Dismantling the GNU? — Mashaba’s next move after VAT increase U-turn

ActionSA leader Herman Mashaba felt vindicated on Thursday morning after a proposed 0.5% Value-Added Tax (VAT) increase was scrapped just a week before it was set to be implemented.

National Treasury confirmed the decision shortly after midnight on Thursday, stating that Finance Minister Enoch Godongwana will soon introduce legislation to reverse his decision.

ActionSA was among the parties that supported the ANC to pass the budget, with the condition that VAT not be increased and an alternative source of funding be found.

While banks and other businesses started to prepare for the increase, some analysts believed the ANC may have tricked smaller parties into getting their way. Mashaba held firm that a VAT increase would not be implemented, or if it was, it would be reversed.

Speaking to The Citizen just hours after Treasury’s announcement, Mashaba said he was overjoyed and vindicated by the decision.

“ActionSA committed to South Africans that the country would have a budget, but that other revenue streams and cuts can serve to replace VAT, instead of running to the courts” he said.

What’s next for Mashaba?

With the VAT hike fight now over, Mashaba has set his sights on the “next step” of his plan: reconfiguring the ruling coalition.

A reset of the government of national unity (GNU) was announced after the ANC’s biggest coalition partner, the DA, refused to support the budget and took it to court.

The Citizen understands that parties such as ActionSA are earmarked to be included within the GNU under such a restructuring.

Mashaba told The Citizen that his party will now begin engagements on a new coalition arrangement with its own terms of reference.

“If the GNU collapses, ActionSA will not enter into this arrangement. We will enter into a new arrangement with a proper, predetermined, legal agreement regulating how we co-govern.”

He said he did not mind the DA being part of the coalition, but believes it should drop the pretence of a governing coalition that speaks for all South Africans when only a portion is represented.

“If the ANC is willing to sit with us and agree on the terms of reference, we are happy to participate. We do not believe in this GNU; it is just a grand coalition between the ANC and the DA.”

GNU on shaky ground

DA federal chairperson Helen Zille admitted that the future of the GNU is uncertain, with the ANC cancelling a meeting between the parties at the last minute.

“It is not my position to say whether or under what circumstances, the GNU should continue. The question is whether it should continue after the ANC negotiated with parties outside of the coalition during the budget votes.

“What the future of the GNU is, I can’t answer now. A lot depends on what will happen today [Thursday]. The ANC and smaller parties will hold a press conference to triumph in championing these negotiations as if they were the reason for the minister backing down, when he said last week he wouldn’t.”