DEAL: President Cyril Ramaphosa
Image: Kopano Tlape/ GCIS
THE ANC and the DA, the two leading parties in the Government of National Unity (GNU) are on the verge of coming to an agreement to pass the contentious budget.
GNU parties have previously been fighting over Finance Minister Enoch Godongwana’s proposed 0.5% increase in Value Added Tax (VAT).
Sources told IOL that the DA and ANC have agreed on a deal that would give the DA more influence over economic policies going forward. However, the Expropriation Act – a sticking point for the DA – will remain unchanged.
This development follows the DA’s initial rejection of the ANC’s proposal for a 0.5% increase in VAT, which sparked controversy among citizens and other GNU partners.
This led to speculation that the GNU could collapse. However, it now appears the parties are “close” to reaching a deal that would ensure its survival.
This situation underscores the delicate balancing act within coalition governments, where economic and political considerations must be carefully negotiated to maintain stability.
An ANC insider told IOL: “The ANC has agreed to some of the DA’s terms, but remember it was not only the DA – all GNU partners were involved. We are talking about comprehensive reviews of expenditure and the decentralisation of authority over ports and rail.
ANC secretary-general Fikile Mbalula told journalists over the weekend that negotiations were ongoing, although he did not disclose any specific details.
But he confirmed talks were underway.
Another source confirmed to IOL that the deal was expected to be finalised soon.
The source said: “We have been back and forth on this budget issue, and finally we’re getting somewhere. If the DA and ANC don’t reach an agreement, the GNU will suffer – which would also affect citizens.
Godongwana revealed on Friday that the DA had written to President Cyril Ramaphosa, agreeing to the 0.5% VAT increase – but only if the ANC scrapped the Expropriation Act.
The DA joined the voices of AfriForum and the Solidarity Movement in condemning the Act.
But another source said: “Yes, the parties deliberated on the Expropriation Act, but the law still stands – it cannot be scrapped. Land is for the people, regardless of race or ethnicity, so it must be given to the people.”
The budget vote is expected on Wednesday.