Cracking Down, Building Up: Inside Treasury’s Bold 2025 Budget
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The National Treasury’s 2025 Budget Vote speeches by Minister Enoch Godongwana and Deputy Minister Ashor Sarupen outlined government’s strategy to restore public trust, drive economic growth, and tackle fiscal risks. Here's a plain-language summary with key points that matter for accountants:
Budget Allocation and Priorities
The total Treasury budget is R91.8 billion for 2025/26 (excluding direct charges). Nearly 50% (R45.7 billion) goes to SARS to boost tax collection, implement e-invoicing for VAT, and upgrade customs infrastructure.
Other spending:
R3.4 billion on employee compensation
R6.9 billion on goods/services
R89 million on payment of capital assets
R78.5 billion on transfers/subsidies
and R2.786 billion on payment for financial assets.
Key Strategies & Reforms
Disaster Risk Finance
Climate-related disasters are increasingly placing pressure on public finances, forcing government to redirect funds from essential services to emergency response. To address this, the National Treasury will launch a National Disaster Risk Financing Strategy aimed at shifting from reactive spending to proactive planning. This strategy will include the introduction of climate insurance products, improvements in disaster planning within municipal grant frameworks, and support for departments and municipalities to integrate climate-risk considerations into their financial planning and investment decisions. The goal is to reduce both the financial and human costs of climate events through smarter, forward-looking budgeting.
Fixing Municipal Finances
Many municipalities are financially broken. Treasury is enforcing:
Funded budgets only (no wishful planning)
Revenue collection and billing system reforms
Capacity building for CFOs and budget managers
Tailored financial recovery plans
Transparent reporting using mSCOA
Real consequences for financial misconduct.
Metro Services Reform (Water Focus)
In an effort to stabilise essential services, particularly water, metros will now be required to produce separate financial statements for each trading service. This move aims to bring transparency to the financial health of services and improve accountability. Metros must also submit turnaround strategies and institutional reform plans. To encourage compliance and progress, performance-based financial incentives will be offered. These grants will help attract loan financing and private investment, supporting long-term infrastructure upgrades.
Public Infrastructure Drive
Government has committed to spending over R1 trillion on public infrastructure over the next three years, making it the fastest-growing area of expenditure. To support this investment, new public-private partnership (PPP) regulations came into effect in June 2025, reducing red tape and making it easier for the private sector to participate. A new, centralised Treasury unit will oversee project preparation, provide PPP support, and coordinate investments for maximum impact.
Auditing Profession Overhaul
Changes to the Auditing Profession Act will:
Allow audit firm rotation
Improve IRBA’s power and funding
Enable recognition of foreign qualifications
Boost transparency and enforcement.
Fiscal and Economic Oversight
Spending Reviews
Treasury plans to cut waste via audits of:
Ghost workers in public service
Underperforming infrastructure grants
Excessive board/executive pay in public entities
Inflation Target Review
Treasury is consulting on possibly lowering SA’s inflation target, with careful economic and political consideration.
Procurement Overhaul
A new Procurement Act will be introduced to ensure fairness, transparency, and transformation. Draft regulations come in August 2025.
Anti-Corruption & State Capture Recovery
Efforts to recover funds lost to state capture are showing results, with SARS having already reclaimed R4.8 billion in unpaid taxes linked to corrupt activities. To strengthen accountability, a central register has been established to track officials who resigned while facing disciplinary action, ensuring they can’t quietly re-enter public service. In addition, a new General Laws Bill is being finalised to bolster South Africa’s ability to combat money laundering, terrorism financing, and other illicit financial flows. These measures form part of a broader strategy to clean up public finances and restore trust in government institutions.
Bottom Line for Accountants
Whether you're advising clients or managing company finances, these reforms mean:
More scrutiny at local level—accountants will be central to rebuilding municipal credibility
More infrastructure deals and PPPs—opportunities for advisory, tax, and compliance services
Higher demand for transparency and reporting—the audit and finance professions are front and centre
📌 For the full budget documents and updates, visit www.treasury.gov.za
