Ahead of the 2025 Budget Speech, civil society organisations have referred to as on President Cyril Ramaphosa to censure the Minister of Finance for his feedback on the R370 Social Relief of Distress (SRD) grant.
At the weekend, the Sunday Times reported that Godongwana insists there’s a want to extend VAT as a result of the SRD grant, which has near 10 million recipients, requires an unplanned price range allocation.
The Budget Speech, which Godongwana was anticipated to desk on 19 February, was postponed as a result of proposed two share level improve in VAT, which many political events, together with these within the ANC-led Government of National Unity (GNU), rejected.
BUDGET SPEECH 2025: GODONGWANA ACCUSED OF PITING THE POOR AGAINST EACH OTHER
Following Godongwana’s feedback, in a joint assertion, civil society organisations together with Black Sash, the Economic Institute for Economic Justice and #PayThe Grants stated it’s categorically unfaithful that the SRD grant isn’t within the price range.
The organisations stated the Director-General at National Treasury, Duncan Pieterse confirmed to the Parliamentary Finance Committee on 31 October 2024 that the SRD grant was “included as a provisional allocation in the fiscal framework’s baseline” for 2025/2026, that means it’s budgeted for, and it has been within the price range for the previous 5 years. It is on no account a brand new or unanticipated expense.
“What Minister Godongwana’s remarks quantity to is an ultimatum: Choose between cuts to fundamental companies like well being and schooling, a big hike in dwelling prices (through VAT), or the life-saving SRD grant. In every state of affairs, it’s the poorest which can be being requested to make an not possible sacrifice.
“As our organisations have repeatedly submitted—these are not our only options. There are better, fairer, and much less destructive alternatives. These include building the state’s capacity to collect existing taxes—as SARS Commissioner Edward Keiswetter has called for; drawing further on the Gold and Foreign Exchange Contingency Reserve Account; removing unnecessary tax breaks and subsidies which benefit the wealthy such as retirement fund contribution rebates and corporate tax incentives; raising VAT on luxury goods; reversing the Corporate Income Tax rate cut, from 27% to 28%; dealing with unnecessary and wasteful expenditure; and implementing a wealth tax. None of these options are completely frictionless—but they are effective and much, much less painful than increasing the VAT burden,” the organisations stated.”
GODONGWANA ACCUSED OF MISLEADING THE PUBLIC
Further, the organisations stated given the myriad accessible pathways, holding these unacceptable decisions over individuals’s heads is essentially deceptive and dishonest.
“We should see the Minister’s feedback over the weekend for what they’re, a last-ditch try to protect his marketing campaign of austerity by ransoming the SRD grant and the livelihoods and dignity of those that profit from the grant, to pressure by an unpopular and anti-poor tax improve.
“Politicians must be held accountable for their actions, and any Minister who pre-empts democratic policy processes to impose their preferred path by misleading the public and threatening the rights of the most vulnerable has abused their office and the trust we place in them. The President must ensure that the Minister of Finance shows due regard for democratic processes and mandates, and is appropriately censured. The government as a whole must end the era of impunity for National Treasury, which, together with the Minister of Finance, must not be allowed to act unilaterally and defy the collective will of government,” they added.
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