The National Treasury leadership should resign following the faux pas that resulted in the 2025/2026 national budget being tabled twice.
This is the view of economist Duma Gqubule, who believes senior staff at National Treasury, along with Finance Minister Enoch Godongwana, should step down for pushing for a value-added tax hike despite serious opposition.
Initially, Godongwana had to abandon tabling the budget in February, which sought to raise VAT by two percentage points to 17% from 15%.
However, due to a fierce backlash, he backed down, later proposing a 1% increase with a 0.5% split increase over two financial years.
Treasury faced opposition after presenting the fiscal framework to government ministers before the National Budget sitting in Parliament.
There was a charge against the 0.5% VAT increase, which was split into two financial years, 2025/26 and 2026/27.
After the VAT hike rejection, Godongwana is scheduled to table the budget on May 21.
Gqubule accused treasury leadership of a failure to listen to the views of external experts and being insensitive to the needs of low-income households when crafting the budget.
“The VAT was targeting the most vulnerable people in our society. National Treasury rejected everything that goes against rich South Africans, whether it’s corporate income tax, wealth tax, retirement tax credits, corporate tax, medical aid tax, among other things.
“There were 50 presentations in parliament, and there are so many other revenue streams, but the Treasury rejected that and decided to go for the most vulnerable in our society by increasing the VAT.
That is not right.
“If the third budget is going to still target the poor, it must be rejected by all the stakeholders.”
Gqubule lashed Godongwana for saying he will approach the IMF if no austerity measures are implemented in South Africa.
“Godongwana is preparing us for deep budget cuts – to social spending to the most vulnerable in society. I think we must reject the third budget.”
He said the objectives of the economic policy are to grow the economy and create jobs.
“National Treasury is failing at both. If the third budget is rejected, South Africans will wake up and realise we need a new team at treasury,” he said.
He added that the new budget should be drafted in a way that is sensitive to the latest world economic developments.
“There is dramatic change in the global and domestic economic outlook and treasury must counter that. These are exports to the US, which are around R91-billion, which is 1.2% of GDP and 4.5% of our total exports, such as the auto and steel industries.
“The budget must respond to US President Donald Trump’s shock to the world economy, just like five years ago we had a response to the Covid-19 shock.
“We need to inject more money into the economy to counter the effects of the Trump shock to the economy. We have among the highest real interest rates in the world while the inflation is down to 2.7%.
“The Reserve Bank, at its next Monetary Policy Committee meeting [on May 29] needs to lower
interest rates by 200 basis points.
He pointed out that treasury’s most important task was to find a way to grow the economy by more than 1%.
“On this current trajectory, we’ll be growing by less than one percent, which is now for the third consecutive year.
“We can’t go on like that especially when we have high levels of unemployment, poverty and inequality.”
