The DA and the ANC, the two leading parties in the Government of National Unity (GNU), are on the verge of coming to an agreement to pass the contentious budget that includes a proposed 0.5% increase in Value Added Tax (VAT).

Sources told IOL that the DA and ANC have agreed on a deal that would give the DA more influence over economic policies going forward. However, the Expropriation Act – a sticking point for the DA – will remain unchanged.

This development follows the DA’s initial rejection of the ANC’s proposal for a 0.5% increase in VAT, which sparked controversy among citizens and other GNU partners.

This led to speculation that the GNU could collapse. However, it now appears the parties are “close” to reaching a deal that would ensure its survival.

This situation underscores the delicate balancing act within coalition governments, where economic and political considerations must be carefully negotiated to maintain stability.

“The ANC has agreed to some of the DA’s terms, but remember it was not only the DA – all GNU partners were involved. We are talking about comprehensive reviews of expenditure and the decentralisation of authority over ports and rail,” an ANC insider said.

ANC secretary-general Fikile Mbalula told journalists over the weekend that negotiations were ongoing, although he did not disclose any specific details.

But he confirmed talks were underway.

Another source confirmed to IOL that the deal was expected to be finalised soon.

“We have been back and forth on this budget issue, and finally we’re getting somewhere. If the DA and ANC don’t reach an agreement, the GNU will suffer – which would also affect citizens,” the source said.

The budget vote is expected on Wednesday.

Negotiations between the ANC and DA teams resumed on Sunday afternoon, following a Friday stalemate that threatened the stability of the coalition government.

IOL previously reported on cracks within the GNU that threatened its collapse.

This followed the ANC’s refusal to accede to the DA’s demands to have a say in the country’s economic agenda.

Finance Minister Enoch Godongwana revealed on Friday that the DA had written to President Cyril Ramaphosa, agreeing to the 0.5% VAT increase – but only if the ANC scrapped the Expropriation Act.

The DA joined the voices of AfriForum and the Solidarity Movement in condemning the Act.

“Yes, the parties deliberated on the Expropriation Act, but the law still stands – it cannot be scrapped. Land is for the people, regardless of race or ethnicity, so it must be given to the people,” another source said.

Speaking to IOL, spokesperson Karabo Khakhau said there had been no formal communication from her leadership, but added: “From what I’ve heard, there has been progress in closing the deal.”

IOL also contacted the ANC for comment but received no response.

kamogelo.moichela@iol.co.za

IOL Politics

#finance-minister

DA and ANC near deal to pass controversial budget with VAT hike, Expropriation Act untouched