JUHI KASAN: A budget of betrayal — how fiscal policy is failing SA women

For millions of South Africans, whether struggling to keep up with the relentless rise in living costs or trapped in deep poverty, the recently tabled budget is more than just a series of numbers; it is a political statement that signals a continued disregard for the realities of austerity.

A half percentage point increase in VAT may seem negligible to the wealthiest 10% but for the majority, especially the poor majority who are already stretched to the limit, it amounts to a direct assault on survival. It will continue to force impossible choices between food, education, health and dignity, deepening poverty while offering little relief through meagre social grant increases.

This contested budget lays bare an undeniable truth: fiscal policy is never neutral. The details contained within the budget will determine who eats, who learns and who is left behind. By deepening economic precarity and shifting the burden onto society’s most vulnerable, the tabled budget is anti-poor, anti-women and a stark betrayal of the promises of gender-responsive budgeting.

In 2019 the cabinet approved the Gender-Responsive Budgeting Framework (GRBF) to ensure that public spending actively supports gender equity. The GRBF was designed to advance the constitutional vision of a non-sexist society by embedding women’s empowerment at the centre of public policy, planning and budgeting processes. 

Despite this commitment, the recent budget and fiscal framework deliberations make no mention of the GRBF. While the budget claims to support economic recovery and inclusion, it ultimately entrenches the structural barriers women face through regressive taxation, underfunded social services and stagnant social grants that fail to keep pace with the rising cost of living. While the National Treasury continues to prioritise fiscal consolidation it is women, especially those already living in poverty, who are left to absorb the fallout. It is largely women who will pay a larger share for basic goods, take on increased unpaid care responsibilities, and face growing financial insecurity. If SA is serious about achieving gender equality it must go beyond acknowledging disparities. It must reshape fiscal policy to actively dismantle them. 

According to the 2022 Women’s Report, VAT disproportionately affects women. This is because women overwhelmingly bear the responsibility of primary caregiving, often supporting not only their children but also other dependents within a household. Contrary to popular beliefs about male breadwinners, which assume that men are the primary financial providers within households, evidence suggests that women shoulder a greater share of household financial responsibilities despite earning less than men. For example, research indicates that black women are more likely than men to cover their children’s schooling expenses, highlighting the deep economic disparities that VAT increases only worsen.

The Pietermaritzburg Economic Justice & Dignity Group highlights the impact of the VAT increase on low-income households. A half percentage point VAT hike will push the total VAT on a basic grocery basket to about R335. Limited expansion of the zero-rated list, including items such as chicken feet and canned baked beans, offers potential savings of R59.46, but is contingent on retailers passing them on, something they failed to do after the previous VAT hike, according to the Treasury. These savings are therefore minimal compared with rising household costs. 

The VAT increase will also make it harder for households to afford basic utilities. Electricity price hikes will further compound the financial burden. Eskom’s 12.7% tariff increase in July will raise the cost of 350kWh of prepaid electricity by R115.18, with the VAT hike adding another R5.11. Just food and electricity increases will cost households about R20.41 more a month, with VAT on basic expenses exceeding R573.30 a month. In other words, for a domestic worker earning about R4,400, VAT alone consumes 13% of monthly income, further squeezing already overstretched resources.

These ill-advised measures come at a time when women’s economic position is fragile and precarious. The labour force participation rate for women stands at just 54%, compared with 65% for men. Even among those who are employed the gender wage gap persists, with women earning 20% less per hour and 32% less per month than men. The VAT hike will ultimately diminish already limited resources, further entrench inequality and reduce economic agency among women.

Regressive taxation

VAT increases are well documented as a regressive taxation policy that disproportionately affects the most vulnerable. A 2020 study on SA’s fiscal reforms found that VAT hikes and public spending cuts disproportionately harm women across all population groups, worsening poverty and economic insecurity. Using economic modelling to assess these policies, the study revealed that VAT increases push more households below the poverty line. With 46% of female-headed households in SA already living in poverty, a VAT hike will only deepen financial strain, making essentials even less affordable and worsening economic inequality. 

It is in this context that grants offer a lifeline to women. A total of 80% of social grant recipients are women, and since 2023 58% of female-headed households rely on a grant as their main source of income, making these payments a crucial survival net. However, the importance of grants is not adequately reflected in the tabled budget. The child support grant is not only a critical source of income for many mothers but often sustains entire households. Research has shown that the grant plays a vital role in reducing household poverty, improving child nutrition and enabling women to exert some financial autonomy.

Yet the child support grant remains at R560 a month — far below the food poverty line of R796 and lower than the R951 required for a basic nutritious diet. Similarly, the social relief of distress grant remains frozen at R370 per month. The net result is that women will inevitably absorb the rising cost of living while receiving inadequate state support, ultimately forcing impossible trade-offs between food, education and household essentials. This will worsen financial precarity, tighten the noose on economic security, erode independence and deepen cycles of poverty. 

The budget now making its way through parliament will not only deepen economic precarity but also intensify the burden of unpaid care work, which women in SA already perform at twice the rate of men. With socially assigned caregiving responsibilities and limited access to resources, women are disproportionately reliant on publicly provided services such as healthcare, education, electricity, water and public transport. Any cuts or stagnation in these essential services shift even more unpaid labour onto women, forcing them to fill the gaps left by an underfunded state. 

Though the budget proposes slight increases in healthcare and education, it falls far short of reversing a decade of austerity. According to the Institute for Economic Justice, healthcare spending per user in 2025/26 will still be R469 below pre-Covid levels, while education spending per pupil remains R657 lower than in 2019. These shortfalls will deepen staff shortages, widen infrastructure gaps and fail to meet rising service costs, forcing women to fill the gaps by providing unpaid care for sick family members, supporting children’s education at home and taking on additional responsibilities in underfunded public services. 

For the first time in SA’s democratic era the budget is being contested. Parliament must exercise its authority to amend the budget, ensuring that changes are guided by a critical analysis of its gendered effect. This is a crucial step in demonstrating a genuine commitment to implementing a gender-responsive budget.

• Kasan is Care Economies Project lead at the Institute for Economic Justice.