Cape Town braces for Finance Minister Enoch Godongwana’s first budget under the Government of National Unity (GNU), a moment that could define the country’s economic trajectory. With mounting fiscal pressures and fierce opposition to tax increases, the stakes could not be higher. The budget comes at a challenging time. South Africa’s economy is struggling, with economist Dawie Roodt warning that the fiscal outlook is dire. “It is doing quite badly, in fact,” he remarked. Adding to the complexity, U.S. President Donald Trump’s recent executive order freezing funding for the President’s Emergency Plan for AIDS Relief casts a shadow over crucial health programs. Roodt predicted that tax hikes are inevitable. “There will be increases in certain taxes—sin taxes, the fuel levy will go up. I believe some items will be zero-rated,” he speculated. But with a widening budget deficit and growing debt, the challenge for Godongwana is immense. State-owned enterprises, failing municipalities, civil servants demanding salary hikes, and millions relying on government support all contribute to an already overstretched fiscal framework. Economic growth remains a contentious issue. “I don’t see the economy growing by more than 1.5%,” Roodt said, casting doubt on President Cyril Ramaphosa’s ambitious 3% target. “Let’s see if the Minister agrees with the President.” Political parties are drawing their battle lines. The Democratic Alliance (DA) insists that the 2025 budget must mark a turning point, prioritizing infrastructure investment, policy reforms, and private sector job creation.
“We expect a budget that accelerates economic reforms, unlocks investment, and reduces debt,” said DA MP Mark Burke. He urged the government to lower fuel levies, expand the zero-rated VAT basket, and eliminate wasteful spending. Cosatu, South Africa’s largest labour federation, is calling for a bold and progressive budget. “The economy will grow if we fix the state, stimulate growth, and slash unemployment. It will not grow by squeezing already under-resourced public services further,” said parliamentary counselor Matthew Parks. Cosatu strongly opposes any increase in VAT or personal income tax on low-income earners, warning that such measures would “suck money out of the economy when it is most needed.” Instead, the federation argues, SARS must be strengthened to combat tax evasion and customs fraud. The GOOD party’s Brett Herron insists that tough decisions must be made. He questions whether excessive spending on executive protection would be better redirected toward clean water, affordable housing, and public infrastructure. “Hard choices need to be made,” he said, advocating for a Basic Income Grant as a top priority. The South African Communist Party (SACP) shares the opposition to tax hikes, demanding a budget that advances the National Health Insurance (NHI) and lays the groundwork for comprehensive social security. “Tangible progress must be made towards a universal basic income grant,” the party declared. ActionSA’s Alan Beesley echoed similar concerns, stating that any tax increases must be accompanied by “deep cuts to government luxuries.” “South Africans cannot be expected to shoulder higher taxes while state corruption and mismanagement remain unchecked,” he warned. For Build One South Africa deputy leader Nobuntu Hlazo-Webster, this budget is a defining moment for the GNU. “It will show the priorities of this government and allow us, the people, to determine whether the GNU is a breath of fresh air or just more hot air,” she said. As Godongwana prepares to deliver his budget, he faces a nation with high expectations and limited patience. The country awaits to see whether his plans will offer real solutions—or simply more political rhetoric.
