Latest news with #BudgetSpeech
The South African
2 days ago
- Business
- The South African
JUST IN: EFF loses court bid to interdict fuel levy increase
The Western Cape High Court has dismissed the Economic Freedom Fighters (EFF) application to interdict the 4% fuel levy increase. The 4% hike was announced by the Minister of Finance, Enoch Godongwana, when he tabled the revised 2025 Budget Speech for the third time in May and will be effective from Wednesday, 4 June. In challenging the proposed hike, the EFF argued that the fuel levy increase places an unjust burden on the working class and the poor, who are already reeling from rising costs of living, stagnant wages, and ongoing economic hardship. The party maintained that the levy is both economically unjust and unconstitutional, as it deepens inequality and undermines access to essential goods and services. Moreover, the EFF had argued that the standing committee on finance sits on Wednesday 4 June and it is only then that such an increase can be approved. Not before, as the 2025 fuel levy increases have been slated to go into effect the same day. 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.
Hans India
29-05-2025
- Politics
- Hans India
K'taka to launch specialised unit to curb communal strife, revenge killings in state
Bengaluru: The Congress-led government in Karnataka has decided to launch the Communal Violence Control Force -- a specialised unit -- in a bid to curb and control communal strife resulting in a series of revenge killings in the state's Mangaluru, Udupi and Shivamogga districts. The government has also announced that the personnel serving in the Anti-Naxal Force (ANF) will be reassigned to the Communal Violence Control Force. The government order released on Thursday in this regard states, among the total available total 648 posts in the ANF, 248 officers and staff are shortlisted to establish the STF. The order states: "The new STF will have three companies and they will be established in Udupi, Shivamogga and Mangaluru districts. The functions and responsibilities of this force include establishing an intelligence unit with a technical cell to monitor and collect information from the media, social media, and intelligence sources regarding hate speech, provocative incidents, and communal-related activities. 'To create an alert system for potential communal violence through surveillance and human intelligence; to undertake confidence-building measures through effective outreach and influence; to implement measures to identify and monitor radicalisation." The IGP of the zone will take the necessary steps to deploy special task force officers/personnel during instances of communal riots, it says. The order further stated: 'The Director General and Inspector General of Police have submitted a proposal to the government stating that six underground Naxals have surrendered before the Naxal Surrender and Rehabilitation Scheme Committee, and since the state is now considered free of Naxal presence, the Anti-Naxal Force (ANF) will be disbanded. This was announced in the Budget Speech 2025-26. However, they have requested that the Anti-Naxal Force unit be extended for another three years, and have mentioned that after review, the unit may be dissolved.' Meanwhile, the order mentions that it has also considered the fact that the Intelligence Department has provided information that some existing Maoists are relocating from Chhattisgarh and Jharkhand to the border areas of Karnataka, Kerala, and Tamil Nadu. In light of this, it has been proposed that from the current strength of officers/personnel in the Anti-Naxal Force (ANF), certain posts be separated to establish a dedicated 'Special Task Force' within the state, while the remaining officers/personnel will continue to serve in the ANF, the order stated. The government has decided to continue 376 posts with the ANF for a further three years. The Communal Violence Control Force will have several high-ranking officials. Speaking to reporters in Bengaluru, Home Minister G. Parameshwara stated that the government has taken the recent incident of murder in Mangaluru seriously. 'We will take action without any hesitation. If such incidents keep recurring, we cannot remain silent. We will further tighten the law,' he said. The government will take action by considering Mangaluru, Udupi, and Shivamogga districts as sensitive areas, Parameshwara stated. Mangaluru and Udupi are located in coastal Karnataka region and witnessed a series of murders and stabbing incidents over communal strife. Following the previous incident (murder of Hindu activist and rowdy sheeter Suhas Shetty), the government had assessed the situation and issued an order to immediately implement the formation of a Communal Violence Control Force, he stated. The Director General and Inspector General of Police (DG and IGP) will take the necessary steps in this regard, Parameshwara stated. He reiterated that Mangaluru, Udupi, and Shivamogga districts will be treated as sensitive zones and that the government will act firmly to curb communal violence. Half of the personnel from the existing Anti-Naxal Force will be reassigned to the newly formed Communal Violence Control Force. They will be given the necessary powers and facilities. 'We will focus more attention on these three districts,' Parameshwara announced. 'If hatred spreads, what will remain of society? How can people live in such an environment? The government will not stay silent,' he questioned. In connection with the murder of a 34-year-old man in Mangaluru, Parameshwara said the investigation has uncovered serious information, and action will be taken accordingly. Parameshwara urged elected representatives to cooperate in maintaining peace. 'If they try to provoke people, how can peace be maintained? I have instructed officials to hold peace meetings with religious leaders,' he said.
