Last chance budget to get green flag
Another insider said: 'There's happiness throughout. I don't know how he came up with this, I don't know how he made it [the budget] this good, but it just means it was doable from the start. He did his job.'
This source said Godongwana was 'even working very well' with his DA deputy minister Ashor Sarupen.
A fourth source said the spending cuts might have an even worse effect on poor people than a VAT increase would have had and predicted there would be 'long faces' in parliament.
'The amount of cuts or reductions is bigger than what VAT would have been had we left it,' this source said.
The trade-off was that instead of increasing VAT, 'you will have to wait longer for your clinic, or you have to wait longer for us to fix this road, or you will have to wait for a train because we can't put in all the signalling equipment'.
Godongwana's first budget included an additional R232.6bn over the medium-term expenditure framework to address spending pressures.
One of the sources said the opposition to the VAT hikes meant Godongwana had no choice but to cut spending.
'So that's what parties have been doing since February,' this source said. 'In fact, what they said was 'we're not going to give you the means to spend an extra R232bn, we reject your proposal'. Then he came back in March with I think it was R179bn.
'The parties said 'we don't want to give you R179bn'. So, he is coming back now, and he is saying from the March version we are going to have to cut another R75bn.'
Godongwana said last month scrapping the VAT hikes would result in a R75bn shortfall in his budget. To cover this, and in the absence of other revenue mechanisms, the minister is believed to have decided to slash expenditure by at least R60bn.
'Well, let's just say the tough choices finally have to be made,' one of the sources said, citing the International Monetary Fund's decision last month to cut its projection for GDP growth in South Africa this year from 1.5% to just 1%.
'We can't borrow more because revenue projections track GDP, so reducing the amount by which we add to the baseline [last October's medium-term budget] is the only option,' the source said.
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Daily Maverick
5 hours ago
- Daily Maverick
The DA's employment equity case attempts to reverse transformation and entrench white minority privilege
The Democratic Alliance's (DA's) legal challenge to the Employment Equity Amendment Act (EEAA) is a thinly veiled attempt to reverse economic transformation and thereby entrench white minority privilege. The party's claim that its court action is in opposition to 'grand social engineering' rings hollow given the enduring legacy of apartheid's social and economic architecture. In truth, the DA's stance on EEAA is an ideological inheritance, a continuation of their historical resistance to redress; part of its raison d'être to fossilise colonial and apartheid racial and gender hierarchies. To appreciate this, let us briefly consider the Department of Employment and Labour's 24th Commission for Employment Equity (CEE) Annual Report (2023/24). It exposes the fiction that the private sector is a transformed happy terrain which the DA seeks to shield from the supposed 'interference' of the government. The report illustrates a country still struggling to shrug off the shadow of economic apartheid. For example, while the white population group constitutes 7.7% of the nation's economically active population (EAP), it nevertheless held 62.1% of top management level positions in 2023. Representing 2.6% of the EAP, South Africans of Indian descent held 11.6% of these posts. At 80.7% of EAP, black Africans hold 17.2% of top management roles, while coloureds, at 9% of the EAP, account for a paltry 6.1%. These disparities are neither natural nor God ordained; they are an outcome of Verwoerdian economic violence against Africans, coloureds and Indians. The CEE report also damningly notes that the majority of recruitment, promotion and skills-development opportunities at this highest echelon continue to flow to the white population group. This is not merit, it is the perpetuation of a boardroom order where white privilege remains the default. Conveyor belt of privilege The disparity reflected at top management cascades downwards to the senior management level where whites at 7.7% of EAP occupy 48.5% of positions, Indians who constitute 2.6% of EAP hold 12.4%, while black Africans hold 27.6% of positions despite being 80.7% of the population. The lion's share of opportunities still flows to those already at the top, which means that transformation is perpetually decked against a conveyor belt of privilege. The private sector emerges as the stronghold of this resistance. While the government has made commendable strides, achieving 74.7% black African representation at top management, the private sector languishes with a pitiful 14% black African representation at this level, effectively maintaining the apartheid-era status quo, where 65.1% of top posts are held by white individuals. Alongside racial disparities is gender inequality. Across all sectors, men dominate top management by more than two-and-a-half times females (roughly 73% male). While the government shows marginally better female representation at 35.4% in top leadership, the private sector registers 10% less, at 25.8%. This glass ceiling, often a result of old boys' clubs dressing up exclusion as 'culture fit', is an outcome of a patriarchal culture which compounds racial exclusion and puts paid to the mythology of a self-correcting market. Nowhere is this private-sector exceptionalism and entrenched bias more grotesque than in the DA-run Western Cape, their self-proclaimed bastion of good governance. There, white males alone occupy a staggering 57.2% of top management positions and 34.4% at