South Africa on Wednesday pushed back the coalition government’s first national budget speech to parliament in a shock move following internal pressures over tax hikes.
The speech to outline the government’s annual fiscal priorities, including ways of raising revenue, was due to be delivered by Finance Minister Enoch Godongwana in parliament in Cape Town.
“It is something that is unprecedented,” Speaker Thoko Didiza said during a charged session in the chamber.
There had been no agreement on the budget proposals between the parties in the executive, she said, highlighting increasing strains in the 10-party coalition.
“I do think that it is correct that when such situations happen, we need to collectively think on the best way forward,” said Didiza.
A new date for the budget had been set for March 12, the government said.
After ruling South Africa alone since the end of apartheid in 1994, the African National Congress (ANC) lost its majority in last year’s elections, forcing it into a coalition.
The uneasy union saw the ANC join forces with nine other parties, including its long-running critic, the DA.
“The postponement…is a victory for the people of South Africa,” DA leader John Steenhuisen swiftly said after the announcement.
The party had opposed a proposal to raise value added tax from 15 to 17 percent, he said, adding it “would have broken the back of our economy”.
The last minute postponement was nonetheless opposed by the radical-left Economic Freedom Fighters (EFF) party.
“There is no government, it has collapsed,” EFF leader Julius Malema told parliament.
Filling government purse
Godongwana sought to allay any fears of a fallout, saying the cabinet was “grappling” with ways to fund its priorities.
“Do we borrow more, do we cut expenditure or do we raise taxes and what are the implications of that,” he told reporters.
“There is a general agreement that in the current environment we need to find a way of funding our priorities,” he said.
Africa’s most industrialised nation is grappling with how to fill its coffers after it lost US aid, in part due to a recent law which US President Donald Trump alleged allowed the government to seize land from white farmers.
The economy is faced with issues on multiple fronts with inflation inching higher to three percent in December.
The country has among the highest levels of inequality in the world and poverty affects more than 60 percent of its more than 63 million people.
Unemployment edged downward in the last quarter of 2024 to about 32 percent, the government said on Tuesday, but the figure remains among the world’s highest.
