Cape Town – Finance Minister Enoch Godongwana expressed relief after Parliament approved the Fiscal Framework and Revenue Proposals underpinning the 2025 budget on Wednesday.
The approval marks the end of a contentious and politically fraught process, as this was the first budget cycle under South Africa’s Government of National Unity (GNU).
Godongwana described the journey as “painful”, highlighting the political contestation and legal challenges that delayed the budget’s adoption.
“We’ve had a painful journey to arrive at this date, where the fiscal framework is being approved. Definitely from the Treasury perspective, we’ve drawn a number of lessons,” the minister said, according to EWN.
The budget was passed with 268 votes in favour and 88 against, primarily from opposition parties such as the EFF, MK Party, and United African Transformation.
The GNU and its coalition partners supported the revised budget, emphasising that it was a product of compromise aimed at fostering economic growth.
DA finance spokesperson Mark Burke stated that his party backed the Fiscal Framework as it included key gains that would benefit everyday South Africans.
“This is not a moment for celebration, it is a moment to push even harder for real economic reform that streamlines government, creates jobs and delivers growth,” IOL quoted Burke as saying.
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Fiscal Sustainability: Godongwana defended the budget as fiscally sustainable, rejecting claims that it was an austerity budget not supportive of the poor. He pointed out that debates centered less on budget cuts and more on how much to increase spending and how to fund it.
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Infrastructure Investment: The budget allocates R1 trillion for infrastructure in 2025/26. Godongwana urged MPs to ensure this money is spent efficiently, emphasizing the importance of parliamentary oversight to prevent waste and mismanagement.
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Social Grants: The old age grant increased by R120 to R2,310 in April 2025 and is set to rise by another R10 in October, reflecting the budget’s continued support for social spending.
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Debt and Deficit: The 2025/26 government debt is projected to stabilize at 77.4% of GDP, slightly higher than earlier projections due to lower nominal GDP. The primary surplus is expected to grow, which should reduce borrowing needs and debt-service costs over time, though these costs remain high at over R1.3 trillion for the next three years.
Political and Public Response
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Coalition Complexities: The adoption process was complicated by coalition politics, with multiple parties bringing diverse priorities and ideologies. The budget had to be revised after Godongwana withdrew the initial version in April due to internal and external political pressure and a court challenge.
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Fuel Levy Controversy: The revised budget scrapped a proposed VAT increase but replaced it with a fuel levy hike, drawing criticism from opposition parties and civil society for its potential impact on low- and middle-income households. The EFF and others argued that the fuel levy is regressive and disproportionately affects the poor.
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Oversight and Accountability: Godongwana emphasised that, while Treasury has learned lessons from the process, Parliament must also improve its management of fiscal debates and oversight of expenditure, particularly on infrastructure.
Looking Ahead
With the Fiscal Framework and Revenue Proposals now passed, Parliament’s finance committees will begin scrutinising the money bills that determine funding allocations for municipalities, provinces, and state departments. The adoption of the budget allows government services to continue uninterrupted and signals a measure of stability for the GNU’s economic agenda, despite ongoing criticism and the challenges inherent in coalition governance.
Summary Table: Key Points of the 2025 Budget Adoption
| Aspect | Details |
|---|---|
| Budget Passed | 268 in favour, 88 against |
| Main Support | GNU and coalition partners |
| Main Opposition | EFF, MK Party, United African Transformation |
| Infrastructure Spend | R1 trillion allocated, emphasis on oversight |
| Social Grants | Old age grant increased to R2,310, further increase in October planned |
| Debt Projection | 77.4% of GDP in 2025/26 |
| Deficit | Main budget deficit reduced by R8 billion over MTEF |
| Tax Changes | VAT increase scrapped; fuel levy increased, leading to criticism |
| Political Dynamics | Complex coalition negotiations, legal challenges, opposition censure attempts |
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Compiled by Betha Madhomu
