President Cyril Ramaphosa: Picture: The Presidency
President Cyril Ramaphosa said while the political parties in the government of national (GNU) unity may differ on policies and other issues, they are all “pulling in the same direction”.
This follows the postponement of Minister of Finance Enoch Godongwana’s budget speech in Parliament, which is now scheduled for 12 March, due to the GNU parties’ disagreement on increasing VAT to 17%.
The postponement of the much-anticipated budget speech, the first under the GNU government, resulted in frustration, uncertainty and embarrassment for the country.
Ramaphosa is expected to chair a special Cabinet meeting in Cape Town on Monday at 2pm to discuss the contentious budget.
Writing in his weekly newsletter on Monday, Ramaphosa said Cabinet decided to postpone the presentation of the budget to allow further discussion on areas of disagreement among parties in the GNU.
“The last-minute postponement was unfortunate. It gave rise to concern and uncertainty among South Africans, investors and the financial markets, who look to the budget for important signals about the state and direction of our economy.”
“This is the first time that the budget is being presented by the government of national unity. It is understandable that this new arrangement would require a different approach in some respects. The process of forging agreement among the political parties in the GNU is still work in progress, but we are certainly getting there,” Ramaphosa said.
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Ramaphosa added that “disagreements, contradictions, and policy divergence” are inherent in governments consisting of several political parties.
“It has been more than six months since the formation of the GNU. Despite disagreement between parties on a range of matters, the centre holds. It is a sign of a healthy and robust democracy that such differences may emerge from time to time and be ventilated in public. Such differences don’t mean that the GNU is in crisis. It means that democracy is working.”
Last week, independent economic analyst Professor Bonke Dumisa said the embarrassment of postponing the budget speech until 12 March could have been avoided if the ANC had communicated with the speaker in advance to postpone when the ruling party saw that they would not reach a consensus on increasing VAT by 2%.
Dumisa said it was unfortunate that the differences between the ANC and DA on the issue of tax increases had to play out so “badly and embarrassingly.”
“The ANC has been in power for a long time and understands how these things work. Upon realising that the issue of a possible 2% increase in VAT was going to be very divisive and would divide the community, it would have made sense to postpone.”
“Increasing VAT is regressive. Remember when VAT was increased in 2018 because [Jacob] Zuma wanted to buy votes? An increase in VAT would affect poor people the most, but then VAT is the easiest tax to collect,” Dumisa said.
Additional reporting by Ina Opperman
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