Latest news with #FiscalFramework
STV News
21-05-2025
- Business
- STV News
Scottish Government borrowing limits raised to nearly £5bn
The Scottish Government's borrowing limits are set to be raised to nearly £5bn in total. Scottish secretary Ian Murray announced that Scotland will have increased borrowing powers following a debate to be held in the UK Parliament on Wednesday morning. 'I'm very pleased to be taking forward this important Scotland Act Order, which increases the Scottish Government's cumulative borrowing limits to a total of £4.9bn,' Murray said. 'These borrowing powers are on top of the Scottish Government's record funding settlement of £50 billion this financial year, ending austerity.' The debate to raise Scotland's borrowing powers follows a draft Order laid by Murray. It will increase the Scottish Government's borrowing limits to a cumulative total of more than £3.1bn for capital and £1.8bn for resource. It's all part of the Fiscal Framework that sets out the Scottish Government's financial arrangements – including how its UK Government funding is calculated. The framework also gives the Scottish Government power to borrow money to handle the tax and social security reconciliations, through which the Budget is adjusted to correct errors in forecasting. In response to the updated borrowing limits, Scottish finance secretary Shona Robison said that Scotland's finances 'remain largely dictated by the spending decisions of the UK Government'. 'To give just one example, by funding less than half of the cost of their employer National Insurance increase, the UK Government has left Scotland's public services with a bill running into hundreds of millions of pounds,' she said. 'While the Fiscal Framework Agreement gives some limited flexibility to manage budget volatility, it remains very narrow due to the approach of the Treasury. Robison added: 'The only way we will have control of all fiscal levers and the full flexibility to address the challenges that emerge is through independence.' However, Murray emphasised that the UK Government has 'reset the relationship' with the Scottish Government. 'This Order is a key part of our commitment to maintain the devolution settlement,' he said. The Scottish Government borrowing limits are (both annual and cumulative) are uprated annually in line with the UK's independent economic and fiscal forecaster – known as the Office for Budget Responsibility (OBR). Officials in both the UK Government and the Scottish Government worked together to deliver the Order, as they do with all Scotland Act Orders. The new limits will take effect from June 30. Get all the latest news from around the country Follow STV News Scan the QR code on your mobile device for all the latest news from around the country
News24
20-05-2025
- Business
- News24
‘Where are the farms?' – Malema slams white genocide claims by emigrating Afrikaners
Malema challenges Afrikaner 'farmers' who fled SA to the US, demanding proof of land they allegedly abandoned. EFF celebrates VAT victory, credits legal and parliamentary pressure for blocking government's tax hike. Ramaphosa accused of bowing to US pressure, with Malema warning against backtracking on policies like land expropriation and the ICJ case against Israel. EFF leader Julius Malema says if the 49 Afrikaners who left the country for the USA over the alleged genocide they claim is happening in South Africa are real farmers, then where is the list of the farms left behind by those who emigrated to America? Malema made these remarks in Pretoria, where the party was leading a VAT victory march to the National Treasury. Thousands of marchers took part in the demonstration on Monday afternoon, painting the country's capital city red. BREAK TIME! EFF marchers take a quick rest at a crossroad, with leaders including Julius Malema, Godrich Gardee, and Marshall Dlamini seated, still holding strong with their placards #VATVictoryMarch #EFF @City_Press — Wendy Manjeya (@manjeya_wendy) May 19, 2025 Malema said the march was meant to celebrate what he described as a 'victory' in opposing the value-added tax (VAT) increase. The party claims its pressure on Minister of Finance Enoch Godongwana played a role in the decision to reverse the tax hike. EFF supporters, dressed in their red outfits, sang struggle songs with joy at the Union Buildings to celebrate the cancelled VAT increase. They then marched to the National Treasury. The mood was lively, and people looked happy to avoid the extra tax burden. The #EFF 's #VATVictoryMarch is underway. The party's leadership, including Julius Malema, Deputy President Godrich Gardee and Secretary General Marshall Dlamini, are leading the march from the Union Buildings to Treasury. @City_Press — Wendy Manjeya (@manjeya_wendy) May 19, 2025 Buses transported EFF members from nearby townships to the Union Buildings, where the march was set to commence. The EFF demonstration came just two days before the 2025 national budget is set to be tabled in the National Assembly on Wednesday. Budget 3.0 follows two ultimately unsuccessful attempts to pass a budget earlier this year. The first tabling in February was cancelled due to disagreements among government of national unity (GNU) partners over a proposed two-percentage-point VAT increase. A revised budget was introduced in March by Finance Minister Enoch Godongwana, proposing two VAT increases of 0.5 percentage points each, to be implemented over two financial years. However, the Western Cape High Court suspended the implementation following a legal challenge by the EFF and DA, prompting the need for a new budget. Godongwana is now expected to present the 2025 Fiscal Framework and Revenue Proposals, alongside the Appropriation Bill and Division of Revenue Bill. The EFF is framing Monday's march as a celebration of what it calls a successful effort to block the VAT hike both in Parliament and in court. The court granted an interim interdict last month, halting the first VAT increase. The EFF and DA argued that the hike would worsen the cost-of-living crisis, especially for low-income households, and further drive up food prices. Although Parliament approved the fiscal framework with 194 votes backed by the ANC, IFP, Patriotic Alliance, Rise Mzansi, and others the EFF maintains the process was unconstitutional and failed to follow proper procedure. Meanwhile, former USA president Donald Trump claimed that Afrikaners are being persecuted in South Africa because of their race, and are facing a 'genocide'. The group flew to the US on a special relocation plan and will be allowed to settle there. 