Watch live: All eyes on Godongwana's ‘Budget 3.0' this afternoon
Dubbed 'Budget 3.0', the revised fiscal framework to be broadcast live by Finance Minister Enoch Godongwana at the Cape Town International Convention Centre this afternoon follows two failed attempts to pass the original 2025 Budget.
The Witness reports that while the dispute within the Government of National Unity (GNU) over the 2025 Budget appears to have been resolved, attention has now shifted to the trade-offs Godongwana is expected to make when he tables his revised budget in Parliament at 14:00 today.
On both previous occasions, Godongwana was not able to secure sufficient political backing, primarily due to his proposal to increase VAT — initially by 2%, and later by 0.5%.
The VAT hike was intended to help close a R75b revenue shortfall facing the National Treasury.
Investec Treasury economist Tertia Jacobs says today's budget is likely to reflect spending cuts, given National Treasury's reluctance to increase debt.
'Scrapping the VAT increase necessitates a reduction in spending to maintain a neutral impact on the budget deficit.
'The focus now will be on where said spending will be lowered, and the ability of the so-called GNU to craft a way forward that both demonstrates its priorities and allows for consensus,' she says.
Disagreements over the budget had threatened to destabilise the coalition government, which is seen by many as a key stabilising force amid ongoing geopolitical tensions and a sluggish domestic economy.
The DA, which drew criticism from its senior GNU partner — the ANC — after voting against the original budget in Parliament last month, now appears to be backing the revised version.
DA leader John Steenhuisen, whose party had gone so far as to take Godongwana to court to compel him to revise the fiscal framework, expressed satisfaction with the recent consultation process.
When asked in a recent interview about the progress of the talks, Steenhuisen said: 'We are going very, very well.
'There really is a sense of collaboration and working together to put on the table a credible budget that will be a strong, stable platform for us to go out and seek confidence from our investors, and also to start growing the economy and creating jobs.'
Business Leadership South Africa CEO Busi Mavuso says government must now focus on reforms that stimulate growth to avoid future fiscal shortfalls.
'The growth outlook has deteriorated from February, when the budget was first tabled, meaning there will be less revenue in the form of tax collection and therefore a bigger headache on how to balance the books.
'At last week's business-government partnership meeting, held with the president, it was clear that we must speed up reform to drive economic growth.
'It is time for Parliament and government to show that we are capable of rallying around a coherent budget that maintains fiscal consolidation,' she says.
Watch the 2025 Budget Speech live at 14:00:
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