Will Last-minute talks save the Budget from a political showdown?

President Cyril Ramaphosa is set to meet with DA leader John Steenhuisen just one day before the National Assembly aims to pass the 2025/26 fiscal framework and revenue proposals.

The highly anticipated discussion follows a previous bilateral meeting between the ANC and the DA, which ended without consensus on the VAT increase.

Both the Presidency and the DA have confirmed the upcoming meeting. “I can confirm that President Ramaphosa as well as our federal leader John Steenhuisen are scheduled to meet and after that, we will be able to come back with more,” DA spokesperson Karabo Khakhau said.

 The DA cancelled its 8.30am briefing after Steenhuisen took to social media, accusing the ANC of “imperiling the GNU” by refusing to finalise an agreement on growth and spending reforms.

“The DA will oppose the Budget unless and until a written agreement is reached,” he said.

But, ANC chief whip Mdumiseni Ntuli said the DA was opposing a reduction in the expenditure.

“We don’t agree with that,” Ntuli said.

He also said the second biggest party in the GNU wanted the government to do away with the National Youth Development Agency, and the National Health Insurance and Expropriation Act, among others.

“They are proposing some strange arrangement where the Deputy Minister, who happens to be from the DA, to be assigned certain responsibilities. What does that have to do with Budget?” he said.

Ntuli insisted that the Budget was geared towards massive investment in infrastructure as well as health and growing the economy.

 “The ANC is absolutely confident having listened to all political parties in Parliament we have sufficient consensus to go through the portfolio committee and agree on fiscal framework,” said Ntuli, adding that they were refining how to go about dealing with the VAT increase.

He was unsure if the DA would remain within the GNU when Parliament adopted the Budget they did not support.

“If you want to walk that is perfectly your decision… Whoever decides to walk out will do so voluntarily, but the ANC will work with parties in the GNU and those in opposition to find common answers and solutions to the various problems.”

Khakhau dared the ANC to pass the Budget without her party.

“They must try to pass the Budget and we will see,” she said.

She warned that the DA would not sit and work with a Budget it did not believe served the best interests of South Africans.

“If a push comes to shove and we find ourselves in a position where GNU is unworkable altogether, where there is no sobriety in so far as direction we are supposed to take, if we must, yes,” Khakhau said.

DA spokesperson on finance Mark Burke said his party had proposed alternatives that did not punish South Africans with more tax.

“While we have been open-minded, and we have taken the posture of collaboration with our partner, the ANC has failed to agree to the reforms that we need to get the economy going, and if we get the economy going for our revenue to increase over time so we don’t need to increase taxes. 

“Because of this refusal from the ANC to agree to reasonable politically neutral measures, I have now been mandated to go into this committee to amend fiscal framework that there will be no VAT increases,” Burke said moments before the joint meeting of the Select Committee on Finance and Standing Committee on Finance.

He said the focus should be on efficient government that creates jobs and provides an environment that allows businesses to grow the economy.

Speaking at the joint meeting, Burke said: “We need to take those VAT hikes out of the fiscal framework.”

The EFF and MK Party wanted the committee to first discuss whether they accepted the fiscal framework, rejected it, or amend it.

EFF MP Sinawo Thambo said there was nothing special about the DA's submission.

ActionSA MP Alan Beesley proposed an amendment to the fiscal framework with no VAT increase and to allow the National Treasury to come up with alternative revenue proposals within 30 days.

The ANC, EFF, and MK Party supported the ActionSA’s proposal.

“We are clear we are not to support VAT increase. It is regressive that will further burden our people,” MK Party’s Des van Rooyen said.

Thambo raised concern with the ActionSA’s support for the fiscal framework with a condition for alternative revenue to come from the National Treasury when it had the opportunity two times.

 “We are saying we disagree with VAT increase and we must state clearly that we accept or amend,” he said.

The ANC supported the ActionSA proposal with the party’s Lusizo Sharon Makhubela saying the MPs should think about the South Africans to be serviced by the Budget as halting it would cause harm.

After some discussion on whether to obtain legal advice, the parties held caucuses before taking a resolution on the fiscal framework.

The People’s Movement for Change (PMC) has raised significant concerns over the actions of the Democratic Alliance (DA) within the Government of National Unity (GNU), alleging that the party is placing partisan interests ahead of essential national cohesion.

This criticism from the small opposition party comes amid ongoing tensions and unresolved disputes over the national budget, particularly regarding a proposed 0.5% VAT increase.

In a statement, PMC president Marius Fransman explained that the DA is utilising the budget speech as a "Trojan horse," ostensibly targeting the African National Congress (ANC) in a tactical move designed to undermine the internal unity of the GNU.

“Such actions raise serious questions about the DA's commitment to the broader national interest,” Fransman stated, noting the detrimental impact on cooperation and collaboration crucial for the GNU’s efficacy.

Fransman contended that South Africans did not vote for such a fragmented approach to governance, pointing out the absence of a unified policy programme within the GNU.

“There is no binding social contract between citizens and this formation,” he said.

* Additional reporting by Simon Majadibodu.

Cape Argus