senior management level. This is in a province where white people constitute only 17% of the population, compared with 42% coloured and 38% black African – who together form 80% of the residents. This is not a reflection of a 'dearth of qualified candidates'; it is a damning testament to a systemic racial and gender bias thriving under a political administration that pays lip service to equality while actively fighting the tools designed to achieve it. Coloured and black African professionals are corralled into the lower tiers by an exclusionary 'culture fit' that walks and quacks like 'job reservation' in post-apartheid South Africa. These are the gatekeepers making crucial investment and employment decisions and shaping institutional cultures that too often exclude black African, coloured and Indian talent. In its affidavit to the North Gauteng High Court, the DA wilfully misrepresents the amended Section 15A of the EEAA, which empowers the minister to set 'numerical targets', as a draconian imposition of immutable 'quotas'. Yet, the original Employment Equity Act (EEA), in Section 15(3), explicitly clarifies that affirmative action measures 'include preferential treatment and numerical goals, but exclude quotas'. The Constitution itself was drafted to smash apartheid's economic architecture, not to immortalise it, and the Employment Equity Act is one of our key demolition hammers. Transformation failure The current amendments provide a desperately needed impetus precisely because the 'context-sensitive employer-led plans' so cherished by the DA have demonstrably failed to achieve substantive transformation, as the CEE statistics brutally confirm. Furthermore, the Act is far from being the rigid cudgel the DA portrays. Section 15A (3) explicitly provides for nuanced, differentiated targets responsive to occupational levels, sub-sectors or regions. Critically, Section 42(4) explicitly permits any employer to 'raise any reasonable ground to justify its failure to comply'. The Act has consistently emphasised the appointment of 'suitably qualified' individuals. Nothing in the Act prohibits the appointment of a candidate from a non-designated group if a diligent, exhaustive search does not find a suitably qualified candidate from a designated group. In practice, the Act operates much like our critical-skills visa process – nuanced, consultative and always mindful of maintaining standards. This inherent flexibility exposes the DA's opposition as ideological warfare rather than a practical critique. Their true grievance is with the erosion of racial privilege. Qualified franchise, swart gevaar This position is not new for the DA. As recently as 1978, 47 years ago, the DA, then called the Progressive Party, championed a qualified franchise for black people over universal adult suffrage or 'one person, one vote'. Revealing – more than it concealed – its contempt for black people, this party, which claims liberal credentials, argued that black people needed to have attained a certain level of education and own property in order to vote. No doubt a strategy to manage the savages. After rebranding as the Democratic Party, it opposed the Labour Relations Act of 1995 and the original Employment Equity Act of 1998 on grounds that these laws offend against 'meritocracy'. You can accuse the DA as you will, but inconsistency in protecting white minority privilege cannot be one of its faults. The DA's dire prophecy that the Act will cripple investment or decimate employment is an old swart gevaar red herring pure and simple. After the original EEA took effect, between 2001 and 2007, South Africa's economy grew between 4.5%-5.5%, while unemployment dropped by 11%, proving that equity policies can coexist with economic expansion. The real drags on investment are challenges such as energy and logistics bottlenecks and crime, not the presence of black African women and men in the C-suite. By selectively championing Section 9(1) of the Constitution (equality) while ignoring the clear mandate of Section 9(2) – the solemn duty to enact measures that advance those historically disadvantaged by unfair discrimination – the DA reveals its true colours. It aligns itself with every white-supremacist argument ever used to defy meaningful change. This constitutional mandate demands decisive, active intervention, not passive hope or transformation on its terms – optional, non-binding and perpetually negotiable. No Bantustan boardrooms The EEAA, fortified by the undeniable truth of the CEE's findings, stands as an indispensable instrument in our protracted struggle to dismantle structural racism, unlock the full spectrum of South African talent and forge an inclusive economy – a boardroom that is not a Bantustan reflecting a 7% minority. We cannot allow the boardrooms of corporate South Africa to remain gated enclaves. The consequences for doing so would be more than symbolic. These are the individuals who shape investment decisions, workplace cultures and corporate governance. If they do not reflect our nation, neither will our economy. Besides, we can forget about social and political stability – something to which the DA either pays lip service or does not appreciate, or both. The DA has no history of genuinely advancing the interests of black people in general, Africans, coloureds and Indians in particular, in our country. Its historic positions are consistent with this latest offensive and an affront to the eradication of the legacy of colonialism and apartheid. South Africans must ask – whose freedom is advanced if the DA wins? Certainly not the coloured engineer passed over because she 'won't fit the culture'. Not the black African professional locked out of a training programme because the boardroom is 'already diverse enough'. The only winners would be those who mistake yesterday's privilege for today's right.

