Cabinet says budget ‘will keep SA afloat’

"The tax increases are going to finance sustainability of this country by maintaining 1,000 teachers in the classrooms, 9,300 health workers in their jobs, the employment of 800 community service doctors, and allow an additional 700,000 children of the age of four years to access early childhood development which is necessary," said Minister in the Presidency Khumbudzo Ntshavheni on Thursday.

Ntshavheni delivered the outcomes of a cabinet meeting in Cape Town.

It was held on Wednesday night, just hours after Finance Minister Enoch Godongwana delivered his revised budget.

The proposed percentage point VAT increase split over two years was among the talking points.

 READ: Ramaphosa praises Godongwana for ‘difficult’ budget

Ntshavheni said the budget does contain measures to soften the blow.

"No increase in the fuel levy, above-inflation increases to social grants with old age and disability grants increasing by R130 to R2,315 by 2025.

"Significant funding allocation to PRASA to improve passenger rail transport, which will reduce household income spent on transport costs."

Meanwhile, reaction to the budget is continuing to stream in.

Zwelinzima Vavi, who's with the trade union federation SAFTU, has described lifting VAT as an insult to the working class. 

 ALSO READ: VAT ‘not only way’ to balance books

"It's an insult to the working class. Everybody knows that VAT is the most aggressive tax; it targets the poor and the working class more," he said.

"The government is telling us that it seeks to resolve all of the crises created by capitalism, by mismanagement, corruption, and the perks of the workers."

ActionSA's KZN provincial chair, Zwakele Mncwango, said they rejected the decision to hike VAT.

"I believe that the GNU partners have played the mind game. Unfortunately, this will make the poor poorer. It will never help anyone."

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