Latest news with #FiscalFramework
Daily Maverick
3 days ago
- Business
- Daily Maverick
SA needs structural reform and moral courage, not more fiscal tinkering
At the third time of asking, on Wednesday, 11 June, Parliament considered, debated and voted for the 2025 Fiscal Framework, the basis for the Government of National Unity's (GNU) very first budget. To paraphrase former US congressman and economist Phil Gramm, passing a pro-growth budget is like going to heaven – everybody wants to do it, but nobody wants to do what you have to do to get there. Unfortunately, the GNU was not willing to do what it takes, and instead pushed through a budget that will not produce the rapid investment and growth required to begin our journey out of the economic doldrums. Growth flat, investment dried up, and taxes on the rise. We will be back here next year, facing another round of tax increases, because there will have been little to no investment. A budget ought to be a blueprint for progress. A reflection of our values, our priorities and our path forward as a country. The 2025 Fiscal Framework was preceded by the GNU's 31 priorities in its Medium-Term Development Plan, a bold promise of reform and delivery. Yet the Fiscal Framework tabled in Parliament offers no clear roadmap for achieving those priorities. There is no strategic alignment between what the government says it wants to do and what it is willing to fund. Without that alignment, these priorities are reduced to political rhetoric. We've seen this playbook before. The National Development Plan (NDP), hailed over a decade ago as the blueprint for South Africa's long-term development, now serves more as a reminder of broken promises than a source of policy coherence. Most of its targets on jobs, education, crime reduction and infrastructure remain unmet. Over the past 10 years, our economy has grown at an anaemic average of less than 1% per year. In the most recent quarter, growth was a paltry 0.1%. The only sector showing sustained growth is financial services. Meanwhile, real economy, labour-absorbing sectors such as agriculture, mining, manufacturing, construction, trade and transport have all declined in their contribution to GDP. These are precisely the sectors that should be powering inclusive growth and job creation. Gross fixed-capital formation, which is the clearest indicator of future growth and productivity, remains stagnant at 4.2%. These numbers are warnings. And they are being ignored. The diplomatic disaster last month at the White House only confirmed what many investors already suspect: South Africa is becoming uninvestable. And we are seeing the consequences. I recently visited Accra, the capital of Ghana, and you can feel the difference in the air. Cranes fill the skyline, a clear signal of construction, investment and progress. How many cranes are visible in Johannesburg, Cape Town or Durban today? We cannot tax our way out of this crisis. We must invest our way out. And that means fundamentally rethinking how we use the public purse. We must prioritise investments that unlock growth – in infrastructure, digital connectivity and efficient public transport systems. We need to fast-track the rollout of modern special economic zones, backed by genuine incentives. Instead of bold reforms or pro-growth investments, the Budget leans on familiar and increasingly regressive tactics: raising taxes on the already-overburdened middle class and borrowing more from international lenders without a clear plan for debt repayment or structural reform. This year's tax increase comes disguised as 'bracket creep' in personal income taxes, effectively taxing South Africans more without explicitly changing the rates. Next year, there are already whispers of additional taxes on the horizon. The government is milking a shrinking base instead of expanding the economic pie. Years ago, when VAT was raised, we were promised serious spending reforms and a leaner, more effective state. That promise, too, has faded. The state remains bloated, with an oversized Cabinet and a civil service often rewarded more for loyalty than for performance. There are still no performance scorecards linked to Cabinet roles. There has been no movement on taxing high-turnover, high-risk sectors such as online gambling. And crucial functions such as policing and justice remain underfunded and underperforming. The human cost of this drift is staggering. Education budgets in key provinces such as Free State, KwaZulu-Natal and North West are taking a hit, on track to run out of funds to support teachers. Our doctor-to-patient ratio now stands at 1 to 3,000, a clear sign of a healthcare system under collapse. The National Prosecuting Authority continues to buckle under the weight of its mandate, unable to bring criminals to justice in a country overrun by corruption and violent crime. There are small signs of momentum. Minister Barbara Creecy's commitment to rail and transport reform is welcome. Fixing our logistics network is essential for reigniting growth in key sectors such as agriculture and manufacturing. But isolated reforms are not enough. We need a coherent, national strategy backed by real budgetary commitments. I reject the idea that this is the best we can do. South Africa does not need more fiscal tinkering. We need structural reform and moral courage. I am proposing three immediate steps to be pursued in round two and three of the budget process , asParliament considers the Appropriations Bill and the Division of Revenue Bill. First, cut wasteful spending. Initiate independent, sector-wide spending reviews to reduce inefficiencies, and reallocate funds to frontline services. Second, legislate for investment. Pass laws that make South Africa the easiest place in Africa to do business. Prioritise local businesses with the same urgency we show global ones such as Starlink.
