The ANC's national working committee has mandated the secretary-general's office headed by Fikile Mbalula to come up with proposals for a new budgeting process which could see powers taken away from the National Treasury.
According to ANC insiders, the committee agreed that the ANC will need to look at managing budgeting processes differently to allow for more political engagement.
The constitution allows Treasury vast powers to enable it to make decisions based on the economic principles with little room for political pressures.
This comes after the February budget speech by finance minister Enoch Godongwana was postponed when cabinet rejected his proposal for a twopercentage-point increase in VAT.
Godongwana and the National Treasury has been working overtime to come up with a new budget that will meet the demands of the ANC's GNU partners for adoption by cabinet.
TimesLIVE Premium understands Godongwana was expected to meet the ANC's top officials on Monday to present a finalised budget.
President Cyril Ramaphosa's spokesperson Vincent Magwenya said the president would be meeting the ANC's GNU partners before Wednesday.
An ordinary cabinet meeting is also expected to meet on Wednesday morning in Cape Town and Godongwana will hear whether his proposals receive cabinet approval.
ANC leaders who attended the NWC meeting said the party decided it would need to manage the budgeting processes differently owing to its participation in the GNU. The insiders said the new process will have to include other political parties in the crafting of the budget.
They said party leaders expressed frustration with the ANC's own cabinet members who openly went against Godongwana in February.
“We need to ensure in future that even ANC comrades who are ministers are in the know to avoid this situation where ANC ministers at the level of cabinet where unhappy and expressed their unhappiness ... about a matter that should have otherwise been discussed.
“We were all thrown into disarray when we had to comment in public about a VAT increase we never discussed, and we can't openly denounce the minister because this is your colleague and comrade. To denounce and isolate him sends the wrong message to society. The way we do it is unsustainable and we need to find a new formula,” an insider said.
A second NWC member said the committee dealt with the process and procedures rather than the substance of the budget.
They said the SGO working with the president's office must give the ANC guidelines on how the process will be handled politically, adding that “it's time we all understand, even Treasury, that the budget is a cabinet budget not a NationalTreasury process unilaterally as we have seen before”.
“It was easy before because once there is consultation between National Treasury, the president and the national officials, even if you are not happy as a minister you would sort of toe the line or give it the benefit of the doubt. So now things have changed, we need to make room for others to make submissions on the budget and we don't want the ANC to go into those discussions on the back foot and not be prepared.
“We can't have a situation where we were caught on the back foot again. So we need to manage this practically.”
ANC leaders have in the past expressed frustration with Treasury's “unlimited powers”. In 2023 the ANC clashed with Treasury after it proposed a drastic reduction in the number of government departments and entities to cut spending.
This led to the ANC's then economic chief and cabinet member Mmamoloko Kubayi accusing the Treasury of attempting to usurp Ramaphosa's powers.
In an interview with Business Day, ANC second deputy secretary-general Maropene Ramokgopa suggested government must scrutinise the Treasury's autonomy that is enshrined in the constitution.
“We’ve always just allowed them to actually just look at, for example, what the manifesto of the ANC would say, and decide to do what they think is correct. But no-one questioned them. I see now with this GNU, people are starting to question, even in the ANC, and say, ‘we don’t agree. We think maybe you should look at this,’” she told Business Day.
DA leader John Steenhuisen has maintained the party will not accept any increase in VAT, leading to a standoff in cabinet.
Government insiders have told TimesLIVE Premium that despite this, Godongwana was still intent on some form of VAT increment.
ANC's national spokesperson Mahlengi Bhengu-Motsiri said the matter of the national budget is still under discussion, adding the relations with all parties in the GNU remain guided by the Statement of Intent and the need to prioritise the national interest.
The ANC is said to be looking to parties outside the GNU as a contingency plan should the DA refuse its budget proposal.
DA finance spokesperson Dr Mark Burke said the DA was disappointed but not surprised, adding that negotiations outside the GNU were a poorly conceived ANC negotiation tactic that makes them look anti-poor.
“You have to wonder why the ANC is so desperate to tax South Africans who are suffering enough already, rather than cutting fat-cat jobs and wasteful expenditure. Whose interests are the tax-hike fanatics actually serving,” he said.
Burke said the DA believed government does not have a tax shortfall problem but rather an expenditure and efficiency problem.
You have to wonder why the ANC is so desperate to tax South Africans who are suffering enough already, rather than cutting fat-cat jobs and wasteful expenditure.
— DA finance spokesperson Dr Mark Burke
“It’s an ANC trap to fall into a narrative where we debate which terrible option is the least bad,” Burke said.
However, UDM leader and GNU partner Bantu Holomisa said the GNU only met once to discuss the budget in February, hours before it was postponed.
“I’m waiting for the minister of finance to read the budget on the 12th. Those who don’t want to vote for that budget can stay aside, and then they will have to justify to the people why their grants have not been paid on April 1.
“We are positive as the UDM, we want the minister to come to the house and table the budget as he usually does. Then if there are people who reject it we can deal with it at that time, but we cannot postpone any more. Our view is clear, it says let’s look at other avenues like company tax, which is too low. Even other methods to strengthen the hand of Sars to collect more revenue,” he said.
EFF national spokesperson Sinawo Thambo said the ANC had not approached the party about the budget, but said the EFF was clear that it would not support any VAT increase.
“An increase VAT at any percentage point is not acceptable and we don't agree to that as a way to generate revenue,” Thambo said.
Rise Mzansi leader and GNU partner Songezo Zibi said VAT is not the only issue.
“What I am looking to see are areas where the cabinet has decided to cut, which is another outcome. There must be cuts in the budget if there is to be an increase in some of these other allocations, but we cannot have a situation where people say what they don’t want, but don’t say where the reductions need to be.
“So this decision is not narrowly about VAT, the issue not to raise R35bn means there is going to be less allocations for certain things, one of them being early childhood development funding especially in the context of BELA, which is going to be on the chopping block,” Zibi said.
He said he expected when Treasury tables the budget it will be composed of these choices, adding the VAT increase will raise between R28-R32bn.
We have to find that money somewhere for those allocations, Zibi said.
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