BUDGET 3.0 | Sceptism from opposition but budget gets nod from GNU partners

Finance minister Enoch Godongwana received a nod from the GNU partners but sceptism from opposition benches when he presented his third-time-lucky budget speech. 

With a visibly relaxed and confident demeanour, Godongwana presented a budget wrapped in comic anecdotes — with nodding and clapping from the DA benches indicating success for the minister.

The DA, as a GNU partner with whom the ANC shares 60% of the seats in the National Assembly, said it “cautiously welcomes the revenue and expenditure proposals”.

The DA rejected the previous budget's proposal to increase VAT and challenged it in the courts. However, the decision to drop the VAT increase carved a pathway to gaining the DA’s support, a move which the party believes is “manifestation of coalition politics in action”.

The DA's spokesperson on finance, Mark Burke, described the budget as a workable outcome in the context of trying economic times.

“The DA was not prepared to get behind a budget that maintained unsustainable government expenditure on the back of raising VAT, making struggling South Africans pay for inefficiencies and waste in government — but today’s version from minister Godongwana has gone some way to undo this,” he said.

“It is a victory for all South Africans that the mooted VAT hike has now finally been removed from the minister’s revenue proposals, after the DA court action in this regard. We see this budget speech as a turning of the tide toward growth and investment. It is turning away from unchecked government spending funded by South African taxpayers.”

The party welcomed the R1-trillion investment in infrastructure over the next three years, the snub on bailouts to state-owned entities, a national spending review which must eliminate all wasteful spending, and ending low-priority projects.

“The DA realises our economy desperately needs to grow and government must budget for this, creating the environment that enables this growth in the private sector. We also note that more realistic economic growth forecasts have been used to model revenue in this version of the budget.”

Despite Godongwana’s U-turn on the proposed VAT hike, the EFF, which was vocal and opposed to the proposed VAT hike in the previous tabling of the budget, rejected Wednesday's presentation.

Calling it weak, misguided and disconnected from the lived reality of South Africans, the EFF says the absence of President Cyril Ramaphosa and his deputy Paul Mashatile is a further indicator of how disconnected the executive is from the economic realities facing the poor and the working class.

“We note the deliberate silencing of public discourse around this budget, with mainstream media choosing to focus obsessively on political coalitions and cabinet appointments, while ignoring one of the most consequential events in South Africa’s governance calendar. This is not accidental — it forms part of a broader campaign to depoliticise the budget and shield the National Treasury from democratic scrutiny and public accountability.”

Party spokesperson Sinawo Thambo criticised Godongwana for reportedly ignoring proposals from stakeholders and the majority of parties in parliament who claimed that the scrapping of the VAT hike was a product of consultation. 

“Not a single alternative revenue-generation mechanism proposed by any political party is present in this third budget, proving once again that the VAT increases were scrapped solely due to the court intervention which was initiated by the EFF. The VAT increases have simply been substituted with austerity.”

ActionSA, which played a crucial role in helping the ANC pass its first fiscal framework in the budgeting process, said it was in two minds over Godongwana’s proposed expenditure and revenue plans. Herman Mashaba’s party welcomed the additional R7.5bn allocated to Sars over the medium term, a move the party had long insisted on.

However, they disagreed with the suite of taxes and levies in the absence of what they described to be meaningful action to curb government wastage.

In a statement, the party said while South Africans are still being forced to carry the burden of an extra R22bn through income tax bracket creep, an increase in the fuel levy, and duty hikes, the funding boost to Sars marks a critical step in the right direction.

“In his speech today, the finance minister confirmed that Sars’ performance will be monitored monthly, with the potential for R20bn in tax relief to be granted in the 2026 budget if revenue collection exceeds targets. ActionSA is confident Sars will deliver on this promise, helping to ease the financial pressure on struggling South Africans.”

Rise Mzansi said it was content that the budget baseline remained the same, however they would have wanted additional allocations to things that matter to South Africans — such as health, safety, education and economic infrastructure.

The party believes the country will get out of its financial rut only by making smart, yet tough, decisions.

“Over the past few months, the people of South Africa have made it clear that they do not want to give the government any more money, and that with the existing money, elected representatives must make the country work. This is a fair demand, which has placed us in the difficult position we are now in, notwithstanding an almost 15-year period of poor policy decisions and wanton corruption.

“This is particularly about arresting corruption, how we spend money, and what we spend that money on. Especially, when we are told that the GDP growth outlook has been revised down from 1.9% to 1.4% for 2025, with projections also revised downwards over the medium-term. The consequence of this is also muted revenue collection.”

Party leader and Scopa chair Songezo Zibi said it is important to ensure that the debt-servicing costs and interest which costs the fiscus about R1.2bn a day, must not be placed at the feet of future generations as a burden.

“Any further borrowing must be about igniting economic growth and a jobs boom. Borrowing to plaster over poor decisions is something Rise Mzansi will fight against. In this context, it is of the utmost importance that we focus on making the right policy choices that may not bear fruit today but are for the future, which means investing in skills and education that will contribute to the building of a modern and resilient economy.

“Furthermore, we must aggressively invest in infrastructure and health. We must invest in the things we need, not the things we want.”

Zibi vowed to use his position at Scopa to advance accountability, ensuring that every rand is spent properly and accounted for, and that savings are cemented.

“We will work with the National Treasury to claw back on wasted and recklessly spent public funds. The next few years will tough, particularly for poor, working-class and middle-class South Africans, but with mature leadership, which often means making politically unpopular decisions, we will be able to get out of this mess, and truly build a prosperous South Africa.”

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