Ramaphosa calls special cabinet meeting on budget

Finance Minister Enoch Godongwana was initially scheduled to table the budget on Wednesday, only for the parliamentary sitting to be pushed back to 12 March.  

The delay came amid disagreements within the Government of National Unity over a proposed increase in value-added tax from 15% to 17%.  

Monday’s meeting in Cape Town will allow GNU parties to discuss the way forward before the budget is tabled in March.

Ramaphosa addressed the matter at the G20 foreign ministers meeting on Friday, saying while the postponement is a challenge, it has not dumped the country into a crisis.

 "What happened was, in many ways, a sign of our own democracy maturing. Some have called it democracy in action, and I would agree,” the president said.

“There are valuable lessons for all of us in the process that unfolded. It's important to distinguish between how events played out and the substance of what was ultimately presented to the nation.”

He emphasised that even in well-established democracies, budget setbacks happen and must be resolved through consensus.  

Ramaphosa also defended Finance Minister Enoch Godongwana, dismissing suggestions that the proposal to raise VAT was made without due consideration.

He said no finance minister would raise taxes unless they believed there was an alternative.  

In his weekly newsletter on Monday, the president acknowledged the uncertainty caused by the delay, particularly among South Africans, investors, and financial markets.

"The budget reflects the government's choices and priorities for the country’s development. Decisions on how to spend public funds have implications for every South African.

“It is therefore essential that the concerns raised by different parties around the budget are properly addressed in the interests of accountability, transparency and consensus-building.

“This is the first time that the budget is being presented by the Government of National Unity. It is understandable that this new arrangement would require a different approach in some respects.

“The process of forging agreement among the political parties in the GNU is still a work in progress, but we are certainly getting there.

“Disagreements, contradictions and policy divergence are inherent in governments made up of several political parties," he said.

He emphasised that despite disagreements in the GNU, the government is not in crisis.

“It means that democracy is working. A Government of National Unity, by definition, infers consensus-building. No one party can impose its will. There needs to be thorough deliberation and meaningful engagement.

“The decision to postpone the budget speech and to continue discussions should engender public confidence in the GNU. It should reassure citizens that despite differences of opinion, we are pulling in the same direction,” added Ramaphosa.

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