Wednesday, 12 March 2025

The Economic Freedom Fighters (EFF) firmly rejects with contempt the right-wing neoliberal 2025 budget tabled by the Minister of Finance in the National Assembly today. The shameful budget, finally tabled after an embarrassing inability to do so last month due to internal GNU squabbles, is the final nail in the coffin of the economic struggles facing the poor and working class while there are all sorts of promises for the parasitic white capitalist establishment.

The Minister of Finance has unashamedly handed over government fiscal policy to the parasitic white capitalist establishment, capitulating to the whims of the National Treasury while offering nothing to the poor and working class. South Africa needs economic policy that will guarantee full employment and grow the productive sector of the economy.

The National Treasury has repurposed South Africa’s fiscal policy to revive high levels of profitability for multinational corporations at the expense of the country’s much needed economic growth and development. This is done without a guiding framework besides the announcement that the government has adopted a Medium-Term Development Framework, which has not even been circulated to the public, yet the public is expected to engage with the budget tabled by the Finance Minister. If anything, the National Treasury is just continuing with its misguided operation to decapitate the strategic state owned companies.

The EFF reiterates that South Africa does not have a guiding economic policy framework that links government spending with sustainable economic growth, development, and job creation to reduce poverty and inequality. Once more, there is no mention of the National Development Plan (NDP), as that plan has been completely abandoned because it has failed. There will evidently be no achievement of any of the objectives set out in the adopted NDP of 2014, which were meant to be achieved by 2030.

The EFF vehemently rejects the proposal to increase Value Added Tax (VAT) by 0.5% in 2025/2026 and another 0.5% in 2026/27. This is ultimately what the EFF predicted that there will be an attempt to propose a one percentage point increase in VAT after testing the public response and sentiment to the outrageous two percentage point proposal three weeks ago.

The EFF wants to assure South Africans that a delayed and prolonged increase in VAT over a two-year period remains detrimental to the poor and the middle-class and remains an unviable option to generate revenue. The EFF calls on all Members of Parliament and Opposition Parties to engage in collective and necessary bilateral engagements across party lines, utilising the Money Bills Amendment Procedures and Related Matters Act, 2009 to amend the proposed fiscal framework and revenue proposals contained in the Budget.

Ultimately, the Budget and Revenue Bills presented today are mere proposals and guidelines, and Parliament ought to utilise its instruments to defend the poor from austerity and malicious taxation of the poor, while the corporate sector gets away with undermining our economy through illicit financial flows and tax evasion.

We agree with the Commissioner of the South African Revenue Service (SARS) that increasing VAT will not lead to any sustainable or significant increase in revenue but will only put poor and working households under more pressure to protect the white capitalist establishment. This comes after the Minister of Finance reduced corporate income tax in 2022, despite evidence that South Africa’s corporate income tax is below the global average.

The EFF has called on the government for the past 10 years to capacitate SARS to deal decisively with illicit financial flows, particularly profit shifting and base erosion, to increase revenue collection that can be used to fund education, health, policing, defence, and the justice system.

The EFF additionally calls on civil society, trade unions, and academic institutions to come together to reject this VAT increase. This is a time when we should stand in solidarity against such a dangerous and irrational proposal. The majority of households are already under enormous financial pressure and will be disproportionately affected by this proposed VAT increase.

We note that the much-talked-about increase in infrastructure spending by state owned companies is disingenuous because it prioritises the involvement of the private sector in strategic economic functions that should be reserved for the state, as they are critical to national economic security.

Beyond the privatisation of strategic services, the National Treasury is continuing with the deliberate sabotage and collapse of SOEs, refusing to provide much-needed funding while calling it a bailout, when in reality, it should be viewed as an economic development fund. The National Treasury’s obsession with reviving the rate of profitability for the private sector, which already constitutes a large section of our economy, while failing to create jobs and grow the economy is simply economic incompetence. The idea that public infrastructure should be subjected to profiteering is plain looting of public resources and should be outrightly rejected.

We further reject the suggestion or any insinuation that Eskom can generate electricity at anything resembling a fair recovery cost, when the role of energy in a national economy is development. Electricity is critical to re-industrialisation, economic development, growth, and job creation, and this should be funded by a parliamentary allocation.

The EFF additionally notes the ongoing entrenchment of the privatisation of public services, now extending to municipalities, as essential municipal services are being commercialised. The National Treasury wants to complete the privatisation and commercialisation of municipal services, a process initiated in the late 1980s, which led to the sale of water, sanitation, and refuse collection. Soon, the majority of our people will not be able to afford municipal services, and many municipalities will begin to operate as private commercial entities instead of people’s municipalities.

We note and agree with the proposed social grant increases by the Minister of Finance. However, given the current economic conditions, high joblessness, and dependency, where one black worker supports four people while white workers earn more but support fewer dependents, these increases will not be enough to cushion many vulnerable and poor households.

The EFF, therefore, condemns the National Treasury’s deliberate attempts to postpone the introduction of a comprehensive and sustainable social grant for unemployed youth, particularly graduates. By 2025, three years will have passed since COVID-19 ended in 2022, yet the continuous extension of the SRD grant is malicious and must be rejected.

The EFF will closely study the proposed budget, Appropriation Bill, and Division of Revenue Bill to determine an appropriate course of action, which will include mobilising all stakeholders to take the fight to the picket lines to reject the 2025 budget.

ISSUED BY THE ECONOMIC FREEDOM FIGHTERS

Leigh-Ann Mathys (National Spokesperson) 082 304 7572

Thato Lebyane (Media Enquiries) 078 304 7572