Budget 3.0: Opposition parties clash over impact on poor

The Citizen

21-05-2025

Parties are split, with some calling Budget 3.0 progress and others accusing it of deepening poverty and failing the economy.
Finance Minister Enoch Godongwana at the presentation of the Budget for the 2025/26 financial year at Cape Town International Convention Centre (CTICC) on 21 May 2025 in Cape Town, South Africa. Picture: Gallo Images/Jeffrey Abrahams
Opposition parties are divided over Budget 3.0, with some welcoming key changes and others condemning it as anti-poor and lacking solutions to South Africa's economic crisis.
The DA cautiously welcomed the proposals for revenue and expenditure in the budget, viewing them as a pathway to a national budget that the party can support when it is time to vote.
'It is a victory for all South Africans that the mooted VAT hike has now finally been removed from the minister's revenue proposals after the DA court action in this regard,' said Dr Mark Burke, DA spokesperson on finance.
VAT hike removal a win for the DA
The party stated that the budget speech is turning the tide towards growth and investment. DA said it is turning away from unchecked government spending funded by South African taxpayers.
'The DA also notes and welcomes that more realistic economic growth forecasts have been used to model revenue in this version of the budget,' Burke said.
The uMkhonto weSizwe (MK) party has criticised Budget 3.0 as an indictment of the poor, asserting that the increase in the fuel levy effectively acts as a hidden value-added tax (VAT) increase. From 4 June, the general fuel levy will increase by 16c per litre of petrol and by 15c per litre for diesel.
ALSO READ: Budget 3.0: not austerity budget, but a redistributive budget
'This budget is as absent as its president,' said MK spokesperson Nhlamulo Ndhlela.
President Cyril Ramaphosa is in Washington, D.C., on a working visit to the United States.
Ndhlela said the budget continues to punish the poor.
The party's reaction comes as it announced it has tabled a motion of censure against Finance Minister Enoch Godongwana because of his 'gross incompetence, chaotic budgetary process, and ongoing neglect' of the country's socioeconomic crisis. The MK party is also moving to table a vote of no confidence in President Ramaphosa.
MK tables motions against Godongwana and Ramaphosa
'Minister Godongwana presented yet another hollow and anti-poor budget, burdening the most vulnerable through fuel levy increases and the removal of essential zero-rated VAT items, while offering no meaningful proposals to resolve the deep structural crises facing our society,' the party said in a statement.
The MK party was not impressed that the VAT was not increasing and urged the government to attract investment into the country, double infrastructure spending, and create jobs.
'This budget is perpetuating the state of the poor,' Ndhlela said.
ALSO READ: Budget 3.0: First fuel levy increase in three years – Here's by how much
The Economic Freedom Fighters (EFF) have rejected the third version of the budget, describing it as 'weak, misguided and disconnected' from the daily lives of South Africans.
'What is now tabled is not only weaker than the previous budget – it is a declaration of surrender by the National Treasury,' the party said in a statement.
'It demonstrates complete incompetence and an ideological commitment to failed neoliberal austerity, despite the claim by the Minister of Finance and the former liberation movement that this is not an austerity budget.'
Budget lacks concrete plan to create jobs – Malema
EFF leader Julius Malema said Godongwana's budget lacks a concrete plan to create jobs or stimulate economic growth.
'He must increase corporate tax. He must increase the inheritance tax. He must increase the luxurious land tax where people just have beautiful land and don't use it for anything. We must strengthen the South African Revenue Service (Sars),' Malema said.
He also criticised the government for failing to raise corporate tax.
ALSO READ: Godongwana cuts government spending to offset VAT shortfall
'To them, the rich are untouchable,' Malema said.
Inkatha Freedom Party (IFP) leader Velenkosini Hlabisa supported the budget, stating that South Africans must use the available resources rather than rely on tax increases.
'The good aspect is that the frontline services (education, health, social grants) were maintained. More funding is going to infrastructure to generate job opportunities and create an opportunity for the country to grow its economy,' Hlabisa said.
IFP not happy with fuel levy increase
The party was not happy with the fuel levy increase, as it would hit the poorest hard. Hlabisa stated that the budget requires close monitoring due to a shortfall over the next three years.
The Freedom Front Plus (FF Plus) welcomed Godongwana's amended budget as a win for multiparty democracy and the government of national unity's (GNU) influence on policy.
The party praised the decision to avoid a VAT hike, which it argued would harm the poor, but criticised the increased fuel levy as counterproductive.
ALSO READ: Budget 3.0: pressure and expectations are building
'The party continues to advocate for alternative solutions, such as a sharp reduction in government expenditure coupled with the eradication of corruption,' the party said.
'The Freedom Front Plus is pleased that its proposals regarding constructive solutions to stimulate economic growth and promote cost-effective state expenditure have been incorporated into today's budget.'
ActionSA welcomes Sars boost
ActionSA welcomed the R7.5 billion boost to Sars, seeing it as a vital step toward improving revenue collection.
However, the party strongly opposes the new tax measures—such as bracket creep and increased fuel levies—arguing they unfairly burden ordinary South Africans while government waste and corruption remain unaddressed.
ActionSA also criticised the lack of funding for the National Prosecuting Authority (NPA) and stressed the need for structural economic reforms to tackle the country's deepening unemployment and cost-of-living crises.