Democratic Alliance (DA)
By Thabo Mosia
The Democratic Alliance (DA) has issued a bold threat to block South Africa’s 2025 budget, intensifying tensions within the Government of National Unity (GNU). The standoff stems from the African National Congress (ANC)’s refusal to sign a written agreement on growth and spending reforms, which the DA says is vital to protect South Africans from unaffordable taxes and boost the economy. With the budget vote looming on April 2, 2025, this clash could destabilize the fragile coalition and disrupt critical government funding.
Coalition Cracks Widen Over Budget Dispute
South Africa’s GNU, formed after the ANC lost its parliamentary majority in the 2024 elections, was meant to unite parties for the country’s good. But the 2025 budget, tabled by Finance Minister Enoch Godongwana on March 12, 2025, has revealed deep divisions. The budget proposes a phased 0.5% VAT increase over two years to fund infrastructure, social grants, and debt repayments—a move the DA fiercely opposes.
On March 31, 2025, the DA spent the day drafting an agreement to secure its support for the budget. That night, DA negotiators met with ANC counterparts, only to see their proposal rejected. DA leader John Steenhuisen took to X on April 1, 2025, warning, “Time is almost up. Last night, the ANC refused to finalise an agreement on growth and spending reforms, imperilling the GNU. The DA will oppose the budget unless and until a written agreement is reached.”
The joint finance committees are set to meet this morning, April 2, 2025, to finalize the fiscal framework, with the full budget vote scheduled for tomorrow. The outcome will test the GNU’s survival.
DA’s Stance: Protect Citizens, Grow the Economy
The DA’s position is clear: no new taxes without reforms to cut waste and spark growth. DA Finance spokesperson Mark Burke told a morning broadcast, “The DA’s position around the budget has been quite firm from the start, which is that we need to protect South Africans from taxes they can’t afford and at the same time we need to focus on an efficient government that creates jobs by providing the environment that allows businesses to grow the economy.”
Burke outlined key DA demands, including devolving control of underperforming ports like Cape Town and Richards Bay from state-owned Transnet. “We need to see those ports devolved and potentially privatized,” he said. “Our ports are some of the worst-run in the world, and we’d like to see them among the best.” The DA also wants an open electricity network to reduce reliance on Eskom, encouraging private sector involvement to stabilize power supply.
Burke stressed that without an ANC-DA deal, talks with other GNU parties are pointless. “Unless the ANC and the DA can agree within the GNU, there’s no point in either of them negotiating with other GNU members,” he said. “The numbers just don’t add up.”
ANC Defends Budget, Dismisses DA Threats
The ANC, however, stands firm. ANC Chief Whip Mdumiseni Ntuli insists the budget will pass, with or without DA support. “The ANC is absolutely confident that having listened to all political parties in parliament… we now have a sufficient consensus to go through the portfolio committee this morning and agree on the fiscal framework,” Ntuli said in an interview.
He defended the VAT hike as a tough but necessary step, arguing, “The question of the 0.5% VAT increase… is the only major concern amongst us now,” and hinted at refining it to ease opposition. Ntuli dismissed the DA’s demands as political posturing, saying, “I’ve never seen it anywhere in the world where a component of any kind of coalition… oppose a budget and remain in government.”
Ntuli also revealed the ANC has “overwhelming support” from GNU and opposition parties, potentially isolating the DA. He accused the DA of raising unrelated issues, like scrapping the National Health Insurance (NHI) and expropriation laws, to score points.
High Stakes and Tight Deadlines
The budget process has been anything but smooth. For the first time in 30 years, it’s faced prolonged delays and debate. If the DA follows through on its threat and the budget fails, South Africa could face a government shutdown by June 2025. Municipalities would run dry, halting services like rubbish collection and water repairs, while social grants for nearly 28 million people could be delayed.
Economists warn of broader fallout. A stalled budget could rattle markets, raise borrowing costs, and push South Africa closer to a debt crisis. The International Monetary Fund (IMF) has flagged this risk, urging swift resolution.
Behind closed doors, new details have emerged. The DA’s draft included a two-year public-sector wage freeze, rejected by the ANC due to union resistance. The ANC countered with a six-month VAT delay, which the DA called inadequate. Meanwhile, public pressure mounts—small businesses oppose the VAT hike, while rural leaders fear service cuts if the budget flops.
Other Voices Join the Fray
The budget battle has drawn reactions across the political spectrum. ActionSA, the Economic Freedom Fighters (EFF), and the MK Party reject the VAT increase, with ActionSA calling it “unacceptable” and the MK Party slamming the ANC’s “reckless incompetence.” The EFF has even demanded the DA’s exit from the GNU as a condition for support—a non-starter for the ANC.
Despite this, Ntuli claims most parties back the budget, pending a VAT solution. “The majority of the political parties in the GNU and in parliament have agreed overwhelmingly on the budget,” he said, suggesting a compromise could emerge from today’s committee meeting.
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