DA, EFF hit back at Godongwana's Budget 2025 for failure to address SA's jobs crisis

Director-General of National Treasury Duncan Pieterse (left) briefs Parliament’s Standing Committee on Appropriations, Select Committee on Finance and Standing Committee on Finance on Friday morning, 14 March 2025. (Photo: Phando Jikelo / Parliament of SA)

By Victoria O’Regan

14 Mar 2025

MPs on Friday had sharp words for Finance Minister Enoch Godongwana on the contentious 0.5 percentage point hike in the VAT rate, and the absence of a ‘clear and achievable plan for job creation’ in SA’s Budget 2025.

Finance Minister Enoch Godongwana came under fire from Members of Parliament (MPs) on Friday, 14 March, when he presented his revised Budget 2025 to Parliament’s finance portfolio committees.

“Deep and hard introspection is needed. We are bleeding jobs; we are not creating jobs … I don’t see anything in this proposed Budget that’s going to be the vehicle to triple economic growth,” said DA MP Joseph Britz.

“This proposed Budget does not lead to economic growth and creation of jobs. In its current form, this proposed Budget is a domestic risk to the future economic outlook.

“You cannot tax yourself into prosperity,” he continued.

Godongwana briefed Parliament’s Standing Committee on Appropriations, Select Committee on Finance and Standing Committee on Finance on Friday morning.

Read more: What happens next for a contested Budget?

Speaking to MPs before the presentation, Godongwana said that “irrespective” of where political parties stand on a number of issues – in an indirect reference to the impasse on the VAT hike – “we [must] keep our eyes on the ball”.

He said the Budget must address the needs in communities, specifically the needs in the health, defence and education sectors. Godongwana spoke about the hundreds of doctors left jobless in SA because of a shortage of funds.

“We may disagree, colleagues, about methodologies and other things, but I don’t think we’ll disagree on the substantive nature of what we’re attempting to resolve.”

Read more:

Godongwana’s Budget promises improved funding for the health sector — but is it enough?

Budget constraints leave hundreds of doctors jobless in deepening public health crisis

Overall, the health budget will grow from R277-billion in 2024/25 to R298.8-billion in 2025/26.

In his Budget Speech, Godongwana acknowledged that South Africa’s public healthcare system had lost about 9,000 health workers in the past years alone, as the state did not have the money to retain or replace them, Daily Maverick’s Tamsin Metelerkamp reported.

An additional R28.9-billion, he said, will go towards employing 800 post-community service doctors without jobs, and 9,300 healthcare workers in hospitals and clinics.

“The attempt to make us take responsibility for National Treasury’s incompetency and poor planning is incorrect, and the attempt to blackmail us into a corner that we all have to take these tradeoffs in order for people to receive services – whether its health or education – they’re tradeoffs that are consequences of poor fiscal planning,” said EFF MP Sinawo Tambo.

Alan Beesley from ActionSA welcomed the much-needed boost in funding to the South African Revenue Service (SARS), but said, “It’s patently clear there’s just too much wastage, corruption and incompetence in the system – in government departments and entities.

“It’s like a bucket – it’s pointless filling the bucket up with water if it’s got a massive hole in it, because it’s just going to keep running out. And that’s what’s happening at the moment.

“I think we wouldn’t have to have tax increases if we could cut the leakage,” he said. Beesley added that the party would like to see money ringfenced to combat corruption.

VAT increase

Godongwana has claimed responsibility for coming up with the idea of the contentious 2 percentage point increase in VAT, which had caused the postponement of the initial Budget on 19 February, according to a News24 report.

On Friday, DA MP Mark Burke accused Godongwana of “undermining” the Treasury after allegedly going against the advice of its director-general Duncan Pieterse, who warned him against the increase.

“If that’s the case, it seems that you [were] acting contrary to the advice of the Treasury, and would you then agree with me, Minister … that in fact you have now gone rogue and you are undermining the Treasury,” he said.

DA MP Kingsley Wakelin said “a number of very strong and very valid submissions were made by the DA” to Godongwana, but none of them received his support.

“Is it just being defiant?” Wakelin asked Godongwana.

However, Pieterse, in a presentation to MPs prior to Wakelin’s comments, stressed that National Treasury had “considered different” options to raise the revenue required in order to cover the government’s expenditure.

He explained why Treasury decided to increase the VAT rate by half a percentage point, which will be followed by another half a percentage point increase next year.

“It is our view that an increase in the spending has to be accompanied by an increase in revenue in order for the government to maintain its commitment to fiscal sustainability, including a rising primary surplus and stabilising debt in 2025/26,” said Pieterse.

“While this Budget includes a mixture of tax measures, it does still consider that a VAT increase will be indispensable for raising the additional revenue.”

Read more: DA will not support budget despite evidence of increased compromise in the GNU

“We were concerned that increasing personal income tax or corporate income tax would be more negative for employment, savings, investment and growth than a value-added tax increase,” he said.

Pieterse added South Africa already has a “very high contribution” of corporate income tax towards tax revenue.

Pieterse said to mitigate the impact of an increase in the VAT rate, the government has proposed “direct relief to vulnerable households in the form of above-inflation increases to the various social grants”, and expanding the basket of zero-rated items to include canned vegetables, edible offal and dairy-liquid blends.

EFF MP Constance Mkhonto said there is no “clear and achievable plan for job creation” in the Budget.

“We can’t increase VAT to the unemployed masses of this country … When is the issue of unemployed youth going to be addressed?”

Echoing her statements, EFF MP Annacleta Siwisa said: “At this moment, we should be speaking about job creation.” But there’s nothing in the Budget which speaks to mass job creation, she said. DM

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