A chief whip George Michalakis said the postponement of the national budget indicated that parliament was no longer a rubber stamp for bad policies.
At a media briefing outside the National Assembly DA leader John Steenhuisen said a number of proposals were not in line with the DA’s growth and job creation agenda and did not consider the plight of the poor suffering under a cost of living crisis.
He said the DA could not in good conscience support a two-percentage point VAT increase, though conceded that a postponement of the budget was “not an ideal situation” but would allow National Treasury to come back with a budget that all parties could support. He believed the GNU had made the right decision.
He said the DA wanted a pro-growth budget including more assertive port and rail concessions.
“This historic victory demonstrates the DA’s muscle within the GNU. For the first time ever, the ANC was prevented from tabling an anti-growth budget. Now is the time to replace a failed ANC VAT budget with a brand new GNU growth budget,” Steenhuisen said in a statement.
ANC secretary-general Fikile Mbalula said in a press briefing outside the National Assembly that the ANC was in uncharted waters.
“It is a government of national unity and in this instance it is important that the budget must be passed by the majority. Parties needed to engage with each other.
“We support the postponement with a view to resolving the issues,” Mbalula said. “The GNU is not in crisis ... it is just a point of major disagreement.”
EFF leader Julius Malema said: “This is unprecedented. Speaker, this is going to be your legacy — that during your tenure as speaker parliament couldn’t deliver the budget and debate it.
“There is no government if you don’t adopt a budget; clearly, the government has collapsed. We will never agree to a 2% increase in VAT, that’s why they are scared to come here because it will never be accepted.”
MK party chief whip Mzwanele Manyi said the postponement was an indication of the crisis the country was facing. “The country has no leadership.”
ACDP MP Steve Swart appealed to the House to let the GNU reach consensus on the budget, warning that presenting the contentious budget in its current state could have a “severe impact on the markets and the currency”.
The Freedom Front Plus spokesperson on finance, Wouter Wessels, said GNU parties demonstrated that they would not be “bullied as they put their foot down regarding the proposal to hike VAT by two percentage points”.
“It is the first time since 1994 that such a drastic step — postponing the budget speech — has been taken. After the national budget’s details were announced to political parties this morning, several parties, including the FF Plus, made it clear that they would not support it,” Wessels said.
“A staggering hike of 2% in VAT will, in the FF Plus’s view, have a direct and significant impact on SA’s economy. Besides, it is an indication of the fiscal crisis in which the country finds itself, and the party will also strongly oppose any legislation on this in the National Assembly.”
The national budget needed to focus on cutting back “needless government expenses, squandering on luxuries as well as government’s unsustainably high wage bill”.
“Economic growth is the only thing that can save SA and tax hikes will knee-halter it. Instead, the focus should be on creating a favourable policy environment for the private sector to expand and create jobs.”
Wouter said over the course of the last few weeks, economists across the board had warned against a VAT hike. He said SA’s tax rates are already exorbitantly high and its companies’ tax no longer internationally competitive.
“The high tax rates have already established a trend of tax evasion among ordinary South Africans. And the FF Plus is concerned that hiking taxes further will only exacerbate it.”
Oxford Economics senior political analyst Louw Nel said: “Today’s events have left the GNU flailing and raise serious questions about the coalition’s ability to deal with major disagreements.
“Mr Steenhuisen told journalists that the DA and the GNU made a responsible decision to postpone the budget, but even he will know that the fallout will be significant.
“Opponents of the GNU are relishing the dysfunction and will hammer home the message that the GNU is failing at its most basic function. Postponing the budget speech to March 12 means three weeks of massive uncertainty as GNU partners try to find common ground — and everyone considers what will happen if they cannot.”
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