President Cyril Ramaphosa stated on Monday that the country’s expenditure on the social wage can only be sustained if there are higher levels of economic growth, which he said will come through infrastructure development.

In his latest letter to the nation, Ramaphosa pointed out that the 2025 Budget allocated up to R1-trillion for infrastructure over the medium term.

“…this includes the allocation in this Budget of an additional R62-billion over the next three years for road maintenance, electricity transmission lines, water and sanitation projects, school infrastructure and to support the ongoing recovery of our rail networks,” he said.

Once government’s debt repayments have been taken out, 61% of spending over the next three years has been allocated to the social wage, Ramaphosa said.

“This includes the provision of free primary healthcare, basic and tertiary education and housing. Over the past 24 years we have implemented an indigent policy under which free water, electricity and sanitation services are provided to qualifying households,” he said.

He noted that social grants were another tool for alleviating poverty, explaining that this year, the value of these grants would increase at above inflation.

He said the Social Relief of Distress Grant, which has played an important role in poverty alleviation, will also be extended for another year.

“As part of improving access to healthcare, there will be a higher allocation of funding to clinics and community health centres. We are investing in the recruitment and retention of health personnel, particularly doctors and nurses, and to employ newly qualified doctors after their community service ends,” Ramaphosa highlighted.

Support is also provided to other growth-enhancing measures in the medium term, such as incentive programmes in automotive, business process outsourcing, special economic zones, electric vehicle production, clothing and textiles and other sectors.

The 2025 Budget also adjusts allocations to municipalities to allow them to address their infrastructure needs, improve service delivery and improve their revenue collection systems.

“In a challenging economic environment – both locally and globally – this year’s Budget supports measures to drive growth and relieve the effects of poverty. At the same time, it aims to stabilise public finances and continue to reduce our national debt,” Ramaphosa said.

While the Budget reflects the priorities of the Government of National Unity’s (GNU’s) Medium Term Development Plan, substantial funds are also allocated to other frontline services such as teachers, police, emergency personnel and the Border Management Authority.

“Improving educational outcomes is key to community upliftment, development and producing the skills needed by our economy. Budgetary allocations have been made to support teacher training, for expanded mother-tongue bilingual education and for early reading programmes. This year sees a substantial investment in early childhood development, reflecting our commitment to establishing a solid foundation for the development of every child,” Ramaphosa said.

Additional funds had been allocated to public employment programmes, which he said helped in providing work opportunities during constrained economic growth.

Ramaphosa said funds had also been allocated to support small businesses, and that adjustments were being made to the Employee Tax Incentive to further incentivise businesses to hire more young people.