President Cyril Ramaphosa has defended finance minister Enoch Godongwana, stating that the cancellation of the budget speech on Wednesday was not a crisis that threatened the government of national unity.
Speaking to the media at the G20 foreign ministers meeting on Thursday, Ramaphosa said Godongwana was walking a tightrope.
He said Godongwana was trying to find some leeway to support the country's ambitions and ensure the budget would support growth and the livelihoods of all South Africans.
Ramaphosa said the GNU had experienced crises which have threatened its existence, however this was not one of them.
He defended Godongwana who has been widely criticised by political parties who said the two percentage point VAT increase he proposed would have punished the poor, saying that no finance minister easily sought to raise taxes.
“No minister of finance will just willy-nilly raise taxes without getting to a point where they believe that they have no other alternatives. I have never met a person who wants to pay more taxes in any country, I guess in the world.”
Ramaphosa said the issue needed to be confronted and there are trade-offs that have to be embraced.
“Right now we have limited revenue limits, our revenue as it stands is not able to fund every priority and ambition we have. The minister of finance scrounges around to find money, so in the end as South Africans we therefore need to sit back and say how are we going to get over the budget cuts, how are we going to continue funding all our priorities.”
He said the country should take “many lessons” from the cancellation of the Wednesday's budget speech.
“The GNU will sustain this and continue working. We are going to go back to the drawing board...We have had near crises which threatened the GNU, but this is not one of those that will threaten the GNU, this is a hiccup,” he said.
He downplayed the effects of the budget postponement, arguing that in some countries an impasse in the budget has led to the fall of some governments.
He made examples of Germany where a disagreement over its budget led to fresh elections.
“In our own country, municipalities and metros there are often real serious challenges over budgets. Budgets are moments when the actors become wide awake and want to be consulted and find consensus so that they can move their entities forward.”
Godongwana was meant to table the 2025 budget in parliament on Wednesday afternoon, but cabinet would not approve it due to a proposal to raise the VAT rate from 15% to 17%. The first budget speech under the GNU will now take place on March 12.
TimesLIVE Premium reported that ANC cabinet members joined the chorus of other cabinet members from GNU parties who called for a postponement during a cabinet meeting shortly before Godongwana was meant to address parliament in Cape Town.
He said the budget would be reviewed and claimed Godongwana wanted to move quickly to start crafting an alternative budget.
Godongwana had no other alternative — Ramaphosa defends minister's proposed VAT increase
Ramaphosa said the GNU had experienced crises which have threatened its existence, however this was not one of them
Image: Thapelo Morebudi
President Cyril Ramaphosa has defended finance minister Enoch Godongwana, stating that the cancellation of the budget speech on Wednesday was not a crisis that threatened the government of national unity.
Speaking to the media at the G20 foreign ministers meeting on Thursday, Ramaphosa said Godongwana was walking a tightrope.
He said Godongwana was trying to find some leeway to support the country's ambitions and ensure the budget would support growth and the livelihoods of all South Africans.
Ramaphosa said the GNU had experienced crises which have threatened its existence, however this was not one of them.
He defended Godongwana who has been widely criticised by political parties who said the two percentage point VAT increase he proposed would have punished the poor, saying that no finance minister easily sought to raise taxes.
“No minister of finance will just willy-nilly raise taxes without getting to a point where they believe that they have no other alternatives. I have never met a person who wants to pay more taxes in any country, I guess in the world.”
Ramaphosa said the issue needed to be confronted and there are trade-offs that have to be embraced.
“Right now we have limited revenue limits, our revenue as it stands is not able to fund every priority and ambition we have. The minister of finance scrounges around to find money, so in the end as South Africans we therefore need to sit back and say how are we going to get over the budget cuts, how are we going to continue funding all our priorities.”
He said the country should take “many lessons” from the cancellation of the Wednesday's budget speech.
“The GNU will sustain this and continue working. We are going to go back to the drawing board...We have had near crises which threatened the GNU, but this is not one of those that will threaten the GNU, this is a hiccup,” he said.
He downplayed the effects of the budget postponement, arguing that in some countries an impasse in the budget has led to the fall of some governments.
He made examples of Germany where a disagreement over its budget led to fresh elections.
“In our own country, municipalities and metros there are often real serious challenges over budgets. Budgets are moments when the actors become wide awake and want to be consulted and find consensus so that they can move their entities forward.”
Godongwana was meant to table the 2025 budget in parliament on Wednesday afternoon, but cabinet would not approve it due to a proposal to raise the VAT rate from 15% to 17%. The first budget speech under the GNU will now take place on March 12.
TimesLIVE Premium reported that ANC cabinet members joined the chorus of other cabinet members from GNU parties who called for a postponement during a cabinet meeting shortly before Godongwana was meant to address parliament in Cape Town.
He said the budget would be reviewed and claimed Godongwana wanted to move quickly to start crafting an alternative budget.
WATCH | Budget speech postponed
Budget speech to take place on March 12 after discussions with cabinet – Godongwana
Budget speech cancelled following 'dispute over VAT'
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