Latest news with #AppropriationsBill
IOL News
5 days ago
- Business
- IOL News
Western Cape Finance MEC ensures stability with R89. 3 billion budget despite national challenges
Western Cape Finance MEC Deidré Baartman delivers the 2025 Budget Speech in the Provincial Parliament. Western Cape Finance MEC Deidré Baartman re-tabled the province's R89.3 billion Appropriations Bill after the national government unexpectedly withdrew its budget, including the legally binding Division of Revenue Bill. Addressing the Western Cape Provincial Parliament, Baartman clarified that although the process had to be repeated for legal compliance, 'nothing in substance in the Western Cape Appropriations Bill has changed.' The 2025/26 Western Cape Budget still allocates a total of R269.5 billion over the next three years, with more than 80%, or R215.8 billion, dedicated to social services. This includes R101 billion for education, R100 billion for health, R6.4 billion for housing, and R8.4 billion for social protection.
IOL News
5 days ago
- Business
- IOL News
Western Cape Finance Minister re-tables R89. 3 billion Appropriations Bill as national budget faces uncertain future
Western Cape Finance MEC Deidré Baartman delivers the 2025 Budget Speech in the Provincial Parliament. Image: Supplied Western Cape Finance Minister Deidré Baartman re-tabled the province's R89.3 billion Appropriations Bill after the national government unexpectedly withdrew its budget, including the legally binding Division of Revenue Bill. Addressing the Western Cape Provincial Parliament, Baartman clarified that although the process had to be repeated for legal compliance, 'nothing in substance in the Western Cape Appropriations Bill has changed.' The 2025/26 Western Cape Budget still allocates a total of R269.5 billion over the next three years, with more than 80%, or R215.8 billion, dedicated to social services. This includes R101 billion for education, R100 billion for health, R6.4 billion for housing, and R8.4 billion for social protection. In terms of strategic spending, the province is staying the course on its four apex priorities: R43.8 billion to 'Growth for Jobs,' R3.9 billion to safety, R194.9 billion to build an 'Educated, Healthy and Caring Society,' and R23.4 billion to innovation, culture, and governance. 'In light of this,' said Baartman, 'the doors of the Western Cape Government have, and will continue to, remain open.' Despite the chaos at a national level, Baartman assured residents that essential services would remain intact, crediting this stability to provincial fiscal discipline. 'Despite the uncertain fiscal environment, the Western Cape Government can assure this house that we have kept strict protocols in place on cash flow management in the province to ensure service delivery continues uninterrupted,' said Baartman. She also acknowledged the tireless work of officials during this turbulent period. '2025 has really seen us exercise our legal and procedural muscles within the uncertain fiscal space nationally, and I would like to thank the Provincial Treasury team as well as the Legal team in the Department of the Premier for their assistance and guidance throughout this process.' Looking ahead, Baartman expressed hope for a smoother national budget process next year. 'For certainty, fiscal stability and trust, it is my sincere hope that the national budget process for 2026 will flow more effortlessly.' IOL News
IOL News
04-05-2025
- Business
- IOL News
Coalition politics and budget cuts: What to expect from Godongwana's upcoming speech
Minister of Finance, Enoch Godongwana briefing media on the 2025 Budget Process. Image: Supplied / GCIS While there have been calls for Enoch Godongwana to resign, South Africa's Finance Minister announced this past week that a third Budget Speech will be taking place later this month, on 21 May. The announcement came after the 0.5% Value Added Tax (VAT) reversal, which was proposed in the March 2025 Budget, with the matter being taken to court by the Democratic Alliance (DA) and Economic Freedom Fighters (EFF). Earlier this year in February, the minister's first budget attempt was thwarted by political parties in Parliament, as the minister proposed a larger VAT increase of 2%. Godongwana said that the Budget of 12 March 2025 and the proposed VAT increase sparked rigorous debate. 'This is welcomed in a healthy democracy. Today there is clarity that VAT will remain at 15%. This decision was shaped not only by political debate but by the voices of the South African people. When people speak we must listen. I'm encouraged by the passion shown, and it reflects the seriousness with which we approach the hard choices needed to place our finances on a sustainable path.' Godongwana added that we are all new in South Africa to what is called coalition politics. 