Johannesburg – Finance Minister Enoch Godongwana faces a tumultuous week as he prepares to deliver the revised budget speech today, Wednesday, 12 March, amidst a storm of criticism over his handling of the country's finances. The 2025 Budget Speech, to be delivered in the National Assembly at the Nieuwmeester Parking Dome in Johannesburg, comes after a previous budget proposal was rejected and as the Minister grapples with the thorny issue of the COVID-19 social relief grant (SRD).
Godongwana has drawn sharp criticism for suggesting that the R350 SRD grant should be reduced, a move that has ignited fury amongst civil society organisations and those who rely on the grant for survival.
Black Sash executive director Rachel Rukasa has condemned the Minister's stance, emphasising the vital role the SRD grant plays in the lives of millions of South Africans. "To say the SRD grant is the reason he is in trouble now is shocking," Rukasa stated. "Honestly, as a society, we should be wary of the minister's language. 'I need this, I need that.' The minister does not live in a dictatorship. He is a democratically elected official who must consult not only ANC leadership but also the broader coalition about how these decisions are made."
Rukasa further criticised Godongwana's approach, arguing that his personal opinions should not dictate policy decisions that affect the most vulnerable. "Godongwana's personal dislike of the SRD grant should not be the reason behind such actions. To pit poor people against each other? It's either the grant that gives dignity or higher bread prices. This is dangerous, and he should be called out for it."
Godongwana is expected to outline the government’s spending priorities for 2025, including strategies for revenue collection to fund planned interventions. The minister's speech will introduce the Appropriation Bill and present the 2025 Division of Revenue Bill for parliamentary review in the coming months. The budget will determine the allocation of financial resources to national priorities, aligning with commitments made by President Cyril Ramaphosa in the recent State of the Nation Address (Sona).
The budget was originally scheduled for 19 February 2025, the Budget Speech was postponed due to disagreements within the Government of National Unity (GNU) over a proposed 2% VAT hike. The increase, aimed at raising R60 billion in the upcoming fiscal year, has faced strong opposition from political parties, businesses, and civil society organisations. Critics argue that raising VAT would disproportionately impact low-income households and further strain an already struggling economy. The National Treasury estimates that a 2-point VAT increase could generate R60.0bn, R63.7bn, and R67.3bn over the next three years, totalling R191bn.
South Africa’s small business sector has warned that higher taxes will cripple SMEs, weaken consumer spending, and stall economic recovery. Shawn Theunissen, founder of Property Point and eTTP, cautioned that the VAT hike would put immense pressure on small businesses, particularly those serving lower-income consumers and operating on thin margins.
"A VAT hike will drive up costs for small businesses, forcing them to increase prices and making it even harder to compete in an economy where consumer confidence is already low. Instead of making it easier for SMEs to grow, we’re seeing policies that will squeeze them out of the market," he said.
Despite the controversy, the African National Congress (ANC) Caucus in Parliament has expressed confidence in the budget’s direction. The Office of the Chief Whip, Mdumiseni Ntuli, said the ANC expects Godongwana to present a balanced budget considering the difficult economic choices facing the country.
"The ANC Caucus believes that the budget is an essential instrument for redistributing wealth and income, advancing fundamental transformation, and ensuring the realisation of the socio-economic rights enshrined in our Constitution," Ntuli said.
As Godongwana prepares to address the nation, he faces the daunting task of navigating these conflicting pressures and presenting a budget that can garner support across the political spectrum while addressing the urgent needs of the country's most vulnerable citizens.
