Will Godongwana deliver the budget without any problems?

Minister of Finance Enoch Godongwana will present a revised budget proposal in parliament next week after days of disagreements among members of the government of national unity (GNU).

In a statement on Tuesday, the Presidency said a high-level Cabinet meeting took place on Monday, and discussions “ended positively”.

According to the statement, Godongwana will be assisted by a team led by Deputy President Paul Mashatile in putting together the final budget presentation.

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Several options to fund the budget

“The team, led by Deputy President Mashatile and supported by National Treasury, tabled a variety of options that were considered by Cabinet. In compliance with the provisions of section 27 of the Public Finance Management Act (1 of 1999), Cabinet mandated the Minister of Finance to select from the discussed options and fund the budget,” the statement said.

According to the Presidency, Godongwana’s final presentations should consider several factors. These include the fiscal constraints of the country, mitigating the impact on poor and middle-income households and supporting economic growth.

“With the conclusion of the Cabinet input process into the budget, the minister of Finance and National Treasury are now set to finalise the budget and table it before parliament on the 12th of March 2025,” the government said.

Will there be a VAT increase?

The citizen reached out to the DA spokesperson on finance, Dr Mark Burke, for comments on the matter.

However, he refused to comment on the Cabinet meeting, saying the meetings are confidential.

However, on Monday, Burke released a scathing statement lashing out at the ANC for now attempting to increase VAT to 0.75%.

Good afternoon, South Africa. Constructive discussions on the budget are ongoing. There is no agreement yet, but we are working towards a resolution by 12 March. 🇿🇦

— John Steenhuisen MP (@jsteenhuisen) March 4, 2025

On Monday, the ANC also said it is consulting with other political parties on the latest budget presentation. It is still not clear if VAT will be increased. If not, there are still concerns about where the government will get the money from.

Measures to cut costs

Meanwhile, the Federation of Unions of South Africa (Fedusa) appealed to the government to avoid cutting its contribution to the Government Employee Pension Fund (GEPF) to save money.

“The Federation of Unions of South Africa (Fedusa) strongly opposes any suggestion to reduce government spending by pausing pension contributions at the Government Employees Pension Fund (GEPF). Public servants’ pensions should not be used as a solution for budget shortfalls in the national budget or any future financial plans,” the federation said in a statement.

Parliament had to adjourn last month on the day Godonwana was expected to present the budget speech. Members of the GNU, including some ANC ministers, had expressed concern about a 2% VAT hike that many believed would affect the poor negatively.

A test for the GNU

Theo Neethling, a political analyst from the University of Free State (UFS), told The Citizen that disagreements over the budget are a test to the coalition partners.

However, he said the ANC will have to work with its partners to ensure the smooth running of the country.

“The government has serious fiscal challenges. They have to finance state expenses, and they are not able to do that. This is indicative of the challenges the government is facing with regard to meeting the demands of a variety of sectors such as education, police, the defence force and many many more,” he said.

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