In February, South Africa’s Finance Minister failed to even deliver the annual Budget Speech. He had hoped to propose a 2 point increase in VAT to raise revenue. Since 1994, the ANC has never struggled to pass a budget. But now that they are in coalition, they had to consult other partners. That was Budget 1.0
After Budget 1.0 failed, the ANC tried to negotiate first with the DA and then with other parties to get another budget through. This budget would’ve included a 0.5 point increase in VAT, despite all the parties in Parliament claiming it wouldn’t. This was stopped by the DA and EFF going to court over procedural irregularities and inappropriate powers delegated to the Minister, forcing him to cave. That was Budget 2.0.
We are now on Budget 3.0, and it seems the DA is happy that it has been properly included and consulted. This article describes the DA leader’s satsifaction with the proposed budget. The DA’s policy agenda focuses on growth. This budget apparently won’t include tax increases or extra borrowing. I don’t have more details or economic analysis on it. I have heard that they said they can raise revenue through better enforcement at the tax agency.
Politically though, this drama has been a watershed moment. The ANC’s determination to push through the VAT increase saw it do very badly in a poll that was run at the time. For the first time in the history of that poll, the DA beat the ANC (by less than a percentage point, to be fair).
While the first year of the coalition involved the ANC still getting to act as if it was in charge by signing into law bills passed in the last Parliament, the budget debacle has broken that illusion. The party has been humbled by failing to pass its preferred budget twice.
Miraculously, the DA remains a part of the GNU even though they literally opposed the Budget. We all thought it was over after the Budget 2.0 drama. But the GNU is still kicking.
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In February, South Africa’s Finance Minister failed to even deliver the annual Budget Speech. He had hoped to propose a 2 point increase in VAT to raise revenue. Since 1994, the ANC has never struggled to pass a budget. But now that they are in coalition, they had to consult other partners. That was Budget 1.0
After Budget 1.0 failed, the ANC tried to negotiate first with the DA and then with other parties to get another budget through. This budget would’ve included a 0.5 point increase in VAT, despite all the parties in Parliament claiming it wouldn’t. This was stopped by the DA and EFF going to court over procedural irregularities and inappropriate powers delegated to the Minister, forcing him to cave. That was Budget 2.0.
We are now on Budget 3.0, and it seems the DA is happy that it has been properly included and consulted. This article describes the DA leader’s satsifaction with the proposed budget. The DA’s policy agenda focuses on growth. This budget apparently won’t include tax increases or extra borrowing. I don’t have more details or economic analysis on it. I have heard that they said they can raise revenue through better enforcement at the tax agency.
Politically though, this drama has been a watershed moment. The ANC’s determination to push through the VAT increase saw it do very badly in a poll that was run at the time. For the first time in the history of that poll, the DA beat the ANC (by less than a percentage point, to be fair).
While the first year of the coalition involved the ANC still getting to act as if it was in charge by signing into law bills passed in the last Parliament, the budget debacle has broken that illusion. The party has been humbled by failing to pass its preferred budget twice.
Miraculously, the DA remains a part of the GNU even though they literally opposed the Budget. We all thought it was over after the Budget 2.0 drama. But the GNU is still kicking.