The SA Chamber of Commerce and Industry (Sacci) expressed alarm over the political standoff that led to parliament postponing SA’s national budget on Wednesday following a day of tense negotiations.
The National Treasury’s plan to increase VAT from 15% to 17% — to fund a major boost in spending on front-line services — faced strong pushback from cabinet members within the government of national unity (GNU).
After an early-morning meeting between President Cyril Ramaphosa and leaders of the nine parties represented in the GNU, followed by a heated cabinet discussion, the budget announcement was rescheduled for 12 March.
“We are concerned that the apparent lack of agreement by the government of national unity partners, and other political parties with sufficient votes to pass the budget, will lead to uncertainty, and an inherent perception of political instability in the ruling coalition government of SA.”
The organisation urged all political parties to “bring a high level of maturity and seriousness in the negotiations, to get to an acceptable conclusion”.
Sacci also appealed to decisionmakers to consider cutting non-essential government spending rather than raising taxes, contending that additional levies could harm business confidence, dampen economic growth and increase unemployment.
The chamber noted that “no evidence has been provided to show that enough has been done, in a systematic and scientific way, to find savings, without necessarily cutting down on critical social services, and infrastructure expenditure”.
“We should focus more on efficiencies and raising the levels of productivity.”
Drawing on international precedents, Sacci pointed out that delayed or contentious budgets occurred in many established democracies.
It cited Germany’s coalition collapse in November 2024 over budget disagreements, former British Prime Minister Liz Truss’ abandoned corporate tax cuts in 2022, and the US Congress’ regular struggles to pass budgets on time.
While emphasising the seriousness of the impasse, Sacci said the disputes reflected a dynamic political system.
“We make these examples not to minimise the seriousness of the situation, but to highlight that our SA situation is not unique,” the statement read.
Sacci called for diligence and speed in resolving the stalemate to prevent prolonged uncertainty and bolster both business and investor confidence.
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