Godongwana commits Treasury to debt stabilisation amidst revised Budget

The revised budget includes processes as set out in the Money Bills and Related Matters Act

- YOGASHEN PILLAY

FINANCE Minister Enoch Godongwana has assured the country the National Treasury has already commenced work on developing a new fiscal framework that will maintain the trajectory toward debt stabilisation.

This is a crucial element in strengthening the country's public finances amidst deteriorating fiscus. In March, Treasury projected that gross debt-to-GDP will stabilise in at 76.2% of GDP in the 2025/25 fiscal year, compared with 76.1% in the 2024/25FY, before declining gradually thereafter.

It comes after Godongwana decided to rescind his decision to implement a 0.5 percentage points increase in the value-added tax (VAT) following litigation. The VAT increase proposal was in a bid to raise about R60 billion for the fiscus, which is facing a R75bn revenue shortfall in the medium-term.

"The revised budget will adhere to all established technical processes and consultations as set out in the Money Bills and Related Matters Act," Godongwana said on Wednesday.

"This includes formal consultations with the Financial and Fiscal Commission, thorough consultations with all political parties within the Government of National Unity (GNU), as well as Cabinet approval before presentation to Parliament."

Godongwana added that this comprehensive review will include the Fiscal Framework, the Appropriation Bill, Division of Revenue Bill, and the already tabled Rates and Monetary Amounts and Amendment of Revenue Laws Bill.