GNU partners dug-in their heels and rejected a reported 2% VAT increase that Finance Minister Enoch Godongwana was due to table yesterday, which caused an unprecedented postponement of the 2025 Budget speech.
With the return date set for March 12, it remains to be seen whether the impasse on the increased VAT rate, which, if approved, is likely to have hefty consequences for the public and the business sector, would be agreed upon.
In the aftermath, it has become murky waters trying to determine who exactly was responsible for shooting down the 2% VAT increase that was raised, as DA and the ANC were among the parties claiming their opposition to the hike.
To ease tensions of South Africans and the business communities contemplating what the repercussions of a 2% increase would be, President Cyril Ramaphosa has since assured citizens that a re-hashed the budget would be user-friendly for all and kind to those living below the bread-line.
He said: “We are called upon as the national leadership to pursue all initiatives aimed at growth for us to increase employment and alleviate the effects of poverty.
“The Government of National Unity (GNU) will in the coming days and weeks intensify our efforts to balance the imperatives that drive the fundamental growth objectives of this administration with the realities of a constrained fiscal environment.
“We are working as partners to ensure that the Budget works for individuals and investors alike.”
Wednesday’s postponement was preceded by a eleventh-hour meeting of the Cabinet to receive a briefing from Godongwana amid a reported VAT increase of 2% that would have pushed it to 17%.
Instead of Godongwana tabling his first GNU budget speech in Parliament at 2pm on the day, National Assembly Speaker Thoko Didiza reported that the whips of parties had decided to adjourn the proceedings for a date to be determined after consultation with the Leader of Government Business (LOGB), Deputy President Paul Mashatile.
March 12 has since become the date that was confirmed.
“We were informed by the LOGB that while today we have been gathered to have the Minister of Finance presenting the budget to this august House, that there has not been agreement in terms of parties in executive to actually find one another in proposals of the budget,” Didiza said.
Although parties represented in Parliament had different views, Didiza said: “There was agreement that if there is no budget to be presented, no discussion will be held as there is no item on the agenda.’’
In addressing Didiza, EFF leader Julius Malema demanded that Godongwana present the budget and Parliament could decide whether to adopt it or not.
“There is no government. It has collapsed. It has no capacity to present a budget,” Malema said.
MK Party's chief whip, Mzwanele Manyi, said the postponement was an indication of the crisis the country is facing.“We don’t want to hear rumours.
We heard VAT would have been increased by two percent. We heard rumours that the ANC government wanted to impoverish our people. The minister must come here and say what he wanted to say,” he said.
UDM parliamentary leader Nqaboyomzi Kwankwa said a proposal from the executive should not be final.
But, Freedom Front Plus parliamentary leader Corne Mulder said the GNU was serious about South Africans and the future.
“We must understand things could happen in terms of when the time is needed for the Ministers to have discussion and for the executive to discuss these things,” Mulder said.
The writing was on the wall for a postponement of the budget as the Cabinet had not met on Wednesday morning, as it usually did, and Godongwana had to move forward a closed briefing with the media to 10am after President Cyril Ramaphosa apparently experienced a flight delay.
“I am still going to the Cabinet. There are nine political parties and there are local government elections. All those things will play themselves out. I don’t know what the cabinet will say.
“It does not stop the delivering of the budget speech,” said Godongwana early on Wednesday, telling the media that the Treasury had made a presentation on the budget to the Cabinet two weeks ago and indicated there would be tax increases, without disclosing the amount.
The DA has previously threatened not to vote for the budget if its proposals were not accommodated in the budget.
DAILY NEWS