South Africa: Budget Postponement Is a 'Blessing in Disguise' Says Cosatu

GCIS
South African Finance Minister, Enoch Godongwana
19 February 2025
GroundUp (Cape Town)
By Liezl Human

Hundreds marched in Cape Town ahead of budget announcement

  • Trade union federation COSATU says the surprise postponement of Wednesday's budget speech is a "blessing in disguise".
  • The budget announcement has been postponed to 12 March amid concerns in the government about a proposed two percentage point hike in the VAT rate.
  • COSATU Western Cape chair Motlatsi Tsubane said the federation was totally opposed to a VAT increase.
  • Earlier, several organisations marched through Cape Town to demand that Finance Minister Enoch Godongwana put an end to spending cuts.

The postponement of the 2025 budget is a "blessing in disguise", Congress of South African Trade Unions (COSATU) provincial chair Motlatsi Tsubane said on Wednesday.

The budget speech by Finance Minister Enoch Godongwana was postponed at the last minute amid concerns about tax increases. The speech will now be delivered on 12 March, National Assembly Speaker Thoko Didiza told MPs. At a press conference after the announcement in Parliament of the delay, Minister in the Presidency Khumbudzo Ntshavheni said cabinet had not yet finalised the budget. She said ministers, including ANC ministers, had opposed a proposed hike in VAT.

Tsubane said COSATU was in two minds about the postponement of the budget speech. On the one hand, he said, the federation was disappointed. But on the other hand, he said "it is quite clear that they were going to push through a 2% increase in VAT".

"So it's a blessing in disguise even though it's an unprecedented situation that happened today in Parliament."

Tsubane said COSATU was "totally against a VAT increase" because of the high unemployment rate and weak economy.

Earlier, hundreds of people marched through Cape Town to demand that Godongwana put an end to cuts in his 2025 budget. More than a dozen organisations joined the march, including COSATU, the South African Federation of Trade Unions (SAFTU), Equal Education, Cry of the Xcluded, People's Health Movement, Alternative Information and Development Centre (AIDC), and Rural Women's Assembly.

Speaking to the crowd outside Parliament, Zwelinzima Vavi, general secretary of SAFTU, said any increase in VAT would affect poor people. VAT, he said, is a "regressive tax system that will impact the poor more than the rich". To this, the crowd chanted: "Phantsi, VAT, phantsi."

Noncedo Madubedube, general secretary of Equal Education, read out a petition calling for lower prices of food, fuel, and electricity; more resources for safety in communities, funding to fill vacancies in schools, hospitals, and clinics; more money for the National Student Financial Aid Scheme (NSFAS); a commitment to and timeline for the introduction of the Basic Income Grant (BIG); and an end to privatisation of services offered by public utilities such as Eskom and Transnet.

National Treasury Deputy Director-General Stadi Mngomezulu came out to meet the protesters and signed the petition. He said that he would ensure the petition reached Godongwana's office and that marchers could "expect a response".

The petition was read out on Tuesday evening at the People's Budget Assembly at St George's Cathedral.

"Mass unemployment, hunger, collapsing municipalities, and an economy that is going nowhere -- these are the real emergencies, not the government's debt. While the government is obsessed over budget cuts, ten-million people go hungry each week," the petition read. "How can anyone justify cuts to healthcare, education and other basic public services in this situation?"

COSATU National Treasurer, Freda Oosthuysen, said spending cuts affected everything. "Austerity measures have an impact everywhere, even when you buy a loaf of bread."

Oosthuysen also raised concerns about lack of policing in communities, shortages of teachers in classes, and rising unemployment. "We're sitting with graduates that can't get a job," she said.

Nomacebo Mbayo, a waste picker from the Wastepicker's Movement, told GroundUp that she was worried about unemployment, and explained that she lost her job during Covid, and has not been able to find a new job other than waste picking. Mbayo wanted the government to find alternatives to job creation.

Aliya Chikte, from the Alternative Information & Development Centre, said the government should prioritise social protection and transform the Social Relief of Distress grant into a Basic Income Grant. Chikte also said there should be no increase in VAT.

Read the original article on GroundUp.

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