The ANC has no choice but to “draw a line in the sand” and not allow officials to serve in government in some capacity while they objected to its policy and objectives.
This was the bold statement finance minister Enoch Godongwana directed at the DA in parliament on Wednesday moments before MPs voted to adopt the report on his fiscal framework and revenue proposals.
The DA’s federal executive committee is scheduled to meet on Thursday to chart the way forward after losing the budget battle, including whether to remain in the GNU.
The party also announced that it was mounting a court battle to challenge the passing of the budget, arguing procedural flaws.
Godongwana on Wednesday afternoon pointed his guns at the DA accusing them of being dishonest and negotiating in bad faith.
The House sat to consider the report from the standing committee on finance on Godongwana’s budget, which includes a 0.5 percentage point VAT hike for each of the next two years.
The proposal was rejected by the MK Party, the DA and the EFF, the latter two hinting at legal action if the budget is passed with a VAT hike to take effect in May. The National Assembly voted to adopt the report by a margin of 194 in favour and 182 against and no abstentions.
We had accepted their proposal. Today they have the audacity to stand up and say they don’t want bracket creep. It’s a lie!
— Enoch Godongwana, finance minister
Addressing the plenary ahead of the vote, Godongwana “drew a line in the sand”, saying the GNU needed to work harder to find consensus on the budget and could not allow its officials to serve in the government in one capacity and work to undermine the aims of the GNU in another.
“The budget process now is going to be changed. We will come back to the committee [to think about] how we make sure we can involve everybody, starting from July, September, October.”
The minister said he did not believe a member of the GNU could vote against a budget and lead its implementation once it is passed. Heaccused the DA of lying and negotiating the budget in bad faith.
“They have got a tendency to shift the goal posts every day. The deputy president chaired a committee where we were looking at the alternatives.
“The DA proposal was no bracket creep … no medical tax credit, nothing. We had accepted their proposal. Today they have the audacity to stand up and say they don’t want bracket creep. It’s a lie! Let’s be fair. Let’s debate honestly and disagree honestly. We accept honest disagreement … but don’t base it on lies.”
Godongwana said critics of his budget were engaging fiercely with its revenue proposals, calling them anti-poor, but he said much of the spending programme his budget proposed went towards service delivery for South Africa’s most vulnerable households.
“In debating this budget, there is a positive aspect we are missing. Never since the democratic breakthrough have we ever had this public debate around the budget. That in itself is a positive development. Sadly though, that debate has only been focusing on one side of the equation, - the revenue side. Little attention is spent on the spending side of the equation.”
A major part of the budget is targeted towards spending on pro-poor policies. Nine-thousand workers left the health system last year among other services for poor South Africans that were being eroded.
Godongwana said his 0.5 percentage point VAT hike proposal would raise R15.5bn, paid mostly by the three upper-income categories with the remainder being paid by lower income categories.
“We are talking about zero grading which is R2bn. We are talking about an increase in the indigent basket. We are talking about this R29bn in education. We are talking about this R28bn in health. Let’s be fair when we talk about help for these communities. Let’s talk about numbers!”
Asked about the participation of the DA in the GNU, presidency spokesperson Vincent Magwenya said: “The DA will have to reflect on that as to how do they move forward, operating in a government whose budget they opposed and did not support. ”
DA MP Matthew Cuthbert said the ANC, Action SA and the IFP worked to undermine the other parties in the GNU and pretended that amendments to the report were legally binding on the minister and National Treasury.
“First, the finance committee had only two options. It could either accept or amend the existing fiscal framework as empowered by the money matters and related procedures amendment act. On this score, the ANC, IFP and Action SA voted in favour of the existing fiscal framework which included a 0.5 percentage point VAT increase and the non-adjustments to personal income tax brackets for inflation, commonly referred to as bracket creep.
“However, they desperately tried to buy themselves cover by inserting non-binding recommendations into the committee’s report which requested that National Treasury revise its budget within 30 days. So despite the snake oil ActionSA sold to South Africans last night, National Treasury has no legal obligation to amend the framework if it passes in today’s sitting.”
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