Only 15 days to conclude Budget 3.0, and talks are falling behind: Matisonn

Key topicsTensions rise in GNU as ANC-DA disputes delay Budget 3.0 planningIMF cuts SA growth forecast to 1%, complicating fiscal outlookMKP, IFP gains in KZN signal rising Zulu-ethnic political support.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By John Matisonn.Listen to this story instead:.With Finance Minister Enoch Ndongwana’s Budget Speech 3.0 now only 15 days away (as of Tuesday), the narrowing timetable to iron out a differences with GNU partners is raising new concerns.At a Monday DA media conference in Johannesburg to discuss plans for Tuesday’s court challenge to the Employment Equity Amendment Act, DA federal chairperson Helen Zille said her ANC opposite number, Fikile Mbalula, had failed to turn up at five out of their last seven agreed meetings. At a meeting of about 100 ANC MPs at the weekend, Mbalula had to manage a rising call for the ANC to remove the DA from the GNU.In the light of the DA’s successful court challenge to budget 2.0 over the VAT increase, Ndongwana said last week that key elements of the political process need to be adapted for this third round of budget talks, “to align with the new reality of coalition politics”, and Director-general Dr Duncan Pieterse confirmed this depended on talks with GNU partners to produce a consensus. Godongwana was criticised for trying to force the last two budgets through without taking full account of the DA’s objections.The new budget must take account of two key changes since the previous budgets – that there will be no VAT increase, and the downgrading of growth forecasts since US President Donald Trump launched his global trade war.In its latest World Economic Outlook (WEO) report, the IMF revised its 2024 GDP growth projection for South Africa to a modest 1%, down from a previous estimate of 1.5% made in October 2024. Treasury projected growth of 1.9%. The IMF reduced its Global growth forecast to 2.8% in 2025, down from the 3.3% projection in January..Read more:.Cape Town’s Budget isn’t a reform, it’s a quiet revolution - Jim Tait.The DA’s published position is that there can be no new taxes, and it wants stepped up implementation of growth measures, including rail and port concessioning and the devolution of more powers to speed up reforms at municipal level. Godongwana said that the new budget would have to find R75billion to make up for the loss of the VAT increase over three years. In the 2025/26 financial year, a VAT increase of 0.5% was intended to raise about R13.5 billion. In 2026/2027, that was expected to increase to R14.3 billion, and R15billion the following year. The rejected proposal foresaw two 0.5 percentage point increases over the following two years, adding another R 14.3billion and R15.5 billion, for a total of R75 billion.Meanwhile, the ANC’s political position remains under strain after it lost another KwaZulu-Natal municipal by-election last week. The MKP took a seat in Mandeni from the ANC, which won with 60% in 2021. The MKP gained 42%, leaving the ANC a distant third with 27%. The IFP’s second place with 30% was a substantial increase from 13%. The EFF also declined from 14% to 1%. The growth of MKP and IFP seems to signal a rise in support for parties with a strong Zulu ethnic identity in the province.Popular City Press columnist and editor Mondli Makanya ridiculed the accelerated jockeying for leadership positions because President Cyril Ramaphosa is on the way out, saying Ramaphosa “is probably the last guaranteed South African president of the republic we will see in a while.“Your party just don’t matter that much no more,” Makhanya mocked.

Only 15 days to conclude Budget 3.0, and talks are falling behind: John Matisonn

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