Issued by Ismail Joosub on behalf of the FW de Klerk Foundation on 03/04/2025

The FW de Klerk Foundation acknowledges the adoption of the national Budget by the National Assembly, which passed with 194 votes in favour and 182 against, with no abstentions. Following this, the National Treasury is now tasked with identifying alternative revenue sources totalling R31,5 billion within 30 days. This would replace the proposed VAT increases and the decision not to adjust personal income tax brackets for inflation.

The debate surrounding the Budget has revealed sharp divisions within Parliament. The ANC, ActionSA and the IFP supported the fiscal framework, while the DA, EFF and MK Party voiced strong opposition, citing both procedural and substantive concerns. The DA has also indicated that it is reviewing its involvement in the Government of National Unity (“GNU”), with an announcement expected soon. Additionally, the EFF and MK Party have raised legal challenges, arguing that the parliamentary process did not comply with the Money Bills Amendment Procedure and Related Matters Act of 2008. The Speaker of Parliament, however, clarified that the process followed was consistent with the Assembly’s rules and parliamentary procedures.

The broader fiscal challenges persist. With the VAT increase deferred and alternative revenue measures uncertain, there are significant concerns that these decisions could negatively affect household budgets and overall economic stability. The ability of Parliament and the executive to address these challenges swiftly and effectively will be a key test for governance under the GNU framework.

“The debate around this Budget underscores the deep divisions within Parliament and the ongoing fiscal challenges we face as a nation,” says Christo van der Rheede, Executive Director of the FW de Klerk Foundation. “It is critical that all decisions made in the Budget process are grounded in principles of fairness, transparency and long-term sustainability.”

Ismail Joosub, Manager of Constitutional Advancement at the FW de Klerk Foundation, concludes, “The coming weeks will be crucial in determining the stability of the Government of National Unity and ensuring that South Africa follows a sustainable fiscal path.”

The FW de Klerk Foundation reiterates the importance of sound fiscal management, as outlined in section 215 of the South African Constitution, which mandates that national revenue and expenditure must be managed efficiently. Additionally, the Foundation stresses the relevance of section 195, which calls for accountability and transparency in public administration. These constitutional principles must guide South Africa’s approach to fiscal policy and governance, ensuring decisions benefit all South Africans equitably.