Politics

ANALYSIS

Big Budget Bust-Up — here’s why DA might be overplaying its hand

As the Budget negotiations teeter on the edge of political chaos, the DA risks a spectacular miscalculation by banking on market sentiment while the ANC's hawks sharpen their talons for a potential power shift.

Illustrative image, from left: President Cyril Ramaphosa. | Minister of Agriculture and DA leader John Steenhuisen. (Photos: Gallo Images / Jeffrey Abrahams)

By Ferial Haffajee

1 Apr 2025

As talks to approve the Budget went to the wire and President Cyril Ramaphosa and DA leader John Steenhuisen were in urgent talks once more on Tuesday, 1 April, this chart shows why the DA may be overplaying its hand.

Daily Maverick has calculated that the ANC needed only five votes to pass the Budget when it was tabled earlier in March. The ANC caucus in Parliament has started talks with blocs including the EFF and MK party to get the Budget across the line.

If that happens, then the present government of national unity (GNU) could fail and a second constituted from the parties who support the largest party to pass the Budget.

The DA is banking on market reactions to ensure this does not happen, but that may be a political blunder.

Significant parts of the caucus and the ANC National Executive Committee (NEC) have long favoured a black GNU. Early talks after the May 2024 election showed that a substantial part of the ANC NEC would have preferred a power-sharing agreement with parties like the EFF (but not MK) to form a GNU.

If the DA hardballs on the Budget, it could overplay its hand. Ramaphosa and Steenhuisen are struggling to contain their hawks on either side who have set their faces against compromise.

At the weekend, a report in the Sunday Times revealed that the DA team is using Budget negotiations to secure much larger economic reforms that suit its own positions.

These include dropping import tariffs (unlikely to happen), accelerating port reform (in the works but slow), scrapping localisation laws (unlikely), scrapping National Health Insurance Act (NHI) regulations (unlikely) and amending the new expropriation laws (unlikely).

What happens next for a contested Budget?

If the DA does not step back on these demands and the Budget fails to pass, South Africa will be in new territory. The brinkmanship weakened the rand – the currency’s value is a proxy for market sentiment, as this Bloomberg report showed.

The DA’s looking to the market for leverage in negotiations, but it discounts the power of the ANC hawks who are in ascendancy as Ramaphosa has limited negotiating room in the lead-up to the party’s national general council (NGC) meeting this year.

The NGC is a mid-term progress meeting between ANC conferences. Ahead of presidential elections, it is a barometer of sentiment about the President. Ramaphosa is in the final yards of his ANC presidency so does not have too much room to negotiate or to push his positions beyond a point.

Steenhuisen is in the same boat.

The deputy finance minister and DA deputy chairperson of the Federal Council, Ashor Sarupen, told Daily Maverick last week that he believed the parties would find each other.

On News24 on Tuesday, Presidency spokesperson Vincent Magwenya said: “Every task or challenge is approached with a degree of confidence that success will be attained.” DM

This article has been updated to reflect the ACDP’s opposition to the VAT hike.

Comments (10)

Pieter van de Venter Apr 1, 2025, 01:20 PM

The pig in the story, us the ANC ego. It is all about the ANC and the citizens comes in at a distant last. Stick to your guns DA and teach the ANC a lesson in basic sums - 38% is not a majority. Start working with others.

megapode Apr 1, 2025, 03:38 PM

Any "others" that the DA might find to work with would not add up to 50% of parliament. If the DA wants to have any effect it must stay in the GNU. But also the ANC must allow the DA to have something they can take credit for. The public needs to understand that in this sort of arrangement no party keeps all of it's promises, no party gets everything that it wants.

megapode Apr 1, 2025, 03:42 PM

I'm surprised at the sentiments that the DA should stick to it's guns & if the GNU fails then it's the ANC's fault. Even assuming that the blame lies exclusively with the ANC, where does this leave the country? A new GNU must be formed or the current government will be dissolved and a new one must be found. That will almost certainly exclude the DA and VF+ and include other parties that are less concerned about what the markets think. That would be better, would it?

Hidden Name Apr 1, 2025, 01:31 PM

For the ANC to work with the MK or EFF would spell the end of their party. Its really that simple. The DA understands this. The author apparently does not. The DA are 100% correct to stick to their guns on this issue. And if the ANC chooses to play with EFF or MK, then they should leave the GNU. Its passed time the ANC learns their time of impunity is over. They now have to actually take other view points into account and consideration.

kanu sukha Apr 1, 2025, 05:36 PM

Your first sentence assumption makes it necessary for you to use a pseudonym. That both these parties were part of the ANC not so long ago, seems to have escaped you. In politics getting into bed with the 'disreputable' is normal, especially if it means controlling 'power'.

