The 2025 Budget Speech has been postponed for the first time in democratic South Africa’s history as parties could not reach consensus on proposed value-added tax (VAT) increases. The budget will be tabled on March 12.
Originally meant to start at 14h00 today (February, 19), the speech was delayed due to an emergency Cabinet meeting between members of the Government of National Unity. The meeting was called after the Democratic Alliance voiced its “resolute opposition to the ANC’s plan to hike VAT at a time when millions of South Africans are already suffering under a cost-of-living crisis”.
According to the party and a leaked version of the speech, a 2% increase in VAT was due to be tabled.
Announcing the delay at around 14h20 today, National Assembly Speaker Thoko Didiza said: “We have decided to adjourn proceedings for a date to be determined by the programming committee.
“Before we started the session, we were informed by the Leader of Government Business that, while today we’ve been gathered here to have the Minister of Finance present the budget to this august house, there has not been agreement of parties in the executive to actually find one another in proposals of the budget.”
In a media briefing after the postponement, Finance Minister Enoch Godongwana said: “Cabinet is united in the view that we must strike a balance between the interests of the public, economic growth and fiscal sustainability.”
When asked if the VAT hike is the only sticking point in the speech, Godongwana said: “You can’t have the 2% alone without talking about what’s going to replace it. What we are grappling with is not necessarily the 2%. What we are grappling with, given the challenges and priorities we are facing, is how do we fund that? Do we borrow more? Do we continue cutting expenditure? Do we raise tax? We need to find ways of funding our priorities. The debate is what is the best way of doing that.”
The impact of the cancellation of the speech was almost immediate on the rand. The rand-dollar exchange rate went from R18.33 at noon to R18.58 at 14h30 today.
Duncan Pieterse, National Treasury Director General, said National Treasury typically has a global call with the country’s domestic and foreign investors after the budget speech – this will be done after March 12.
