South Africa’s 2025 national budget, presented by Finance Minister Enoch Godongwana, faces significant political challenges due to divisions in the coalition government, particularly from the Democratic Alliance. After a month-long delay, the revised budget proposes a staggered VAT increase but still lacks critical support. The current situation underscores the fragility of governance following the ANC’s loss of parliamentary majority.
In the context of the 2025 budget, South Africa finds itself in unprecedented political turmoil due to significant rifts within the coalition government. Finance Minister Enoch Godongwana’s proposed budget, delayed for a month, has faced substantial pushback, particularly from the Democratic Alliance (DA), a major coalition partner. This situation arises following the African National Congress (ANC) losing its parliamentary majority and forming a coalition with nine other parties, complicating governance efforts.
The Minister’s initial proposal to increase value-added tax (VAT) was met with fierce opposition, prompting a postponement that had not occurred since the end of apartheid in 1994. Upon returning to present a revised budget, Godongwana announced a mitigated VAT increase from 15% to 16%, implemented over two years, in an attempt to garner support while addressing the pressing issue of public spending in critical sectors such as health and education.
Despite his efforts, the DA has rejected the budget, insisting it would not support any tax increase unless it was temporary and accompanied by significant economic reforms. This ongoing impasse has raised questions about President Cyril Ramaphosa’s leadership as only a minor party, the Patriotic Alliance, has supported the budget.
The divisions in the coalition extend beyond budget disagreements, touching upon contentious issues such as land reform. The DA is currently challenging legislation that permits government seizure of private property without compensation, stating it undermines property rights. Additionally, both the Economic Freedom Fighters (EFF) and Umkhonto weSizwe have condemned the budget, arguing it disproportionately burdens the poor.
Thokozile Madonko, an analyst at Wits University, observes that the present deadlock signifies a departure from past ANC practices, necessitating collaboration with other parties to avoid potential budget rejection. Critics, including Adrian Saville, describe the budgetary proposals as lacking substantive plans for economic growth, urging the Minister to provide more concrete goals for job creation amidst high unemployment rates.
Historically viewed as a competent figure, Godongwana now grapples with diminished credibility following the recent budget crisis, facing the imperative to navigate his proposals through Parliament effectively. The success or failure of this endeavor may play a significant role in determining his future as Finance Minister.
In summary, South Africa’s budget for 2025 has uncovered deep political divisions within the coalition government, particularly concerning proposed tax increases. Finance Minister Godongwana’s attempts to compromise with a staggered VAT increase may not suffice to secure the necessary support from coalition partners. The political deadlock emphasizes the necessity for collaboration to pass the budget while also highlighting broader concerns regarding economic strategies and the credibility of leadership amidst this challenging fiscal landscape.
Original Source: www.bbc.com
