MTBPS 2026: Opposition calls Godongwana’s fuel levy cuts ‘a scam’ as GNU offers muted support

Finance Minister Enoch Godongwana delivered the Medium-Term Budget Policy Statement on Wednesday, announcing immediate reductions to fuel levies intended to alleviate pressure on consumers ahead of the municipal elections scheduled for November 4. The announcement came just two weeks before voters head to the polls, a timing that drew sharp criticism from opposition parties who labeled the moves cynical electioneering. Godongwana stated that the general fuel levy would be reduced by three rand per liter for diesel and one rand fifty cents per liter for petrol starting November 4. This initial phase runs until December 1. Following this period, the relief will taper to one rand fifty cents per liter for diesel and one rand per liter for petrol, remaining in effect until January 5, 2027. The fiscal cost of these measures is estimated at ten billion rand in foregone revenue. To maintain fiscal neutrality, the government plans to return ten billion rand previously transferred to the Central Energy Fund back to the National Revenue Fund. National Treasury Director-General Duncan Pieterse explained that the decision relies on rebuilt fiscal buffers, allowing the relief to proceed without compromising spending or debt targets. He noted that while the relief is positive for household consumption and inflation control, it must remain within the broader fiscal framework. Treasury estimates suggest that the combination of levy relief and consumer behavioral changes, specifically reduced fuel purchases, could result in a deviation of up to thirty-one billion rand in fuel levy collections for the 2026/27 financial year. Originally, the department had budgeted for one hundred four point nine billion rand in collections for that period, a figure now revised downward to seventy-four billion rand. Record-high pump prices prompted the intervention. In October, ninety-five unleaded petrol reached a peak of thirty rand twenty-five cents per liter in Gauteng and twenty-nine rand thirty-eight cents on the coast. Wholesale diesel costs stood at thirty-one rand ninety-six cents in Gauteng. Data indicates that without the levy cut, prices would have risen further in November, with projections showing increases of one rand fifty-two cents for ninety-five unleaded and one rand fifty-nine cents for ninety-three unleaded. Global factors contributed to the spike, including supply disruptions linked to conflicts involving Iran and restrictions on the Strait of Hormuz. South Africa imports the majority of its fuel, making it vulnerable to international price swings. Beyond fuel, the budget statement outlined specific allocations for national priorities. Three hundred sixty-five million eight hundred thousand rand was designated for the Madlanga Commission. An additional eight hundred twenty-three million one hundred thousand rand was allocated to Operation Prosper, a joint initiative between the defense force and police aimed at combating gangsterism and illegal mining. The government committed three point eight billion rand to hire three thousand five hundred social workers to intensify efforts against gender-based violence and femicide. Furthermore, three hundred four million rand was assigned to the Department of Home Affairs to manage unforeseen expenses related to the mass repatriation and deportation of foreign nationals, a process accelerated by a June 30 deadline set by the March and March group. Special appropriations totaling six point nine billion rand include four point four billion rand for the South African Revenue Service, nine hundred eighteen million rand for parliamentary reconstruction and public participation following the January 2022 fire, and two hundred eighty million rand for healthcare services for retired defense members. Reaction from political stakeholders was divided. Cosatu expressed deep disappointment, characterizing the package as a missed opportunity to address the forty-three point eight percent unemployment rate and stagnant growth. Thulani Shongwe, an MK Party member of parliament, described the fuel levy cuts as a scam and cynical electioneering, arguing that the budget failed to prioritize job creation or land reform. Sinawo Thambo, spokesperson for the Economic Freedom Fighters, dismissed the measures as an election ploy, stating there was no evidence of genuine economic stimulus. Alan Beesley of ActionSA voiced disappointment that the levy cuts were not more substantial but welcomed the increased funding for the tax authority. Mmusi Maimane, leader of Build One South Africa, acknowledged the appeal of the cuts during an election year but argued they would not sufficiently accelerate economic growth. Within the Government of National Unity, responses varied in tone. Fikile Mbalula, secretary-general of the African National Congress, praised the moves for returning money to working families and signaling control over government debt. However, other coalition partners offered more reserved assessments. Wouter Wessels of the Freedom Front Plus called the statement positive given the country's condition but deemed the fuel relief too little and too late. Nqabayomzi Kwankwa, chief whip of the United Democratic Movement, stated that improved balance sheets did not automatically translate into better lives for citizens. Songezo Zibi of Rise Mzansi described himself as happy but not thrilled, expressing regret that savings from curbing social grant corruption were not directed toward fighting hunger. The Democratic Alliance pushed for bolder structural reforms, with Kingsley Wakelin asserting that while the treasury laid a foundation, the rest of government must now deliver the necessary growth drivers. Macroeconomic forecasts presented in the statement indicate a weakening growth outlook. The economy is now projected to expand by one point two percent in 2026, down from the one point six percent predicted in February. Growth is expected to recover to one point six percent in 2027 and reach two percent by 2029. Public debt is forecast to stabilize at seventy-eight point four percent of gross domestic product in the 2025/26 financial year, marking the first time the ratio has paused in nearly two decades. Revenue improvements have been driven by stronger corporate, dividend, and value-added tax collections, though analysts note much of this stems from elevated commodity prices that are unlikely to persist in the medium term.