Agriculture Minister John Steenhuisen. (Delwyn Verasamy/M&G)
The Democratic Alliance (DA) will not support the revised 2025 budget with tax hikes Finance Minister Enoch Godongwana tabled on Wednesday but remains open to negotiations on reworking it, party leader John Steenhuisen said on Wednesday.
He said the ball was in the ANC’s court if it wanted the support of its biggest coalition partner to see the budget through parliament.
“We have made it very clear to the ANC in the GNU [government of national unity] that we would not support any increases in taxes unless those increases were temporary and the ANC agreed to a series of major reforms that would grow the economy, produce jobs, reduce waste and bring down taxes within three years,” Steenhuisen said shortly after Godongwana concluded his address to the National Assembly.
He said the ANC had refused to agree to these terms.
Instead, he said, the party insisted on “two likely permanent increases” by hiking VAT by 0.5 percentage points in the new financial year and the same margin in the following year. This will bring VAT to 16% in 2026.
“As a consequence the people of South Africa will be poorer and the future of the government is at risk,” Steenhuisen said, suggesting the impasse could imperil the future of the coalition formed after the May 2025 elections.
“The ANC has still not accepted the outcome of the general election and cannot bring itself to share power.”
The consequence of that failure to work with the former opposition was that the party was prepared to “sacrifice the South African people and risk the economic future of the country”, he said.
“The ANC’s VAT budget does not have a majority and the DA has made it very clear that if it wants us to support a budget it needs to be based on growth and jobs, and we remain open to discussions on how we can make that happen and for compromised to be made, but it is now up to the ANC to get on top of the mess that it has created.”
In a pre-budget media briefing on Wednesday, Godongwana suggested the DA’s ongoing resistance to any tax increase was an attempt to save face after losing coalition battles on health, education and expropriation legislation.
He said party leaders had told him as much in negotiations on the budget last week.
““It is not about the VAT increase, it is about a whole lot of grievances they have,” he said.
“Therefore they want to win something. It is important that we call a spade a spade,” he said, adding that he fully expected the standoff to continue in parliament’s finance committees in coming weeks.
But this was not his immediate concern, added the minister, who on February 19 had to abandon a prepared budget with provision for a 2 percentage point VAT increase after the DA said they would not support it.
“Today I table and walk away.”