'There are lessons to be learnt by cabinet, legislature and ourselves. I'm pleased that we have agreed that we will balance the budget without raising VAT while protecting vital sectors such as education, health, and social grants,' he said. Frank Blackmore, lead economist at KPMG shared his thoughts with Business Report on what he thinks Godongwana's re-tabling of the 2025 Budget Review for the economy. Blackmore said, "The comprehensive review will include the Fiscal Framework, Appropriations Bill, Division of Revenue Bill, as well as the already tabled Rates and Monetary Amounts and Amendment of Revenue Laws Bills. Given the long delay since the original budget was tabled in February, until the new budget is passed, government services will continue to be funded under Section 29 of the Public Finance Management Act." He added that this provision also applies, in part, to the funding of provinces and municipalities, it is therefore not the case that these levels of government will be cut off from funding. "Public services should continue to be rolled out. The Minister also informed us that the National Treasury has begun developing the new fiscal framework to maintain the trajectory towards debt stabilisation, an essential element in strengthening public finances. A key point here is that the Treasury will need to revisit the economic assumptions, using the most recent data available,"Blackmore said. "I imagine their GDP forecast will be revised down from the 1.9% we saw in the previously tabled budget. This process involves generating updated fiscal projections, recalculating revenue estimates, determining appropriate borrowing strategies, and consolidating these elements into a coherent fiscal framework. It seems that much remains open at this stage, and we will only see the full details on 21 May, by which time, one hopes, agreement will have been reached with all parties that form part of the Government of National Unity (GNU)." Waldo Krugell, an economics professor at the North-West University, said, "The work will be done by the Treasury's Budget Office. Economists are keen to see the impact of updated economic growth forecasts and what they mean for tax income and major ratios like debt-to-GDP." Krugell added that Godongwana has also indicated that borrowing more will not be an option, so there will have to be some spending cuts to the proposals made in Budget 2.0. Siyabonga Ntombela, University of KwaZulu-Natal academic and political analyst, warned that the government will attempt to recoup the lost revenue through alternative measures, such as increasing the fuel levy, which will in turn impact food prices. "Certain goods will all of a sudden cost more. South Africa's borrowing ratings are below investment grade. The government will have to put some austerity measures to keep the country afloat," Ntombela said. BUSINESS REPORT
Eyewitness News
23-04-2025
- Business
- Eyewitness News
Parliament takes next step in budget process looking at Appropriations Bill
CAPE TOWN - Parliament's standing committee on appropriations has on Wednesday continued with the next steps in the national budget process, with a first look at the Appropriations Bill. This is despite the unresolved matter of the value-added tax (VAT) hike, which will be used to fund the R2.3 trillion budget. Except for the uMkhonto weSizwe (MK) Party, political parties have not taken major issue with the allocations made to the State's 42 departments. However, the committee has taken a dim view of neither the finance minister nor his two deputies showing up at the meeting. As the National Treasury officials took the standing committee through the key expenditure in the bill, chairperson Mmusi Maimane was supported by members in taking exception to the absence of political principals to discuss the concerns. 'It's important that we engage with the executive even on some of the political issues, otherwise you create the impression that ultimately arrangements can be made elsewhere, whereas actually, Parliament must exercise its duty.' The Appropriations Bill has to be passed by Parliament within four months of the start of the new financial year. 'The standing committee has, in the past, not been known for making any significant changes to the spending allocations.' The MK Party's Wesley Douglas said his party rejected the bill. 'It's an anti-poor budget. It's a budget that breaks people.' The committee has already considered the Division of Revenue Bill, which will be the first of the money bills to be voted upon next month. The bill allocates money to provincial governments and municipalities and, by law, must be passed within 35 days of adopting the fiscal framework.
