2025 Budget cancelled

In an unprecedented move, the 2025 Budget Speech scheduled for 19 February has been cancelled until further notice.

This follows a disagreement between parties within the Government of National Unity (GNU) on the proposals within the budget.

The executive decided to adjourn and postpone the National Assembly’s sitting to allow enough time to reassess the budget.

The budget is now expected to be delivered sometime in March.

According to the statements delivered at the sitting, the main point of contention was proposed tax hikes, on which parties within the GNU did not agree.

It was widely reported ahead of the scheduled speech that Value-Added Tax (VAT) was to be hiked by two percentage points, taking it from 15% to 17%.

This was corroborated by a leaked 2025 tax summary document for SARS, which showed the hike.

While adjustments to the zero-rated tax basket would have been made, parties—primarily the Democratic Alliance—took great exception to this.

President Cyril Ramaphosa called an emergency cabinet meeting ahead of the address to give Godongwana an opportunity to address the GNU parties on the proposals.

The postponement of the 2025 Budget was met with mixed reactions. However, most parties agreed that a date should be set for it.

Many members of parliament criticized the executive as incompetent, highlighting it as a low point in South Africa’s democracy.

The 2025 budget is the first in South Africa’s democratic history to be compiled by a non-majority government.

Following the 2024 national election, the ANC lost its majority, securing only 40% of the vote. This led to the creation of the GNU.

While the GNU has inspired positive sentiment thanks to its wider representation of South Africa’s interests, it has not been without conflict.

Parties have butted heads over several key policies and laws that had been championed by the ANC during its majority rule.

The National Health Insurance Act, signed before the 2024 elections, has been a major sticking point with the DA and other parties.

But two laws signed after the formation of the GNU—the Basic Education Laws Amendment (BELA) Act and the Expropriation Act—have caused even bigger problems within the government.

The Expropriation Act in particular has drawn unwanted attention on a global scale, damaging South Africa’s relations with one of its biggest trade partners, the United States.

This perceived instability—likely exacerbated by the cancellation of the Budget Speech due to disagreements—could be seen as counter-productive to the GNU’s stated goals of driving economic growth.