Scopa chair Zibi praises spirited VAT debate, calls for a deeper budget conversation

The finance committee has called for a deeper, more focused national budget conversation that prioritises urgent spending needs, addresses systemic inefficiencies, and restores public trust in government spending. 

Addressing fellow MPs and the public during a budget review on Thursday, Rise Mzansi leader Songezo Zibi, who is also chairperson of parliament’s standing committee on public accounts (Scopa), praised the spirited VAT debate but warned it had overshadowed the broader fiscal picture.  

Following political and public pushback, finance minister Enoch Godongwana announced a VAT hike withdrawal, and to compensate for that gap, the fuel levy was increased for the first time in three years. 

Godongwana introduced the hike – 16 cents per litre for petrol and 15 cents for diesel – on Wednesday while presenting Budget 3.0. He also announced a reduction of R68bn in projected spending over the medium term. 

However, Zibi said although the VAT was scrapped, it took a lot of attention. “For the first time since the dawn of democracy, MPs and members of the public really engaged with the budget.

“But since February, very few people have spoken about any of the urgent spending priorities we need to speak about at budget time. South Africans will spend too much of their hard-earned income on transport instead of cheap, safe government trains,” he said. 

Godongwana had revealed a significant reduction in funding for the Passenger Rail Agency of South Africa (Prasa). The allocation for Prasa’s signalling system renewal was decreased from R19.2bn, as proposed in the March budget, to R12.3bn, a cut of R7bn. However, the entity still received R66.3bn over the medium-term expenditure framework (MTEF) period. 

Zibi said: “Roads and bridges are falling apart, partly because of climate change affecting critical services and the economy itself. Unemployed doctors and hospitals without essential equipment, causing people to wait for weeks instead of being treated immediately. And doctors who have to play God by choosing who dies or lives today, needlessly so.”

Zibi said municipalities that are financially unviable were facing a collapse. “The point here is that budgets are meant to solve problems. The debate around budgets is supposed to be about the order of those priorities and whether these allocations are sufficient or to be spent in an efficient manner.”

He also questioned whether the government remains fit for purpose. “Do we have the right number of civil servants doing the kind of work that needs to be done? Or are we trying to fit a square into a circle?” he asked. 

BOSA leader Mmusi Maimane, who’s chairperson of the standing committee on appropriations, said focusing on tax alone is not the answer. 

“Yesterday, the minister of finance announced a lower-than-projected growth rate over the last three budget cycles, which means that SA isn’t growing, and if SA isn’t growing, the facts are real. There’s a limited opportunity to create jobs. 

“So we can reduce the budget to a conversation about tax and miss out on some of the key indicators of which one of them is GDP and whether SA is growing at the rate that it should…for it is, remains ultimately true, no nation has ever taxed itself to prosperity,” he said. 

Maimane drew attention to investor perceptions of SA’s safety. 

“The minister appropriated just over R133bn which goes into police. How is that money then going to be spent? Just under 19% of it or just under 20% of it will be spent on administration. The greater difficulty is that 81% of the police budget goes to personnel,” he said. 

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