The Minister of Finance (MoF) delivered the Medium Term Budget Policy Statement (MTBPS), more commonly referred to as the “Mini-Budget” this afternoon. The MoF also tabled the various 2026 tax and revenue bills along with the Revised 2026/2027 Fiscal Framework and the 2026/2027 Adjusted Estimates of National Expenditure.
We have summarised the key information as follows:
Economic indicators
- 2026 GDP growth rate is revised to 1.2% which is lower than the projected 1.6% announced in this year’s Budget Speech delivered February.
- 2026 Inflation – revised to 4.4% Estimated to reduce to 3% in 2029 (3.8% in 2027 and 3.2% in 2028).
- 2026 main budget primary surplus of R80.8bn (1% of GDP – 0.2% higher than predicted) which is primarily due to higher-than-expected revenue collection.
- The main budget deficit of 3.7 per cent of GDP in the current year is forecast to decline to 2.5 per cent in 2029/30.
- Debt-to-GDP has stabilised at 78.4% and is projected to be at 78.2% in 2027, 77.9% in 2028 and 77.5% in 2029)
- “government will spend more on debt costs than it will on health, social development or basic education. To manage these costs down over time, the primary surplus will continue to grow”
- Debt-service costs in 2026/27 will be R9 billion higher than estimated
- Borrowing requirements increase by R54.2 billion due to the sum of the budget deficit, maturing loans and the GFECRA settlement
- Unemployment rate increased from 31.4% in Q4 of 2025 to 33.6%.
Revenue
- Tax and non-tax revenue and National Revenue Fund receipts are R54.1 billion above the 2026 Budget estimate
- Gross tax revenue collections for 2026/27 is revised up by R17.1 billion compared with the 2026 Budget estimate of R2.12 trillion to R2.14 trillion to R2.14 trillion in 2026/27 and project R2.53 trillion in 2029/30.
- The higher tax revenue collection is driven by:
- Provisional taxes collections from corporates grew by 17.4% with the mining sector being the highest contributor
- Increase in VAT collection due to resilient household spending and lower VAT refunds.
- The higher tax revenue collection is driven by:
- Fuel levy will be reduced by R3 per litre for diesel and R1.50 per litre for petrol from 4 November 2026 up until to 1 December 2026.
- Thereafter, the relief will continue at a lower amount until 5 January 2027. The diesel levy will be reduced by R1.50 per litre the petrol levy by R1 per litre.
- These measures will provide R10 billion in support, at a fiscal cost of R10 billion in foregone revenue
Spending
- Increasing the contingency reserve to R10 billion in 2026/27 for drought and El Niño response, and potential responses to additional energy price spikes
- Proposed upward adjustment of R10.6 billion in expenditure which includes rollovers of R1.9 billion from the previous financial year and unforeseeable and unavoidable expenditure of R6.2 billion, mostly for disaster relief
- Special Appropriation Bill allocating R6.9 billion to SARS
Public sector wage bill
-
Ghost workers audit has successfully flagged 4 323 high-risk, suspicious cases in the payroll system
- The early retirement programme has been rolled out (Phase 1 and 2) and is projected to realise net savings of R4.3 billion in 2027/28, R4.4 billion in 2028/29 and R4.6 billion in 2029/30
Overall the MTBPS is a stabilising but highly cautious address. While it offers temporary relief at the petrol pumps, it confirms that middle-to-high-income earners will continue to bear the heavy fiscal burden of keeping South Africa’s R6-trillion debt from spinning out of control.
