President Cyril Ramaphosa convened a special Cabinet meeting on 24 February to discuss the ongoing Budget uncertainties. Finance Minister Enoch Godongwana presented an alternative proposal after his initial Budget plan faced rejection for the second time in a week.

The first Budget, which proposed tax increases, was met with strong opposition from ministers. As a result, the Budget announcement has been postponed to March 12 due to ongoing disagreements.

A Cabinet insider revealed that the rejection of Godongwana’s proposal has created significant challenges, damaging the minister’s reputation. In response, a subcommittee chaired by Deputy President Paul Mashatile has been established to address the issue with Cabinet’s assistance.

Despite the controversy, another source confirmed that the Budget will still be tabled next month. However, Cabinet spokesperson and Minister in the Presidency, Khumbudzo Ntshavheni, dismissed the reports as “fake news.” Her media liaison officer, Sipho Mbele, declined to comment further.

During a six-hour discussion, Godongwana explained that avoiding VAT increases meant that proposed budget cuts would be necessary. These cuts included:

• R29 billion over the Medium-Term Expenditure Framework (MTEF), affecting the hiring of unemployed doctors and healthcare services.
• Funding cuts preventing the hiring of 11,000 teachers, impacting early childhood development initiatives required by the BELA Act.
• A R2 billion reduction for prison warders, limiting staffing for correctional facilities.
• R23 billion allocated for government employee salary increases, affecting a planned 5.5% pay raise.
• R13 billion in Defence budget savings, intended for salaries and recruitment of young soldiers.
• R5 billion for military deployment in the Democratic Republic of the Congo (DRC), with reliance on reserve forces due to unbudgeted deployments.

A Treasury proposal to defer government contributions to the Government Employees Pension Fund for a year was also discussed. While this would free up R53 billion, it is expected to face strong resistance from unions.

A source close to the discussions questioned the fairness of the proposed cuts, particularly regarding military funding. “South Africa is regarded as a military powerhouse in Africa, yet its armed forces are in a dire state due to budget reductions,” they said.

Despite these challenges, efforts continue to reach a consensus and finalize the Budget ahead of the March deadline.