ANC impasse with DA over VAT opens the door to talks with EFF

The ANC is believed to be in last-minute discussions with the EFF to secure their support ahead of the budget speech expected to take place on Wednesday. 

This comes after the DA, the second-largest party in the Government of National Unity (GNU), continues to refuse to budge on any proposed VAT hike.

Last month's budget speech by Finance Minister Enoch Godongwana was postponed to Wednesday after several parties, including the DA, refused to allow for a 2% in crease in VAT.

According to sources within the ANC, the party is desperate to get the budget passed and is willing to make concessions to the EFF in exchange for their support. 

The EFF has consistently opposed any increase in VAT, but the ANC is hoping to persuade them to change their stance.

The DA's refusal to support the budget has put the ANC in a difficult position, as they need the support of at least 50% plus one of the members of parliament to pass the budget. With the DA refusing to budge, the ANC is forced to seek alternative support, sources said.

The sources have revealed that while some senior members of the party were opposed to the idea, a member of the ANC NEC had been mandated to meet with the red berets on Monday in an attempt to convince them to vote in their favour.

"We are looking for alternatives outside of the GNU to pass the budget…The DA is forcing our hand, and we are willing to work with other parties to get the budget passed,” said another NEC member, on condition he was not identified.

A senior source in the EFF confirmed that high level discussions had started between the two parties.

The EFF yesterday did not respond to questions on whether they had been approached by the ANC and about their stance on the budget, however EFF leader Julius Malema had made comments in the past about being willing to work with the ANC. 

ANC spokesperson Mahlengi Bhengu-Motsiri did not answer her phone nor respond to text messages.

Last week the ANC and the DA were in a stand-off during a special Cabinet meeting, scrambling to reach an agreement on the passing of the budget.

Godongwana is expected on Wednesday to propose a gradual increase in VAT over the next two years, starting with a smaller hike of 0.5% this year.

Political analyst Sandile Swana believes that the ANC would have to offer the EFF significant incentives to secure their support. 

"It would be more straightforward if the EFF simply said that they wanted to be admitted into the GNU, whether the DA leaves or not, and say that they are prepared to serve in the GNU with the FF Plus and the DA. 

“That would be one of the relevant ideas and then the DA would have to make a decision whether they want to leave the GNU if the EFF comes in,” Swana said.

Swana also believes the DA is in a strong bargaining position and is unlikely to leave the GNU. 

"The DA is in control of ministries, and they are able to market themselves by controlling ministries. So, the ANC trying to entice the EFF into collaboration on the VAT issue, it would have to offer the EFF something worthwhile," Swana said.

“Remember that the DA, ANC, EFF FF plus serve in the same parliament anyway. The FF plus has worked with the EFF to oust  the DA in some municipalities. They have also worked with the ANC, so these are some considerations."

Another political analyst, Dr. John Molepo, believes that the death of the GNU is inevitable but that the EFF and ANC could work together on the VAT issue. 

"The demise of the GNU is inevitable, primarily because coalitions are dying. People in these coalitions disagree on many things," Molepo said.

Molepo also believes the DA is unlikely to leave the GNU and will instead try to push their agenda. "They know very well that should they leave power, it might be the end of the party in many ways, so they would still want to hang on," Molepo said.

Molepo believes that the DA would ultimately concede defeat and accept the VAT hike.

“But this tells you the nature of the GNU and how it has been structured…Today we are fine and tomorrow we are not fine…It's very possible the EFF works with the ANC.

“You can see lately how Malema has been warming up to the ANC. He has been making remarks on how best they can work together,” Molepo said