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22 April 2025 | Story Terrance Molobela | Photo Supplied
Terrance Molobela
Terrance Molobela is a Lecturer in the UFS Department of Public Administration and Management.

Opinion article by Terrance Molobela, Lecturer in the Department of Public Administration and Management, University of the Free State.

 


 

Despite fierce opposition of the already passed National Fiscal Framework, the African National Congress (ANC) convened several meetings within and outside the Government of National Unity (GNU) mostly pioneered by its Secretary-General Fikile Mbalula who recently stated: “We are not trickers; we do not trick people. We engaged with ActionSA, and they said they do not want VAT; that’s not tricking anyone.”

One thing is clear, there is nothing binding on the GNU that after receiving additional budget proposals to raise revenue from ActionSA and Building One South Africa (BOSA), the VAT hike will be dropped. In fact, on 16 April 2025 in an interview with Newzroom Afrika the Minister of Finance Enoch Godongwana said: “I am not married to any increase or percentages”. The minister pointed out that the initial budget without VAT hikes was still on the table, however, he further highlighted that VAT increases remain Parliamentary policy issues. His advice is: “If you remove the 0.5% VAT increase, you must find an equivalent amount on the expenditure side to ensure the fiscal framework remains balanced.”

As the budget impasse stands, people need to understand that once the budget is passed by Parliament, the minister cannot unilaterally reverse the VAT increase. This is cemented by Section 12 of the Public Finance Management Act and Section 7(4) of the VAT Act. This ball is in Parliament’s court to reverse the budget and revenue proposal once alternative revenue generation proposal have been brought forward.

With 1 May 2025 looming, South Africans have a bitter pill to swallow as they will be charged R15.50% for every R100 spent. The media covered the VAT increase with rage and concerns from various communities across the country. The people feel punished by the GNU, while facing deep-rooted socio-economic problems like inequality, high unemployment, and poverty.

Despite the GNU deadlock and its fiscal crisis, several members within the ANC have unanimously admitted that the party has grossly failed to reach an amicable consensus within the GNU to freely support the VAT hike, hence it is vehemently opposed from all sides. Some critics suggest that the ANC-led government is poised to drop the VAT hike, but it’s unclear as to where and how the minister of finance would find the money to plug the fiscal gap.

 

Marriage may be sweet, but divorce is bitter

Both the ANC and DA knew ahead of time that forming the GNU with other parties was what is commonly known as “a marriage of inconvenience”. Before and on the wedding day, you both blind yourselves because of the sweet cake, joy, guests, and presents that long-lost friends will bring along. You create this beautiful picture that only exists in your head and hope that the other party shares a similar picture. But after you have entered the marriage, you then realise that you each functions on different levels and do not have complementary ideologies.

The DA’s ideologies on governance and policy is far the opposite of the ANC, and although it could work, the ANC have demonstrated their thirst for power and control, hence, their ability to share power equally remains a foreign language. DA leader John Steenhuisen has made it clear that they will not sacrifice citizens’ votes for a piece of cake but would rather fight and support a budget that caters for economic growth and job creation. This they have demonstrated by challenging the legality of the budget process in court, with hopes of blocking the implementation of a VAT increase, which has led to widening the rift within the fragile GNU.

 

The authenticity of the parliament – flawed budget process?

Amid mounting tensions created by the budget impasse, the National Assembly narrowly facilitated the national budget process, the DA, Economic Freedom Fighters (EFF), and uMkhonto weSizwe (MK) party rejected the budget, whilst the ANC-led government through coalescing outside GNU with parties like Action SA, secured majority support for the approval of the fiscal framework.

Parliament passed the 2025 National Fiscal Framework without the formal amendment of the mounting VAT and tax hikes. This was approved without binding recommendations, although budget committees suggested that the VAT and tax hikes be reconsidered at a later stage. As 1 May 2025 approaches for the VAT hike to kick in, reversing the VAT increase would be a lengthy process because it appears untenable.

The DA leader raised concerns that the Finance Committee acted ultra vires of the standing rules of Parliament, meaning the budget was not properly presented to the committee to reject or approve it, and that only a single proposal from the ANC was prioritised, whilst neglecting the DA proposal. This legal anomaly occurred under the watch of the National Assembly on the 2 April 2025. Hence, the DA have been challenging the budget.

One would ponder – “if the tables were turned, and the DA was in the position of the ANC and visa-versa, would the National Assembly opted to approve the budget framework?” I guess we would never know.

 

Where does the road lead now?

GNU: the ANC has already held several talks and meetings indirectly citing that the DA should hand over their divorce papers. But the president of the ANC needs the DA to remain in the coalition because of further economic shocks, which saw R1 trillion wiped out on the Johannesburg Stock Exchange (JSE). Investor confidence in the economy has hit rock-bottom, and the current trade wars have put pressure on multiple businesses to tighten their investment belts until it is safe to continue investing. The DA has not yet declared whether they want a divorce, but critics suggest that the Deputy President, Paul Mashatile, would be delighted if the DA left since they rejected the very same budget that they expect to reap from. As for ActionSA, it is unclear whether they have decided to join the GNU, but its leader Herman Mashaba has shown interest in joining the GNU, which most critics have weighed as a betrayal to the people of South Africa.

