Illustrative image | ANC secretary-general Fikile Mbalula. (Photo: Gallo Images / Frennie Shivambu) | Helen Zille, chairperson of the DA Federal Council. (Photo: Gallo Images / Brenton Geach) 
An ANC delegation has concluded the latest round of talks with various political parties to try to solve the Budget deadlock, but no deal has been reached.
The party’s national officials are set to meet on Monday, 14 April 2024, after which they are expected to report back to the National Executive Committee (NEC), the ANC’s highest decision-making body. The NEC will decide the next steps.
A special NEC meeting is expected to be called to decide whether to abandon the VAT hike. It will also decide if there will be a reconfiguration of the government of national unity (GNU).
Finance Minister Enoch Godongwana’s fiscal framework, a key component of the national Budget, is facing a backlash over a proposed 0.5 percentage point VAT increase.
The Sunday Times reported that the ANC is set to drop its demand for a VAT increase in this year’s Budget, after it became clear that none of the parties it’s been negotiating with is prepared to back the move.
Last week, the party’s secretary-general, Fikile Mbalula, said that while talks with most if not all parties had gone smoothly, there has been a strong opposition to the proposed VAT hike.
The DA, the second-biggest party in the GNU, and the Freedom Front Plus were the last political formations to meet the ANC in Sandton at the weekend.
In a statement, ANC national spokesperson Mahlengi Bhengu-Motsiri said the meetings were respectful and focused on the future, with everyone agreeing on the need to address the country’s fiscal and governance challenges.
“There was broad alignment on the importance of the recently adopted fiscal framework, particularly as a foundation to stabilise public finances, maintain essential public services and promote sustainable economic growth. The parties also agreed on the need for vigilant parliamentary oversight, efficient spending and decisive action against financial mismanagement,” Bhengu-Motsiri said.
Read more: Budget bust-up forces ANC to rethink GNU rules, Zille says forget it
The DA’s federal council chairperson, Hellen Zille, said the talks were constructive and the DA had been frank in its stance, opposing the proposed increase on the basis that it will hurt the poor most. The party has also gone to court to challenge the legality of the Budget process.
Daily Maverick reported that following the impasse, the ANC was pushing for a new formal agreement – one that would legally bind parties to support future parliamentary motions, aiming to prevent a recurrence of the current impasse.
“We all agreed that you need to have a rules-based GNU, but it has to start with the foundation stone of the statement of intent that we negotiated in June last year, and everything can build on that. And once we respect the statement of intent, we can certainly extend that to create rules for various different forms of engagement and decision-making,” Zille said in an interview with eNCA.
GNU reconfiguration
The ANC’s National Working Committee recently took a decision to “reset” the GNU in response to the ongoing impasse. While the party has not gone into detail in terms of what this reconfiguration will look like, Deputy President Paul Mashatile said the ANC intends to reshape the GNU to include other parties willing to work with it.
“Now, the leadership of the ANC, after what has happened recently, decided that we are going to reconfigure the alliance. We are going to reconfigure the alliance and we are going to reconfigure the GNU to ensure that we bring other parties on board to work with us, but also to ensure that we discuss this properly with all the parties,” Mashatile said.
Mashatile has been outspoken against the DA’s stance on the Budget. Zille, however, is adamant that the DA is committed to the GNU.
“We continue in the GNU. We continue to push the envelope. We continue to drive a growth and jobs agenda. We realise it’s not going to be easy, but we bought into a big challenge, and that was to ensure that we rescue South Africa, and we use the GNU to get economic growth, to remove the obstacles to growth, and to ensure that more people get into jobs. That is our objective here, and that is why we flex our muscles and fight for the people against the VAT increase,” Zille said.
Parties such as ActionSA and Build One South Africa (Bosa) played a crucial role in helping the ANC pass the fiscal framework, but there are still two significant bills that require approval in Parliament: the Division of Revenue Bill and the Appropriation Bill.
These bills are crucial for finalising the Budget and determining how public funds will be allocated. However, ActionSA and Bosa have made it clear that their support is dependent on the ANC fulfilling its promise to explore alternatives to the proposed VAT hike within 30 days. DM