IOL News
5 hours ago
- IOL News
Godongwana urges MPs to ensure proper expenditure of R1 trillion infrastructure budget
The report on the Fiscal Framework and Revenue Proposals easily garnered the majority vote from the Government of National Unity partners and other smaller parties. Finance Minister Enoch Godongwana on Tuesday challenged parliamentarians to ensure that the R1 trillion allocated for infrastructure in the 2025/26 budget was spent efficiently and effectively. Speaking moments before the vote on the Fiscal Framework and Revenue Proposals and report of the standing committee on finance, Godongwana said he has discharged his responsibility. 'MPs have to make sure that this R1 trillion on infrastructure is spent effectively and efficiently,' he said. His comment was a sequel to the remarks by National Coloured Congress leader Fadiel Adams who sympathised with Godongwana after he was asked 'to pull off a miracle with nothing in revising the budget'. 'That should be the concern of these members … If not spent properly, that is your duty as MPs to do oversight,' he said. The report on the Fiscal Framework and Revenue Proposals was tabled in Parliament for the third time. On Wednesday, 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. Godongwana, who had to redraft the budget and scrap initially proposed VAT increases, said it was a painful journey to have the budget adopted. 'From the National Treasury's perspective, we drew a number of lessons, but I suspect also members of this House must draw a number of lessons as to how we in practice are to manage debate around the Fiscal Framework moving forward,' he said. The passage of the Fiscal Framework and Revenue Proposals was despite the adjustment in the fuel levy, which was criticised by many during the debate. 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. 'The stakeholders, however, raised concerns about the proposed adjustments to the fuel levy, the lack of adjustment to PIT (personal income tax) brackets, above-inflation increases in excise duties, the withdrawal of zero-rated food items and the National Treasury's failure to increase Social Relief of Distress grant allocations,' he said. 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. 'These represents real breakthroughs that protect both the poor and the economy, but they are not enough,' Burke said. 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 ACDP's Steven Swart said they welcomed the removal of VAT but it was sadly replaced by the maligned fuel levy hike. 'We will support the report but will be closely monitoring it. We want to be builders, not breakers,' said Swart in backing the Fiscal Framework report. BOSA leader Mmusi Maimane, whose party abstained in the vote, said the obsession should be about the rate of investment brought into the country, saying the projected economic growth was far too low. 'I suggest that we be aggressively declaring economic zones and giving infrastructure support, digital connectivity, efficient public transport and ethical government,' he added.

TimesLIVE
6 hours ago
- TimesLIVE
Godongwana declares contentious Budget the new normal as parly adopts fiscal framework
While finance minister Enoch Godongwana did not run this past weekend's Comrades marathon, his 2025 Budget finally reached the last mile of its race for adoption, after three lockups, two tablings and a court challenge. The National Assembly voted to adopt the 2025 fiscal framework and revenue proposals as well as the committee report thereof on Wednesday afternoon, with 268 voting in favour of the adoption, 88 voting against the adoption, and two abstentions. Godongwana told the National Assembly sitting that he suspected that over the next four years, the management of the Budget as well as the fiscal framework would be similar to how it was handled this year. 'We have had a painful journey to arrive at this date, where the fiscal framework is being approved. It has been a very painful journey. Definitely, from the Treasury perspective, we've drawn a number of lessons, but I suspect, also members of this house, must draw a number of lessons as to how, in practice, are we going to manage the debates around the fiscal framework moving forward?' Parliament's February sitting to table the Budget was postponed over resistance at a cabinet level to a VAT hike proposal. Godongwana returned to parliament in March with a revised VAT hike proposal, and the fiscal framework was challenged in court. He finally tabled a Budget in May with a fuel levy hike in place of the scrapped VAT hike. He challenged the assertion that his 2025 Budget was an austerity budget. 'This budget is not austerity. We are increasing taxes, not to focus on debt, but to focus on funding social services. Education, health and so on.' ANC MP and standing committee on finance chair Joe Maswanganyi moved for the adoption of the fiscal framework and revenue proposals report, saying that processing a budget within a coalition government can be complex due to the competing interests involved. In Godongwana's defence, Maswanganyi said anyone calling for Godongwana's head was out of tune with the realities facing coalition governments around the world. 