Experts say the ANC’s inability to pass the budget highlights its loss of control, signaling the end of its power to push policies through other parties.
The postponement of the budget will reflect badly on investor confidence in South Africa, experts said.
But it indicates the ANC is confronted with the reality that it is no longer in control and cannot bulldoze other parties into submission any more.
Political economy analyst Daniel Silke and independent political analyst Sandile Swana said the shelving of the budget not only indicated the differences within the government of national unity (GNU), but showed the DA’s power to put its foot down in opposing the ANC policies within the unity government.
Swana said the ANC caused the disagreement by rebelling against previous agreements influenced by big business that the GNU should implement no tax increases for some time.
Swana said the disagreement was due to a failed attempt by the ANC to subject other parties within the GNU to comply with its policies, but the DA had fiercely and effectively resisted that.
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The DA opposed tax increases, including VAT, to which Cosatu, an ANC ally, objected, he said.
“By taking this action, the DA is doing it on behalf of the Business Leadership South Africa (BLSA), which objected to any tax increases, which it stated clearly in its statement in May last year. The DA was sticking to the BLSA instruction that there must be no tax increase, but the ANC is rebelling against that business order.”
“If the ANC was faithful to the BLSA instruction, there wouldn’t be tax increases. Big business has bailed out the government, so they cannot rebel randomly because BLSA and others helped to save a sinking Eskom, Transnet and other state-owned companies, so they are expected to comply,” Swana said.
Days of ANC bulldozing other parties over
“The days of the ANC bulldozing its policies on other political parties are over. They have been fiddling with VAT, but there is no unity on the issue, the Cabinet is divided. They can’t go to parliament without reaching consensus on tax increases,” Swana said.
Silke said the proposed 2% VAT increase seemed to be the straw that broke the camel’s back in GNU unity, but it also reflected on DA’s ability to flex its muscle.
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“One would assume those opposed to the VAT increase wouldn’t have voted for the budget. In that case, South Africa would have been plunged into further financial and economic chaos,” Silke said.
The postponement had proven in a sense the DA’s mettle in the GNU. It was a red line for the DA and other smaller parties that would also have not voted for the budget.
“This does put additional political pressure on the ANC and it favours the elements within the ANC that did not want a coalition with the DA.
Budget speech postponed until 12 March
“This makes governance much more difficult for the ANC. It’s clear it’s not the same game it used to be; there are now constraints on the ANC itself,” Silke said.
The postponement until 12 March was designed to allow a GNU-approved alternative to be found.
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“But the postponement reflects incredibly poorly on the negotiation mechanisms in the GNU and the inability of the minister of finance and the ANC to broach these issues beforehand.
