‘People are paying for years of corruption’: Parties slam budget speech

Opposition parties have expressed dissatisfaction after Finance Minister Enoch Godongwana announced a value-added tax (VAT) hike in the budget speech.

The 2025/2026 national budget was presented by Godongwana at the Nieuwmeester Dome in Cape Town on Wednesday.

This followed a postponement on 19 February due to disagreements over a proposed 2% VAT increase.

The National Treasury opted for a 0.5% VAT hike, with the rate set to reach 16% in the 2026/2027 financial year.

The revised budget also confirmed no inflationary adjustments to personal income tax brackets.

DA reacts to budget speech

Reacting to the budget, DA leader and Agriculture Minister John Steenhuisen reiterated the party’s opposition to a VAT increase.

He confirmed that the DA would not support the budget in its current form “out of good conscience” after the government of national unity (GNU) failed to reach a consensus.

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“We have been very clear from the beginning that we don’t believe a VAT increase is the right way to proceed especially if it is not accompanied with bold economic reforms,” Steenhuisen stated.

The DA leader further warned that if South Africa’s economy does not grow, the government will be “looking for scraps of money” when the medium-term budget policy statement (MTBPS) and budget speech are presented in October and next February, respectively.

DA open to further talks

He also pointed out that the ANC no longer holds a majority in Parliament and will require support from other political parties to pass the budget.

“If there are other parties that want to support a 1% increase in VAT over the two years then obviously they must enter into the negotiations,” Steenhuisen added.

However, he emphasised that the DA was open to further discussions before the fiscal framework and accompanying legislation, such as the Division of Revenue Bill, are presented for a parliamentary vote.

“There is still some time for us to have another chat and another look about what we can do to negotiate further on these matters.

READ MORE: Budget speech: VAT increase decision not made by someone who knows hunger

Steenhuisen also expressed hope that “sanity is going to prevail”.

“This budget is going to harm poorer South Africans and the middle-class by increasing VAT.

“Personal income tax is also going up because there’s no provision for bracket creep and those things perhaps could have been negotiated,” he concluded.

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Budget speech’s ‘greatest betrayal’

Build One South Africa (Bosa) leader Mmusi Maimane criticised the tabled budget, calling it “a plan without growth” and accusing government of essentially “double taxing” citizens.

He also said the National Treasury’s failure to identify any cost-cutting measures was the budget’s “greatest betrayal”.

“The expenditure side of things has not been adjusted for. There’s still the same bloated Cabinet, the same spend on social welfare in certain areas, and the same expenditure framework which exceeds our income,” Maimane remarked.

READ MORE: Budget speech: Why Godongwana wanted a VAT increase of 2%

“It was an opportunity to make tough choices in the new government and that wasn’t done.

“Instead, people are paying for years of corruption and are missing out on an opportunity to get relief,” the Bosa leader added.

Maimane stated that the Standing Committee on Appropriations, which he chairs, would scrutinise the budget to find areas for potential spending cuts.

Changes to budget incoming?

Meanwhile, EFF leader Julius Malema questioned why corporate taxes were not raised.

“Let the wealthy pay tax because they’ve got too much money to a point where they don’t even know how to spend it,” Malema said.

He further stated that the EFF would not support the budget and would present its own proposals in the relevant parliamentary committees.

“There is no one here with outright majority. Every decision that must be taken here must be through consensus and trade-offs.

“So, we are going to make sure we lobby other political formations to ensure that we amend the budget,” the EFF leader said.

The Money Bills Amendment Procedure and Related Matters Amendment Act allows Parliament to make alterations to the budget.

Mantashe defends budget speech

In response to the opposition’s criticism, Mineral and Petroleum Resources Minister Gwede Mantashe defended the budget.

“We’re not going to allow them to polarise society on the budget,” Mantashe said in reference to the DA.

“The budget has been tabled to Parliament. The parliamentary processes will take place and look into accepting the budget.”

Mantashe argued that Treasury’s allocation to social services is an investment that would drive growth.

“I heard a new theory of economics today, where people say the budget is not pro-growth. I’m saying spending on education, health, infrastructure, and investing on social grants cannot be anti-growth. Those are pro-growth,” he concluded.

Moreover, Inkatha Freedom Party (IFP) leader and Co-operative Governance and Traditional Affairs (Cogta) Minister Velenkosini Hlabisa confirmed that there had been discussions in Cabinet about cutting expenditure.

“Very soon there will be a deep discussion in terms of identifying areas where more cuts must be done so that next year there will be no need of the 0.5% VAT increase.”

Zero-rated basket

Furthermore, the Congress of South African Trade Unions (Cosatu) expressed its “extreme disappointment” with the budget, particularly the VAT hike.

However, it welcomed the government’s decision to expand the zero-rated basket to include additional meats, vegetables, and dairy products.

“This should be expanded to include sanitary pads and school supplies,” Cosatu stated.

MK party MP Nhlamulo Ndhlela voiced strong criticism of the budget, claiming that it was designed to “impoverish our people”.

“This is not a government for the people. This is not a government for the marginalised,” Ndhlela said.