By Lehlohonolo Lehana.
President Cyril Ramaphosa downplayed the effects of the budget postponement, saying should not be seen as a “crisis” but rather a “Democracy at work.”
On Wednesday, the Cabinet postponed the budget speech to March after parties failed to agree on the proposed 2% VAT increase.
The move is unprecedented and has rocked the Government of National Unity (GNU).
It’s the first time a budget speech has been postponed since at least the end of apartheid in 1994.
Following the 2024 national election, the ANC lost its majority, securing only 40% of the vote. This led to the creation of the GNU.
Speaking to reporters on the sidelines of the Group of 20 (G20) foreign ministers’ meeting in Johannesburg on Thursday, 20 February, Ramaphosa said the delay in tabling the Budget and disagreement among parties over its substance, was not one of the issues that threatened the existence of the GNU.
“Yesterday, we were meant to present the Budget of our own country to our Parliament, and discussions that ensued prior to that presentation, in both the leaders of the GNU and also Cabinet, gave clear indication that some of the proposals that were being put forward would not be favourably accepted. The Cabinet then felt that we should postpone the presentation of the Budget.
“We are in a government of unity system now and, in the end, no one party can be able to truly impose anything without much negotiation and discussion,” said Ramaphosa.
“This is not a fatal fallout – the Government of National Unity is sustaining this, it will continue working. We are going to go back to the drawing board and find one another. We’ve been through a number of other near-crises that have threatened the existence of the GNU – this is not one of those that will threaten the existence of the GNU. It is a hiccup that we are going to get over.”
If the Budget had passed in the National Assembly, the increase in VAT would have kneecapped an already struggling nation – particularly the millions of South Africans still living below the poverty line.
Tensions have arrived with regularity in the GNU, and the inability to table the Budget is one of many incidents that have evidenced significant fractures within the fragile power-sharing board, which is still divided on legislation, including the Bela Act, National Health Insurance Act and Expropriation Act.
Ramaphosa told reporters that the Budget, which has been postponed to 12 March, would be reworked.
“The Budget clearly is going to be reviewed. That is going to be the process that we follow and in doing so, the minister of finance wants to move very quickly to start crafting what could be an alternative. But, also, he will bring to the fore the stark realities that we face and the budgetary challenges that he has had to [contend with] in crafting the Budget that he put forward,” he said.