South Africa is reeling after the political events over the last few days.
Following the ANC’s last-minute about-face on budget negotiations with the DA, the future of the GNU hangs in the balance, with talks of the blue party leaving.
Remember how we told you about the budget delays after most parties opposed the 2% VAT hike in February? Finance minister Enoch Godongwana tried again on 12 March, proposing a 0.5% hike in a new budget, but this too was rejected. Cue: frantic negotiations, particularly between the two biggest parties in the GNU and parliament, the ANC (40%) and DA (22%), ahead of this week’s deadline to pass the budget in Parliament.
Over the past weekend, it seemed that negotiations, while tense, had been successful.
But by Tuesday, things fell apart. Instead of scrapping the 0.5% hike as the DA had asked for – and frankly, is best for our country, the ANC made a last-minute deal with ActionSA to pass the budget as is in parliament’s Standing Committee on Finance – they were able to do this with the IFP – the three hold a majority in the committee. This meant it could move to the next stage – voting in the larger national assembly. Fast forward to Friday, and despite a chaotic sitting and the DA, EFF and MK (the three biggest parties after the ANC) voting against the budget because of VAT hikes, the ANC got its way. The budget was passed thanks to support from most smaller parties.
ActionSA has come under a lot of fire for its role. Herman Mashaba’s party are not part of the GNU and has opposed VAT hikes previously. The party claims their actions as a victory as they passed a recommendation along with the budget that the government should rework the budget within thirty days to avoid VAT hikes. However, experts agree this recommendation has no legal standing. The party was either incredibly naive or trying to get one up on their rivals, the DA. Either way, they enabled a very damaging VAT hike to pass.
What happens now? The DA is heading to court over the hike. But more importantly, the party’s continued participation in the GNU is in danger. ANC leaders are all saying the DA has self-selected itself out of the GNU by not endorsing this budget. The DA, meanwhile, are meeting today about what to do next.
This is not good news, any way you look at it. While the ANC can hold a slim majority without the DA, they will be held hostage by any small party. Plus, whether you like the DA or not, investors do, and their inclusion in the GNU was putting our fragile economy back on track.
We’ll keep you updated on what happens next.
Verashni is passionate about empowering citizens to hold those in power to account. She was previously editor-in-chief of the Mail & Guardian and HuffPost South Africa, and won the CNN African Journalism Award, among others.
