Godongwana says his budget can't be faulted for not apportioning money to where it's most needed
CAPE TOWN - Finance Minister Enoch Godongwana said his budget could not be faulted for not apportioning money to where it was most needed.
Following a second successful attempt at passing the fiscal framework which underpins the national budget on Wednesday, Godongwana said that it was now up to MPs to ensure the money was spent correctly.
The budget allocates one trillion rand for infrastructure spending over the next three years.
"Is that money going to be used efficiently and effectively. That should be the concern of these members. But you can't fault the budget. If it's not spent properly, that's your duty as Parliament to do your oversight."
Parliament's finance committees will now get to work in scrutinising the money bills which allocate money to all spheres of government.
ALSO READ:
• Parliament gives Fiscal Framework and Revenue Proposals underpinning budget green light
• GNU parties support 2025 fiscal framework and budget, opposition parties call it anti-poor
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The South African
8 hours ago
- The South African
HOW government ineptitude wiped out R127 billion in TWO months
In unprecedented circumstances for the South African government, the country's predicted GDP fell by R127 billion between March and May 2025. How can anyone forget that Finance Minister Enoch Godongwana under GNU needed three stabs at tabling a fiscal budget in 2025? Initially, the Finance Minister's first Budget Speech was cancelled on 19 February 2025. Until he finally delivered his first address on 12 March 2025. In it, the Minister pegged South Africa's economic growth at an average of 1.8% over three years. Nearly 45% of residents receives some form of SASSA grant, which many argue is creating unsustainable dependency on social welfare. Image: File However, government saw that budget framework overturned in the court proceedings over the controversial VAT increases. And the process needed to begin again. Therefore, on 21 May 2025, Godongwana delivered an updated 2025 Budget. and in it GDP growth had weakened to 1.6% over three years. That 0.2% may not sound like a lot less, but over three years it represents R127 billion, reports Daily Investor . 'Global growth has faltered, and South Africa's economic outlook has also weakened, with GDP expected to grow by only 1.4% in 2025. Since the 2025 Budget Review publication in March, greater uncertainty and trade fragmentation have contributed to a weaker economic outlook,' justified Minister Godongwana. Is GNU helping or hindering South Africa, in light of the 2025 fiscal budget fiasco? Image: File However, on the face of it, aren't' economic circumstances improving? Eskom's power supply to the country is better than ever and fuel prices have been dropping all year. The trade feud with the United States government looks to be in check (for now) and there have been interest rate cuts across the board. So, why the sustained bleak outlook? Critically, the government spends the most money each year on two things: Servicing debt and social welfare. Neither of which create jobs to bring any money back into government coffers. Likewise, the International Monetary Fund (IMF) recently cut its economic growth forecast for South Africa to just 1%. Way lower than the anticipated 1.6%. And if the South African economy only grows by 1%, as the IMF predicts, even this subdued budget will have a big hole. As such, if government is forced to borrow yet more money, the already high debt-to-GDP ratio will only worsen … Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
The South African
a day ago
- The South African
3 pieces of GOOD news for the South African taxi industry
There have been three major developments in the South African taxi industry in recent weeks. Firstly, government announced it will scrap nearly 2 000 illegal/unroadworthy minibus taxis. Likewise, there is a directive to convert approximately 400 vehicles to alternative fuels, too. This progress in the South African taxi industry is all part of a 'Taxi Recapitalisation Plan' that was presented in parliament last month (Tuesday 20 May 2025). As such, government's broader mandate is to finally modernise the industry through various projects. In time, these vital industry reforms will translate into savings for the end user. Image: File Like them or loathe them, the South African taxi industry is the lifeblood of the country's economy. More than two thirds (66%) of the nation relies on public transport to get to and from work each day. As such, another piece of good news is that the South African National Taxi Council (SANTACO) won't raise fares this month. When the Minister of Finance Enoch Godongwana hiked the General Fuel Levy (GFL) for the first time in three years, it was widely anticipated that taxi fares would increase in June 2025. This would add yet more financial pressure to the country's poor. Effective from this month, the GFL increased by 16c per litre and 15c per litre for petrol and diesel respectively. As a result, the total cost of GFL is R4.01 per litre for petrol and R3.85 per litre for diesel. That taxi fares are unmoved is a remarkable turn of events when you remember that the Carbon Levy increased by 3c per litre back in April, too. We're not there yet, but cleaner, greener and safer, is what the future of the South African taxi industry is all about. Image: File Furthermore, new Liquid Petroleum Gas (LPG) conversions will lower the cost of fuel for taxis by as much 35%, reports BusinessTech . The department says LPG is the most viable alternative fuel because of the ease of conversion for minibus taxis. Better still, LPG runs cleaner, providing a longer engine lifespan and less maintenance. The option of dual systems is also viable for long-range commutes. At last count, the department says only seven taxis have converted as part of the LPG pilot project. It hopes to install 400 conversion kits. Finally, stakeholders in the South African taxi industry are once again encouraged to take advantage of the Taxi Recapitalisation Projects (TRP). Government says voluntarily surrendered unroadworthy minibus taxis will be scrapped free of charge. And owners/operators will gain access to an allowance which they can recapitalise on a new taxi. The department believes there are as many as 2 350 illegal/unroadworthy taxis still operating in South Africa. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
The Herald
a day ago
- The Herald
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%.' TimesLIVE
