Historic early childhood development investments threatened as Budget withdrawal sparks fears of lost progress
In a dramatic turn of events, the Government of National Unity (GNU) has withdrawn the 2025/2026 National Budget, following deep divisions over the proposed VAT increase. As South Africa prepares for a new Budget to be tabled on 21 May 2025, uncertainty looms. For the early childhood development (ECD) sector, the stakes couldn't be higher.
For the first time in South Africa's history, the government proposed a historic R10-billion allocation to expand the ECD subsidy, a R210-million increase for ECD infrastructure, and R336-million to extend nutrition support to our youngest citizens. It was a moment that made the sector feel seen, valued, and finally recognised not just in policy, but in practice. But now, with the Budget withdrawn once again, this progress hangs in the balance.
The smartest investment South Africa can make
The evidence is clear. As Nobel Prize winner James Heckman's work has shown, quality early learning programmes deliver a 13% annual return on investment through improved health, education, and employment outcomes.
The Department of Basic Education's (DBE) own 2030 ECD Strategy shows that scaling up ECD would create 300,000 jobs and 70,000 new enterprises, primarily in township and rural communities. Investing in ECD isn't just a moral imperative; it is an economic strategy.
ECD investment directly contributes to the GNU's own priorities: driving inclusive growth, reducing poverty, and building a developmental state. Ilifa Labantwana modelling shows that increased ECD funding could:
Reduce malnutrition and child poverty.
Improve the working conditions of 250,000 largely female ECD workers.
Relieve care burdens for more than two million caregivers, unlocking economic participation.
Stimulate township and rural economies through infrastructure and programme expenditure.
'This investment would enable us to retain qualified practitioners, maintain resources, and support families through holistic programmes,' said Refilwe Mkhoe from Lusemanzi ECD Centre in Orange Farm.
The cost of neglect is far greater
Failing to protect this funding now means continuing a generational cycle of poverty. One in four children under five in South Africa is stunted. More than 1.3 million children aged three to five are not in any early learning programme. Most ECD practitioners, many of whom are black women, earn below the minimum wage.
Agnes Ramosela, the principal at Tsepiso's Kiddies World Preschool in Lenasia South, said: 'We are not even able to pay ourselves minimum wage. I am currently employing 20 people, mostly young people struggling with employment, and I am sometimes unable to pay them.'
Progressive alternatives exist
We acknowledge that the removal of the proposed VAT increase has created new fiscal pressures. However, austerity cannot, and must not, come at the expense of young children. Even with our last rand, there is no wiser or more transformative investment than ECD. Rather than cutting these important services, the government must pursue a more sustainable revenue strategy.
The Budget Justice Coalition (BJC) has proposed progressive and equitable alternatives to raise revenue without placing additional burdens on poor people. These include implementing a net wealth tax, tackling corporate tax base erosion and profit shifting, reversing unnecessary corporate tax cuts and rebalancing the tax mix, expanding the taxation of luxury goods, among others. The South African Revenue Service has also suggested investment in improving compliance and collection efficiency as a revenue generating mechanism. These measures align with our Constitution's call for equity and social justice, and they can support sustainable investment in key services like ECD.
The time is now
We call on the GNU to protect, not reverse, the R10-billion subsidy expansion, the R210-million infrastructure investment, and the R336-million increased nutrition support. These are not optional line items. They are the building blocks of a thriving nation. In March this year, at the ECD Leadership Summit, President Cyril Ramaphosa issued a heartfelt apology, saying: 'it was a mistake not to invest in ECD 30 years ago'. He is right. And now, we have a second chance.
We urge all political parties in the GNU, and Minister of Finance Enoch Godongwana, to keep young children at the centre of South Africa's development agenda. ECD must remain a non-negotiable. DM
Tshepo Mantjé is the Right to ECD Coordinator at Equality Collective and the Real Reform for ECD Movement Coordinator. Daniel McLaren is a Public Finance Economist at Ilifa Labantwana. Hopolang Selebalo is Head of Policy and Research at SmartStart South Africa and Chairperson of the Real Reform for ECD Steering Committee.
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