# summary

- Link: https://dearsouthafrica.co.za/budget-tips-2026/summary/
- Published: 2026-02-02T18:30:08+02:00
- Author: dearSA

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The 2026 Budget Speech (25 February)

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2026 Budget Speech delivered by Minister Enoch Godongwana

### _Budget 2026: Where the Minister Listened, and Where the Battle Continues_

The 2026 Budget Speech has officially been tabled by Finance Minister Enoch Godongwana.
For the thousands of active citizens who participated in our “Budget Tips 2026” 
campaign, the question is simple: _Did the government actually listen to the 4,023
submissions sent through our platform?_

The answer is a resounding yes in some critical areas—including a massive, direct
victory for small businesses—but it also highlights stark ideological divides where
public pressure must urgently continue.

Here is the definitive breakdown of how your Budget Tips stacked up against the 
National Treasury’s 2026 allocations.

[The Big Win: The R2.3 Million VAT Threshold](https://dearsouthafrica.co.za/budget-tips-2026/summary/#1763554389233-fdb8fee6-6da4dd2d-6849)

The most direct and celebrated alignment between public demand and government action
was the adjustment of the compulsory VAT registration threshold.

During our campaign, a targeted proposal was submitted to raise the threshold from
R1 million to R2.3 million to account for 17 years of inflation and protect the 
razor-thin margins of SMMEs. The Minister not only implemented this change but explicitly
cited a “tip from the public” as the catalyst. Effective 1 April 2026, the threshold
is officially R2.3 million—a massive victory that proves well-researched, data-driven
public participation can rewrite national policy.

[Alignment: Conditional Municipal Funding](https://dearsouthafrica.co.za/budget-tips-2026/summary/#1763554389265-aa09206a-7766dd2d-6849)

**What the Public Demanded:** Participants were unequivocal that municipal funding
must be strictly conditional. Citizens demanded an end to unconditional bailouts,
asking that allocations be tied to actual performance, maintenance of aging water
infrastructure, and payment compliance with bulk suppliers like Eskom.

**What the Minister Delivered:** Treasury heard this call. The Minister announced
a R27.7 billion performance-linked reform for metro trading services (electricity,
water, sanitation, and solid waste). This marks a significant shift away from blank
checks, mirroring the public’s demand to enforce accountability at the local government
level.

[The Disconnect: State-Owned Enterprises (SOEs)](https://dearsouthafrica.co.za/budget-tips-2026/summary/#1763554389298-fbc55a3c-817cdd2d-6849)

**What the Public Demanded:** The consensus on DearSouthAfrica was loud and clear:
stop the bailouts, aggressively privatise failing entities, and replace cadre deployment
with merit-based appointments. Citizens view SOEs as a primary drain on the fiscus.

**What the Minister Delivered:** The Treasury remains committed to a state-led recovery
model. While the Minister praised structural reforms under Operation Vulindela, 
he avoided any mention of wholesale privatisation. Furthermore, instead of cutting
off funding, he announced a R5.8 billion allocation for PRASA’s rolling stock fleet
renewal. The ideological clash here remains unresolved.

[The Elephant in the Room: Government Spending](https://dearsouthafrica.co.za/budget-tips-2026/summary/#1770123537714-89210f95-b798)

**What the Public Demanded:** “Government spending” was the single most dominant
issue in our report. Citizens demanded drastic cuts to the bloated cabinet, the 
removal of VIP blue-light brigades, and the alignment of the public wage bill with
private-sector realities.

**What the Minister Delivered:** The Minister proudly noted that for the first time
in 17 years, the national debt will stabilise and the budget deficit has narrowed.
However, there was zero mention of reducing the size of the executive or cutting
administrative perks. Efficiency was found elsewhere, such as an enhanced authentication
process for social grants expected to yield R3 billion in savings by reducing fraud,
but the executive wage bill remains largely untouched.

[A Mixed Bag: Taxation and Levies](https://dearsouthafrica.co.za/budget-tips-2026/summary/#1772036340227-3811e884-e62d)

**What the Public Demanded:** Respondents expressed that the shrinking formal tax
base is “bleeding.” The overwhelming suggestion was to broaden the tax net—targeting
the informal sector and un-taxed industries—rather than squeezing existing taxpayers.

**What the Minister Delivered:** The Minister offered some relief for savers by 
increasing the tax-free annual investment limit to R46,000 and raising retirement
fund deductions. However, this was countered by increases across the board for the
general fuel levy, the carbon fuel levy, and the Road Accident Fund levy. While 
income tax wasn’t hiked, the cost of living and transport will directly increase
for the very households pleading for relief.

