ActionSA offered the ANC crucial support to pass the fiscal framework on Tuesday as talks with the DA deadlocked. The vote heads to the National Assembly on Wednesday and could determine the future of the Government of National Unity.
On Tuesday, during a finance committee meeting in Parliament, the African National Congress (ANC) and the Inkatha Freedom Party (IFP) — both members of the Government of National Unity (GNU) — voted for a fiscal framework report which featured a recommendation tabled by ActionSA’s Alan Beesley.
It was a key step in passing the 2025 Budget, which has divided the GNU’s largest members, the ANC and Democratic Alliance (DA). The parties’ leaders, Cyril Ramaphosa and John Steenhuisen, met on Tuesday, while the ANC garnered support from outside the GNU to get the fiscal framework through the committee.
Negotiations between the two parties were reportedly ongoing and expected to go down to the wire. If those discussions fail, ActionSA could help the ANC get the Budget over the line.
Speaking on whether the collaboration between the ANC and ActionSA meant ActionSA was now part of the GNU, Beesley, ActionSA’s representative on Parliament’s Standing Committee on Finance, said, “It’s been purely about the Budget at the moment, so we haven’t got into any discussions about that.”
The fiscal framework establishes economic policy and revenue projections and sets the overall limits to government spending.
The National Assembly is expected to vote on it on Wednesday afternoon. This is despite questions raised by the DA, Economic Freedom Fighters (EFF) and uMkhonto Wesizwe (MK) over the legality of the report passed on Tuesday.
The ANC needs 201 of the 400 votes in the National Assembly to pass the fiscal framework.
It has 159 votes of its own and has secured support from various political parties, including 17 votes from the IFP, nine from the PA, three from the UDM, two each from Rise Mzansi and Al Jama-ah, and one each from Good and the PAC. With ActionSA’s six seats, this adds up to 200 votes.
The ANC has been actively lobbying other parties for support, including the ACDP and Bosa.
An ActionSA insider told Daily Maverick that the ANC had made several concessions in exchange for their support on the Budget.
The concessions include “a future in the GNU”, and as a result, ActionSA agreed to narrow its demands, prioritising only the VAT and income tax increases, the two issues that have stirred the most concern among South Africans.
VAT debate
ActionSA claimed victory following the vote, saying the 0.5 percentage point VAT increase in the proposed Budget, as well as income tax bracket creep, where tax brackets aren’t adjusted for inflation, had effectively been scrapped.
The recommendation tasks Parliament and the National Treasury with finding alternative revenue and expenditure proposals within 30 days. The DA and other parties, however, said the recommendation wasn’t binding and that ActionSA had effectively passed the VAT increase.
“The DA condemns this sell-out tactic by ActionSA, which has worked with the ANC to adopt the Budget and has condemned the poorest South Africans to a higher cost of living,” said DA spokesperson Willie Aucamp.
“By adopting this Budget without the reforms and changes that were needed, ActionSA has shamefully shut down the required government spending review. This is extremely irresponsible and will hand a blank cheque to the ANC to continue spending government money without review.”
The DA, EFF and MK voted against the fiscal framework report and made it clear there were legal aspects at play when it came to the procedure regarding whether the amendment could be inserted and the report adopted.
ActionSA’s new tune
ActionSA’s support for the Budget comes weeks after the party said it would not support a VAT increase. The planned VAT hike will come into effect on 1 May if the Budget is passed in Parliament.
Speaking to journalists about this turn, Beesley said the party was still adamant it would not support VAT increases.
“ActionSA has made the decision that we would reject any VAT increases, but we must allow the Budget system to go forward.”
When asked if this proposal would stand against legal scrutiny, Beesley said, “Yes, I’m very confident. We’ll know if it gets taken to court, but we’re very happy and very confident.”
ActionSA has not officially commented on its future participation in the governing coalition, saying that only Budget-related issues had been discussed with the ANC.
However, considering its history with the ANC, it seems likely the party could play some role, as it already has a working relationship with the ANC in at least two Gauteng metros.
In Johannesburg, when the ANC wanted to take over the mayoralty now occupied by Dada Morero, it turned to ActionSA for support. ActionSA also holds the important role of Speaker of the Council, filled by Nobuhle Mthembu.
She got the position after ActionSA agreed to a “conditional partnership”, meaning it would vote with the ANC on an issue-by-issue basis. ActionSA set conditions for this, including the removal of the then mayor, Kabelo Gwamanda, and the scrapping of the controversial R200 electricity surcharge, which is still in place.
In Tshwane, ActionSA’s Nasiphi Moya holds the role of executive mayor. The ANC agreed to support an ActionSA mayor as part of a coalition agreement, similar to the one in Johannesburg
ANC, DA still at odds
The DA’s spokesperson on finance, Dr Mark Burke, told Daily Maverick the party would be looking at a range of options following Tuesday’s meeting, including legal options.
“We will use every means at our disposal, including legal, to oppose the madness that we saw happening here today,” he said.
“There was nothing procedural, and we kept trying to make constructive recommendations to get the process back to something that is vaguely recognisable in law, and they’ve just completely diverted from that.
“That’s not my decision to make … I’m sure our Federal Executive will meet on this and chart a way forward.”
Speaking to journalists earlier on Tuesday, the ANC secretary- general, Fikile Mbalula, said that should the DA forge ahead with the decision not to support the Budget, the GNU could collapse.
“Everything has implications,” he said.
Mbalula later said if the ANC was able to pass the Budget without the assistance of the DA, then there would be a “reconfiguration”. Previously, the DA suggested that it would be the end of the GNU if the Budget was passed without its support.
Following ActionSA’s proposed amendment, FF Plus spokesperson Wouter Wessels said the party would consider supporting it after looking at the final version.
“It can’t be a blank cheque for support. We will have to look at it and consider what it entails, but it’s very uncertain what is going to happen from now.”
Unlike the DA and ANC, Wessels was optimistic the GNU would survive the Budget storm, which is one of many incidents that have highlighted significant fractures within the fragile 10-party GNU, which is still divided over several pieces of legislation, including the NHI Act, Bela Act and Expropriation Act.
Commenting further on the talks, Mbalula warned, “If you engage with this process on the basis of political scoring, it may lead to situations in which [the] GNU itself … has to be reconfigured.”
ActionSA’s full submission
ActionSA’s Beesley read the party’s full submission to the fiscal framework report:
“The fiscal framework tabled by the minister of finance is supported subject to the strict condition that National Treasury facilitates the receipt of substitute revenue proposals from the committee, together with corresponding expenditure savings, that will form the basis of an alternative revenue proposal instead of:
“a) The proposed 0.5 percentage point increase in Value-Added Tax (VAT) for the 2025/26 financial year, effective 1 May 2025, in respect of which the committee has expressed serious concerns; and
“b) The failure to adjust personal income tax brackets in line with the higher of the actual CPI inflation rate for 2024 or the projected CPI inflation rate for 2025 to prevent bracket creep; and
“Furthermore, the committee recommends that the alternative revenue proposals and expenditure savings to balance the R28-billion shortfall — which must effectively suspend the proposed increases — be finalised and submitted by the committee to process within 30 days for consideration and adoption of this report by the House.” DM
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