This research examines the challenges caused by infrastructure budget underspending in South Africa's built environment. Infrastructure is vital for economic and social activities, but the government has persistently underspent allocated budgets, hindering development. Using a questionnaire and exploratory factor analysis, the study surveyed construction industry professionals on the impacts of underspending. Factor analysis uncovered three challenge clusters: project efficacy issues like delays and reduced quality, eroded stakeholder confidence due to inadequate maintenance and mistrust, and operational inefficiencies from poor planning and training. Underspending causes multidimensional damage across timelines, quality, employment, trust, and strategy. The analysis aligns with the literature on prudent financial management and skilled labor’s role in development. Recommendations include improving project execution, boosting innovation and employment, enhancing transparency, and reforming public financial accountability. Tackling underspending can spur growth, but continued mismanagement carries heavy economic and social costs. This research provides an evidentiary base to inform targeted fiscal and operational interventions to maximize infrastructure delivery amid budget constraints.