Finance Minister Enoch Godongwana.
The first budget speech of President Cyril Ramaphosa’s 7th administration had to collapse in an unprecedented move as the Finance Minister Enoch Godongwana had no choice but to postpone the much anticipated speech to 12 March.
These developments were formed by differences between the various parties of the GNU that couldn't give birth to soundness over pressing issues in the speech that affects the citizens of this country. The Budget Speech was expected to take place at 2pm on Wednesday.
Godongwana's Budget Speech leaked copies show that the Treasury had moved to propose a 2% increase on the VAT, which would have raised it to 17%.
The Budget Speech read: "After careful analysis of the trade-offs, we have chosen the most responsible path forward. We propose to raise the VAT rate by 2 percentage points to 17 per cent – a necessary step that will enable us to, fund public sector wage increases for our civil servants, expand early childhood development opportunities for our children, retain the teachers, doctors, and essential frontline workers that serve our communities, revitalise our commuter rail system to better serve working-class families and provide above-inflation increases to social grants for our most vulnerable.”
When addressing the media after the failed budget speech, Godongwana said Ramaphosa’s administration must ensure that the country needs to find methods to find its priorities. He brushed off pressing suggestions that the budget speech was postponed mainly because of the 2% VAT proposal which was also denied by opposition parties which weren’t part of the GNU.
"What we are grappling with is not necessarily the matter of 2%, given the challenges we face as a country, how do we fund them, do we continue cutting expenditure, we need to find ways of funding our priorities," said Godongwana.
Presidency Minister Khumbudzo Ntshaveni also attempted to summersault the ANC 2% VAT proposal throwing a curveball to the Treasury stressing that they had a responsibility to ensure that books are balanced.
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