Ordinary citizens: It is time for South Africa’s citizens to brace themselves for the oncoming VAT hike. As much as the minister of finance has argued that it was necessary to stretch the already deeply embedded financial distress of citizens grappling with over-taxation of income, the bitter pill remains theirs to swallow. The 0.5% in VAT carries an underestimated distress for households who will be left alone to deal with increased prices of goods, services, and essentials.

 

What should be done thus far?

More tax on the people, goods and services kills jobs, which results in reducing revenue generation by government. To avoid further inflationary hikes, the government needs to approach the problem in an unusual way – this means placing strict rules and regulations on any government transaction that takes effect, deal with corruption and mismanagement at every sphere of government. Monies lost and stolen through unfinished projects should be recovered and ensuring that all state projects remain frequently monitored.

The government needs to change its ways of approaching industries, companies, and businesses to create jobs, and transfer some of their skills to the people of South Africa. The youth is yearning to be seen, supported, trained, and placed into the real world to unleash their potential, which might be something the economy needs to re-establish and position itself in the right direction to stir desired economic growth.

 

News Archive

Mellon Foundation awards R10 million research grant to Trauma, Forgiveness and Reconciliation Studies
2015-02-20

Prof Pumla Gobodo-Madikizela, Senior Research Professor in Trauma, Forgiveness and Reconciliation Studies, and Dr Saleem Badat, Programme Director at the Mellon Foundation.
Photo: Johan Roux

Through her profound insight, vast experience, and unfaltering belief in humanity, Prof Pumla Gobodo-Madikizela, has secured a R10 million grant from one of the world’s most prestigious foundations funding human sciences research.

“This is one of the biggest grants that the Andrew W. Mellon Foundation has awarded to a university”, said Dr Saleem Badat, Program Director: International Higher Education and Strategic Projects at the Mellon Foundation. Prof Badat attended the press event that took place on 16 February 2015 on our Bloemfontein Campus.

UFS Trauma, Forgiveness, and Reconciliation Studies, spearheaded by Prof Gobodo-Madikizela, will manage the research project.

Prof Jonathan Jansen, Vice-Chancellor and Rector of the UFS, expressed great excitement “about this particular grant and the subject on which it focuses is so incredibly timely and germane to our own situation.”

Trauma, Memory and Representations of the Past: Transforming Scholarship in the Humanities and Arts

This new-found partnership between the Mellon Foundation and the UFS will enable a five-year research programme. The focus area of this initiative will be ‘Trauma, Memory and Representations of the Past: Transforming Scholarship in the Humanities and Arts’.

The research will pivot specifically around the question of how trauma is transmitted from one generation to the next. “South Africa lends itself to these questions,” Prof Gobodo-Madikizela said, “because we are now dealing with a generation of young people who were born after the traumas of the past.” These past experiences, though, are “passed on to the younger generation and become their own stories and narratives as if they themselves experienced the traumas directly.”

“This is an investment in how we can in fact create a different kind of community,” Prof Jansen said, “in which we eventually recognise each other – not by the accident of our skin, but by that elusive sense of a common humanity.”

Arts and theatre

Other aspects critical to this study are the inclusion of the arts and theatre. Many people have great difficulty in expressing their experiences of trauma in the spoken word. The arts and theatre provide an ideal platform to engage the public and stimulate conversation. As an example of the power these platforms possess, Prof Gobodo-Madikizela highlighted the success of the Johannes Stegmann Art Gallery – situated on the Bloemfontein Campus and curated by Angela de Jesus – in engaging the public in very productive ways.

Participants

Some of the artists, directors and scholars who will join in this project include:

• Lara Foot-Newton, Director/Playwright
• Sue Williamson, Activist Artist
• Angela de Jesus, Visual Artist/Curator
• Dr Buhle Zuma, Social Psychology Research
• Dr Shose Khessi, Social Psychology Research
• Prof Tamara Shefer, Women’s and Gender Studies
• Prof Kopano Ratele, Gender/Men and Masculinities
• Prof Jan Coetzee, Sociology of Developing Societies
• Prof Helene Strauss, Literary and Cultural Studies

New intellectual frontiers

“There is an aspiration in this proposal,” Dr Saleem Badat said. “We were born through this pain of colonialism and apartheid; we even went through the TRC. Our scholars in this country, our universities, should be at the forefront of this research. This is not research we can leave to the institutions in the north.”

Prof Gobodo-Madikizela agreed. “The overarching theme of this work is new knowledge production, focusing on the experiences in South Africa as experiences that can teach us something new.”

This will serve not only South Africa, but can also establish support for, and inform, countries facing similar dilemmas. In fact, “any part of the world in which genocide and murder and racism remains as legacies from the past,” Dr Badat said.

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