Finance Minister Enoch Godongwana said the government has found R38.1 billion in savings over the medium term. He announced this on Wednesday while delivering the Medium-Term Budget Policy Statement in Parliament.
According to SAnews, the savings cover the 2027 Medium-Term Expenditure Framework period. They come on top of R12 billion in savings identified in the 2026 Budget.
“We are also restructuring underperforming and inefficient programmes, and reducing administrative inefficiencies and fraud in programmes,” the minister said.
Godongwana said the government is phasing out programmes that no longer serve their purpose. The government said it wants to move away from budgets that simply grow each year. Instead, it said spending decisions should be based on results, affordability and value for money.
The largest share, R13 billion, is expected to come from reducing fraud in social grants. A further R11.7 billion will come from low-priority programmes in national departments. That amount also includes steps to cut duplication and wasted admin work.
The government said R7.8 billion will come from the human settlements development grant. According to the budget statement, poor running of the programme and rent-seeking meant less money went to building houses. Another R5.5 billion will come from surplus cash held by public entities.
Godongwana said provinces could also find savings in their own budgets. As an example, he said better pay policies for healthcare workers could help provinces hire more health professionals.
National Treasury said programmes are checked using the same set of questions. These include whether a programme is required by law, whether it matches policy priorities and whether it delivers measurable results. Treasury said it also looks at long-running underspending and whether the same goal could be reached at a lower cost.
“Government will continue to reduce leakage and fraud by improving administration and verification, redesigning programmes that fail to meet their objectives, redirecting funds from low priority, inefficient or duplicated activities and addressing accumulated cash surpluses in public entities,” National Treasury said.
Treasury said the savings have been moved to other areas of spending. Godongwana said extra revenue in 2026/27 means the government can spend R45.5 billion more than announced in February.
The 2026 Adjustments Appropriation Bill proposes adding R10.6 billion to spending. This includes R6.2 billion for unforeseen costs, mostly disaster relief, and R1.9 billion rolled over from last year. Another R2.2 billion is set aside for early retirement and voluntary exit packages for qualifying public servants.
The adjustments also include R823 million for the South African National Defence Force. The soldiers will help police fight gang crime and illegal mining. A further R516 million goes to the Madlanga, Khampepe and Nkabinde commissions of inquiry.
Treasury said R10 billion of the extra revenue will go to the contingency reserve for the El Niño response and other risks. It said R150 million will help the digital services unit build the MyMzansi app. The app is meant to let citizens reach government services on one digital platform.
A separate Special Appropriation Bill for 2026/27 proposes R6.9 billion, mainly for the South African Revenue Service. Treasury said R20 billion has been set aside for infrastructure projects still being assessed by the Budget Facility for Infrastructure.
Source: this article is based on reporting by SAnews.gov.za. Image: GCIS via SAnews.gov.za. Written with the help of AI and published by the Tzaneen Voice News desk. See our Editorial Standards.
Kgomotso Maake covers news and politics for Tzaneen Voice. Kgomotso reports on government, Parliament, municipalities, courts, crime and service delivery across South Africa, with a close eye on how national decisions reach towns like Tzaneen and the wider Limpopo province. Stories are written in plain English and focus on the facts: who made the decision, what it means, and what happens next.