DA leader John Steenhuisen expressed optimism on Thursday that the parties in the government of national unity (GNU) would reach a compromise on the budget before a vote in parliament next week.
“We are closer than many people think and I remain hopeful that we will be able to find each other,” Steenhuisen said.
SA’s budget approval process requires MPs in the National Assembly and the National Council of Provinces to consider and approve several bills.
The first of these is the fiscal framework, which is due to go before the National Assembly on April 2.
Parliament also has to consider the Division of Revenue Bill, the Appropriation Bill, the Rates and Monetary Amounts Bill and the VAT Amendment Act.
For the first time in SA’s democratic history, the passage of the budget through parliament is in doubt because so many of the parties in the GNU are opposed to the VAT hike proposed by finance minister Enoch Godongwana. The budget he tabled on March 12 proposes hiking VAT by one percentage point over the next two years.
The situation SA found itself in was not unusual for coalition governments, Steenhuisen said.
“When you have coalitions, there is wrangling over the budget because you cannot have a budget that gives expression to one party’s view and disregards the rest,” he said on the sidelines of the Nutrition for Growth Summit in Paris.
He is attending the summit, which seeks to mobilise resources to combat malnutrition and obesity, in his capacity as agriculture minister.
The DA has said it is opposed to tax increases, advocating instead for reducing SA’s debt-to-GDP ratio by cutting wasteful spending and instituting measures to accelerate growth.
Among the DA’s proposals are introducing private concessions in port and rail to increase trade competitiveness, a comprehensive spending review and amending the Expropriation Act, Steenhuisen said.
“I fully accept that we’re not going to get everything we want out of the budget, but we must get some of what we want. That’s how fair coalitions work,” he said.
The ANC’s highest decision-making body, the national executive committee, is due to begin a four-day meeting on Friday, during which it is expected to discuss the budget impasse.
Its hopes of securing enough votes from parties outside the GNU to ensure parliament passes the fiscal framework were looking unlikely, Steenhuisen said.
The DA, which has rejected the proposed budget, has 87 seats in the 400-seat National Assembly. Without its support, the ANC, which has only 159 seats, has been looking for votes outside the GNU to get the majority it needs to get the budget approved.
Action SA, which is not part of the GNU and has six seats, informed the ANC last week that it would not support the budget.
The 10-party GNU represents 70% of the seats in parliament, and includes the ANC, DA, Rise Mzansi, Al Jama-ah, IFP, Patriotic Alliance, GOOD, the Pan African Congress, Freedom Front Plus and the UDM.
The IFP, which has 17 seats, said earlier this week it would support the budget, provided the VAT increase was temporary. Rise Mzansi, which has two seats, has yet to declare its position on the budget.
Citing ratings agency Moody’s latest assessment of SA, Steenhuisen said bypassing the GNU and securing votes from outside the coalition to pass the budget would have “grave consequences”. The ratings agency said in a note that such an outcome would increase doubts about the GNU’s future and its ability to deliver on economic and fiscal reforms.
• Kahn attended the summit as a guest of the French government.
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