By Lehlohonolo Lehana.
Parliament passed the budget’s fiscal framework and revenue proposals on Wednesday, removing a key pillar of uncertainty for investors.
Disagreements in the coalition government have delayed the budget, but most of those have been resolved following changes made in a third budget version presented by Finance Minister Enoch Godongwana last month.
The report garnered the majority vote from the Government of National Unity (GNU) partners and other smaller parties.
The report was passed with 268 votes in favour, 68 MPs, from the MK Party, EFF and United African Transformation were in opposition and two abstained.
Tabling the report, ANC MP and standing committee on finance chairperson Joe Maswanganyi said Godongwana’s third budget presentation underscored a steadfast commitment to fiscal responsibility and transparency.
Maswanganyi said the budget adoption process within a coalition government can be quite complex due to the multitude of interests involved as coalition partners often bring diverse priorities, ideologies, and agendas to the table, which can complicate consensus-building efforts.
“Anyone calling for the Minister’s head for the budget delay, is out of tune with coalition government dynamics all over the world,” he said in veiled attack on the MK Party, whose motion to censure Godongwana failed on Tuesday.
Maswanganyi said during the budget hearings, stakeholders had welcomed the withdrawal of the VAT increase and additional allocations to SARS.
While opposition parties on Wednesday rejected the Fiscal Framework and Revenue Proposals that underpin the 2025 budget, GNU parties have come out in support of the revised budget, saying it is a product of compromises to achieve much-needed economic growth.
This is a relief for Godongwana as his budget blueprint for 2025 has finally passed political muster.
Godongwana has acknowledged it’s been a tough road that’s been paved by political contestation and legal challenges.
DA spokesperson on finance Mark Burke said his party supported the Fiscal Framework because it reflected some critical breakthroughs for ordinary South Africans.
“This is not a moment for celebration, it is a moment to push even harder for real economic reform that streamlines government, creates jobs and delivers growth,” Burke said.
He praised the DA’s firm stance against the VAT hike, securing billions in infrastructure investment, a commitment to root out ghost workers and an urgent review of government spending.
MK Party’s Des van Rooyen said the GNU has subjected the country to a high fuel levy increase.
“Fuel levy is the most regressive taxing system and far worse than VAT is,” he said.
Van Rooyen also said the report refusing their proposal for the introduction of a wealth tax, confirmed that ‘the so-called GNU was a platform to protect the wealthy few, using puppets’.
The EFF’s Omphile Maotwe said her party rejected the Fiscal Framework that was supported by the GNU, which replaced VAT with ‘the regressive fuel levy that will affect the poor and the working class and failed to adjust the personal income tax brackets in line with inflation’.
“The Minister of Finance has declared to increase fuel taxes without even bringing a bill to Parliament. This tax is already in effect. It is a violation of the basic constitutional principle that no tax be imposed without the authority of legislation,” she said.
The rand was marginally stronger in early trade on Wednesday, as lawmakers were due to vote on the first pieces of budget legislation.
At 07:20 the rand traded at 17.6950 against the dollar , up 0.1% on Tuesday’s closing level.
Parliament on Tuesday rejected the MK Party’s motion to censure Godongwana over his alleged mishandling of the Budget.
This was after MPs voted on the matter following a debate in a mini-plenary that took place last Friday after the party’s former chief whip, Mzwanele Manyi, tabled a motion last month.
In its draft resolution, the MK Party urged the National Assembly to note with grave concern that Godongwana allegedly mishandled the national Budget process.
Only the MK Party with its 46 votes and a vote each from the ATM and United African Transformation backed the motion.
The ANC, DA, EFF, IFP, Patriotic Alliance, Freedom Front Plus, ActionSA, ACDP, UDM, Rise Mzansi, and the National Coloured Congress voted against. The Good Party, BOSA, PAC, and Al Jama-ah were not present during the vote.