The South African Government of National Unity encounters a budget crisis as the ANC and DA disagree on fiscal strategies. The ANC proposes a VAT increase to maintain social programs, while the DA advocates for spending cuts. Unions and the SACP vehemently oppose the VAT hike, arguing it exacerbates poverty. Protests against austerity measures signal deepening public discontent and the struggle for equitable policies as leadership questions arise.
On March 1, 2025, the Government of National Unity (GNU) in South Africa, comprising the African National Congress (ANC) and the Democratic Alliance (DA), faced a budget crisis, failing to present its first budget since the end of Apartheid. The ANC proposed raising the Value Added Tax (VAT) from 15% to 17% to sustain social programs, while the DA advocated for slashing public spending. This conflict exemplifies the contradictions within a government meant to unify the country but deeply divided on how to address the fiscal shortfall.
The potential VAT increase has sparked strong opposition from various labor organizations, including Irvin Jim of the National Union of Metalworkers of South Africa (NUMSA) and the Congress of South African Trade Unions (COSATU). They argue that the tax hike would disproportionately harm the working class, already struggling with high living costs. Jim highlighted that with almost 60% of incomes spent on essentials, any increase would exacerbate existing burdens on the poor.
Dissatisfaction extends to the South African Communist Party (SACP), which criticized the ANC for not consulting its allies within the Tripartite Alliance. SACP spokesperson Alex Mashilo condemned the VAT increase as a step further into poverty for South Africans, stressing that proper discourse beforehand was lacking. Both NUMSA and COSATU cautioned the ANC about the implications of prioritizing revenue over alleviating immediate economic pressures on citizens.
Despite leftist opposition, the ANC relied on the DA’s support to pass the VAT increase. Historically, the DA has pursued policies criticized as anti-poor, complicating its newfound partnership with the ANC. This tactical alliance arose after the ANC failed to secure a majority in the last election, marking a stark shift in governance dynamics amidst a rising cost of living crisis in South Africa.
Hundreds rallied against the proposed budget cuts and VAT hike, reflecting widespread public dissent. These protests underscored the urgency of addressing issues like mass unemployment and soaring hunger rates, which many argue are more critical than the government’s debt concerns. Critics assert that while the government emphasizes fiscal discipline, millions are left without adequate nutrition or social services.
On the very day the budget was scheduled for presentation, it was unexpectedly postponed due to disagreements within the executive parties. This unprecedented move highlighted a leadership crisis, as opposition leaders articulated concerns over the lack of governance. Julius Malema from the Economic Freedom Fighters (EFF) expressed frustration, calling for transparency and accountability within parliament.
Irvin Jim of NUMSA warned against misinterpretations of the DA’s opposition to the VAT hike, asserting that their motives do not align with the working class’s needs. While the ANC pushes for regressive taxation under the pretext of funding essential services, the DA seeks to reduce public expenditure altogether, risking further marginalization of vulnerable populations.
Following discussions among the Cabinet about a potential wealth tax, tension persisted as the DA remained staunchly opposed to any measure perceived to be unfavorable to capitalists. NUMSA’s General Secretary pinpointed the ANC’s inclination towards accommodating capitalist interests, exacerbating the struggles faced by the working class. The SACP has since urged the ANC to engage in serious deliberations to explore alternative funding mechanisms that do not burden the impoverished majority.
The budget crisis in South Africa’s Government of National Unity illustrates stark ideological divides between the ANC and DA, with significant implications for the working class. Growing dissent from unions and historic allies highlights the urgency of equitable fiscal policies, particularly as essential services decline amidst rising costs and unemployment. As protests reflect the populace’s discontent, the government faces increasing pressure to prioritize the needs of the majority over the interests of the wealthy.
Original Source: indepthnews.net