The South African
29-05-2025
- Business
- The South African
EFF takes legal action to block fuel levy hike
The Economic Freedom Fighters (EFF) have filed an urgent application in the Western Cape High Court. They want to stop Finance Minister Enoch Godongwana from implementing the fuel levy increase announced in the 2025 Budget Speech. The government plans to raise the fuel levy by 16 cents per litre for petrol and 15 cents for diesel, effective from June 2025. The party claims it repeatedly cautioned the Minister and appealed to his conscience. It warned him of the impact such a move would have on poor and working-class South Africans amid a deepening cost-of-living crisis. The party insists that the government should follow proper constitutional and legislative processes for the fuel levy hike. It compares this to how Parliament previously rejected the VAT increase. The EFF warned that skipping Parliament weakens democracy and could lead to more bad decisions in future. The EFF warns that implementing the levy without a Money Bill could lead the courts to declare the national budget invalid even after the funds have been spent. The party says such a ruling would jeopardise the country's fiscal credibility, disrupt service delivery and damage public confidence in government institutions. They stress that the issue is not only legal but economic, as the fuel levy directly affects transport, food, and other basic goods. The EFF says the increase will hit the poorest households hardest. It insists it will not stand by while technocrats override democratic processes. The EFF has written to the Speaker of the National Assembly and the Chairperson of the Standing Committee on Finance. It warned them not to proceed with adopting the 2025 Fiscal Framework if it includes the fuel levy hike. They urge Parliament to act responsibly and call on the Minister to withdraw what they describe as a reckless decision. 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.
IOL News
28-05-2025
- Business
- IOL News
Budget 3. 0: a look at South Africa's plan to use pension funds for building infrastructure
Minister of Finance, Enoch Godongwana Image: Phando Jikelo/ Parliament of SA FINANCE Minister Enoch Godongwana delivered the third iteration of the 2025 national budget speech last Wednesday. As citizens, we all hoped this time would bring positive changes. The latest version of the 2025 budget appears more reasonable within our current economic context and paints a vivid picture of South Africa's finances. 'I believe this budget supports economic activity while enhancing future economic prospects, directs spending towards the social wage, and invests in state capability and critical infrastructure,' said Godongwana. The budget revises several key areas, including the country's economic status, growth projections, substantial debt servicing costs, the withdrawal of the controversial VAT increases, and the continuation of the social relief grant. Although there were no VAT hikes, financial experts warn that public relief may be short-lived. Rising fuel levies and unadjusted tax brackets to account for inflation mean households could still face financial pressures. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Godongwana noted that, despite sluggish growth over the past decade, South Africa's economy is expected to expand by only 1.4% this year, a reduction from the 1.8% projected in March. This decline is primarily attributed to increased trade tensions, geopolitical issues, and policy uncertainty. Additionally, the new budget sets the national borrowing requirement at R588 billion for 2025/26, approximately R6 billion more than planned in March. The 2025 Budget Speech, especially in its 3.0 version, emphasizes infrastructure investment and explores alternative financing mechanisms, such as infrastructure bonds. These mechanisms aim to involve various stakeholders in the investment process. The budget also includes structural reforms to improve access to basic services, particularly in network sectors. As the minister stated: 'The reality, however, is that the decision to eliminate the VAT increase, without a viable alternative source of revenue, significantly reduced our ability to fund additional government programs and projects to the extent we had deemed necessary.' Infrastructure, the fourth pillar of our economic growth, necessitates the exploration of alternative financing arrangements. Therefore, the government is investigating options allowing pension funds, commercial banks, development banks, and international financial institutions to participate in financing the country's infrastructure plans. While South Africa has relatively developed core infrastructure, disparities and inequalities exist in areas like transport, power, communications, and water/sewage systems. These aspects of infrastructure are crucial for enhancing the country's commercial competitiveness. The minister hopes that by seeking alternative financing instruments, the government can leverage infrastructure investment to alleviate supply-side constraints on the economy and improve citizens' access to social services. As citizens, it is essential to understand the rationale behind this proposal. The current budget aims to reduce our reliance on external borrowing and the revenue needed to service this debt. This strategy addresses South Africa's infrastructure deficits and stimulates economic growth. However, it also raises important considerations regarding the implications for pension fund members and the broader economy. The idea of using pension funds to invest in infrastructure is not new. However, we can be assured that the South African government cannot directly seize or take pension fund money without following proper legal processes. Although there have been proposals for pension funds to invest in government-backed assets or infrastructure, regulations and legal frameworks restrict the government's ability to utilise these funds. Regulation 28 of the Pension Funds Act limits how much pension funds can invest in various assets, including government bonds and infrastructure projects. No mandated investments or 'prescribed assets' require pension funds to invest in specific government-backed projects. The government's primary role is ensuring a stable and sound financial system while creating a framework that prudently allows pension funds to invest. Therefore, we can rest assured that no legal mechanism permits the government to take pension fund money without adhering to proper legal procedures and respecting the rights of pension fund members. To implement this strategy, the government