Finance Minister Enoch Godongwana has boosted the health budget to support the equitable provision of public health services including free primary healthcare. During his budget speech on Wednesday, Godongwana said R28.9 billion has been added to the health budget to keep 9 300 healthcare workers in public hospitals and clinics.
Here’s what civil society thinks of the health budget allocation.
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Section 27 welcomes the budget and believes that the health department has been allocated its highest allocation since the COVID-19 pandemic. The health budget enjoyed a 7.8% increase from last year’s R277.2 billion to R298.9 billion.
This allocation places real investment behind promises to widen the access to quality health care in our country. Translating to a real increase of 3% after accounting for the CPI inflation for 2025/26 of 4.7%, this is the first time we have seen a real investment in health since the 2021/22 Budget. Due to the increase in population numbers and inflationary effects, healthcare spending per user increases in nominal terms from R5 345.71 to R5 511.60 but decreases from R5 595 to R5 512 in real terms.
Health inflation has historically tended well above inflation, which should be considered when engaging budget allocations.
Good news for the Health Facility Revitalisation Grant – which upgrades failing clinics and hospitals – as it sees its first nominal increase of 1.2%, its first increase since the 2023/24 cost containment measures that cut its budget by 5.2% (R440 million) and 2024/25’s cut of R1.2 billion.
Though this is a real decrease, it is an improvement to funding patterns of the past. In the context of clinics and hospitals damaged by storms and other extreme weather events, resourcing provinces to repair damaged health facilities may chart one step forward in more climate-resilient healthcare facilities.
Meanwhile, compensation for healthcare workers has received a welcomed increase to R194 billion from R179 billion – an 8.2% increase that could aid in addressing staff shortages. This is but one step as there is uncertainty over whether all unplaced medical graduates will be absorbed.
Rural Health Advocacy Project (RHAP) Executive Director Russell Rensburg says he is delighted that calls from the organisation did not fall on deaf ears.
“While the government has the delicate task of balancing the financial pressures that the country faces, the government has a constitutional obligation to alleviate the plight of the millions of people who depend on their services, particularly for healthcare, education and social services.”
“Minister Godongwana sends out a positive message with his healthcare allocations, signalling to the masses that this government cares,” says Rensburg.
The allocations would lay a foundation for the broader plan to strengthen public-funded health services going forward.
VAT increase an unfair burden
Sector 27: While this budget marks an important step in expanding access to health care, the reliance on a VAT increase to fund it places an unfair burden on lower-income households, making the path to universal health coverage more costly for those who can least afford it.
Healthy Living Alliance (HEALA): The decision to hike the value-added tax (VAT) instead of increasing the Health Promotion Levy (HPL) flies in the face of scientific evidence, which shows that the increase of the HPL is vital life-saving intervention and an easy way to boost the fiscus. Godongwana has shown complete contempt for ordinary people living in South Africa.
The proposed increase in VAT is a regressive measure. Indeed, leading voices on tax justice have indicated how its increase will bring thousands, if not close to millions, in our country closer to poverty and economic disaster.
We have lost an opportunity to save the lives of thousands of South Africans. We have lost the opportunity to protect the most vulnerable amongst us, the poor. Since its inception in 2018, the levy has contributed R10bn to the fiscus and has the potential to do more. This is money which could be spent on various health promotion interventions.
The decision to implement a further moratorium after the Finance Minister’s decision in 2023 to place a two-year moratorium on an increase of the HPL points to the government’s leniency to the sugar industry and its continued decision to pander to minority interests.
It is very clear that the sugar industry is being treated with kid gloves. This is despite evidence of mismanagement and graft which has caused more damage to the industry than the HPL ever could. We demand the Treasury to reevaluate its decision and follow the science.
HEALA CEO Nzama Mbalati says: “We all are experiencing non-communicable diseases in one way or the other. Either oneself, relative, family member, friend, colleague are who is living or have lost their lives due to diabetes, heart diseases or cancer. It has become clear to the Minister of Finance that the lives and livelihoods of South Africans are less important than the profits of the sugar industry. It is obvious that the sugar industry, like its counterparts in the alcohol and tobacco industry, will continue to disregard the effects their products have on South Africans.”
Increased tax on alcohol and tobacco
Health Tax Alliance: The Health Tax Alliance welcomes the above-inflation increases for both alcohol and tobacco products in the 2025 budget, noting that these would start to relieve the pressure on the public health system. According to the budget review document, tobacco excise duties will increase by 4.75% for cigarettes, cigarette tobacco and electronic nicotine and non-nicotine delivery systems, more commonly known as vapes. And the government proposes to increase excise duties on alcoholic beverages by 6.75 percent for 2025/26.
Currently tobacco taxes, as a percentage of the retail selling price, sits at 40%. The increase is a move in the right direction. But it is still a long way from the World Health Organisation (WHO) recommended 70% of the retail price.
Last year, the National Treasury raised excise duties on alcohol by between 6.7 and 7.2% while duties on tobacco products increased by between 4.7 and 8.2%.
Member of Health Tax Alliance Aadielah Maker Diedericks believes that despite the significant tax increases on alcohol, it still falls short from WHO’s recommendation.
“SA needs to learn from the International best practice and introduce minimum unit pricing (MUP) as a measure to reduce heavy consumption,” she says.
Rensburg, who is also a member of the Health Tax Alliance, says the increases are a step in the right direction.
“Increasing these taxes will drive a reduction in the use of these products and that would mean less people get ill and put pressure on the health system.
“But it is not clear that the R1 billion in revenue that will be generated from the increases in duties on alcohol and tobacco will be used to navigate the costs that tobacco and alcohol cost the health system,” he says.
Finance minister mum on USAID gaps
TB Accountability Consortium: The TB Accountability Consortium is disappointed that Finance Minister Enoch Godongwana has failed to account for the additional finances required to cover the activities that were sponsored by funding from the US government that have now been withdrawn.
If this funding gap is not addressed, critical support in the provision of HIV and TB services in South Africa will be crippled.
There are about 280 000 people estimated to have TB each year and it remains the biggest infectious disease killer.
Just under 60% of people with TB are co-infected with HIV. The aid that was halted from the US President’s Emergency Plan for AIDS Relief (PEPFAR) funds 17% of HIV and TB services in South Africa, and amounts to about R7 billion.
It covers the salaries for 15 000 health workers, of which 8000 are community health workers, 2000 are nurses and 300 are doctors.
In his State of the Nation address in February President Cyril Ramaphosa noted with concern the funding gap and announced that the government was looking at “various interventions to address the immediate needs and ensure the continuity of essential services”.
The health sector has anticipated details of a programme to transition the services. However, in delivering his budget speech Godongwana remained mum on the US aid gaps.
Godongwana acknowledged the pressures on the health system and offered a R28 Million bail out to the health sector.
TBAC Coordinator Sihle Mahonga-Ndawonde said that while the consortium welcomes the additional investments in health, it was concerned that the PEPFAR funding gap had not been addressed.
“It is critical that the government provide guidance on how these services will be covered. Millions of people rely on this lifesaving treatment,” she says.
