By Johnathan Paoli
Labour has welcomed the postponement of Finance Minister Enoch Godongwana’s annual Budget Speech, in light of his intention to increase the value- added tax by 2 percentage points.
The Federation of Unions of SA acknowledged the postponement as indicative of the nature of a complex coalition government, saying it was important that there was a thorough deliberation on fiscal policies that impacted all South Africans.
“Fedusa has consistently expressed concern over tax hikes that disproportionately affect workers and low-income households, especially amidst the prevailing economic challenges, including a crippling cost of living crisis,” Moleya said in a statement.
She said the federation commended the government’s commitment to transparency and inclusive dialogue, and remained hopeful that this period would allow for the development of equitable fiscal strategies that prioritised economic growth, job creation and the welfare of all citizens.
“Fedusa stands ready to engage constructively with all stakeholders during this critical time to ensure that the forthcoming Budget reflects the needs and aspirations of the South African workforce,” she said.
The National Education, Health and Allied Workers’ Union did not mince words in its rebuke of what it deemed an agenda of cementing austerity policies.
Nehawu spokesperson Lwazi Nkolonzi criticised the government for introducing a policy of austerity, with budget-balance and public-debt targets at a time when it had received a mandate to shift away from austerity.
“It is ironic that this time around the Treasury has caught itself in its own trap, having previously leaked information to prepare the public for an impending announcement,” Nkolonzi said.
Nehawu called on the Treasury to reverse the cut in the corporate tax rate of 1 percentage point back in 2022, increase the capital gains tax and introduce a wealth tax.
Nkolonzi said while privileging big business by the cut, the Treasury had launched an offensive on public servants when it openly undermined a collective bargaining agreement by refusing to adjust the salaries of public servants.
The union also accused the Democratic Alliance of plunging the Government of National Unity into a crisis that could make things worse.
Citing the DA’s request to the US government to monitor the 2024 elections as well as its response to President Donald Trump’s reaction to the Expropriation Act, Nkolonzi condemned the party for its “continuous political destabilisation of the country”.
In its response, Solidarity responded to the postponement of the Budget with a mixed response.
Spokesperson Theuns du Buisson welcomed the decision by members of the GNU to resist the increase in VAT as a positive step in ensuring cooperation and negotiation over unilateral decision-making by the ANC.
“South Africa is currently experiencing a diplomatic crisis and severe economic pressure. In such a context a cohesive and functional government is of great importance. It is, therefore, essential that the ANC realise that it is no longer governing on its own,” Du Buisson said.
He accused minister Godongwana of including the increase without consulting with the GNU.
“If the GNU is to be successful, ministers must develop a mindset where precedence is given to consensus and cooperation. Similarly, all partners in the GNU must take their role seriously and must guard against any tendencies to abuse power,” the spokesperson said.
Du Buisson said the lack of transparency and consultation was unacceptable and undermined the credibility of the government’s supposed collaborative nature.
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