'Nothing looked like a farmer among those people, they looked like those car attendants in the parkings,' Malema said. We want to see those 49 farms, and if you do not show us, you must know that you can't be talking about white people leaving, because that is pure lies. 'They are leaving, where were they staying?' Malema asked, adding that the addresses of where they were staying must be revealed. He said people must stop believing in nonsense. This march also comes as President Cyril Ramaphosa left the country this weekend to meet USA President Donald Trump in what his government describes as an attempt to 'reset' the relationship between the two countries. Trump and his billionaire ally, South African-born Elon Musk, have severely criticised the Ramaphosa administration's alleged poor treatment of white people in South Africa, following Ramaphosa's signing into law of an Expropriation Bill. The law, signed in January, allows the government to confiscate land, in some instances, without compensation, for redistribution to marginalised groups such as women and people with disabilities. Some Afrikaner groups say the law could allow their land to be redistributed to some of the country's black majority. Trump has highlighted allegations by a group of white South Africans who fear that their land will be seized. This group also says white farmers face a disproportionate number of violent assaults, which have led to several deaths and amount to a 'genocide'. The South African government has denied there is a genocide and says the attacks are part of a broader crime problem. According to Malema, Ramaphosa only went to the USA because 'he likes things'. He thinks it's nice in America. They will teach him a lesson there because those people know that there is no white people that is being killed here in SA. 'They know that very well, but they use it to make us change our policies, one of the policies which makes America hate us so much is that we took Israel to an International Court of Justice because they were killing Palestinians.' 'They [USA] will tell Ramaphosa that they can hear that he says he does not kill people, so go and withdraw the case at the ICJ, then we'll come to G20.' He said they will also tell Ramaphosa to change policy on the NHI and BELA Act.
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
IOL News
03-05-2025
- Business
- IOL News
The VAT betrayal: how SA's political charlatans sold out the people
WHEN the ANC announced plans to increase Value-Added Tax (VAT) in 2025, it struck a dagger into the heart of every struggling South African. VAT - a tax that punished the poor for simply surviving - was once again being weaponized to protect the rich and punish the working class. Today, the so-called "leaders" of South Africa's political parties stand exposed, naked before the nation, stripped of their empty rhetoric and false promises. The VAT saga has laid bare their treachery, their hypocrisy, and their unforgivable betrayal of the very people they swore to serve. The real impact of VAT on the poor Let's be clear: VAT is not just another tax. It is a tax on survival. When government raises VAT, it increases the price of bread, milk, school shoes, and bus fare -essentials that millions of South Africans already struggle to afford. VAT doesn't ask if you are rich or poor. It strikes hardest at the empty pockets of the working class, pensioners, and the unemployed. In a country where over 18 million people depend on social grants, unemployment has soared to over 32% and more than 55% of citizens live below the poverty line, a VAT increase is economic violence. And yet, knowing all this, the ANC still proposed a VAT increase of up to 3% in internal discussions - a brutal attack on the most vulnerable. Only a massive public outcry forced them to reduce the immediate increase to 0.5%. Had the ANC still held its old majority, the VAT increase would have sailed through Parliament unchallenged. It was the entry of the MK Party into Parliament that weakened the ANC's iron grip. But even then, the betrayal was only beginning. The fiscal framework farce When the Fiscal Framework - the blueprint for government spending, including the VAT increase - came before Parliament, the ANC desperately needed allies. They found them among parties that had loudly campaigned against the ANC, sworn never to work with the ANC, and claimed to stand for the people. Yet when the moment of truth arrived, ActionSA, BOSA (Build One South Africa), Rise Mzansi, Gayton Mackenzie's Patriotic Alliance, and others stood not with the people - but with the ANC. In a narrow vote, the Fiscal Framework was adopted, giving life to the VAT increase. These so-called opposition parties handed the ANC a knife and pointed it at the neck of the poor. ActionSA, a party that had thundered against ANC corruption and mismanagement, voted for the ANC's Fiscal Framework. BOSA, led by the so-called "new hope" Mmusi Maimane, voted with the ANC. Rise Mzansi, the party that brands itself as the future, voted for a future with higher VAT and deeper