The newly tabled national budget has drawn sharp criticism from opposition parties, including the uMkhonto WeSizwe (MK Party) and the Economic Freedom Fighters (EFF), who argue that it fails to address the economic struggles of the poor and working class.
The criticism follows Finance Minister Enoch Godongwana’s budget 3.0 speech, delivered in the absence of President Cyril Ramaphosa and Deputy President Paul Mashatile. The two leaders were on official trips—Ramaphosa meeting with former U.S. President Donald Trump in Washington, D.C., while Mashatile was in Paris.
Opposition parties slammed their absence as a sign of the executive’s detachment from pressing economic issues. The MK Party and EFF, in a joint statement, rejected the budget, calling it “disconnected” from the realities faced by ordinary South Africans.
Key Budget Takeaways
The budget avoided a widely speculated VAT increase due to lack of political support but introduced a fuel levy hike—the first in three years—set to take effect on June 4. Petrol prices will rise by 16 cents per liter, while diesel will increase by 15 cents per liter, a move critics warn will further strain consumers amid already high living costs.
Treasury defended the decision, stating the adjustment aligns with inflation. However, analysts and opposition figures argue it disproportionately impacts low-income households, as transport and goods prices are expected to rise.
Mixed Reactions from Alliance Partners
The South African Communist Party (SACP) and trade union federation COSATU, traditional allies of the ruling ANC, offered cautious support. SACP’s Dr. Alex Mashilo acknowledged some positive aspects, such as increased funding for education, healthcare, and infrastructure, but criticized the fuel levy’s inflationary impact.
COSATU’s parliamentary coordinator, Matthew Parks, welcomed the rejection of VAT hikes but stressed the need for efficient spending, particularly in rebuilding public services.
Fiscal Concerns and Future Tax Hikes
The budget revealed a concerning rise in debt-to-GDP ratio, now at 77.4%—the highest since 1994. While no new taxes were introduced this year, the minister warned that 2026’s budget may require new tax measures to raise an additional R20 billion, signaling potential future financial pressures on citizens.
Deadline Looming for Budget Approval
The finance minister emphasized the urgency of passing the budget and appropriations bill by July 30, warning that failure to do so would leave government departments with only 10% of their budgets, crippling public services.
As debates continue within the Government of National Unity (GNU), the budget’s long-term impact on South Africa’s economic stability remains a contentious issue, with opposition parties vowing to challenge its provisions.