Fernando Moreira Apr 1, 2025, 01:32 PM

Why is the narrative that the DA is probably overplaying its hand ! Why is it not that the ANC has no clue how to run a country as has been shown for all to see for 30Years . The ANC has reached its expiry date years ago ! The DA must not blink ! The Markets tame tigers just look north of SA !!

Pieter Rautenbach Apr 2, 2025, 09:42 PM

Because there are other parties that would happily take the DA's place in the GNU. The ANC still holds the largest share. Few will partner with the DA.

Karl Sittlinger Apr 1, 2025, 01:36 PM

The demands by the DA, if the author would have actually bothered to properly include them in this opinionista, are really not as outlandish or crazy as this article is trying to make us believe. As an example, all the DA wants to have amended on the expropriation act is that actual expropriation of property may only take place after the final court decision, not before. This is hardly outrages nor is resistance to the NHI. Stick to your guns DA, if the GNU fails it will purely the ANCs fault.

megapode Apr 1, 2025, 05:49 PM

I don't think the DA's ideas have been portrayed as crazy. The author just said that the ANC is unlikely to budge on most of the points we know (or believe) the two parties differ on. My reading of it is that the DA is taking a broad view (you give us something on these things here and we'll support the budget) whilst the ANC is taking the narrow view (we're sitting down to talk about the budget and nothing else).

Karl Sittlinger Apr 2, 2025, 06:55 AM

By framing the DAs actions at as some kind of blunder (the only blunder here is the sheer arrogance of the ANC since the inception of the GNU) , by using words such as "brinkmanship" to describe the DAs current stance (again it is the ANC that are pursuing a dangerous policy to the limits of safety by not even considering DA proposals) and by not describing the changes the DA is asking for beyond a flimsy remark it is not unreasonable to read significant bias in this article by this author.

keith.ciorovich Apr 1, 2025, 01:55 PM

It was the DA and several other smaller party's that supported the Anc after the elections. The DA was used by the anc to retain power and were naive in believing it was a government of national unity for the betterment of the country. Yes the anc will get the votes from the kill the boer party, but the country will pay a very heavy price and the Rand will depreciate to such an extent that we will be paying a lot more than 22 cents in the Rand on our debt servicing. Expiring or new loans will be a lot more expensive. That is if any one is willing to take the risk.

R S Apr 1, 2025, 03:19 PM

I've lost a bit of regard in Ferial after watching her interview with Joel. He may have been incorrect on a number of issues, but Ferial didn't seem properly prepared either. But on topic, the DA is doing the right thing. Put the ANC over the barrel. There's too much corruption and incompetence and things need to be moved in the right direction.

dou Apr 1, 2025, 03:26 PM

I find it amazing how keen the author of this article is to focus on the DA's potential blunder and not the 40% ANC arrogance! Interesting bias?

kanu sukha Apr 1, 2025, 05:48 PM

As I said elsewhere and explained .. bias is in the eye of of the beholder !

megapode Apr 1, 2025, 03:42 PM

I’m surprised at the sentiments that the DA should stick to it’s guns & if the GNU fails then it’s the ANC’s fault. Even assuming that the blame lies exclusively with the ANC, where does this leave the country? A new GNU must be formed or the current government will be dissolved and a new one must be found. That will almost certainly exclude the DA and VF+ and include other parties that are less concerned about what the markets think. That would be better, would it?

Karl Sittlinger Apr 1, 2025, 06:03 PM

And we are back at the assumption that the DA has to say yes to everything no matter what the ANC does. If the DA rolls on important economic decisions like this, that really are the wrong choice for this country, they may as well be in the opposition. While BELA was no hill to die on, stopping the ANC waste and it's corresponding ever increasing tax needs due to inefficiency, bad policy (foreign and lical) and blatant theft is very much addressing the very core of our problems.

Rae Earl Apr 1, 2025, 05:02 PM

If Ramaphosa buckles to the hawks in his party then both he and the ANC are lost. Any deals with the EFF or the remote chance of one with the MK would spell disaster for SA. The entire structure will unravel in a godawful mess of infighting and factional battles. The DA knows this. They knows that they have the upper hand and that Ramaphosa, in the twilight of his political career, realises that he absolutely cannot come out as the ultimate coward in this fight.

Ludovici DIVES Apr 1, 2025, 06:16 PM

Ramapohsa is on very thin ice, if there is a vote of no confidence in him initiated by the DA it would stick and Ramaphosa is out, finished.

DM is much better if you are signed in...

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