#Budget2025: Pushback over Fikile's D-Day announcement

Source: Reuters. Leader of the Democratic Alliance (DA) John Steenhuisen speaks to media in Cape Town, South Africa 14 June, 2024.

"The ANC has resolved that we will reset the button to engage with all political parties within the GNU as well as those not in the GNU to address the impasse with regards to the Budget. We intend to do that within five days to conclude the negotiations of the Budget," ANC Secretary General, Fikile Mbalula said.

He was speaking at a media briefing at Luthuli House in Johannesburg on Tuesday, 8 April 2025.

At the heart of the impasse is not only the DA’s opposition to the proposed 0.5% VAT increase for 2025/2026— which it argues will burden the poor — but deep ideological rifts over key transformation policies.

Coalition tensions escalate

ANC Secretary General Fikile Mbalula has accused the DA of using the VAT issue as a lever to push back against the Expropriation Act, National Health Insurance (NHI), and Basic Education Laws Amendment (BELA) Act — legislation the DA allegedly seeks to dismantle from within the coalition.

"We are now deeply concerned with the DA, whose participation is marred by government deal-making, negotiations, and disdain at transformation. What the GNU cabinet adopted: the NHI, BELA Act and Land Expropriation Act, the DA seeks to undo. It undermines the essence of collective government. The ANC is clear, the Expropriation Bill, the BELA Act, and the NHI are here to stay," Fikile said.

Fikile stressed that the ANC never agreed to review or halt already-passed National Assembly bills.

"The President has signed bills that have been duly passed by the National Assembly and the Council of Provinces — they remain before him — and he sends those that are unconstitutional back to Parliament. Nothing is unconstitutional about the NHI, the BELA Act and the Land Expropriation Act. And that's it."

Call for co-governance

The DA insists voters rejected single-party rule at the 2024 elections; and said current policy must reflect shared power. "South Africa needs an era of co-governance, built on the implementation of bold, pro-growth reforms that create jobs and restores fiscal stability," it said on X. "That is why the DA signed the Statement of Intent and entered the GNU — we wanted shared governance that prioritises delivery and economic recovery over political convenience."

The DA said it has proposed practical solutions for growth, jobs, and fiscal stability, ready for implementation.

"We look forward to discussing a clear reform agenda for growth and jobs with the ANC," it said.

But while the GNU debates SA's fiscal consolidation, the budget delay also reflects South Africa's efforts to navigate complex international relationships. A funding shortfall, exacerbated by the end of US aid, places additional pressure on the government to secure alternative financial sources.

In February 2025, about 40 USAID-funded health projects in South Africa received termination letters, leading to the cessation of services provided by approximately 8,493 PEPFAR-funded staff involved in HIV response activities.

The proposed VAT increase, which is expected to generate an additional R28bn in 2025/26, is aimed at addressing a R60bn deficit partly due to the cessation of this funding.

Investor concerns and a falling rand continue to reflect uncertainty over the coalition’s future.