Finance minister Enoch Godongwana’s attempt to foist a VAT hike on the country was a spectacular and embarrassing failure, suggesting desperation on his part in that he seems to have had adequate warning that the proposal would not pass muster in parliament.
Apart from the DA's opposition to the move, even ANC ministers rallied against it just hours before the minister was due to address parliament, despite the party's top seven having been briefed beforehand on the National Treasury’s intentions.
Notwithstanding some ANC ministers’ attempts to distance themselves from the hike, the affair has not for the first time pitted the ANC against its junior GNU partner, the DA. On previous occasions when there was a difference over legislation, the DA had to blink and stand down. On this occasion, however, with the ANC unable to hint at securing a parliamentary majority by appealing to either the EFF or MKP, the DA was able to threaten to withhold its vote, dressing up its position as striking a blow for the ordinary person and demanding a “pro-growth” budget.
The ANC emerged from the shambles with its critics on the Left further emboldened by what they see as a neoliberal grip on the party’s policies as they are either diluted or rejected in the GNU. They will relish pointing out that the increase would have further impoverished the working class, while the middle class would shrug it off as just another increase that will hardly dent their standard of living.
Ironically, amid the prognostications of doom for the country, all is not lost. The likelihood of a budget more to liking of the DA and ANC critics is quite probable when the revised budget is tabled on March 12. How exactly this will come about, with Godongwana looking to fill a R58bn hole in his budget, remains to be seen.
The theatrics that led to the postponement of this week’s budget speech may well have killed any chance of VAT changes being included in the budget on March 12, meaning the GNU may have to consider huge spending cuts to balance the books.
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