The ongoing talks between President Cyril Ramaphosa and DA leader John Steenhuisen have taken center stage as the ANC and Democratic Alliance (DA) failed to reach an agreement on the fiscal framework. ActionSA stepped in on Tuesday to try and rescue the ANC in crucial parliamentary deliberations on the fiscal framework after disagreements arose.
The discussions between Ramaphosa and Steenhuisen continued throughout the day while parliament’s finance committees met to discuss Finance Minister Enoch Godongwana’s revenue proposals. The DA’s finance spokesperson Mark Burke confirmed that the ANC had rejected the conditions set by his party for supporting the minister’s proposed 0.5 percentage point VAT increase for the upcoming fiscal year.
Burke proposed amending Section 6.28 of the committee’s report to reject the VAT hike and adjust the budget’s expenditure framework accordingly. This proposal was supported by the Economic Freedom Fighters (EFF) and the uMkhonto weSizwe (MK) party, indicating a stalemate in the backchannel negotiations between the ANC and these parties.
The Freedom Front Plus also opposed the VAT increase, leaving the ANC without the necessary support for the budget. ActionSA’s Alan Beesley proposed deferring the VAT increase to allow the treasury time to find an alternative revenue-raising method to balance the budget.
The proposed amendment would require national treasury to present substitute revenue proposals and corresponding expenditure savings within 30 days to balance the budget without the VAT increase. The ANC supported this proposal, but the DA, EFF, MK, and other parties indicated that they would not support it during the committee vote.
The uncertainty surrounding the outcome of the committee vote has raised the possibility of a postponement of the scheduled budget vote in the National Assembly. The finance minister’s failure to secure approval for his budget would mark a significant event in the democratic era.
As of 5 pm, the committees had not yet voted, indicating ongoing political consultations outside parliament. The outcome of the vote remains uncertain, with the future of the budget hanging in the balance. The unprecedented nature of the situation has put the legislature in uncharted waters, highlighting the complexity of the current political landscape.
