By Thebe Mabanga
The current budget impasse, which saw the national budget postponed for the first time in 30 years of democracy and still to be fully passed by Parliament, should lead to a more transparent and inclusive planning process with public participation.
This was the view expressed by Deputy President Paul Mashatile, who spoke at a Budget Roundtable event, hosted by the Finance and Fiscal Commission (FFC) in Cape Town.
The FFC is an independent statutory body that makes recommendations of government’s fiscal stance, revenue proposal as well as departmental allocations, including detailed aspects of budget management such as drawing up hospital budgets.
The commission is currently involved with the review of the Local Government White Paper on municipal governance models and funding, as part of Operation Vulindlela, which is the economic reform programme run by Treasury and the Presidency.
Following its postponement in February, the budget was eventually tabled in March and the first step in its adoption was the contentious passing of the Fiscal Framework and Revenue proposals in April, without support of some parties within the Government of National Unity, most notably the Democratic Alliance.
The process now faces the hurdle of passing the Division of Revenue Bill in May, and the Appropriation Bill in June.
Mashatile noted that the process showed South Africa’s maturing democracy.
“It is important to recognise that, in contrast to other governments around the world that have collapsed due to fiscal disputes, South Africa successfully navigated the challenges,” said the deputy president, who chaired the Cabinet committee that was tasked with resolving the crisis and seeking an alternative to the proposed increase in VAT.
“The 2025 Budget process has taught us important lessons, especially those relating to improving transparency in decision-making processes.” said Mashatile.
“We have learnt that the current budgetary process is not transparent and inclusive enough, making it difficult for citizens to understand how government goes about the process of taking some of the most critical decisions in allocation of resources albeit limited resources because of the competing needs.” he told his audience, whom he joined virtually.
Mashatile said the foremost lesson that government has learned was the need to return to the concept of the people’s budget, an idea associated with veteran parliamentarians, the late Ben Turok and the retired Joan Fubbs.
“What this means is that we need fiscal planning that is inclusive from the start, in terms of the Medium-Term Expenditure Framework, and in line with Government’s priorities,” said Mashatile.
“In my considered view a transparent process is one that allows for public participation, scrutiny and informed decision-making, ultimately leading to better resource allocation and improved service delivery to the citizenry.” Mashatile noted.
He also said the budget process should be governed by principles of equity, equality and non-discrimination.
Mashatile outlined the principles that were agreed on at a 2023 national dialogue on coalition governments that he convened to guide coalitions at all levels of the state.
The principles include putting people’s needs first, a commitment to creating a prosperous and united society, a commitment to clean governance and sharing executive seats at all spheres of government according to proportion of votes received, a principle that Mashatile says parties currently differed on.
He also reiterated the argument put to the DA that it could not be part of the government if it opposed the budget and has taken one of its key aspects, the VAT increase, to court.
The country’s number two emphasised the GNU’s priorities of achieving inclusive economic growth, addressing the cost of living as well as building a capable, ethical and developmental state.
Mashatile also outlined South Africa’s economic path of the past 30 years.
“For the first 15 years of the country’s democratic rule, the economy grew at a rapid pace. However, over the past decade and a half, the country’s economy has been marked by slow growth.” he said, the latter part being a reference to the period since the global financial crisis in 2008.
He also noted the levels of poverty and low levels of black ownership of the economy as a challenge, which required industrialisation, especially minerals beneficiation.
“Industrialisation and reindustrialisation are… critical for driving and achieving sustainable social, institutional and political economic changes.” Mashatile said, who pointed to localisation as a key benefit of beneficiation.
Mashatile spoke of using the budget to navigate global shocks and disruptions, but did not address tariff threats posed by US President Donald Trump, in the week when the International Monetary Fund said it would knock global growth from 3,3% to 2,8%.
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