[The Verdict: Participation Works](https://dearsouthafrica.co.za/budget-tips-2026/summary/#1772036372498-6d3a7f95-1096)

The 2026 Budget proves that the wall between the public and the policymakers is 
not impenetrable. The R2.3 million VAT threshold victory and the shift toward performance-
linked municipal funding show that when citizens provide specific, practical solutions,
the government can be forced to act.

However, the continued funding of SOEs and the bloated executive wage bill remind
us that our work is far from over. We don’t just watch the budget; we must continue
to shape it.

Public participation report – with all public comments

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This report was delivered to The National Treasury on 17 February 2026.

If you see value in what we do, please chip in – even a small amount helps tremendously.

[ click here to chip in](https://dearsouthafrica.co.za/thankyou/)

[ have a say](https://dearsouthafrica.co.za/budget-tips-2026/#havasay)

### _Questions and answers _

_thank you [PMG](https://pmg.org.za/blog/Budget%20Tips%202026:%20why%20you%20should%20participate%20and%20how%20your%20input%20is%20used)
for this content_

[What does the Treasury do with the input received?](https://dearsouthafrica.co.za/budget-tips-2026/summary/#1772036167500-8bb8e410-a823)

Every input is read and 10 of the most impactful tips are selected. These are sent
to one of the divisions within the National Treasury that are responsible for the
Budget, where a further selection of 5 tips is made. These are then sent to the 
Ministry where one winning tip is selected. The tip would then be included in the
Minister’s speech and the winner mentioned in the speech.

[Why should South Africans participate in this process?](https://dearsouthafrica.co.za/budget-tips-2026/summary/#1772036167545-f2322d5e-4d37)

To voice their opinions and make their voices heard on issues of national importance
and budget allocations. The Budget affects each and every citizen. Their participation
also contributes to the rankings South Africa receives in various indices in which
it participates, such as the Open Budget Index which has public participation. National
Treasury uses the tips and any other platform to reach out to the public.

[Having analysed the input received over the years, what can you comment about?](https://dearsouthafrica.co.za/budget-tips-2026/summary/#1772036167590-3483d1c9-5c3b)

a) the types of issues and priorities South Africans raise:

**Response:** They are often focused on frontline service delivery areas of the 
budget—and any topical issue at the time. Among others, South Africans want to see
a Budget that works for the people; more allocations for health and education; tax
relief for businesses and individuals, to name but a few. Some people also use the
platform to share their struggles with ministers and request that they make a budget
to meet their needs, while others send advice to ministers. In a recent media statement,
the Treasury highlighted certain areas where people should submit their budget tips
on, including:

    - government spending priorities
    - addressing a large budget deficit
    - stabilising State-Owned Entity finances
    - energy funding solutions
    - tax revenues
    - debt sustainability
    - municipal finances
    - any other economy-related topics

b) budget literacy in South Africa:

**Response:** It is one very important part of public participation. With a higher
budget literacy in a country, public participation yields better results. In that
regard, Vulekamali Phase 2 has a particular focus on that- enhancing citizens’ budget
literacy. The public can use this platform to interact with budget information: 
[South African Government Budgets 2024-25 – vulekamali.](https://vulekamali.gov.za/)

[Are there other opportunities to participate in the budget process? (this Q and A was developed by PMG)](https://dearsouthafrica.co.za/budget-tips-2026/summary/#1772036167631-d122f0b7-3053)

Response: The Budget presented by the Minister is not the final budget but a proposal
that has to be scrutinised and approved by Parliament.

The Finance and Appropriations committees in both Houses first consider and hold
hearings on the fiscal framework and the Division of Revenue and Revenue Proposals.
When these are adopted by Parliament, portfolio and select committees consider the
various departmental allocations. The NA debates each budget in extended public 
committees (EPCs).

The law specifically makes provision for public participation in this stage, which
allows for the input of civil society and interest groups in the legislative process.
Parliament typically passes the budget four months after the start of the financial
year. The adjustments budget is introduced six months into the financial year and
provides for any adjustments to departmental budgets. Once the budget has been passed,
funds can be allocated to government departments and other entities, and implementation
of government plans and projects can begin.

Lastly, after the budget is presented, the National Treasury distributes the People’s
Guide to the Budget, which can be accessed on the National Treasuries [website](https://www.treasury.gov.za/).

