Finance Minister Enoch Godongwana says the Cabinet committee tasked to look at the impact of the Middle East conflict will make appropriate recommendations to the government on how to deal with the rising fuel costs.
Image: FILE
Finance Minister Enoch Godongwana on Thursday revealed that Cabinet has established a committee tasked with evaluating the ramifications of the ongoing conflict in the Middle East, particularly regarding rising fuel costs.
This decision follows inquiries from EFF MP Sam Matiase, who expressed fears that the country would be economically vulnerable amid the escalating geopolitical tensions.
During a question-and-answer session in the National Assembly, Matiase challenged Godongwana on whether he would reconsider his position on the controversial fuel levy increase, especially after a Western Cape High Court ruling that barred a VAT hike.
“How does your government intend to shield poor households and the economy from potentially severe consequences?” Matiase asked.
Responding, Godongwana assured the assembly that the newly formed committee would present recommendations to the government regarding the structure of fuel pricing.
“This is not a decision that will be made by the (me) alone.”
This committee, which includes Mineral Resources and Petroleum Minister Gwede Mantashe and Electricity and Energy Minister Kgosientsho Ramokgopa, is expected to recommend to government how to deal with the rising fuel costs.
His statement came after he earlier refused to answer a question from DA MP Mark Burke
Burke stated that while the Western Cape High Court had ruled that Godongwana did not have the power to unilaterally increase VAT, subsequent and related court rulings indicated that he has the power to unilaterally and suddenly decrease or increase the fuel levy.
He also said the DA, a partner in the Government of National Unity, has proposed a funded model on how to avoid the catastrophic costs of living.
“Will you use your court-approved powers to decrease the fuel levy by 50% before prices go up next week?’ asked Burke.
In his response, Godongwana maintained that the main question was whether he would appeal the judgment on the VAT increase.
“I am answering that I have not made a decision to appeal that decision,” he said.
In her main question, EFF MP Omphile Maotwe asked whether Godongwana will appeal the judgement of the Western Cape High Court that ruled that Section 7(4) of the Value-Added Tax Act was invalid and not consistent with the Constitution.
Godongwana said the declaration of invalidity of the VAT Act in the order of the Western Cape High Court order was subject to confirmation or otherwise by the Constitutional Court.
“I have sought legal advice and will make a decision based on that advice. At the moment, I have not yet firmed up a decision.”
However, Matiase asked whether he should not be prioritising and upholding the Constitution rather than defending and maintaining rigid fiscal measures, saying this did not advance the aspirations of the working class and the poor.
“I am waiting for a legal opinion which will guide me. Even if I were to comply with the court decision, the court requires me in 24 months to make necessary changes to the Act,” Godongwana said in response.
Cape Times