South Africa

Budget battles — ANC, DA, and the fight over power, policy and politics

16 Mar 2025

With Parliament now having about two months to formally vote on the Budget, South Africans are about to understand what really goes into a sausage. While the most likely outcome is still the ANC and the DA coming to some agreement, various parties will now try to reset relationships relative to one another.

While the current fracas may look as if it is just about whether the DA will vote in favour of the Budget, beyond that are many other questions.

It is not clear that the DA’s real aim is to frustrate the ANC Budget. After all, as News 24’s Carol Paton has pointed out, there is much in this Budget that the DA has called for (including, crucially, a process that should lead to the total reform of government spending).

The real aim is probably to try to reset the relationship between the DA and the ANC.

As many have pointed out over the past month, the DA is clearly frustrated at President Cyril Ramaphosa’s tactic of signing controversial Bills from the previous Parliament into law, despite its objections.

This informs a Business Live report on Friday suggesting that the DA told Ramaphosa that it wanted changes to the NHI, the Expropriation Act and the Bela Act before the party would vote to pass the Budget.

The DA certainly needs to show its constituency that it can make a change in government. Over the weekend, it had members stationed at least one intersection, handing out leaflets titled “Stop the ANC’s Job-killing VAT increase!”

But the fact that the new Budget has a promise of spending reform (which will be centred in the Presidency) already allows the party to claim victory, if it needs to.

While the argument between the ANC and the DA is likely to become fairly loud over the next few weeks, both parties have reason to believe the other will back them in the end.

The DA knows the ANC cannot work with the EFF and MK while the ANC knows the DA cannot tell its voters it allowed the EFF and MK into government simply for the sake of a 0.5 percentage point VAT increase.

This alone suggests these two parties will come to some agreement.

Negotiating positions

At the same time, the ANC might well have been preparing for this in other ways.

Several days before the new Budget containing the lower VAT increases was proposed, Health Minister Dr Aaron Motsoaledi published regulations under the NHI Act. The DA, and other groups, protested vocally, claiming it showed he had not listened to them.

If there is now to be a negotiation over the NHI, in retrospect, Motsoaledi may well have published these regulations when he did to bolster the ANC’s negotiating position.

But both parties can play this game.

The Minister of Public Works and Infrastructure is now expected to publish Expropriation Act regulations. The current Minister is the DA’s Dean Macpherson.

He could publish regulations that weaken the Act, or just fail to publish them at all, thus delaying its implementation.

And, as Business Live’s Natasha Marrian has pointed out, it may be unwise for the DA to expend political capital on these issues.

This is because it, and others, can challenge measures like the NHI in court and thus still win the argument there (also, by challenging the issue legally they can keep the issue alive for longer, thus showing their voters they are fighting for them).

At the same time, there is likely to be some argument over technicalities.

It has been reported that the view of the National Treasury is that because Finance Minister Enoch Godongwana has announced the VAT increase in the Budget, it is now law. In other words, the only way to prevent it from being implemented is to pass another law before 1 May, which is practically impossible.

But, as financial and political analyst Khaya Sithole told The Money Show last week, it seems unlikely that even under the process regarding Money Bills that the Finance Minister’s word is law.

The two major parties may have an argument about this in the coming days.

Smaller parties

Meanwhile there is now also a chance for smaller parties, including the EFF and MK, to make a lot of noise.

Both have a reason at the moment to show that they have some kind of political power.

Currently, MK is not in any government anywhere and might need to show its supporters that it can actually have an impact on their lives.

EFF leader Julius Malema is desperate to show he is relevant. While he can’t publicly support a VAT increase, he can dangle the prospect of support for the ANC, just to give the appearance of power.

This might also be an important moment for some of the smaller parties, because of the positions they hold in Parliament.

Currently, Build One South Africa leader Mmusi Maimane is the chair of Parliament’s Appropriations Committee. This might well give him the chance to play a big role here and to insert himself into this debate.

While Parliament’s Standing Committee on Public Accounts may not play an active role in this process, its chair, Rise Mzansi leader Songezo Zibi, might also find some space during this time.

Meanwhile, other parties may simply enjoy the prospect of holding the balance of power if and when this comes to a vote.

For example, Action SA has said it doesn’t support the Budget in its current form, but its leader Herman Mashaba has previously betrayed voters who believed his promise never to work with the ANC.

Slim hope for rational debate

The past few weeks have seen several commentators suggesting this moment is good for South Africa, because it should lead to a more democratic process in developing a Budget.

The debate that we are about to see may make us more cautious about what we wish for.

It is unlikely that there will be any rational debate over what is best for the country.

For example, as Deputy Finance Minister Ashor Sarupen of the DA pointed out this week, salary increases for government workers are bigger than those announced for social grants.

If this is truly a “pro-poor” Budget, this would be unacceptable.

It seems unlikely that there will be any increase in productivity from government workers in return for this increase (Jonny Steinberg recently explained how unproductive government workers can be).

Instead, this is a reminder of the true nature of our politics. If you are a member of a union affiliated to the ANC and you work in government, you can still get an above-inflation increase.

If you are an unemployed outsider, you have no power to extract anything from the government.

And, it is impossible to really develop a budget democratically.

First, one could never get true agreement across our diverse constituencies.

Second, those who raise their voices the loudest calling for more government spending are not the ones who have to pay the bills. The result of any democratic process would be to increase our debt. This would mean our children have to repay our debts, thus re-entrenching generational inequality.

The next few weeks are likely to be fairly noisy. But in the end, the true interests of the various parties will prevail.

For both the ANC and the DA, their true interest is to retain the power they have, while keeping other parties out – forcing the pair to stick together. DM

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South Africa

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DM is much better if you are signed in...

South Africa

Negotiating positions

Smaller parties

Slim hope for rational debate