While there have been reports circulating from the South African Ministry of Finance that the revised government 2025/2026 budget has been finalised by the caucus of the Government of National Unity (GNU), there have been statements made by other members of the GNU that indicate that the budget is not finalised yet.
GNU Parners Indicate Consensus not Reached Yet
John Steenhusen, Minister of Agriculture and leader of GNU partner, the Democratic Alliance, posted in a message on social media platform X a short while ago that “Constructive discussions on the budget are ongoing”.
This would seem to imply that agreement over a finalised budget has not yet been reached.
Historic Delay in Budget over VAT Dispute
Last month saw the delay of the budget speech, for the first time ever, due to a major spat over a last minute inclusion of a proposed additional 2% increase in VAT from Finance minister Enoch Godongwana, that divided the GNU partners who said they would not support the budget.
The issue at stake for South Africa, is an existing high rate of taxes and levies against an ever growing government spending spree that is gradually suffocating the economy.
Last year saw a growth rate of 0,5% in GDP which is less than 20% of the average growth in GDP across the African continent, leading to lack of growth in jobs and extremely high unemployment rates.
Poor Delivery of Services Decries Higher Taxes
The high tax rates alone are not the only concern, but in particular, the bloated government structure that is failing to deliver a commensurate level of delivery, alongside high levels of financial miss-management and wasteful expenditure, is the main sticking point for opposition parties and the public in general.
Civic organisation, The Organisation Undoing Tax Abuse (OUTA) has stated in its latest post, that it “notes with concern the statements made by Minister Inkosi Mzamo Buthelezi at the G20 Anti-Corruption Working Group on Monday 3 March 2025, where he spoke on the need for ethical leadership, financial controls, and accountability in the fight against corruption. While his words ring true in principle, they bear little resemblance to the reality of governance in South Africa”.
They state further that “instead of tackling the high levels of wasteful expenditure and gross maladministration – the very environment that breeds our high levels of corruption in South Africa – the Minister of Finance, Enoch Godongwana, deems it necessary to turn on citizens to cough up more in taxes, to fund this grossly inefficient government.
Despite numerous official enquiries such as the Zondo Commission, that found massive amounts of fraud and poor financial controls on items such as tenders, that had sucked billions out of the economy, very little has been done to curtail this type of practice in government structures and very few held accountable for misdemeanours regarding financial irregularities.
Minister Challenged to Reduce Spend
Increasing pressure is being placed on the government, both at national and on regional levels, to rapidly improve its budget and financial management controls, that have been incredibly poor for decades, and with the Auditor General warnings of poor financial discipline in government departments falling on deaf ears.
This is one of the key factors that has seen the ruling ANC party loose it’s national election majority for the first time in thre decades last year, and could well see them lose further support in the local elections in 2026.
Outa has sent an official letter to The Minister of Finance, indicating 11 areas where the government could claw back around R650 billion over a period of two years and replace the requirement to add any additional tax burden to an already over-taxed country.
FIND OUT MORE ABOUT THE BUDGET – OUR PRE-BUDGET PODCAST WITH LULA; LISTEN HERE