Eyewitness News
12-06-2025
- Business
- Eyewitness News
Godongwana says his budget can't be faulted for not apportioning money to where it's most needed
CAPE TOWN - Finance Minister Enoch Godongwana said his budget could not be faulted for not apportioning money to where it was most needed. Following a second successful attempt at passing the fiscal framework which underpins the national budget on Wednesday, Godongwana said that it was now up to MPs to ensure the money was spent correctly. The budget allocates one trillion rand for infrastructure spending over the next three years. "Is that money going to be used efficiently and effectively. That should be the concern of these members. But you can't fault the budget. If it's not spent properly, that's your duty as Parliament to do your oversight." Parliament's finance committees will now get to work in scrutinising the money bills which allocate money to all spheres of government. ALSO READ: • Parliament gives Fiscal Framework and Revenue Proposals underpinning budget green light • GNU parties support 2025 fiscal framework and budget, opposition parties call it anti-poor
News24
11-06-2025
- Business
- News24
Fiscal framework passed with DA's support
On Wednesday at 14:00 both Houses of Parliament - the National Assembly (NA) and the National Council of Provinces (NCOP) - will consider the 2025 Fiscal Framework and Revenue Proposals. This framework outlines economic policy and revenue projections, setting the overall limits for government spending.
IOL News
11-06-2025
- Business
- IOL News
Godongwana urges MPs to ensure proper expenditure of R1 trillion infrastructure budget
The report on the Fiscal Framework and Revenue Proposals easily garnered the majority vote from the Government of National Unity partners and other smaller parties. Finance Minister Enoch Godongwana on Tuesday challenged parliamentarians to ensure that the R1 trillion allocated for infrastructure in the 2025/26 budget was spent efficiently and effectively. Speaking moments before the vote on the Fiscal Framework and Revenue Proposals and report of the standing committee on finance, Godongwana said he has discharged his responsibility. 'MPs have to make sure that this R1 trillion on infrastructure is spent effectively and efficiently,' he said. His comment was a sequel to the remarks by National Coloured Congress leader Fadiel Adams who sympathised with Godongwana after he was asked 'to pull off a miracle with nothing in revising the budget'. 'That should be the concern of these members … If not spent properly, that is your duty as MPs to do oversight,' he said. The report on the Fiscal Framework and Revenue Proposals was tabled in Parliament for the third time. On Wednesday, the report garnered the majority vote from the Government of National Unity (GNU) partners and other smaller parties. The report was passed with 268 votes in favour, 68 MPs, from the MK Party, EFF and United African Transformation were in opposition and two abstained. Godongwana, who had to redraft the budget and scrap initially proposed VAT increases, said it was a painful journey to have the budget adopted. 'From the National Treasury's perspective, we drew a number of lessons, but I suspect also members of this House must draw a number of lessons as to how we in practice are to manage debate around the Fiscal Framework moving forward,' he said. The passage of the Fiscal Framework and Revenue Proposals was despite the adjustment in the fuel levy, which was criticised by many during the debate. Tabling the report, ANC MP and standing committee on finance chairperson Joe Maswanganyi said Godongwana's third budget presentation underscored a steadfast commitment to fiscal responsibility and transparency. Maswanganyi said the budget adoption process within a coalition government can be quite complex due to the multitude of interests involved as coalition partners often bring diverse priorities, ideologies, and agendas to the table, which can complicate consensus-building efforts. 'Anyone calling for the Minister's head for the budget delay, is out of tune with coalition government dynamics all over the world,' he said in veiled attack on the MK Party, whose motion to censure Godongwana failed on Tuesday. Maswanganyi said during the budget hearings, stakeholders had welcomed the withdrawal of the VAT increase and additional allocations to SARS. 