Finance Minister Enoch Godongwana delivered the 2025 Budget amidst a contentious debate in the National Assembly. The fiscal framework narrowly passed with a vote of 194 to 182 after the Democratic Alliance (DA) refused to support it, prompting President Cyril Ramaphosa to caution that this would be a betrayal of the government of national unity.
The DA immediately announced its intention to challenge the budget in court, highlighting their opposition to the tax proposals and the looming staggered VAT increase set to take effect on May 1st. Despite a recommendation by parliament’s finance committee for Minister Godongwana to explore alternative options within the next 30 days, the DA argued that this was unlikely to result in any meaningful changes.
Finance spokesperson Mark Burke criticized the committee’s report for essentially cementing the tax hikes into the fiscal framework, limiting the scope for amendments. Tax experts echoed Burke’s concerns, noting that the current legislation did not provide a clear path for altering the tax framework in such a short timeframe.
In response, Minister Godongwana defended the tax proposals as necessary to fund essential services for marginalized communities. He emphasized the budget’s allocations for health, education, and welfare grants, refuting claims that the tax increases were anti-poor.
Godongwana expressed willingness to engage with constructive proposals but stressed the importance of addressing both revenue and spending considerations in the budget process. He called for a more collaborative approach involving parliament to ensure transparency and accountability in future budgets.
Critics, however, accused the DA of lacking constructive solutions and focusing solely on opposing the tax increases. They highlighted the party’s inconsistency in advocating for adjustments to personal income tax brackets while previously supporting bracket creep.
As the budget process unfolds, the debate surrounding the fiscal framework continues to highlight the challenges and complexities of balancing revenue generation with social spending priorities. The coming weeks will test the government’s ability to navigate these issues and address the concerns raised by opposition parties and stakeholders. Let’s have an honest and robust debate, free from lies and deceit. This was the sentiment echoed during a recent joint sitting of parliament’s standing and sitting committees on finance. The focus of the meeting was to draft a report on Godongwana’s fiscal and revenue proposals, which unfortunately resulted in a deadlock between the ANC and the DA.
The ANC pushed for the endorsement of the proposals, while the DA insisted on amending them before approval. The proposed amendment would have required the minister to reconsider the text, leading to a potential postponement of the debate. However, a proposal by ActionSA offered a compromise solution to break the impasse.
ActionSA’s recommendation, not an amendment, allowed the fiscal framework to be approved with the condition that national treasury facilitates the receipt of substitute revenue proposals. This novel approach was met with skepticism from the DA, uMkhonto weSizwe (MK) party, and the Economic Freedom Fighters (EFF), who argued that it had no legal basis.
DA leader John Steenhuisen announced plans to file legal papers challenging the constitutionality of the tax proposals and the flawed processing of the fiscal framework. Despite objections from opposition parties, the debate proceeded in parliament, with Speaker Thoko Didiza asserting the authority of parliament’s legal advisers.
During the debate, tensions ran high as accusations of betrayal and treachery were hurled between parties. The EFF accused the ANC of neglecting the interests of the poor by pushing for tax increases, while the DA criticized the coalition partners for their role in the deadlock. ActionSA defended its stance, emphasizing its commitment to protecting ordinary South Africans from unjust tax hikes.
The events of the past two days have raised concerns about the stability of the coalition government. President Ramaphosa expressed his desire for the DA to remain part of the government of national unity, but emphasized that their vote on the budget would test their commitment to the coalition.
In a surprising turn of events, the Freedom Front Plus, a coalition partner, also voted against the fiscal framework. This decision further complicates the dynamics within the coalition and raises questions about its future.
As the debate continues, it is essential for all parties involved to prioritize transparency, honesty, and genuine dialogue. Only through open and honest discussions can meaningful solutions be reached for the benefit of all South Africans.
