National Assembly passes budget after heated debate

The National Assembly has approved a report adopting the national budget, despite strong resistance from several opposition parties.

During a plenary session held at the Nieuwmeester Dome in Cape Town on Wednesday, 194 Members of Parliament (MPs) voted in favor of the Standing Committee on Finance’s report on the fiscal framework and revenue proposals, while 182 MPs opposed it.

There were no abstentions.

The fiscal framework and revenue proposals outline the country’s economic policies, revenue projections, and government spending limits.

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The adoption of the framework — backed by ActionSA, the ANC, and the Inkatha Freedom Party (IFP) — was a contentious issue during the committee’s meeting on Tuesday, as various political parties sought amendments.

The Democratic Alliance (DA), Economic Freedom Fighters (EFF), and uMkhonto weSizwe (MK) Party opposed ActionSA’s proposal, which called for Finance Minister Enoch Godongwana and National Treasury to identify alternative revenue sources within 30 days.

This would replace the proposed value-added tax (VAT) increases and the decision not to adjust personal income tax brackets for inflation.

Heated debate over the budget process

Committee chairperson and ANC MP Joe Maswanganyi defended the process, insisting that Tuesday’s meeting followed parliamentary rules.

“The report that the house is considering today is a result of an extensive process. We welcome the budget as tabled by the minister of finance,” Maswanganyi said.

However, MK Party MP Des Van Rooyen challenged the legality of the adoption process, accusing the Treasury of disregarding public input.

“National Treasury was advised by both the FFC [Financial and Fiscal Commission] and the Parliamentary Budget Office not to increase VAT, as this will worsen the hard living conditions endured by the poor masses of our people. This advice was ignored,” said the former finance minister.

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Van Rooyen also criticised ActionSA’s proposal, calling it “very weird”.

DA MP Mark Burke mocked the timing of the report’s adoption, noting that it coincided with April Fool’s Day.

“A farcical day for a farcical process leading to a farcical report. Yet, it’s a report that sadly is not an April Fool’s joke,” he remarked.

Burke further questioned whether ActionSA had sold out their voters for “five minutes of media coverage” or “promises of future Cabinet positions”.

Watch the plenary session below:

EFF MP Omphile Maotwe argued that the fiscal framework did not comply with the Money Bills Amendment Procedure and Related Matters Amendment Act.

“It is up to us as members of Parliament who have legislative responsibility to finalise the budget. We cannot send it back to the finance minister,” she said.

She emphasised that other financial legislation, including the Appropriations Bill and Division of Revenue Bill, must align with the fiscal framework.

“You cannot vote for a VAT increase today and hope when it comes in the form of a separate bill it is different. It will be inconsistent with the law and this fiscal framework.”

Divided opinions within the GNU

Patriotic Alliance (PA) leader Gayton McKenzie acknowledged that most parties within the Government of National Unity (GNU) had opposed the initially proposed 2% VAT hike, with the final 0.5% increase being a compromise.

“I can’t have it my way or the highway,” he said.

READ MORE: You could pay extra VAT for a year, but forget about a refund if hike is rejected

McKenzie also took a jab at the DA, suggesting that if they were unhappy, they should leave the GNU.

“Abahambe (let them go).”

Freedom Front Plus (FF Plus) MP Wouter Wessels said there was a broad consensus that a VAT hike is being opposed, and therefore, the party will not support the fiscal framework.

“The fact of the matter is that we could have amended this fiscal framework and made it better. For too long, Parliament has functioned as a rubber stamp when it comes to the budget.”

ActionSA backs fiscal framework

ActionSA parliamentary leader Athol Trollip maintained that the party remained opposed to both the VAT increase and bracket creep.

He argued that rejecting the fiscal framework would have prolonged delays due to ongoing GNU disputes.

“An amendment would have required the Minister of Finance to redo the entire budget process,” Trollip said.

African Christian Democratic Party (ACDP) MP Steven Swart warned that the fiscal framework report could potentially face court challenges.

“We seriously question from a legal perspective whether [the VAT and bracket creep] have been scrapped as alleged.”

READ MORE: Budget 2025 VAT exemptions show Treasury’s disconnect with poor people

United Democratic Movement (UDM) MP Nqabayomzi Kwankwa highlighted the challenge of rejecting tax increases without proposing viable alternatives.

“When you are dealing with finances, it’s about balancing the books,” he stated, adding that further discussions on alternative revenue sources were necessary.

Rise Mzansi leader Songezo Zibi and Build One South Africa (Bosa) leader Mmusi Maimane also backed the proposal to amend the fiscal framework within 30 days.

Meanwhile, National Coloured Congress (NCC) MP Fadiel Adams cautioned that the report could be overturned in court.

Finance Minister defends budget proposals

Responding to criticism, Godongwana noted that much of the debate had focused on revenue generation rather than government spending.

The minister stressed that government spending prioritises the poor and defended the VAT increase, stating that it would generate R15.5 billion in revenue.

He explained that 76% of this amount will be paid by the three upper-income categories.

The remaining is going to be paid by lower-income categories.

Godongwana assured MPs that Treasury would explore alternative revenue options and report back to Parliament.

He also criticised the DA for the party’s “tendency to shift the goalposts every day”.

The minister said the party was the one who proposed no bracket creep during negotiations.

“We have accepted their proposal [but] today they have got the audacity to stand up and say they don’t want bracket creep. It’s a lie. It’s a lie,” he asserted.

Concluding his remarks, Godongwana sent a message directed at the GNU.

“I don’t think you can vote against a budget, and tomorrow you want to be part of its implementation. It can’t be. We have got to draw a line.”

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