The DA’s future in the government of national unity (GNU) hangs in the balance after it voted against finance minister Enoch Godongwana’s budget on Wednesday, marking the end of tense and heated negotiations with the ANC.
The budget framework was adopted by the National Assembly, a move that secures fiscal stability for the time being. Still, the political implications are far-reaching.
President Cyril Ramaphosa made it clear in an address to the ANC caucus on Tuesday night that the DA was “defining itself outside” the GNU if it failed to support the budget.
The DA is challenging procedural aspects of Wednesday’s parliamentary processes in court, but it has yet to say whether its failure to support the budget implies it is leaving the GNU. Another GNU member, the Freedom Front Plus, did not support the budget either.
It is understood that the negotiation process and the vote have left ANC leaders fuming, with many calling for the DA to be booted out.
Should the DA leave the GNU, the ANC could draw in other parties, which would give it a slim majority in parliamentary votes — there are still two votes on the budget to be passed in the coming weeks — form a minority government or tie-up with Jacob Zuma’s MK party, which is unlikely.
There are also questions whether the national dynamics will affect the unity government led by the IFP with the ANC, DA and NFP in KwaZulu-Natal.
Social Research Foundation executive director Frans Cronje said Wednesday’s events were a valuable lesson and an indication that SA is fully in coalition territory.
“I don’t think people should be too worried ... it won’t make a material difference on the ground. It is not like this GNU was driving any fundamental reforms,” Cronje said.
The report adopting the framework was carried with 194 votes in favour, 182 against and no abstentions. Adoption required a simple majority of those present in the house.
The adoption of the fiscal framework and revenue proposals and attached recommendations now means the National Treasury has 30 days in which to work with parliament to find the R31.5bn in revenue that would have been raised in this year’s 0.5 percentage point increase in VAT and the decision not to adjust personal income tax brackets for inflation.
Most political parties, even those that voted in favour of the report of the finance committee adopting the fiscal framework, were opposed to those tax measures.
The DA’s opposition to the adoption of the fiscal framework came after weeks of intense negotiations with the ANC, which finally came to nothing despite the last-minute talks.
Challenge
DA leader John Steenhuisen said after the sitting that the DA would challenge parliament’s passing of the 2025/26 national budget, which he said was unlawful and unconstitutional.
The DA objects to the way parliament’s finance committee processed its report and will challenge the constitutionality of certain revenue collection and expenditure measures becoming binding through a speech by Godongwana without parliament having to consider, oversee or approve them.
The DA came under attack from its GNU partners during the debate for not supporting the fiscal framework, and Godongwana said in his concluding remarks to the debate that he did not think a party could vote against the budget and still want to be part of its implementation. “It can’t be,” he said.
Godongwana accused the DA of shifting the goalposts of what it wanted from the budget during budget discussions and accused it of lying. He said that during the discussions, the DA had expressed support for there being no inflation adjustment for personal income tax brackets but was now opposing it.
“It’s a lie. Let’s debate honestly and disagree honestly. We accept genuine disagreements,” he said. “Let’s have these constructive engagements about wastage, efficiency.”
Godongwana reiterated that the bulk of the budget was directed to providing services to the poor and that most of the 0.5 percentage point VAT increase would have been paid by the three upper income categories.
He acknowledged that the budget process would have to change, with discussions starting as early as July.
He said the Treasury would on Friday table the Rates and Monetary Amounts and Amendment of Revenue Laws Bill that gives effect to the proposed tax increases. That would provide MPs an opportunity to engage on the tax measures.
DA MPs Mark Burke and Mathew Cuthbert also both attacked the ANC during their speeches and rejected the antipoor budget with “the contempt it deserves”.
Joining the DA in its opposition were MK, the EFF, the ACDP, the African Transformation Movement, the National Coloured Congress and the United Africans Transformation.
Those in favour were the ANC, the IFP, the Patriotic Alliance, ActionSA, the UDM, Rise Mzansi, Bosa, Al Jama-ah, the PAC and GOOD.
The vote was on a knife edge as a result of the DA, the EFF and MK being opposed to the sitting taking place due to what they said were irregularities in the processing of the finance committee’s report, which they said was procedurally flawed and unlawful.
However, National Assembly speaker Thoko Didiza decided to proceed, rejecting the objections. Didiza said she had sought legal advice and that the committee had conducted proceedings according to the Money Bills Amendment Procedure and Related Matters Act and the rules of parliament. The rules specify that committees could determine their own procedures.
Finance committee chairperson Joe Maswanganyi said in his speech that all parties had had an opportunity to object or agree to the report.
The EFF warned of possible legal action if the National Assembly adopted the report. It said the report of the committee — based on a proposal by ActionSA — was unlawful because it did not clearly accept or amend the fiscal framework as required by the law.
ActionSA proposed that the committee accept the fiscal framework with the recommendation that the National Treasury and parliament find other revenue proposals to increasing VAT and not providing for bracket creep for personal income tax.
Update: April 2 2025
This story has been updated with new information throughout.
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