Tuesday, 1 April 2025

The Economic Freedom Fighters (EFF) notes the adoption of the 2025 Fiscal Framework and Revenue Proposals by the Joint Committees on Finance in what can only be described as a deeply flawed, incoherent, and illegal process. The adoption undermined the Money Bills Amendment Procedure and Related Matters Act, which sets out the legislative process for Parliament’s meaningful participation in budget-making.

The EFF rejects the approach taken by the Committee to process a report pre-drafted by content advisors and researchers before deciding whether to accept or amend the Fiscal Framework and Revenue Proposals. This outdated and unconstitutional procedure reflects the failure of the former liberation movement to grasp that Parliament is not a rubber stamp of National Treasury’s anti-poor, neoliberal budget agenda.

Instead of a transparent process of amendments, what we witnessed was a mockery of democratic oversight. The Committee adopted proposals that include a 0.5% VAT increase and allowed fiscal drag to remain in place on personal income tax, which will hurt the working class.

Crucially, it is Action SA which has compromised the poor and supported the Fiscal Framework and Revenue Proposals that include the VAT hikes, in collaboration with the African National Congress (ANC) and the Inkatha Freedom Party (IFP). In an exhibition of deceit, Action SA has attempted to suggest that through their request that ought to be reflected in the Standing Committee of Finance Report, which requests that National Treasury must find an alternative to VAT hikes within 30-days, they have proposed an aversion or amendment of the VAT hikes.

This is untrue and a desperate attempt to mislead South Africans. The VAT hike proposals are within the Fiscal Framework and Revenue Proposals which Action SA has supported.

The request to National Treasury to find alternative measures which Action SA has made through the Committee report, are meaningless and will do nothing to halt hikes. Essentially, Action SA has betrayed the poor and middle class by supporting the VAT hikes, through their support of the Fiscal Framework and Revenue Proposals as part of a backdoor deal with the ANC.

Despite previous admissions that centralising budget formulation within Treasury was a mistake, the ruling party continues to outsource fiscal sovereignty to unelected bureaucrats. What is worse is that political parties in the Committee, including those in the so-called Government of National Unity (GNU), prioritised narrow elite consensus over a developmental agenda that can transform the lives of our people.

It is evident that the adopted framework is not grounded in any coherent economic vision. The parties in the DA-led coalition could not even agree amongst themselves—speaking with one voice in the Committee and contradicting themselves in the public arena. This proves the budget is not the product of consensus, but of desperation and backroom deals.

There was a critical moment during the deliberations when the former liberation movement attempted to steamroll the process, pushing for the adoption of the Fiscal Framework without due regard for Parliamentary procedure. But the EFF stood firm, asserting the constitutional and legislative authority of Parliament.

In a display of political education, EFF members had to remind the committee — including some members of the ANC — that Parliament is not a ceremonial rubber stamp. Many were visibly shocked when we read aloud the relevant sections of the Money Bills Amendment Procedure and Related Matters Act, which clearly empower Parliament to amend the Fiscal Framework and Revenue Proposals. That moment laid bare not only the institutional decay within the ruling party, but also the EFF’s firm commitment to upholding the law and defending the sovereignty of Parliament in the budget-making process.

In a desperate rush to steamroll the process, the Committee flagrantly violated the law, bypassing the required steps for amendment. The EFF stood firm and made the following concrete proposals to shift the budget towards redistributive justice:

1. We rejected the VAT increase and called for it to remain at 15% to protect the working class.
2. We called for adjustments to personal income tax brackets to reflect inflation and protect workers from stealth tax increases.
3. We proposed increasing corporate income tax, as well as introducing a wealth tax on underutilised land and apartheid-era trusts to target inherited privilege and redistribute wealth.
4. We called for a substantial increase in funding to SARS to boost revenue collection, particularly the recovery of the R800 billion debt book.
5. On expenditure, we demanded that the Parliamentary Budget Office (PBO) be mandated to recalibrate spending in health, education, police, and defence to reverse the impact of austerity and allow the hiring of additional personnel.
6. Finally, we proposed that this process mark the beginning of an overhaul of the entire budget framework, in collaboration with the PBO and the Financial and Fiscal Commission (FFC), to ensure the 2026/2027 amendments reflect a decisive shift towards social spending and infrastructure investment.

The EFF is unapologetic in rejecting the budget surplus obsession imposed by National Treasury. If reversing inequality and mass unemployment leads to a wider deficit, so be it — we will not be complicit in fiscal policies that sacrifice black lives for credit ratings.

The EFF reaffirms its commitment to radical economic transformation, and we will continue to fight inside and outside Parliament for a budget that reflects the will of the people, not the interests of capital.

ISSUED BY THE ECONOMIC FREEDOM FIGHTERS

Leigh-Ann Mathys (National Spokesperson) 082 304 7572

Thato Lebyane (Media Enquiries) 078 304 7572