Ntshavheni dismisses reports that Cabinet has rejected a reworked budget.

By Lehlohonolo Lehana.

Cabinet spokesperson and Minister in the Presidency Khumbudzo has dismissed reports that the Cabinet has rejected a reworked budget.

Ntshavheni tweeted that this was fake news that the reworked budget has been rejected.

During a special meeting in Cape Town on Monday, Finance Minister Enoch Godongwana presented an alternative budget that excluded the proposed 2% VAT increase to Cabinet.

However, Cabinet rejected Godongwana’s revised budget, stating that it was not feasible.

This is the second time in a week that the Cabinet has rejected the budget.

In a six-hour discussion, Godongwana told Cabinet members that the budget without VAT increases essentially limited the extent of the suggested increases to departments that he had originally intended to mention in his speech.

The Budget was moved to March 12 after parties failed to agree on the budget.

Fullview learnt that the Budget would still be tabled next month.

The immediate response to resolve the matter, was to set up a subcommittee that would look into the matter and will be chaired by Deputy President Paul Mashatile.

“The subcommittee will work out the modalities,” said our source who spoke on condition of anonymity because they are not allowed to discuss Cabinet meetings with media.

Meanwhile Moody’s Rating Agency expects the government of national unity (GNU) to come to an agreement on a budget that does not stray from the fiscal consolidation path, warning should differences in the government become more entrenched this will increase fiscal policy uncertainty.

The ratings agency was reacting to the postponement of the budget last week after disagreements on the proposed two percentage point VAT hike.

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