EDITORIAL: GNU solution to budget must be found

The budget crisis, which has the main partners in the government of national unity (GNU) — the ANC and DA — at loggerheads, has raised the prospect of closer relations between the ANC and the EFF, and the possible inclusion of the latter in the GNU. 

It emerged at the weekend that the ANC has approached the EFF, MK and ActionSA to get their support for the adoption of the fiscal framework in the National Assembly on April 2 in light of the opposition of the DA to the National Treasury’s proposed one percentage point VAT increase split over two years, among other things. 

In terms of parliamentary rules for the adoption of the fiscal framework, one-third of the 400 MPs must be present and a majority of those present must support it. The ANC has 159 seats, the DA 87, MK 58, EFF 39 and ActionSA six. 

If all MPs are present on the day, a majority would be 201 votes which the ANC could achieve if it had the support of the EFF and ActionSA combined or MK alone. Excluding the DA but including other GNU party MPs would give the ANC 200 votes in which case it would only need the support of a small party.

However, the adoption of the budget without the support of a major GNU partner would considerably weaken the coalition. 

The ANC has been talking to the EFF, MK and ActionSA to secure their support for the budget. But they too do not support a VAT increase. Their inclusion in the GNU is also a possibility. A second round of talks is due this week. 

While it is understandable that the ANC would seek support outside the GNU for a policy as important as the fiscal framework which sets out the government's revenue and spending projections for the next three years, doing so weakens the glue holding the GNU together. If outside support is sought on every occasion of a difference, the GNU would exist in name only. 

Compromises should be thrashed out within the GNU. Intense negotiations were held over the National Health Insurance Act which the DA rejected and as a result, specific references to the demise of private medical aids over the next five years were removed from the medium-term development plan which sets out the government’s medium-term priorities. 

While no change was made to the contentious Basic Education Laws Amendment Act, it was agreed that the regulations drawn up by basic education minister Siviwe Gwarube of the DA would address the party’s concerns. 

Compromises could easily be made over the DA’s demands for the budget to include reforms to generate economic growth and an expenditure review to cut wasteful expenditures. The sticking point is its demand that the Expropriation Act be amended to replace nil compensation with just and equitable compensation. 

Toenadering with the EFF and relying on its voting support carries the great danger that this will give it more influence over the ANC and undermine the GNU which has been welcomed by businesses and won much sought-after investor confidence.

EFF policies, don’t forget, include rapid and large-scale land expropriation, nationalisation of banks and mining companies, a change in the Reserve Bank’s inflation-targeting policy and more spending by a debt-burdened fiscus, all of which spell economic doom.