Finance minister Enoch Godongwana said in parliament on Thursday that the National Treasury would discuss its proposals to replace the proposed taxes rejected by parliament with all political parties.
Godongwana also gave an undertaking that if revenue allowed it, the government would provide further relief on personal income taxes and review the budget’s tax proposals going forward.
He reiterated his previous undertaking that the proposed 0.5 percentage point increase in VAT in 2026/27 could be scrapped if circumstances allowed.
The National Assembly endorsed the fiscal framework on Wednesday along with a recommendation that the Treasury find alternatives within 30 days to the one percentage point VAT increase over two years and the non-adjustment of personal income tax brackets to account for inflation, a total of R31.5bn.
MK MP Des van Rooyen pointed out, during a question-and-answer session with the economic cluster of ministers in the National Assembly, that the Treasury took a prolonged period to produce the fiscal framework and revenue proposals so he could not conceive how it would manage to find alternatives within 30 days and consult on them.
“We will cross the time frames when we get there. If we have to extend we will discuss that,” the minister said.
Godongwana was asked numerous questions on the social relief of distress (SRD) grant, expenditure reviews and the use of consultants to conduct them and the perceived inaccuracy of Treasury’s growth projections.
On the SRD grant, the minister said the Treasury was looking at consolidating and reviewing the over 100 labour activation programmes in more than 20 public institutions, which could result in a jobseekers’ grant and an entrepreneurial grant for small and medium enterprises.
“It may well be that this grant could well emerge as an employment grant but I don’t know.” He gave the assurance that there was no intention to terminate the SRD grant. “There has been a lot of misinformation that we have the intention to terminate the grant. There is no intention,” he said.
On expenditure reviews, Godongwana said President Cyril Ramaphosa had undertaken to set up a committee with the Treasury to probe waste, inefficiency and underperforming programmes.
The more than 200 existing spending reviews undertaken since 2013 would be taken to the cabinet in the next few months and new ones considered. An audit of ghost workers in national and provincial departments would also be undertaken.
He cautioned that the implementation of expenditure reviews fell under the jurisdiction of cabinet ministers.
Godongwana noted that government officials had conducted most of the expenditure reviews undertaken since 2013 but outside consultants were also used where specialised skills were needed and had been paid a total amount of R53m.
Asked about reducing the number of cabinet ministers, Godongwana said the establishment of the government of national unity had brought to a halt a project to reorganise government, but the evaluation of public entities dependent on the fiscus was continuing.
Agriculture minister John Steenhuisen was asked what steps were being taken to ensure SA was not excluded from the Africa Growth & Opportunity Act (Agoa) when it came up for renewal later in the year.
He said the department of agriculture continued to strengthen its relationship with its US counterpart by holding regular discussions. An SA agriculture attaché had recently been appointed in Washington.
In preparation for the possibility that Agoa was not renewed, alternative markets were being actively sought, particularly for citrus, wine and nuts, among others.
“I do think we need to build resilience in the agriculture sector in a post-Agoa world,” Steenhuisen said.
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