2025 Budget Speech Cancelled Indefinitely Amid GNU Disagreement

In a historic and unexpected decision, the highly anticipated 2025 Budget Speech, initially scheduled for 19 February, has been cancelled indefinitely due to internal disagreements within the Government of National Unity (GNU).

Why Was the 2025 Budget Speech Cancelled?

The decision to delay the budget stems from disputes over proposed tax increases, particularly a controversial Value-Added Tax (VAT) hike from 15% to 17%. While adjustments to zero-rated goods were considered, key GNU parties—most notably the Democratic Alliance (DA)—strongly opposed the increase.

In response to these tensions, President Cyril Ramaphosa convened an emergency cabinet meeting ahead of the scheduled speech, giving Finance Minister Enoch Godongwana a final opportunity to address GNU concerns. However, no consensus was reached, leading to the indefinite postponement.

Political and Economic Implications

This marks the first budget under South Africa’s non-majority government following the 2024 elections, where the ANC lost its outright majority, securing only 40% of the vote. The resulting GNU coalition, while praised for its broader representation, has faced internal divisions—this budget dispute being the most significant so far.

Key Concerns

• Uncertainty for Businesses and Investors: The delay raises questions about government spending, tax policies, and economic stability.
• Impact on Public Services: Without an approved budget, key sectors like healthcare, education, and infrastructure could face funding delays.
• Potential Credit Rating Impact: South Africa’s credit rating could be affected by perceived political instability and fiscal uncertainty.

When Will the Budget Speech Happen?

While no new date has been confirmed, sources suggest the budget could now be delivered sometime in March. However, this depends on whether GNU parties can reach a compromise on key tax policies.

What Happens Next?

With South Africans awaiting clarity on tax changes, social grants, and economic plans, all eyes will be on the National Treasury and GNU leaders in the coming weeks. If disagreements persist, further delays—or even a major political shake-up—could follow.

This is a developing story. Stay tuned for updates.

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