Several GNU and opposition parties throw a spanner in the works for Godongwana

Finance Minister Enoch Godongwana’s reworked Budget tabled in the National Assembly on Wednesday, which proposed a 0.5 percentage point increase in VAT, has been rejected by the DA, the second-largest party in the Government of National Unity (GNU).

The revised Budget was supposed to resolve the dispute between the ANC and the DA; on 19 February, the latter had rejected an initial proposed 2 percentage point increase in the VAT rate.

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

However, moments before 2pm, when Finance Minister Enoch Godongwana was due to begin his Budget Speech, the DA leader, Agriculture Minister John Steenhuisen, said in a post on X: “The DA will not support the budget in its current form”.

Good afternoon, South Africa. The DA will not support the budget in its current form. We will continue to fight for economic growth and jobs. ??

— John Steenhuisen MP (@jsteenhuisen) March 12, 2025

Now the relevant committees in Parliament will debate the Budget separately as it relates to their portfolios. At the end of this process, Parliament will debate the Budget as a whole and vote on it.

Steenhuisen said the DA didn’t believe the Budget supported a growth and jobs agenda, but maintained there was “still time to talk and negotiate”.

“They [the ANC] need other people to pass it. If there are other parties that want to support a 1 percentage increase in VAT cumulatively over two years, then obviously they must enter into the negotiations,” Steenhuisen told reporters.

“We are willing to keep the door open to discuss before the instruments come to the floor of Parliament — the Fiscal Framework, the Money Laws Amendment Bill and, of course, the Division of Revenue Act. There is still some time for us to be able to have another chat and another look about what we can do to negotiate further on these — and we remain open to doing so,” he said.

“As we sit here today, this Budget has around 39 percent to 40 percent of the House — it doesn’t have a majority to pass.”

Other GNU parties

Freedom Front Plus chairperson Wouter Wessels said the party did not support any tax increases — including the 0.5 percentage point VAT increase.

“There was no consensus in the GNU on that issue. Remember, the Budget does not need the approval of Cabinet. The first postponement was positive because it did provide time for further consultation — and we did get a better Budget out of it, because at least South Africans will not be paying 2% more for goods and services tomorrow,” said Wessels.

“Legislation needs approval by Cabinet, the Budget does not,” he said. “We believe that we will go through the processes now, try to get it even better than it is now, so that people are not paying more and cost of living does not get higher.”

Read more: No tax hike? Think again — bracket creep and inflation are quietly raising your tax bill

The Good party secretary-general, Brett Herron, told Daily Maverick the party would support Godongwana’s Budget in a vote.

“We have been saying that there are better ways of raising the revenue rather than increasing VAT, but we also said that we would look at the rumoured 0.5 percentage point VAT increase in the context of the entire Budget — and the things that were important to us are still there,” he said.

This, he said, included the retention of the Social Relief of Distress (SRD) grant and the commitment President Cyril Ramaphosa made to transition it into a permanent form of social security, along with investment in the South African Revenue Service to capacitate it to collect outstanding taxes.

“It’s a balancing act that the minister has pulled off,” he said.

“We were afraid of an austerity Budget — a Budget that would have made severe cuts in order to balance it — and we are really relieved that it is not an austerity Budget.”

Read more: Social grant allocations lower than the pre-Budget

Rise Mzansi’s Mabine Seabe said: “The Budget is an over-1,000-page document. It therefore needs to be studied in its entirety and in detail before we’re able to lend our support to it, recommend amendments or reject it.”

He said the important work of Parliament’s committees starts now.

“It’s important to note that what was tabled was a proposal to Parliament, which has the authority to accept, amend or reject.”

United Democratic Movement (UDM) deputy president Nqabayomzi Kwankwa said the party “grudgingly supports” the Budget because it knew certain sacrifices had to be made.

The Patriotic Alliance (PA) leader, Minister of Sport, Arts and Culture Gayton McKenzie, said the PA was in full support of the Budget.

“It breaks my heart when the teachers are being told they’re not going to have a job, but now the minister of finance has saved between 17,000 and 19,000 teacher jobs, so we support the Budget 100% — let nobody tell you otherwise,” said McKenzie.

Read more: Education sector gets a nod with more than R500bn

The Inkatha Freedom Party (IFP) leader, Cooperative Governance Minister Velenkosini Hlabisa, told Daily Maverick the party was in support of the Budget due to the lowered VAT increase.

“We may not have agreed, all of us, but in a coalition government, one party may see differently, many parties supported this Budget.

“We made a commitment that after this presentation, we are going to … [have talks] at a Cabinet level. Who knows, once [the DA’s] concerns are being addressed, they might be on board,” he said.

Outside the GNU

Economic Freedom Fighters (EFF) leader Julius Malema told reporters the party did not support the Budget. “They [have] run out of ideas on how to generate revenue for the state,” he said.

The Sunday Times recently reported that the ANC had warned it would approach the EFF if parties in the GNU (particularly the DA as the second-largest party) did not back the Budget.

The DA is against the VAT hike, but it said in a statement it would study the Budget and then determine an appropriate course of action.

The EFF’s Statement on the 2025 Budget Speech by the Minister of Finance

-The EFF vehemently rejects the proposal to increase Value Added Tax (VAT) by 0.5% in 2025/2026 and another 0.5% in 2026/27. This is ultimately what the EFF predicted that there will be an attempt to… pic.twitter.com/hnDVdzG1M6

— Economic Freedom Fighters (@EFFSouthAfrica) March 12, 2025

Umkhonto weSizwe (MK) party chief whip Mzwanele Manyi said the party rejected the Budget “out of hand. There’s no discussion for us.”

He said there were alternatives to a VAT increase such as a wealth tax and increased corporate tax, or “they could have just given SARS a leg up. We also said to them there is corruption — clamp down on corruption.”

Other options were to criminalise fruitless and wasteful expenditure and to cut the number of Cabinet ministers.

“So we’re saying the solutions are on the table, but we’ve got a government that lacks political will to do the right thing,” said Manyi.

ActionSA and the African Christian Democratic Party (ADCP) — which are not members of the GNU or the “Progressive Caucus” — said the “bloated” executive should have been cut instead of increasing VAT.

The ACDP said it would study the Budget proposals and recommendations while ActionSA said it would not support the Budget in its current form. DM