The government of national unity (GNU), which was established less than a year ago, faces a reconfiguration without the second-largest party.
The political impasse over the public purse and the 0.5 percentage point increase in VAT — which form part of the fiscal framework that was passed by the National Assembly and National Council of Provinces on Wednesday — has exposed the inherent divergent policy priorities of the coalition government, placing its stability at risk.
The DA has taken finance minister Enoch Godongwana and SA Revenue Service commissioner Edward Kieswetter to court over the VAT increase, which comes into effect on May 1. In addition, the party’s federal executive on Thursday held emergency meetings regarding its participation in the GNU.
The DA’s rejection of the fiscal framework could complicate the operations of government, given that the party would still be required to implement government policies that are informed by the budget, in its ministries.
“We are not in the GNU for blue lights, or cars, or ministerial homes, or status,” DA federal council chair Helen Zille said after filing court papers against the VAT hike. “We are in the GNU for one sole purpose and that is to get SA’s economy to grow at the rate it needs to grow, in order to absorb more people into productive employment, and thereby reduce poverty,” she said.
“Our Plan B is to take this to court. This morning I signed these papers, these are crucial papers that are going to really the face of how these decisions are taken in parliament and change the decision to increase your VAT, they will ensure that we prevent that.
“These [legal] papers have two parts. The first is to get the process on April 1, that transpired in the parliamentary portfolio committee on finance declared null and void because it was unprocedural.”
The ANC, whose leaders have stated the DA is free to leave the coalition should it seek to do so, will meet on Monday in Gauteng to discuss the possibility of a reconfigured GNU.
“That’s the reality they need to reflect on. By rejecting the budget, they’ve rejected the GNU,” a senior government official close to the talks said.
“Following the adoption of the 2025 fiscal framework by parliament, the ANC reiterates that the process was not about political point-scoring, but about ensuring a budget that prioritises the needs of the poor and working class, protects the social wage, and sustains economic recovery. We note that several parties engaged with the process in good faith, placing the country above narrow interests,” the ANC said in a statement.
Herman Mashaba’s ActionSA, which has six seats in parliament, is preparing to join the GNU should the coalition government’s reconfiguration go ahead. The party’s chief whip, Athol Trollip, told reporters on Thursday it is on the cards.
“If the DA leaves the GNU, or if they are kicked out, we will reconsider our position, because the DA is good at opposition. The opposition space is suddenly disproportionately full and the government space might be limited. So, we will re-evaluate. We will do that only once this VAT matter is sorted out,” Trollip said.
The DA wants the VAT hike declared unconstitutional and for the resolutions adopted by parliament on the fiscal framework declared invalid.
In the founding affidavit filed by Zille, the DA has asked the Western Cape High Court to set aside “fundamentally flawed” decisions taken by the National Assembly and National Council of Provinces on April 2 to adopt the fiscal framework; remit the matter to the standing committee on finance and the select committee on finance for reconsideration; and prevent the coming into force “of unlawful executive fiats that purport to raise the VAT rate contrary to the will of parliament”.
“The second part of these papers is to get Section (7.4) of the VAT Act declared unconstitutional, because it gives the minister the power to enforce a VAT increase without taking it through parliament, and without the need to have the fiscal framework and other legislation required passed through parliament,” Zille said.
Update: April 3 2025
This story contains additional comment from the DA and ActionSA
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.