'Considering these realities, particularly the tariffs and trade tensions initiated by the US , it is prudent to pay attention to the five-year plan ... This is not an austerity budget. The Budget has garnered praise for being pro-poor and pro-growth.' He said stakeholders welcomed the scrapping of the proposed VAT hike ahead of its effective day of May 1, but raised concerns over the financial impact of the fuel levy hike on business as well as middle-to-low-income households around the country. MK Party MP and former finance minister Des van Rooyen said his party rejected the committee's report on the 2025 budget as a 'sell-out pact' led by the parties that came together to form the government of national unity after last year's election. 'It is in this report that the ANC, DA, IFP, FF Plus, Action SA, and other GNU beneficiaries agreed that the majority of our people should be subjected to the fuel levy hikes and personal income tax. Think-tanks are in agreement that the fuel levy is the most regressive tax: even worse than VAT.' South Africans will pay more for work, school and travel expenses, and the buying power of people's income will be whittled away due to bracket creep. He said the report sought to protect the interests of a wealthy few. DA MP Wendy Alexander said for the first time in years, the budget process included ordinary South Africans rather than being rubber-stamped by a legislature where the ANC enjoyed a strong majority. She called the scrapping of the VAT hike a victory for democracy and South Africans. 'When citizens watch, comment and engage the budget process, the democracy grows, and this is precisely what the constitution envisioned — a government accountable to the people and not the other way around.' She said the GNU must prove that government can function across spheres when the stakes demand it. She said the projected 77% debt-to-GDP ratio was unsustainable and that the country could not be expected to build more schools and hospitals on the back of untenable debt levels. EFF MP Omphile Maotwe said her party rejected the fiscal framework and revenue proposal report as a project which would condemn South Africans to considerable tax burdens, courtesy of the 'former liberation movement', the ANC. 'It took the EFF to approach the Western Cape High Court to stop the VAT increase. If it were not for the EFF South Africans would already be paying 15.5% VAT today. The people of South Africa know now without any doubt that the EFF is the only dependable tool in the hands of the poor and the working class.' She said the fuel levy increase was an attack on motorists, the poor and the working class, who were already facing rising costs before the proposal was tabled. IFP MP Nhlanhla Hadebe said his party accepted the report. Supporting the report, Patriotic Alliance MP Ashley Sauls said the 2025 budget process tested the GNU's resolve as the government remained intact through an ordeal that has collapsed coalition governments elsewhere in the world. Freedom Front Plus MP Wouter Wessels pointed out that MPs calling for a wealth tax were calling for a deeper tax on themselves and their steep salaries. He said a credible budget was one where every rand and cent was channelled towards the benefit of ordinary South Africans. Action SA Alan Beasley said his party was among the first to oppose the proposed VAT hike, saying it was immoral to ask the poor to pay more for essentials while corruption goes unchecked. 'We welcome the minister's decision to scrap the VAT increase and are proud of the role we played in securing this outcome. We also welcome the R7.5bn n allocated to Sars over the medium term, an investment ActionSA championed.' He said that while Action SA rejected the R22bn raised through regressive taxes like fuel levy hikes and bracket creep, strengthening Sars is essential. 'Properly funded, Sars can close the tax gap, tackle illicit trade and boost revenue collection by a conservative R50bn annually. We are encouraged that the minister has committed to monitoring Sars's performance and will provide tax relief in next year's budget if revenue exceeds targets.' ACDP MP Steve Swart said the National Treasury should produce the fuel levy review that was promised to the legislature. He said while the ACDP believed in miracles, it appeared to be a remote possibility that South Africa's GDP would grow well beyond 2% in the coming years. UDM MP Nqabayomzi Kwankwa said the fuel levy was worse than VAT as there was no way of mitigating its regressive impact on low-income households, and anyone who considered the scrapping of VAT a victory for these households was being 'hypocritical'. Supporting the report, RISE Mzansi MP Songezo Zibi said the national balance sheet remained unsustainable as over 80% of the revenue collected by the SA Revenue Service (Sars) pays for over R820bn in salaries, R420bn in debt service costs and R440bn a year to the social security package. 'That leaves very little money to invest in the things we need to unlock economic growth and create sustainable jobs. [Dated] national and local infrastructure continues to choke our economy, together with policy assumptions that still assume we live in the 1960s.' BOSA MP Mmusi Maimane said one of the grimmest realities in the Budget's fiscal framework was that the rate of investment remained low, leaving the government with little funding for its spending programmes. 'I fear it is a missed opportunity for us to really speak about reform. The question we should be obsessed about is not just GDP growth or actually looking at debt. It should be the rate of investment in this country. And on the same budget, it proposes that our rate of investment is at 4.2%.'