There’s been mixed feelings to the third budget tabled by Finance Minister Enoch Godongwana in parliament on Wednesday.
Rise Mzansi and Action SA were among the first to welcome the budget albeit with reservations while MK and EFF have rejected it outright.
“ActionSA welcomes the additional R7.5 billion allocated to the South African Revenue Service (SARS) over the medium term—an investment we have long championed. However, we reject the regressive suite of taxes and levies, particularly in the absence of meaningful action to curb government wastage.
While ordinary South Africans are still being forced to carry the burden of an extra R22 billion through income tax bracket creep, an increase in the fuel levy, and excise duty hikes, the funding boost to SARS marks a critical step in the right direction,” said Action SA MP Alan Beesley.
Beesley expressed particular disappointment with the increase in the fuel levy, the first in three years, likening Godongwana’s balancing act to a case of robbing Peter to pay Paul.
“At the same time, National Treasury has effectively robbed Peter to pay Paul by offsetting R4 billion of the R11.5 billion VAT increase through a hike in the general fuel levy. This is in addition to plans to exclude certain zero-rated items from the VAT basket, as proposed in Budget 2.0. Once again, the financial burden is shifted onto ordinary South Africans. Higher fuel costs will cascade through the economy—raising transport, food, and living expenses—and further entrenching the country’s deepening cost-of-living crisis,” said Beesley.
” While RISE Mzansi is content that the Budget baseline remains the same, we would have wanted additional allocations to the things that truly matter to the people, namely health,safety, education and economic infrastructure,” said Rise Mzansi in its reaction to the budget.
” There is an increase in social grants allocation to protect the poor from the economic hardships; it is for this reason that the ANC regards the budget as pro-poor. This is an expansionary budget designed to address the pressing challenges of the state and to provide service to the people whilst transforming an economy which grows at 1.4%
in 2025.The EFF has strongly rejected the budget citing reduced spending on social services and called on MPs to amend the budget in the portfolio committee on finance which is set to debate the fiscal framework. The party also rejected the labelling of the budget as pro-poor arguing it actually weakens the state’s ability to provide basic services let alone grow the economy,” said the ANC in its reaction.
The ANC said the budget also marks the begining of a process to reduce the country’s debt servicing costs.
“This fiscal strategy will set South Africa on course to stabilise its debt trajectory next year, through improved primary
surpluses and reduced debt-service costs. Despite limited resources, the budget maintains a strong commitment to the social contract and the principles of equity, development, and sustainability.
Through this Budget, South Africa remains firmly on the path of economic transformation and growth. This is a
developmental, transformative peoples’ budget,” said the ANC.
“This latest version scraps the VAT increase but replaces it with a deeper crisis: massive expenditure cuts. Instead of revising the budget to expand state capacity and fight unemployment, the Minister has simply slashed spending, pretending this is a solution. What is now tabled is not only weaker than the previous budgets — it is a declaration of surrender by the National Treasury. It demonstrates complete incompetence and an ideological commitment to failed neoliberal austerity, despite the claim by the Minister of Finance and the former liberation movement that this is not an austerity budget,” said the EFF.
The party also want additional funds committed to help SARS improve its capacity to collect tax to be made available in the current financial year as opposed to over several years as state in Godongwana’s speech.
“We reject the National Treasury’s attempt to deceive the public by announcing a R4 billion increase in funding to SARS over the medium term. But this figure is meaningless if it is not front-loaded. SARS needs the R4 billion in the current financial year — not over three years. We know from SARS’s own pilot project that an immediate R2 billion investment can yield R25–50 billion annually, and R4 billion would unlock even more revenue. While the EFF maintains that we will not tax our way out of the current economic crisis, the lack of urgency demonstrates that National Treasury is not serious about addressing the R800 billion tax gap,” said the EFF.
“We call on the Standing Committee on Finance and the Appropriations Committee to use their full legislative powers to propose amendments, increase frontline spending, and reject this technocratic betrayal of the people. If Parliament does not act decisively, it risks becoming complicit in the destruction of state capacity,” said the EFF about what should happen going forward.
MK also rejected the budget saying it does not address the pressing challenges, of poverty, unemployment and inequality.
“Tonight there is a father who will go home and tell his children there is no food. tomorrow children will go to school without food. A ten year old child will have to leave their home tomorrow to go and fend for themselves because there’s no food at home,” said MK MP Brian Molefe.
Molefe said Godongwana presented ideas that have failed over 30 years.
“This speech that we had today, we’ve had it so many times over the last 30 years, exactly the same thing, fuel levy this, one percent VAT, there’s no decisive and bold intervention to deal with unemployment, poverty and inequality,” said Molefe.