poverty. Gayton Mackenzie, who styles himself as a man of the people, handed the ANC the majority it needed. The great lie: "The fiscal framework had nothing to do with VAT" When caught, these parties scrambled to spin a narrative so ridiculous it insults the intelligence of every South African. They claimed: "We voted for the Fiscal Framework, but it had nothing to do with VAT." Lies. Blatant, shameless lies. The Fiscal Framework explicitly includes the assumptions and parameters for government revenue — including the VAT increase. It is the foundational document that dictates taxes, spending, and borrowing. Without the Fiscal Framework being adopted, the VAT increase had no legislative path forward. On Monday, the Western Cape High Court confirmed what any honest politician already knew: The Fiscal Framework contained the VAT increase. The court set aside the adoption of the Framework and suspended the VAT hike, exposing the lies told to the people. The spin has failed. The betrayal stands naked before us. The reality voters must never forget South Africans must remember this treachery. Remember that these parties made public pledges - and broke them when it mattered most. Remember that in the corridors of Parliament, when faced with a choice between standing with the people or kneeling before the ANC, they chose to kneel. They are not opposition parties. They are political charlatans. They are the ANC's convenient enablers, eager for scraps from the table of power. The tragedy of South Africa is not just a corrupt ruling party. It is an entire political class - old and new - that talks revolution during elections but practices betrayal in Parliament. A systemic betrayal This is not a once-off event. It is a symptom of a deeper sickness: A political elite more interested in self-preservation than public service. A culture of spin doctors, legal loopholes, and manufactured consent. An economy managed for the rich, subsidized by the poor. And VAT is just the beginning. Behind every act of betrayal today lurks the threat of more: More taxes on the working class. More protection for monopolies and billionaires. More lies dressed up as governance. MK Party: a different road In this sea of betrayal, the MK Party has stood firm. From the outset, MK MPs opposed the Fiscal Framework, exposed the hidden VAT increase, and demanded that the burden of fixing the economy be placed where it belongs: on the backs of the wealthy, not the poor. Tax the billionaires, tax the monopolies, nationalize key industries and use the wealth of the country for its people, not for its elite. That is the road to freedom. Not endless VAT hikes. Not squeezing pensioners and single mothers to please global markets and local oligarchs. The final verdict: voters must choose South Africa is at a crossroads. The mask has slipped. The lies have been exposed. In the next election - and every election to come - South Africans must remember who voted for higher VAT. They must remember who lied to them. And they must punish every political party and every political opportunist who chose betrayal over bravery. Never again must we allow political charlatans to dictate the destiny of our children. The VAT saga is a warning. Let us heed it.
IOL News
02-05-2025
- Business
- IOL News
Impact of VAT increase suspension on local government budgets
Parliament's Settlement on VAT Hike: Implications for Municipal Budgets Image: Armand Hough / Independent Newspapers Following the scrapping of the planned 0.5% increase in Value-Added Tax (VAT), initially scheduled to come into effect on May 1, 2025, several previously approved municipal budgets have also been set aside, further complicating local government financial planning. This suspension means that not only is the national budget process delayed, but local government budgets—previously approved and scheduled for implementation—are also temporarily on hold, affecting service delivery and development projects at the municipal level. The ripple effects underscore the broader economic and administrative uncertainty created by the legal and political developments surrounding the VAT hike. On April 27, 2025, Parliament entered into an out-of-court settlement concerning the contentious VAT hike and the broader 2025 Fiscal Framework. The settlement, sanctioned by the Cape High Court, suspends the implementation of VAT increases and sets aside the resolutions adopted by Parliament's two Houses—the National Assembly and the National Council of Provinces—regarding the Fiscal Framework. This means that the original Appropriation Bill, which details government spending and allocates funds to various departments, has been withdrawn and is no longer before Parliament. As a result, Parliament said the scheduled budget votes—crucial steps in the legislative process, are currently on hold. It also stated that municipal budgets, already approved for the current financial year, are being set aside. What Happens Next? Parliamentary spokesperson Moloto Mothapo explained that a new Appropriation Bill and revised budget instruments must be drafted and introduced through the upcoming Budget Speech. Once these are tabled, the legislative Houses must reschedule their review and approval processes. 'A new Appropriation Bill and revised budget instruments will need to be introduced, after which the budget votes will be scheduled afresh by the legislative framework and parliamentary procedures,' Mothapo stated. He emphasised that the National Assembly and the National Council of Provinces must review and restructure their programs accordingly. The respective Programme Committees will set new timelines to ensure that all legislative steps are completed efficiently and that the budget is passed within the legally prescribed timeframes, in line with the Money Bills and Related Matters Act, 2009.
