The ANC is confident it can pass the budget without its partner the DA, with some insiders saying the party has approached political parties outside the government of national unity (GNU) to secure finance minister Enoch Godongwana's proposals after an impasse on the VAT increase.
The cabinet met to discuss the finalised budget proposal in the early hours on Wednesday, with the meeting expected to conclude at 1pm before the parliamentary sitting.
Godongwana has had marathon meetings with the GNU on the days leading up to the tabling of the budget.
The Sunday Times reported this week that Godongwana had been instructed to reach out to opposition parties, including the EFF, in a bid to secure a majority.
High-ranking ANC leaders who spoke to TimesLIVE Premium on the eve of the budget speech said Godongwana was expected to propose VAT be increased by less than a percentage point despite protests from the DA.
In a meeting with the ANC parliamentary caucus on Tuesday, Godongwana is said to have told the meeting there were no funds to cover the R60bn budget shortfall.
"He said part of the reason people call me 'austerity' is because the things we have been defunding over time is as a result of budget constraints. When people say there must be no increase you should also be able to tell us where are we going to get the money to fund the programmes such as National Health Insurance and the Basic Education Laws Amendment Act. It sounded as if there would be an increase, but he didn't tell us what it would be."
Another caucus member said the ANC questioned Godongwana on why he did not take stock of SA Revenue Service (Sars) commissioner Edward Kieswetter's proposal to strengthen tax collection rather than impose tax hikes.
"He told us we don't have that money. It is money we can have in the future, which is if Sars received an extra R1bn in the adjustment budget to raise money. He said this is a future plan and money is needed now.
"He also explained why he met the DA and said the reason because the DA was divided. He said there were two DAs, one in the executive and the other which does not want the GNU. He told us the DA was making demands which cannot be met and there is a big push inside the DA to leave the GNU."
A high-ranking ANC leader and cabinet member said the party had the votes to pass the budget without the DA
A high-ranking ANC leader and cabinet member said the party had the votes to pass the budget without the DA. They said the ANC would negotiate with parties ahead of voting to ensure the budget is passed.
"The budget should have been presented as a proposal in the first place. I agree 2% was ridiculous but the budget will go ahead whether there is a protest in cabinet or not."
The ANC leader said the statement of intent signed by all parties in the GNU must be applied when passing the budget.
"Remember the ANC's decision was that we are willing to cooperate with all 18 parties in parliament and that position has not changed. The ANC's decision on the GNU was that we are willing to work with anyone who wants to ensure there is a functional government, the state is stable. Passing the budget can be seen as a breach from the side of those who have committed to the stability of government.
"Anyone who prevents the passing of the budget will be in breach of the statement of intent. We can't have a situation where government collapses because of the budget. If the EFF and MK Party say in the interests of stability we have changed our minds and we want to join the GNU, why would we have a problem with that?"
ANC head of economic transformation Zuko Godlimpi told the SABC on the eve of the budget speech the budget will include a tax review framework which will include corporate income tax, personal income tax and value added tax.
He said the ANC agreed tax adjustment must be broad and must not be punitive to any social classes, adding the budget will not be regressive.
"To do otherwise, you run the risk of choking demand in the economy if the level of taxation is too high and consumer confidence is going to fall. That is going to undermine the very growth agenda you are pursuing so that is a matter of principle we have raised with our deployees," Godlimpi said.
Godongwana also held meetings with GNU partners on Tuesday alongside President Cyril Ramaphosa. One GNU leader blamed the DA for reducing the debate on the budget to a VAT increase. They said the GNU needed to look at the budget holistically.
"The DA is using the process to fight the battles it has lost. They want a Cyril to walk back on a number of issues," a party leader said. refusing to divulge any further information.
DA finance spokesperson Mark Burke previously told TimesLIVE Premium the DA had proposed capacitating Sars to collect the supposed revenue shortfall. Burke said the government must cut "pointless" expenditure in the short run, such as catering, advertising budgets and funding for the DRC military mission.
"This needs to be followed by a longer full expenditure review. There are billions we can save from outdated or duplicated government programmes that don’t work, such as Setas. Perhaps most importantly we need reforms and we need them fast to speed up growth, otherwise we’ll be having this same conversation again next year. These include rail and port concessions, and further and faster energy sector reform," Burke said.
ANC caucus insiders said they appealed to Godongwana to be briefed in future to mitigate against fallout and political implications.
"What we need to be clear about is the role of caucus. Your chair of the standing committee needs to be briefed. The whip of the appropriations committee needs to be briefed because those are the people who are essentially our mouthpiece. You don't want to catch caucus off-guard because they are the people who must speak about it during the debate. It's important for him to brief the leadership and I think he understood that."
Another ANC caucus member said historically the chair of the appropriations committee was part of the lockup to be able to issue statements.
"That process must be crystallised because if you don't do that, you open yourself up to a situation where caucus thinks they can rewrite the budget. If it's 0.5 [half a percentage point], I think we can manage the wave."
TimesLIVE
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.