'The stakeholders, however, raised concerns about the proposed adjustments to the fuel levy, the lack of adjustment to PIT (personal income tax) brackets, above-inflation increases in excise duties, the withdrawal of zero-rated food items and the National Treasury's failure to increase Social Relief of Distress grant allocations,' he said. DA spokesperson on finance Mark Burke said his party supported the Fiscal Framework because it reflected some critical breakthroughs for ordinary South Africans. 'This is not a moment for celebration, it is a moment to push even harder for real economic reform that streamlines government, creates jobs and delivers growth,' Burke said. He praised the DA's firm stance against the VAT hike, securing billions in infrastructure investment, a commitment to root out ghost workers and an urgent review of government spending. 'These represents real breakthroughs that protect both the poor and the economy, but they are not enough,' Burke said. MK Party's Des van Rooyen said the GNU has subjected the country to a high fuel levy increase. 'Fuel levy is the most regressive taxing system and far worse than VAT is,' he said. Van Rooyen also said the report refusing their proposal for the introduction of a wealth tax, confirmed that 'the so-called GNU was a platform to protect the wealthy few, using puppets'. The EFF'S Omphile Maotwe said her party rejected the Fiscal Framework that was supported by the GNU, which replaced VAT with 'the regressive fuel levy that will affect the poor and the working class and failed to adjust the personal income tax brackets in line with inflation'. 'The Minister of Finance has declared to increase fuel taxes without even bringing a bill to Parliament. This tax is already in effect. It is a violation of the basic constitutional principle that no tax be imposed without the authority of legislation,' she said. The ACDP's Steven Swart said they welcomed the removal of VAT but it was sadly replaced by the maligned fuel levy hike. 'We will support the report but will be closely monitoring it. We want to be builders, not breakers,' said Swart in backing the Fiscal Framework report. BOSA leader Mmusi Maimane, whose party abstained in the vote, said the obsession should be about the rate of investment brought into the country, saying the projected economic growth was far too low. 'I suggest that we be aggressively declaring economic zones and giving infrastructure support, digital connectivity, efficient public transport and ethical government,' he added.
Eyewitness News
11-06-2025
- Business
- Eyewitness News
Parliament gives Fiscal Framework and Revenue Proposals underpinning budget green light
CAPE TOWN - Finance Minister Enoch Godongwana has described the first budget cycle of the Government of National Unity (GNU) as a painful journey. But he's standing by the second version of the budget he presented to Parliament three weeks ago, saying he believes he's delivered an expenditure-and-revenue raising plan that is fiscally sustainable. While opposition parties on Wednesday rejected the Fiscal Framework and Revenue Proposals that underpin the 2025 budget, GNU parties have come out in support of the revised budget, saying it is a product of compromises to achieve much-needed economic growth. This is a relief for Godongwana as his budget blueprint for 2025 has finally passed political muster. Godongwana has acknowledged it's been a tough road that's been paved by political contestation and legal challenges. ALSO READ: 'We've had a painful journey to arrive at this date, where the fiscal framework is being approved. Definitely from the Treasury perspective, we've drawn a number of lessons.' Godongwana has rejected claims from the opposition that this is an austerity budget that's not pro-poor. 'If you look over the last four months, what we've been fighting about is not by how much we cut the budget, it's about how much we are going to increase the budget and how we are going to fund that increase.' The Fiscal Framework has been passed with 268 votes to 88. Parliament's finance committees can now get to work scrutinising the money bills which apportion funding to municipalities, provincial governments and State departments.
