) and Inkatha Freedom Party (IFP) lead the calls for reforms that support households and businesses without adding financial strain.

DA Pushes for Tax Relief and Spending Reforms

The DA, as the second-largest GNU member, insists on no increases in personal income tax, corporate tax, or VAT in the South Africa 2026 budget. Spokesperson Mark Burke stated that South Africans face excessive taxation and called for inflation-adjusted tax brackets and rebates to prevent "stealth taxes." He emphasized shifting discussions from raising taxes to reducing them soon.

Burke highlighted the urgency of stabilizing the debt-to-GDP ratio, which National Treasury committed to declining this year after rises since 2008. Debt service now consumes 22 cents of every rand, crowding out funds for health, education, and policing. The DA also demands action on state-owned enterprises' debt, noting Transnet's R145.8 billion in guarantees last year.

Reforms must target wasteful spending, such as identifying ghost workers and cutting underperforming programs. Burke criticized protecting "ANC pet projects" that cost billions with little return. Instead, the budget should enhance the tax system to aid small businesses through lower administrative burdens and targeted incentives.

IFP Focuses on Social Protection and Infrastructure

The IFP urges the South Africa 2026 budget to advance frontline services and pro-poor policies. Spokesperson Nhlanhla Hadebe called for increased investments in early childhood education, teacher hiring, and foundational learning to build a competitive nation. He also advocated securing positions for doctors, nurses, and specialists to ensure reliable healthcare.

Social grants must align with rising living costs to relieve vulnerable households, Hadebe added. The party supports sustaining the R1 trillion multi-year infrastructure program for job creation, especially among youth, and economic revitalization.

ANC and Broader Expectations

The African National Congress (ANC) expects the South Africa 2026 budget to consolidate fiscal stability and accelerate reforms in electricity, logistics, water, and industry for inclusive growth and jobs. With projected growth up to 2% by 2028, the party wants expanded social protection without reduced services.

Analysts predict no major tax shifts, with revenue boosted through enforcement and efficiency. Economists foresee a lower deficit at 4.4% of GDP, aided by higher tax collections and underspending. However, tough trade-offs loom in a tight fiscal environment.

Implications for South Africa's Economy

A stable South Africa 2026 budget could strengthen the rand, which firmed ahead of the speech due to optimistic fiscal outlooks. Higher tax revenues from a stronger economy provide room for infrastructure without hikes. Yet, experts caution that giveaways might slow interest rate cuts.

The GNU's unity will be tested, building on last year's compromises. Stakeholders hope for a single, fair budget iteration to avoid delays.