Finance Minister Enoch Godongwana, addressing the media at Imbizo lounge in Parliament after the budget speech 2025 was postponed. Phando Jikelo/ Parliament of SA
Parties making up the Government of National Unity (GNU) attempted to present a united front amid the visible internal divisions that led to the postponement of Finance Minister Enoch Godongwana’s budget speech in a decision opposition parties called reckless, disgraceful and shameful.
The tabling of the Budget has now been moved to March 12 after parties in the GNU could not find consensus on the proposal to increase value-added tax (VAT) by 2%, which would have raised it to 17%.
The 11th hour announcement came after the DA made it clear that it would not support the proposed Budget.
National Assembly Speaker Thoko Didiza said the proposed 2% increase in VAT was just one of many issues that could not be agreed upon.
Up until Wednesday’s events, the ANC has largely dominated the direction with which the GNU takes.
This includes the signing of contentious Bills into law including the Basic Education Laws Amendment Act or Bela and recently the Expropriation Act, resulting in the DA not only lodging a dispute within the GNU, but challenging the act’s constitutionality in court.
Reacting to the decision to postpone the Budget Speech, DA leader John Steenhuisen described it as a victory for the people of South Africa, as it stopped the implementation of a 2% VAT increase that would have broken the back of the economy.
“The postponement resulted from the DA’s resolute opposition to the ANC’s plan to hike VAT at a time when millions of South Africans are already suffering under a cost of living crisis.”
EFF leader Julius Malema said the move exposed the “utter incompetence” of the National Treasury and the so-called GNU.
“This is nothing more than a desperate attempt by the illegitimate coalition government to mask its internal contradictions, lack of direction, and total failure to provide economic leadership in a time of crisis.”
“The reality is that the 2025 Budget was already finalised, and the only reason for the postponement is the deep divisions within the GNU, particularly over the reckless and disgraceful proposed increase in VAT from 15% to 17%.
“The National Treasury and the DA-led neo-liberal faction are hellbent on punishing the poor while protecting the white capitalist establishment, and the so-called deliberations are nothing more than a smokescreen for their anti-poor policies.”
The MK Party said this unprecedented budget postponement, never witnessed in South Africa’s democratic history, “was undeniable proof that President Cyril Ramaphosa and his ANC were not in control”.
“This reckless decision by the DA-led coalition not only undermines the authority of Parliament but also shakes investor confidence, as reflected in the rand’s decline following the announcement,” said spokesperson Nhlamulo Ndhlela.
Build One South Africa (BOSA) leader Mmusi Maimane said it was an undeniable demonstration of the chaos within the GNU exposing its lack of a coherent vision for the country.
“For the first time in democratic South Africa, the national budget—a fundamental pillar of governance—has been subjected to the whims of internal party politics. This failure to present a budget on time will rattle investor confidence, send shockwaves through financial markets, and further erode public trust in government.
“The GNU was marketed as a bold step toward stability and collaboration. Instead, it has become a government of national failure. The inability to deliver its first budget is a final death blow to the so-called GNUphoria.” said Maimane.
Freedom Front Plus finance spokesperson Wouter Wessels said the parties in the GNU demonstrated that they will not be bullied as they put their foot down regarding the proposal to hike VAT by 2% points.
Briefing the media afterwards, Godongwana said the postponement would allow for deliberations to take place and that the 2% VAT increase could not be the only issue.
“You can't have 2% alone without talking about what is going to replace it.”
Godongwana said that given the country’s challenges and priorities, the issue was funding and whether there should be continuation of borrowing and raising taxes.
“There is general agreement in the current environment that we need to find a way to fund our priorities. The debate is the best way of doing it,” he said.
Godongwana added the budget was not up for negotiation.
“People are to say what they say and in the final analysis, the president makes the policy choices,” he stated.
Minister in the Presidency Khumbudzo Ntshavheni, in the same briefing, emphasised that the postponement was not about parties disagreeing on the budget.
“It is the cabinet ministers who did not approve the budget and said they need to engage more with the issues,” she said.
Cape Times