Budget review 2025

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### _In the News_

    - Polity — [Minister Enoch Godongwana calls for budget tips submissions](https://www.polity.org.za/article/minister-enoch-godongwana-calls-for-budget-tips-submissions-2026-01-21)
    - SA News — [Public called to share ideas for 2026 Budget](https://www.sanews.gov.za/south-africa/public-called-share-ideas-2026-budget)
    - ZuluLand Observer — [Have your say – Treasury calls for 2026 budget input](https://www.citizen.co.za/zululand-observer/news-headlines/local-news/2026/01/20/have-your-say-treasury-calls-for-2026-budget-input/)
    - Cape Times — [Finance Minister calls on South Africans to share ideas ahead of 2026 budget](https://capetimes.co.za/business/2026-01-23-finance-minister-calls-on-south-africans-to-share-ideas-ahead-of-2026-budget/)

Interested in finding out how the South African budget process works? Learn about
the budget process, how it relates to our constitution and the role that it plays
in a modern day

Find out why the national budget is important to all South Africans, and how vulekamali.
gov.za can help you explore and understand the budget.

### _Statements and media releases_

Click on a logo to view.

Want to display your organisation’s statement? [Click here. ](https://dearsouthafrica.co.za/budget-tips-2026/summary/ budgettips@dearsouthafrica.co.za?subject=org info for Budget tips info page)

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### Cape Independence Party

 **CAPEXIT Party strongly opposes the Business Licensing Bill in its entirety on
all points:**

**Preferential licensing**
 The Bill explicitly empowers the Minister to grant licences
on a “preferential” basis and to impose conditions that advance “historically disadvantaged
individuals” or other designated groups. This is nothing less than state-sanctioned
racial and ideological discrimination dressed up as transformation policy.

CAPEXIT rejects the notion that the state has any legitimate role in deciding which
racial or social group may or may not operate a business. Such preferential licensing
will:

    - Reintroduce apartheid-era economic controls under a new ideological banner;
    - Create a cronyist system where access to markets is determined by political
      connections and demographic criteria rather than merit, innovation or consumer
      demand;
    - Discourage both domestic and foreign investment, as investors will rightly
      fear that their businesses can be denied licences or subjected to arbitrary
      conditions on racial or political grounds.

No free society licenses businesses on the basis of the owner’s skin colour or historical
narrative. This clause alone renders the entire Bill unconstitutional and morally
indefensible.

**Principles of business licensing**
 The Bill fails to articulate any coherent,
objective, or proportionate principle for requiring a general business licence in
the first place. Instead, it presumes that every enterprise – from a street vendor
to a multinational corporation – must seek prior permission from the state simply
to exist and trade.

This reverses the fundamental principle of a free economy: citizens should be free
to engage in lawful economic activity without state permission unless there is a
clear, evidence-based justification (e.g. public health, safety or environmental
protection).

The Bill provides no such justification. It is a blanket assault on economic freedom,
reminiscent of the licence-permit raj that crippled India’s economy for decades.
Requiring a general “business licence” in addition to existing sector-specific permits(
liquor, health, zoning, etc.) serves no legitimate public purpose – only the purpose
of expanding state control and creating new opportunities for rent-seeking and corruption.

**Powers of inspectors**
 The Bill grants inspectors extraordinarily broad and invasive
powers, including warrantless entry into private premises, seizure of documents 
and goods, and the ability to close businesses on the spot. These powers are ripe
for abuse and will be weaponised against political opponents, non-compliant businesses,
and any entrepreneur who refuses to pay bribes.

In a country already plagued by corruption scandals, handing unelected officials
the power to enter and shut down businesses without judicial oversight is an open
invitation to extortion. Small businesses, spaza shops, and informal traders – many
of them immigrant-owned – will be particularly vulnerable to harassment and shakedowns.
Far from promoting transformation, this will simply create a new class of “licence
inspectors” who enrich themselves at the expense of the poor.

**More red tape**
 South Africa already ranks poorly on the World Bank’s Ease of
Doing Business index, largely because of regulatory overreach. This Bill adds yet
another layer of costly, time-consuming bureaucracy on top of SARS registration,
municipal permits, B-BBEE compliance, UIF, COIDA, sector SETA requirements, and 
dozens of other licences.

The compliance costs – application fees, mandatory consultations, endless paperwork,
and the risk of arbitrary refusal – will crush startups and force thousands of small
businesses to close or remain informal. Jobs will be lost, investment will flee,
and the tax base will shrink. The Western Cape, which has consistently outperformed
the rest of South Africa precisely because of lighter and more efficient regulation,
will see its competitive advantage deliberately sabotaged by Pretoria.

**Conclusion**
 The Business Licensing Bill is not reform – it is economic sabotage.
It centralises power in the hands of an already overreaching and underperforming
national government, reintroduces racial criteria into commerce, and erects new 
barriers to entrepreneurship at a time when South Africa desperately needs growth
and jobs.

CAPEXIT calls for the complete withdrawal of this Bill. The people of the Western
Cape, and indeed all South Africans who believe in freedom, will not accept a return
to a permit-based economy controlled by bureaucrats and political gatekeepers.

For a free, prosperous, and non-racial future, this Bill must be rejected in its
entirety.