Mail & Guardian
22-04-2025
- Business
- Mail & Guardian
Approval of the fiscal framework was rooted in deception, court hears
DA supporters outside the Western Cape high court. Counsel for the Economic Freedom Fighters (EFF) argued in court on Tuesday that the ANC used deception to drive the fiscal framework through parliament, because Finance Minister Enoch Godongwana had no intention of heeding a recommendation to rethink a VAT increase. Advocate Tembeka Ngcukaitobi told the Western Cape high court the minister admitted as much in his heads of argument filed in response to the court challenge by the EFF and the Democratic Alliance (DA) to the tax hike. He said the deception lay in persuading MPs to vote in favour of finance committee reports approving the fiscal framework on 1 April, on the false pretext that the text committed the minister to exploring alternative revenue sources. In his court papers, Godongwana said the interim relief the DA sought was moot because his decision to increase VAT was final and 'The decision to introduce the VAT rate increase has been made,' the minister said adding that it 'cannot be interdicted at this stage'. The ANC was forced to look to smaller parties for parliamentary support for the fiscal framework after the DA and the EFF Ngcukaitobi recalled that it was approved by the National Assembly largely thanks to ActionSA's decision to vote in favour, on condition that Godongwana be instructed to find a way, within 30 days, to avert the hike taking effect on 1 May. ActionSA believed this clause agreed in the finance committees was binding, and set about persuading other small political parties to support the framework. It was subsequently disabused of this, he continued. 'The minister is guilty of deception,' he said, adding that a parliamentary report that is undermined by misrepresentation can pass the legal test of rationality. 'If a vote is procured through deception it is unlawful. 'Once you have a budgetary process that is so coloured by deception it is fundamentally in breach of the duties imposed on members of parliament, especially our national executive. It is not honest, what happened here.' Justice Katherine Savage asked whether what transpired was not par for the course for a political party trying to shore up support for a particular decision. Ngcukaitobi quipped that if her inference was that politicians would lie and manipulate to achieve their ends he could accept that in the context of Luthuli House, not the chambers of parliament and not when the public interest was at stake. The DA approached the high court two days after the fiscal framework was approved by 194 votes to 182, paving the way for the referral of the Division of Revenue Bill and the Appropriations Bill (s 10(1)) to the relevant committees. The EFF subsequently joined in the matter. In Part A of its application, the DA is asking the court to urgently suspend Godongwana's announcement that VAT will increase by 0.5 percentage points from 1 May and by a further 0.5 percentage points from 1 April next year and to set aside the adoption by the National Assembly and the National Council of Provinces of the fiscal framework. It wants it to be sent back to standing and select committees on finance for reconsideration. The DA has argued that because MPs believed that the inclusion of a non-binding recommendation that Godongwana find an alternative would stop the VAT hike taking effect in May, their 'The committee acted on the basis of a fatal misconception — that they could control whether the VAT hike would come into effect or not,' it said, adding that what ensued was fatally irregular. Both the DA and the EFF submitted that members of the committee had two options only in terms of the Money Bills and Related Matters Act — adopt the framework or amend it. 'That is the clear statement that was required to be included in the final report by the strictures of the Act. And it was the central issue about which committee members were uncertain,' the DA said. Given the confusion as to what had been agreed at a marathon meeting of the finance committees, it was 'astonishing' that the issue was not put to the vote. Instead of doing so, draft versions of the report urgently due to the National Assembly were circulated after the meeting and at this point, acceptance of the framework was written into the document. The process was unlawful and irrational and in turn rendered the decisions by the National Assembly and the National Council of Provinces to approve the fiscal framework unlawful, the DA argued. The EFF argued in support of the DA's main application that the validity of the fiscal framework is contingent on the validity of the report to the National Assembly. Therefore, it argued that if the report is suspended, it follows that so is the budget and the fiscal framework is suspended and the VAT increase cannot come into effect. Both parties argued that irreparable harm would ensue if the court did not intervene to halt the tax hike, with the DA noting, in support of its application for an interim order, that the effect would be impossible to reverse. The DA is also asking the court, in part B of its application, to declare section 7(4) of the Value Added Tax Act unconstitutional. It proceeds so on the basis that the law improperly granted the finance minister the authority to impose tax increases without full parliamentary approval. It is one of the rare instances, the party submitted, where there is no provision for delegation. 'There are two powers that the Constitution reserves for parliament — the power to amend statutes and the power to impose taxes. The DA's primary argument is that, because s 7(4) permits the Minister to amend s 7(1) and to impose a tax, it is unconstitutional.' That, the party submitted, should be the end of the court's inquiry. The constitutional power to impose taxes rests only in the legislature, not the minister, it said. Delegation is permissible only with regard to regulations, not to taxation, and parliament is not allowed to delegate plenary legislative power to the executive.' 'The power in s 7(4) is unguided, unconstrained, and sets policy, it does not give effect to it. Nothing in the VAT Act constrains how the minister exercises his s 7(4) power. That is because it is, in substance, a power to amend the VAT Act itself. While it is notionally subject to parliament's approval, the effects are irreversible. One, even if parliament does not approve the alteration, it remains in place for 12 months. Two, it is not possible to repay VAT to the consumers who paid it during those 12 months.' There is nothing parliament can do to undo the harm, it argued, because the only way in which it could undo the increase is by way of a money bill, and in terms of the Constitution only the minister is empowered to introduce these to parliament. It is expected that the case will run into judicial caution as to the judiciary overstepping on the terrain of the executive. Ngucaitobi responded to a question in this regard from the bench by saying: 'The mere fact that a decision is polycentric does not mean that it is immune from judicial review.' He also told the court that at this point the finance ministry's contention that the poor would be shielded from the effect of the VAT increase by an expansion of the basket of zero rated items was meaningless because the commission meant to weigh this proposal had yet to be appointed, roughly a week before the hike was due to take effect.
