The IEJ submitted the following comments on the Revised Fiscal Framework and Revenue Proposals to further progressive fiscal reform.
Reclaiming Fiscal Policy for Social and Economic Justice
The Institute for Economic Justice (IEJ) has submitted a comprehensive response to the 2025 Fiscal Framework and Revenue Proposals, urging Parliament to reject austerity measures and adopt a progressive fiscal reform agenda. This submission, made ahead of the public hearings, calls for a fiscal strategy that centres economic inclusion, constitutional obligations, and the right to socio-economic development.
The 2025 National Budget presents a critical moment: for the first time in recent years, Parliament is actively engaging with the budget process. This must signal the end of the Treasury’s failed fiscal consolidation approach. Repealing the proposed VAT increase offers an opportunity to shift away from deep spending cuts and towards a more equitable and transformative fiscal policy.
The IEJ warns that Treasury’s current debt-reduction strategy is ineffective, as it continues to suppress developmental spending and choke economic growth. Public investment remains below what is needed to meet infrastructure goals, while social protection remains underfunded, impacting poor and working-class households the most.
Revenue mobilisation must be approached progressively. The proposed freeze on personal income tax brackets, along with increases in the general fuel levy, will disproportionately burden low-income households. Meanwhile, untapped revenue options—like reinstating the corporate income tax rate, taxing high-net-worth individuals, and leveraging the Gold and Foreign Exchange Contingency Reserve Account—remain overlooked.
Social spending is also falling short. While increases in education and healthcare budgets are welcome, they remain below pre-Covid levels and fail to meet the growing demand for public services. Women, in particular, bear the brunt of this underinvestment as they fill service gaps with unpaid labour.
The IEJ’s submission makes clear recommendations: reject regressive tax proposals, invest in progressive revenue tools, strengthen SARS’ capacity, and mandate Treasury to explore wealth taxes. Most critically, Parliament must hold Treasury accountable and ensure fiscal policy aligns with constitutional and developmental priorities.