Cape Town – Parliament on Wednesday adopted a budget framework after a stormy session with the main coalition partner of the ruling African National Congress rejecting a text it says does not help growth and employment.
The text passed by 194 votes to 182 with no abstentions with lawmakers voting along party lines.
The ANC backed the bill and won support from a number of small parties which ensured its adoption without the support of the Democratic Alliance, the country’s second-largest party and main government coalition partner.
[BREAKING NEWS] Members of Parliament vote in favour of the 2025 budget. pic.twitter.com/QSvAFyR14y
— eNCA (@eNCA) April 2, 2025
The DA opposed a budget which notably provides for a one percent VAT increase staggered over two years, taking the rate to 16 percent by 2026-27.
The bill was the first major test for the coalition which the ANC was forced to enter after it lost its absolute majority in parliament at the last elections for the first time.
The budget was slated for presentation in February but postponed for lack of agreement, leading to weeks of intense negotiations.
Last month, the finance minister, who hails from the ANC, presented a revised draft, which the DA had already rejected.
‘Unthinkable‘
The DA, under its leader John Steenhuisen, said it would challenge the budget in the Western Cape High Court after what it termed an “unthinkable” move by smaller parties to back it and thereby hand the VAT hike to the ANC “on a platter”.
The party said it had pushed for amendments “that would have ensured economic growth and job-creation, because that is what South Africa needs”.
But, “instead of the budget being amended to address the needs of struggling South Africans, the budget has been passed by the National Assembly with VAT hikes to make life more expensive for South Africans”.
The DA also charged that the bill had been pushed through in “unlawful and unconstitutional” fashion notably as “one proposal during the meeting of one political party was taken as adopted without the other tabled amendments being considered”, constituting a “legal shortcoming”.
The DA said it “refuses to give in to the ANC’s tax increases. They remain hellbent on making people poorer. The ANC is out of touch with the people, and if they bought their own groceries or filled their own tanks, they would know how expensive life already is”.
❌ The DA is taking the fight against the ANC’s VAT Budget to court. Watch as DA Leader, John Steenhuisen unpacks this.
The DA negotiated for changes that would have ensured economic growth and job-creation, but the ANC unlawfully proceeded with a flawed process in Parliament. pic.twitter.com/rUC7BWAy2a
— Democratic Alliance (@Our_DA) April 2, 2025
Last year saw growth of just 0.6 percent for inflation was 4.4 percent in an economy held back by failing infrastructure, including massive power outages blamed on years of corruption, mismanagement and theft.
South Africa is the continent’s most industrialised nation but the sluggish economy is burdened by an employment rate topping 32 percent, with the young particularly affected.
Inequality within the country’s 62 million people is one of the highest in the world, a legacy of white-minority rule voted out in 1994.
Last year saw a huge drought batter the agricultural sector and weigh on GDP.
However, the International Monetary Fund (IMF) expects growth to come in at 1.5 percent this year.
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Source: AFP
