The ANC on Tuesday shared a “final offer” for a budget agreement with the DA ahead of a crucial vote in parliament on Wednesday.
That leaves the parties just hours to find each other in tense talks that were escalated to President Cyril Ramaphosa and DA leader John Steenhuisen for a resolution on Tuesday.
The meeting took place as parliament’s standing committee on finance adopted finance minister Enoch Godongwana’s fiscal framework with “recommendations”.
The latest deal includes various measures to grow the economy through accelerated reforms in exchange for support for the budget — which would be amended to limit an increase in VAT to 50 basis points this year and no further increase in 2026. The money the extra VAT hike would have raised will instead be found in a spending review proposed in the agreement.
The DA confirmed receipt of a new document. The proposed “final” agreement excludes two sticking points for the ANC in an early iteration of the document that centred on the role of the deputy finance ministers — the DA wanted the day-to-day running of Operation Vulindlela to be headed by the two deputy finance ministers (the DA’s Ashor Sarupen and the ANC’s David Masondo) — and a proposal for an advisory committee on National Health Insurance.
Meanwhile, the budget vote in the National Assembly looks set to proceed on Wednesday after the standing committee on finance adopted the fiscal framework, with “recommendations”, through a vote supported by the ANC, ActionSA and the IFP.
The ANC appears to have a fallback position should the deal with the DA remain elusive through the support of “swing votes” in parliament, which includes ActionSA and Mmusi Maimane’s Build One SA.
Without the DA’s support, the ANC would have 192 votes, including the remaining GNU parties. ActionSA has six seats in parliament, bringing the tally to 198. It would then need the support of smaller parties to secure the vote — though the broader implication of such a scenario would be the DA’s likely exit from the GNU.
An ANC insider said ActionSA wanted cabinet posts in exchange for its support.
ANC secretary-general Fikile Mbalula on Tuesday indicated that talks were also progressing with the EFF.
“The DA have had a catalogue of issues, and they shift from time to time from one position to the other and it’s difficult when you are in negotiations ... it leaks ... it polarises the negotiation,” he said.
“We need to pass the budget, but at the same time we need to be alive and talk to others and that is what we are clear on as the ANC,” he told a media briefing at Luthuli House in Johannesburg.
According to the document, the agreement includes reforms such as private sector participation in ports and rail; a devolution strategy for passenger rail; energy sector reform; a review of housing subsidy programmes to increase access to affordable housing; a road map for digital transformation; and a review of the Public Procurement Act.
The second pillar of the potential deal is a comprehensive review of government spending, including programmes that should be scaled down, closed or postponed; a comprehensive audit for ghost employees in every provincial and national department, state-owned company and public entity; and protecting spending on policing, healthcare and education where possible.
The final pillar of the deal would be a regulatory review to reduce the administrative burden on business.
“The way forward is that the GNU must come together and sing from the same hymn book. The DA cannot try to introduce a grand coalition through the back door,” a senior ANC insider said.
It is understood that the DA was reviewing the document on Tuesday. Party insiders have expressed concern and confusion over the ANC’s strategy.
“The ANC is like a hydra, and it’s hard to work out which head is actually the correct one,” a source close to the process told Business Day.
The DA indicated that the proposals by ActionSA in parliament on Tuesday were almost identical to those presented by the DA weeks ago, which were rejected by the ANC and the National Treasury at the time.
“It’s bizarre, you would rather do a deal with people outside the government than your own governing partners,” the source said.
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