By Lehlohonolo Lehana.
Finance Minister Enoch Godongwana has announced on Wednesday, that the new budget will be tabled again on 21 May 2025.
National Treasury hosted a media briefing at the GCIS Media Centre to explain the technical process that must now be undertaken regarding the 2025 Budget.
The briefing was led by the Minister of Finance, Enoch Godongwana, supported by Deputy Ministers Masondo and Sarupen, and Director-General Dr Duncan Pieterse.
The National Treasury spent almost R2.4 million on service providers for “Budget day” on 19 February. The Budget was postponed at the eleventh hour as GNU parties disagreed on a VAT increase.
The minister told a briefing that there would be thorough consultations with all political parties in the coalition government as well as approval by the country’s cabinet before the revised budget is presented in parliament next month.
The 21 May budget will be the third he has prepared this year. He abandoned the first minutes before delivery in parliament in February and withdrew the second last week, a day after a high court hearing in which Democratic Alliance (DA) and the Economic Freedom Fighters (EFF) attacked the tax proposals and the manner in which they passed through parliament as unlawful.
Godongwana conceded that he had failed to anticipate the push-back his budget proposals would encounter within a 10-party governing coalition and described what ensued as messy.
“We are dealing with uncharted terrain. As you are aware we used to have a budget with a dominant party, being the ANC, and if one was preparing the budget you could be sure that you would go to parliament and the ANC would pass the budget.
“Now we are in a coalition government.”
The new reality had the practical implication of needing support for the fiscal framework from a number of political parties in the cabinet and in parliament and in the end it was not forthcoming.
“I was within my constitutional parametres to table a money bill, what then happened, because of the nature of the coalition politics we could not find consensus, “Godongwana said.
While readily conceding the lack of political support for his second budget, he was firmly denying the DA’s courtroom argument that the VAT Act was unconstitutional and that he had exceeded his powers but said he was not pointing a finger at the ANC’s coalition partners.
“I am not going to put blame on anybody, but that process on its own, because all of us are new in this thing, was messy,” he added.
“We have all learnt from it because we might have gone into this not anticipating the kind of challenges we faced.”
The EFF, which is outside the coalition but joined in the DA’s court challenge, called on Godongwana to resign after he announced that he would return to the drawing board to revoke it.
He said does not intend to do so, noting that he served at the pleasure of the president who understood the political complexity of his government.
“If that president falls, I fall, but for as long as he wants me to work, I am going to work.”
Godongwana said the treasury would, over the next three weeks, prepare a budget he hoped would pass as a “sellable document” but he was not going to undermine the legislature by saying it would pass muster.
“We are going to work hard to produce a document which will be sellable.”
He said investors would make their assessment on the basis of the fiscal framework as set out in the new budget, not the to and from on taxation that necessitated a third attempt, which will now reach the National Assembly after the start of the financial year.
“We are not worried. The credibility issue is not going to be the reversal of VAT,” he said.
“The credibility issue is going to arise from the final product, the final budget that is adopted, whether that budget will reflect fiscal sustainability and fiscal prudence, that is where the credibility issue will arise.”
He added that international ratings agencies and investors were accustomed to “the chaos of coalition governments” in more advanced economies.
He said the National Treasury had already begun work on developing a new fiscal framework that would maintain the country’s trajectory toward debt stabilisation, a crucial element in strengthening public finances.