The court will hear oral arguments on the DA and EFF’s application to interdict the implementation of a 0.5 percentage point increase to value-added tax.
The DA says it is confident in its court challenge of the 2025 budget, claiming that the framework passed by Parliament earlier this month shows its coalition partner, the ANC, does not care about the poor.
The party’s top leadership held a media briefing in Cape Town on Tuesday before it and the EFF’s application to interdict the budget was heard at the Western Cape High Court.
The parties want to interdict the implementation of a Value-Added Tax (VAT) increase from 1 May. They have also questioned the procedures which led to the passing of the budget.
The DA is challenging the Minister of Finance, Enoch Godongwana’s, ability to propose a VAT increase for the majority of South Africans.
‘The poor will suffer first’
“We have never been in a situation where the budget has been challenged, and this is good for our democracy. It is what you would expect from a parliament emerging from 30 years of being a rubber stamp and all the challenges that come with it.
“The DA is at the forefront of protecting our democratic institutions and their processes,” he said.
DA Chief Whip in Parliament, George Michalakis, said this budget will negatively affect economic growth and the poor. He said it will also hinder the country’s ability to create more jobs.
“If we increase taxes of any kind at this point, everyone will suffer, and the poor will suffer first. If we borrow more, the economy will slow down, and everyone will suffer, with the poor suffering the most.
“We have to find other ways of funding our schools and our hospitals, and it starts with the culture of wasting money. We need to cut wasteful spending and review how we spend money and on what. We need to make sure that the way we spend money focuses on two things: growing the economy and creating jobs,” he said.
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ANC violating GNU priorities?
DA federal chairperson Dr Ivan Meyer said the VAT increase to 15.5% violates the GNU’s vision and the statement of intent that all member parties signed.
“A VAT increase is a sign that the ANC does not care about the people. A VAT increase is a sign that we have a government that is out of touch with the people.
“The GNU has three priorities, to create inclusive economic growth, a VAT increase will erode inclusive economic growth, the second priority of the GNU is to reduce poverty, this VAT increase will increase poverty, the third priority is to build a capable state, but a capable state never punishes the poor,” he said.
Voters will punish the ANC and those who support the budget
ActionSA assisted the ANC in passing the current budget, but said this was conditional on the VAT increase being scrapped and an alternative source of funding secured instead. That guarantee looks increasingly unlikely to be given as banks, retailers, and other businesses prepare for the increase from next month.
It said this week that the DA was complicit in the increase because of its membership in the GNU.
However, Meyer predicted that smaller parties that assisted the ANC earlier this month will be punished by voters.
“They must take responsibility because they voted with the ANC to increase the VAT, and voters will punish them,” he said.
ALSO READ: The DA can walk away from GNU, says Mbalula
Is the DA being a difficult GNU partner?
DA spokesperson on Finance, Dr Mark Burke, said the DA, as a partner in the GNU, is in favour of a budget that focuses on new infrastructure investment and does not bail out failed state-owned companies.
“So, we are not opposed to a budget under any circumstances, but to an ANC VAT-based budget. I ask whoever is making decisions in the ANC and whatever soviet sand they have stuck their hands into to quickly answer this, how many ears does one party need to hear our people cry?”
Political analyst weighs in
Political analyst Sanet Solomon said that GNU partners should come up with alternative ways of resolving their differences before resorting to the courts.
“It is unsustainable for the GNU to continue functioning effectively if the coalition partners continue to utilise the judiciary as a tool to settle differences.
“Hence, the country has a clear division of powers between its executive, judiciary and legislature,” she said.
Solomon described the GNU as “fragile”.
“The GNU is in a fragile state given the number of disagreements and clashes they (the DA and the ANC) have had over the past few months.
“Their opposing interests and priorities have been highlighted on a range of issues such as the BELA Act, the Expropriation Act, and more recently the budget,” she said.
