The DA says it is optimistic that talks with the ANC are heading in the right direction ahead of finance minister Enoch Godongwana’s presentation of the third national budget next week.
“The government of national unity (GNU) leaders had a meeting last week where a budget presentation was done, but it’s still a work in progress,” DA leader John Steenhuisen said.
Ahead of Godongwana’s budget presentation on May 21, he will be torn between the urgent priorities of raising extra revenue, cutting spending and increasing investment.
The minister announced he would return to parliament to again table a budget after introducing the rates and monetary amounts and the amendment of revenue laws bill to “reverse” his 0.5% percentage point VAT hike, which was widely rejected by political parties, the public and judiciary.
While no special cabinet meeting has yet been scheduled ahead of Godongwana’s budget next Wednesday, Steenhuisen and the ANC have confirmed a VAT increase is off the table.
City Press reported on Sunday that ANC chief whip Mdumiseni Ntuli had said the party’s fight with the DA was not about a VAT increase but rather the DA’s bid to retrogressively overturn transformative legislation.
Ntuli also suggested the DA was angry that Godongwana was allegedly sidelining its National Treasury deployee, deputy finance minister Ashor Sarupen.
Last month, the Western Cape High Court scrapped Godongwana’s proposed VAT increase, paving the way for the Treasury to craft a third budget for the next three years. The DA was expected to use the opportunity to increase pressure on Godongwana to implement its budget priorities.
Godongwana’s previous fiscal framework relied on two 0.5 percentage point VAT hikes this year and next, and was meant to fund a sizeable increase in spending on front-line services and an infrastructure build programme.
In a supplementary affidavit filed to the high court before it scrapped the fiscal framework, Godongwana made it clear that borrowing more to plug the shortfall was not a “viable option”.
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