Cabinet approves 2025 budget speech after heated deliberations

1 Views

The Minister of Finance Enoch Godongwana and National Treasury are set to finalise the budget and table it before Parliament on Wednesday, 12 March.

This is according to a cabinet statement issued by the Government Communication and Information System (GCIS) on Tuesday, following a special meeting held by cabinet on Monday – and first reported by The South African website.

ALSO READ | VAT fight! Budget Speech postponed over tax hike disagreement

The meeting was convened to consider inputs by members of the cabinet into best possible options, under the circumstances, to fund the budget of 2025/26 financial year and the medium term.

‘Rapid implementation’

“This follows another special cabinet meeting on Monday, 24 February 2025, that allowed broad discussions on the country’s fiscal constraints and the need for rapid implementation of the three key priorities of the seventh administration under the Government of National Unity.

“At the meeting of 24 February 2025, President Cyril Ramaphosa set-up a team of Ministers led by the Deputy President Paul Mashatile to work with the Minister of Finance and his National Treasury team to consolidate cabinet inputs for further consideration,” cabinet said in a statement.

The team led by the Deputy President and supported by National Treasury tabled a variety of options that were considered by cabinet.

In compliance with the provisions of section 27 of the Public Finance Management Act (1 of 1999), Cabinet mandated the Minister of Finance to select from the discussed options and fund the Budget in a manner that takes into consideration the fiscal constraints of the country; mitigates the impact on the poor and middle-income households; and supports economic growth.

“With the conclusion of the cabinet input process into the Budget, the Minister of Finance and National Treasury are now set to finalise the budget and the table it before Parliament on 12 March 2025,” the statement said.

Last month, Cabinet postponed the tabling of 2025 budget by Minister Godongwana for further deliberations.�

The budget outlines all the financial, economic, and social commitments that the government will prioritise in its planned expenditure as part of the 2025 budget speech.�

VAT hike

The major sticking point – and the reason for the original Budget Speech postponement – centred around a proposed VAT hike.

The ANC were pushing for a 2% hike – from 15% to 17%.

That was met with stern opposition from the DA in particular.

However, it now appears that everyone’s happy enough to proceed, although it must be remembered that a VAT hike – presumably of a lower percentage – may well still be announced.