Some economists believe Godongwana has little room for error with third attempt at budget
Finance Minister Enoch Godongwana will make a third attempt at tabling the national budget on 21 May after political pressure backed him into a corner over a proposed VAT increase.
FILE: Finance Minister Enoch Godongwana. Picture: GCIS
JOHANNESBURG - Some economists believe Finance Minister Enoch Godongwana has little room for error when he delivers the budget 3.0 next month.
Godongwana will make a third attempt at tabling the national budget on 21 May after political pressure backed him into a corner over a proposed VAT increase.
He’s now expected to table a revised fiscal framework without a VAT adjustment.
The February budget, which proposed a two percentage point increase, was turned on its head by political parties protesting the move in the National Assembly.
READ: National Treasury under pressure to kick-start spending review, starting with cuts to government perks for executive
A revised proposal of one percentage point over two years faced a legal challenge.
The third attempt requires a reset, with a fresh round of consultations on alternatives expected to take place from now.
With higher taxes and raising debt largely out of the question, economics professor at the North West University, Waldo Krugell, said that spending cuts were the Treasury’s best bet.
"I think he's finally read the temperature in the room. South Africans don’t want to pay more taxes."
With fiscal policy treading water, the GNU, the economic impact of the budget impasses and the implications on South Africans are all now centre stage.