As South Africa inches closer to the tabling of what is known as the ‘3.0 Budget’ for the 2025-26 financial year, Finance Minister Enoch Godongwana is under immense pressure to address a gaping R75 billion budget shortfall.
This marks his third attempt at presenting a budget in just two months, raising expectations and apprehensions alike.
Economist Dawie Roodt said Godongwana will certainly make sure that he has the DA on his side and the DA’s support for his budget.
“It will be very responsible for the Minister of Finance to go into Parliament without the DA’s support. You must get the buy-in of your most important coalition partner, and that of course is the DA,” Roodt said.
He also said with the VAT increases scrapped, he did not expect the zero-rating of the proposed additional food items.
However, Roodt said the question was whether there will be a further reduction in the increase on the various social grants and the salary increase for civil servants.
“Then lastly, if you can’t cut back on spending on people, then you cut back on spending on capital. Although he is going to say he is going to increase spending on A, B and C, that is probably not going to happen because we simply do not have the money.
“I think what is going to happen is that they will probably borrow more money than what he initially had in mind,” Roodt said.
DA leader John Steenhuisen was upbeat about the 3.0 Budget despite the country being in a tight fiscal spot.
Steenhuisen, who is also the Agriculture minister, said he was comfortable with the budget his department has received.
“I think what Minister Godongwana has succeeded in doing a very good balancing act and I think we’re going to see a budget that will pass the House quite easily and we can then get on with the process of building the economy,” he said, adding that they have to see the final budget.
“Certainly what I’ve seen to date I’m incredibly comfortable with and I think that Minister Godongwana as I said has done a really effective balancing act that will see no extra borrowing and no extra taxation on an already burdened sector, no VAT increase.
“Our people can breathe that sigh of relief and I think that it’s a sign that the government has listened to what the people have said and we now have a budget that I think will, it’s never going to satisfy everybody but I think it’s a good start now for us to have a platform to start growing the economy so we don’t end up fighting over who’s going to get taxed more, who’s getting cut and how we’re going to spend.
“We are going to be focusing on what we do with the extra revenue that comes through with the economic growth that we hope we can stimulate,” Steenhuisen said.
ActionSA, which is credited for offering the ANC support to pass the fiscal framework last month, called on the Government of National Unity to stop dithering and deliver real, practical reforms in Budget 3.0 to address South Africa’s deepening jobs crisis.
“It is time for leadership that prioritises the people — not political deals, not bureaucratic delays, not excuses,” said MP Alan Beesley earlier this week.
ActionSA parliamentary leader Athol Trollip told the SABC that they were not consulted as they were not part of GNU.
“What we do expect to see, though, is that the Minister takes into account that there’s blanket opposition to any form of increased taxation. We also need to see, the government must be prudent in its affairs,” Trollip said.
Build One South Africa leader Mmusi Maimane said the budget must demonstrate to the people that there have been the necessary expenditure cuts so that the politicians aren’t getting the benefit.
“We have got to see cuts in certain expenditure. We have got to see the eradication of wasteful expenditure. We’ve got to ensure that more money is directed towards the program that’s been expressed in the growth chart,” he said.
ANC secretary-general Fikile Mbalula toldthis journalist at the memorial service of late secretary-general Duma Nokwe that his party supported a budget that was pro-growth, that addressed unemployment and that was also pro-poor.
It is “pro-poor in the sense that it seeks to intervene and address what is in the ANC manifesto,” Mbalula said.
Cosatu hopes that the government will not disappoint workers and the nation when the revised budget is tabled.
“We cannot afford a return to the brutal austerity budget cuts inspired by a misplaced belief in neo-liberalism that has crippled frontline public services which the working class require to survive,” said Cosatu’s parliamentary coordinator Matthew Parks.
Parks said revenue must be secured by providing the South African Revenue Service the resources it needs to tackle tax evasion and customs fraud.
“SARS must be empowered and tasked to raise tax compliance from 64% to 70% generating over the Medium-Term Expenditure Framework, thus raising additional R120 billion annually in revenue owed to the state,” he added.
