The ANC has started internal deliberations on its proposed revisions to the national budget, following the National Treasury’s decision to rework its fiscal plans.
This will be the third attempt to table a budget in as many months, with Finance Minister Enoch Godongwana expected to present it later this month.
The previous two budget drafts were unsuccessful due to political party objections regarding a proposed increase in the standard VAT rate.
This latest effort by the National Treasury to create an acceptable budget is anticipated to involve significant input from various political parties, both within and outside the Government of National Unity (GNU), as they submit their fiscal recommendations.
ANC Secretary-General Fikile Mbalula indicated that, aside from the VAT issue, the party believes the current budget framework is largely suitable.
He emphasised the ANC’s desire for a budget that prioritises the needs of the poor, describing the proposed 0.5% VAT increase as a temporary measure for revenue generation.
Mbalula stressed the party’s wish to avoid unexpected VAT increases for which the ANC might be blamed.
Meanwhile, the National Treasury has begun preparations for the upcoming budget, with Director-General Duncan Pieterse confirming cost-saving measures. This follows the expenditure of R2,4 million on the February budget, which was delayed due to the VAT dispute.
Pieterse clarified that the expenses of the previous two budgets were not classified as fruitless or wasteful.
During a media briefing regarding the May 21 budget plans, Pieterse acknowledged the potential negative perception of the costs incurred from multiple budget attempts.
He stated that measures such as reducing printing and increasing electronic document availability would be implemented to lower expenses for the next budget.
Finance Minister Enoch Godongwana had initially proposed a gradual increase in VAT over the next two years, starting with a smaller hike of 0.5% this year.
Taxpayers will ultimately bear the costs associated with the revised Budget Speech. Godongwana confirmed the May 21 filing date after reversing the 0,5% VAT proposal from the March budget.
He admitted the budget process had been disorganised but highlighted lessons learned. Pieterse reiterated that the costs were for necessary items like travel and accommodation and pledged to minimize future expenses to avoid burdening taxpayers.
However, ActionSA MP Alan Beesley reportedly said that he expected nothing to come out of the 3,0 Budget speech, saying it will just be a promise.
“Based on Budget 1,0 and Budget 2,0, as ActionSA, we do not believe there will be any radical changes, and such our expectations are not high,” Beesley reportedly said.
He added that the Broad-Based Black Economic Empowerment (BBBEE) policy had failed to achieve the transformation it had set out for.
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