Disagreements between political parties that form government of national unity (GNU) has forced parliament to postpone the much-anticipated National Budget Speech by finance minister Enoch Godongwana.
According to reports, treasury had proposed a 2% increase on value added tax (VAT), raising it to 17%. However, it was rejected during an emergency cabinet meeting just before the scheduled time of the budget.
Speaker of parliament Thoko Didiza said the postponement will have an impact on society and the markets. “I think what is important is for our society to appreciate that this decision was not taken lightly. And this decision seeks to enable us to have the executive to come to us with a decision on what the budget of the country looks like,” she said.
Budget halted for further deliberations
Speaking to the media following the announcement of the budget, Godongwana said the postponement was needed as there is a need for further deliberations amongst cabinet members.
“Cabinet is united that the budget must strike a balance between the interest of the public, economic growth and fiscal sustainability. Furthermore the budget is presented in the National Assembly according to the rules outlined in the Public Finance Management Act,” Godongwana said.
Related stories
Bennie van Zyl, the general manager of Transvaal Agricultural Union (TLU) said they were concerned with the postponement of the budget speech as it increases economic uncertainty.
“We view this as a sign of mismanagement and undermines investor confidence. A call is being made to government to prioritise stability and investment policies.
“The lack of a clear and timely financial plan creates uncertainty and complicates strategic planning for businesses and farmers. In the agricultural sector, this is particularly concerning as financial planning decisions often rely on subsidies, tax policies, and input costs, which are directly affected by the budget,” he said.
Van Zyl said in a time when the country is already struggling with a rising debt burden, weak economic growth, and a high unemployment rate, consistent and responsible economic policy is crucial.
Impact on farmers and consumers
“While we understand that the minister of finance is under significant pressure with an empty treasury which no longer has funds, and that he must perform, he must also realise that South Africa currently has taxpayers who are not in a position to subsidise theft and mismanagement,” Van Zyl said.
Meanwhile, agriculture minister John Steenhuisen, who is also the leader of the Democratic Alliance, said the postponement of the budget speech due to the DA’s opposition to the ANC’s VAT increase is a victory for the people of South Africa, as it prevents the implementation of a 2% VAT increase that would have broken the back of our economy.
Saamtrek Saamwerk chairperson Sehularo Sehularo said a VAT increase would not only to squeeze farmers but dry up the pockets of consumers.
“Our government needs to understand that as farmers we are barely coping. Consumers cannot afford basics of the basics, what will a 2% VAT increase do to all of us? We hope that in the next budget vote there will be better ways presented on how the country can move forward.
“We need to curb corruption because that is the root of the country not having enough money to sustain itself, that is the reason why things cannot be fixed. But increasing VAT is not the answer to our challenges, it will actually increase our problems,” he said.
READ NEXT: Beefmaster Group honours 60 long-serving employees
Sign up for Mzansi Today: Your daily take on the news and happenings from the agriculture value chain.
