Parliament
By Thabo Mosia
Cape Town – Parliament will meet the legal deadlines for adopting the 2025 Fiscal Framework and Revenue Proposals, according to Parliamentary spokesperson Moloto Mothapo. This commitment follows a turbulent budgetary process that saw a proposed VAT increase suspended by a court order and the initial fiscal framework set aside. Finance Minister Enoch Godongwana is set to table a revised budget next month, with Parliament aiming to finalise it before the end of July. This assurance comes as South Africa grapples with economic challenges and political tensions, making the budget a critical test of governance and unity.
A Rocky Road to the 2025 Budget
The journey to the 2025 budget has been anything but smooth. Earlier this year, Finance Minister Enoch Godongwana announced a 0.5 percentage point VAT increase in his budget speech on 12 March 2025, aimed at addressing a strained fiscal position. This move sparked immediate backlash from opposition parties, including the Democratic Alliance (DA) and the Economic Freedom Fighters (EFF), who argued it would hurt the poor and was pushed through Parliament without proper procedure.
The DA and EFF took their fight to the Western Cape High Court, seeking an interdict against the VAT hike. On 27 April 2025, an out-of-court settlement, made an order of the court, suspended the VAT increase and set aside the Fiscal Framework resolutions passed on 2 April 2025. This ruling forced Treasury into its third attempt to craft a budget that can win broad support, with new documents expected soon.
Moloto Mothapo, Parliament’s spokesperson, remains confident. “Parliament stands ready to act swiftly and responsibly to process and adopt the revised national budget within the timeframes of the law,” he said. With a deadline looming at the end of July, the pressure is on to deliver a lawful and workable budget.
The Court’s Role in Shaping the Budget
The Western Cape High Court’s decision was a game-changer. It not only halted the VAT increase set for 1 May 2025 but also reset the budget process by scrapping the earlier fiscal framework. The court order, agreed upon by all parties, allowed the EFF to intervene and awarded costs against the Minister of Finance, the Speaker of the National Assembly, and the Chairperson of the National Council of Provinces.
Mothapo clarified Parliament’s stance: “Parliament affirms that in entering into the settlement, it had not conceded that the parliamentary processes followed in adopting the fiscal framework were unlawful or procedurally defective.” Still, the ruling has given lawmakers a fresh start, with Godongwana expected to table revised budget instruments in the coming weeks.
This legal victory was celebrated by the DA and EFF. The DA’s Karabo Khakhau called it “a win for every household, every breadwinner, and every South African who cannot afford higher prices at the till.” EFF leader Julius Malema hailed it as a triumph for the poor, though he insisted on broader changes, including Godongwana’s resignation.
Political Tensions and Coalition Struggles
The budget drama has laid bare divisions within the Government of National Unity (GNU). The African National Congress (ANC) struggled to rally support for the VAT hike, turning to smaller parties like ActionSA, the Inkatha Freedom Party (IFP), and others after the DA and Freedom Front Plus (FF Plus) rejected it. A joint media briefing on 24 April 2025 showcased this fragile coalition, with ANC Chief Whip Mdumiseni Ntuli praising the “mature leadership” that led to a “principled resolution.”
The EFF, however, took a harder line. National spokesperson Sinawo Thambo warned against “political expediency,” threatening legal action if Parliament rushed through an unlawful process. On 28 April 2025, Malema doubled down, demanding Godongwana’s resignation and accusing Treasury of incompetence. “The Minister of Finance has failed to comply with the legal and constitutional obligations governing the budget process,” he said.
Meanwhile, the uMkhonto weSizwe (MK) Party seized the moment, filing a Motion of No Confidence against Godongwana. They slammed the VAT proposal as a “betrayal of the working class and poor South Africans,” pushing instead for wealth taxes and levies on luxury goods.
Economic Stakes and the VAT Reversal
Scrapping the VAT increase has left a gaping hole in the budget. Treasury estimates a R75 billion revenue shortfall over the medium term, forcing tough choices on spending. Godongwana has withdrawn the Appropriation Bill and Division of Revenue Bill, promising revisions to balance the books without derailing fiscal sustainability. “Parliament will be requested to adjust expenditure in a manner that ensures that the loss of revenue does not harm South Africa’s fiscal sustainability,” Treasury noted.
The DA opposes cuts to frontline services like healthcare and education, proposing alternatives like slashing government advertising, freezing non-essential hiring, and auditing public sector payrolls to eliminate “ghost employees.” Khakhau pointed to a recent audit at Prasa, where “at least 10% of their workforce does not exist,” as proof of potential savings.
The EFF, meanwhile, has pitched a R512 billion fiscal stimulus over three years, funded by progressive taxes like a wealth tax on luxury landholdings and an increase in corporate income tax from 27% to 30.5% by 2026/27. They argue this would tackle unemployment and boost growth without burdening the poor.
Parliament’s Task Ahead
Under the Money Bills Amendment Procedure and Related Matters Act of 2009, Parliament must adopt a fiscal framework before processing revenue proposals. With the original framework nullified, lawmakers face a tight timeline to review and pass the revised budget by July’s end. Mothapo assured the public that Parliament is coordinating with the executive to set a tabling date, emphasizing a commitment to transparency and legality.
The EFF has raised the stakes, warning that any shortcut could lead to a “constitutional disgrace.” Thambo stressed, “There is no urgency so compelling as to justify illegality.” The party’s detailed proposals, submitted to the Standing Committee on Finance, aim to reshape the budget into a tool for job creation and economic recovery.
South Africa’s Bigger Picture
The budget saga unfolds against a backdrop of economic hardship. Unemployment hovers above 32%, growth is sluggish, and infrastructure is crumbling. The VAT debate has highlighted a deeper clash between fiscal discipline and the need for bold action. Treasury’s focus on sustainability contrasts with calls from the EFF and MK Party for transformative policies to address inequality.
Politically, the GNU’s stability is under scrutiny. The ANC’s reliance on smaller parties has exposed coalition weaknesses, while the DA and EFF’s legal wins have bolstered their influence. Meetings between ANC and DA leaders, like the one on 25 April 2025 led by Fikile Mbalula and John Steenhuisen, signal ongoing efforts to find common ground.
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