is seeking to amend Regulation 28 of the Pension Funds Act to allow retirement funds to allocate up to 45% of their assets to infrastructure investments, an increase from previous limits. This aims to support the government's intention of mobilizing domestic capital for infrastructure development, thereby reducing reliance on external borrowing. If this proposal is adopted, it could bring significant benefits to our country's economy. First, infrastructure growth will stimulate economic activity, create jobs, and enhance service delivery, contributing to overall economic growth. By attracting private investment into infrastructure, the government can relieve fiscal constraints and allocate resources to other critical areas of the economy. It could also allow pension funds to diversify their investment portfolios and potentially achieve long-term returns. As a fellow citizen, I understand the concerns surrounding the implementation of this proposal and the cause for alarm. The primary goal of a member's pension fund is to secure their financial future during retirement. Additionally, we live in a country where we cannot rely on social grants for support in our retirement years. Recognising the various risks that could impact this proposal and potentially reduce our retirement savings is essential. Infrastructure projects are complex and may carry risks that could affect their returns. Therefore, ensuring transparency and accountability in selecting and managing these projects is crucial for protecting pension fund assets. The initiative to utilise pension funds presents both opportunities and challenges. Transparent governance, prudent risk management, and a clear focus on protecting pension fund members' interests are imperative for the success of this strategy. The government must first ensure that a sound, well-regulated financial system is in place to ensure pension fund members' investments are not at risk. Our honourable minister stated in his speech, '…we are not deaf to the public's concern about wasteful and inefficient expenditure … It must be matched by much stricter oversight that quickly identifies problems and provides timely solutions when things go wrong.' As citizens, we must hold him accountable for his promise. Jennifer Reddy Image: File Jennifer Reddy is the chief executive officer of Morar Incorporated, a leading national accounting and advisory firm with a footprint across South Africa. She is a qualified chartered accountant, registered auditor, certified fraud examiner, and holds an MBA. ** The views expressed do not necessarily reflect the views of IOL or Independent Media. THE POST
IOL News
28-05-2025
- Business
- IOL News
The VAT whiplash: why SA can't afford to ignore the real cost of policy uncertainty
This article explores the effects of proposed VAT increases on South African consumer behaviour, highlighting the fragility of financial resilience and the importance of real-time insights for lenders. Image: Armand Hough / Independent Newspapers When the South African Government floated the proposition of a 0.5% VAT increase earlier this year, only to cancel it at the eleventh hour, the economy may have avoided an official tax hike, but the damage had already been done. Even before the proposal could be tabled in the Budget Speech, the mere suggestion of higher VAT triggered a psychological and financial ripple effect. Consumer sentiment shifted almost instantly, with many fearing potential retail activity dips and increased credit card usage, with many South Africans, particularly in the middle-income group, looking to tighten their belts in anticipation of rising costs that never formally materialised. This moment offers a sobering reflection on the state of financial resilience in the country. It wasn't the implementation that sparked anxiety, but the uncertainty. The mere suggestion of a VAT increase was enough to trigger a reaction in households and ripple through lending institutions. This kind of market sensitivity underscores a deeper fragility: one where consumer confidence is worn thin, and policy signals - real or speculative - can tip the scale from financial coping to financial crisis. When policy uncertainty hits home While VAT hikes are not new in South Africa, the reaction to this latest proposal felt particularly acute. Wages have stagnated, unemployment remains high, and the cost of basic goods continues to climb. In this context, even a small increase in indirect tax feels like a direct threat. Consumers responded accordingly. Spending signalled a slowdown across various sectors, particularly in discretionary categories. This wasn't about affordability alone; it was largely about caution. And when spending slows but everyday costs remain, many turn to short-term solutions, namely credit. However, for lenders, these behavioural shifts are not just theoretical; they represent a real risk, particularly when they happen suddenly and at scale. The ability to understand and track how economic announcements shape credit behaviour, whether the announcements are confirmed or not, is now business-critical. The credit cushion is wearing thin Recent XDS studies paint a clear picture of how South Africans are managing the squeeze. Credit card utilisation has risen steadily, not just as a function of increased spending, but as a stopgap for essential purchases such as groceries, utilities, clothing, and fuel. Over the past five years, there has been a 13% rise in credit card utilisation, even as credit limits for new cards have dropped by 21%. This means many consumers are accessing more of their available credit, even with reduced ceilings, underscoring a growing dependence on revolving credit to cover essentials like food, fuel, and utilities. Notably, the average number of new credit cards issued per month has surged by 39% - a clear signal that households are turning to credit more frequently to buffer against economic uncertainty. For many middle-income households, credit is no longer a financial tool, but a survival mechanism. This trend isn't restricted to VAT announcements; it reflects a broader, more troubling reality: households are living closer to the financial edge, with fewer buffers in place. When a single policy proposal can stall retail spending and increase debt reliance, it becomes clear just how precarious the balance really is. And yet, most lending frameworks still rely on backward-looking data and quarterly trends. By the time changes in consumer behaviour are reflected in reports, the impact may have already been embedded in default rates and missed payments. It's a delayed response to a fast-moving problem.
