Cabinet reaches agreement on budget

An agreement has been reached in the cabinet after days of robust debate over finance minister Enoch Godongwana's budget. 

The government held a special meeting on Monday to discuss how the R60bn shortfall in the budget would be met.

This came after cabinet members rejected Godongwana's proposal for a two percentage point VAT increase, arguing this would further debilitate poor and low-income households.

The Sunday Times reported this week the National Treasury was now considering a 0.75 to one percentage point increase. This proposal was said to have come after a special meeting last week where the Treasury presented its proposals to the cabinet. 

President Cyril Ramaphosa then set up a ministerial team led by Deputy President Paul Mashatile in collaboration with Godongwana and the Treasury to consolidate cabinet inputs for consideration.

A statement released on Tuesday said the Mashatile-led team tabled a variety of options considered by the cabinet on Monday. 

It said the cabinet mandated Godongwana to select from the discussed options and fund the budget in a manner that takes into consideration the fiscal constraints, the impact on poor and middle-income households and supports the economy.

“With the conclusion to the cabinet input process into the budget, the minister of finance and National Treasury are now set to finalise the budget and table it before parliament on March 12,” the government said. 

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