NEWS: Budget Speech Uncertainty

With political parties split on the planned budget for the country things are complicated and there is some confusion over the proposed budget that was announced.

Following an unprecedented delay Finance Minister Enoch Godongwana gave the annual government budget speech on 12^th March 2025. This speech outlines how government plans to earn and spend funds.

During the speech, he set out plans to bring in more money for government through extra taxes, including a controversial VAT increase (0.5% this year and 0.5% next year = 1% increase). Other plans involve not adjusting tax brackets to allow for inflation and thus hopefully scoop up some extra income if people get increases.

Many people were surprised that there was not more talk of cutting spending in the face of the crushing debt obligations the government has. Politically though, cutting spending is seldom popular (just look across the pond to the US to see how that is going there) and can often only be accomplished when there is simply nor more room for borrowing or when a popular leader or party is in total control.

The confusion over the budget comes in with not all parties agreeing to the proposed plans, which now have to be discussed and approved by parliament. Which means the plans may or may not actually come about and things may have to go back to the drawing board (if all the behind the scenes wheeler dealing doesn’t make everyone happy enough to vote to agree).