SA’s Version 3 Budget Less Controversial: Will It Serve Its Purpose?

(3 Minutes Read)

Despite the increase in SA’s debt-to-GDP ratio, National Treasury Director-General Duncan Pieterse stressed the government’s commitment to “fiscal consolidation and stabilising the public finances”.

South African Finance Minister Enoch Godongwana presented a less controversial Budget (version 3), which includes some ‘budget cuts’ but also lower revenue forecasts as GDP growth has been revised down.

But, with the latest budget already getting the backing of the cabinet and the government of national unity (GNU) partners following the VAT increase debacle of the first two budget proposals (later canned), Budget 3.0 is set to be rubber-stamped in parliament.

Godongwana announced that the general fuel levy on petrol will increase by 16c to R4.01 per litre and on diesel by 15c to R3.85 per litre on 4 June 2025. The fuel levy increase was one of the main announcements, but National Treasury officials were quick to caution that the increase is linked to inflation and does not amount to an increase in revenue per se. They said not increasing the fuel levy in recent years was a form of “tax duty relief”.

The government’s U-turn on the VAT hike necessitated the increase, but it would bring in only about R3.5 billion to R4 billion in the current financial year. Despite the increase in SA’s debt-to-GDP ratio, National Treasury Director-General Duncan Pieterse stressed the government’s commitment to “fiscal consolidation and stabilising the public finances”.

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