The DA's futile war against the VAT increase, while caving to other ANC plans, has shown poor priorities. After the big GNU gamble, they now have nothing to show for it.
Since the national coalition formed, the DA have been making their name mud by refusing to resist in any meaningful way, any of the ANC’s chosen policies or legislature, until now.
While they calim to be the adults in the room, their stance has not been consonant with this. They have put their foot down on a budget item that, while it certainly will have negative consequences, is not enough to change the course of events in society, or the trajectory of the economy, and appears to be little more than symbolic.
As Dawie Roodt recently explained, with SOEs and local municipalities taken into account, the state is at 95% debt to GDP. Whether the VAT shifts a point or more is not going to make a huge difference. Dramatic interventions are necessary to avoid a default.
Tug of war
The line in the sand they have chosen to defend is a VAT increase proposal. On February 19, 2025, the Treasury proposed a 2 percentage point rise in VAT, swiftly rebuffed by the Democratic Alliance (DA) and the Congress of South African Trade Unions (COSATU) over its burden on poorer households.
A revised plan emerged on March 12, when Finance Minister Enoch Godongwana tabled a budget lifting VAT by 0.5 points annually for two years—effective May 1, 2025 (to 15.5%), and April 1, 2026 (to 16%)—projecting R13.5 billion in additional revenue for 2025/26. To cushion the blow, zero-rating was extended to items like canned vegetables and dairy.
The DA rejected this offer too.
The Standing Committee on Finance received briefings from the minister, deputy minister, Treasury, and the South African Revenue Service on March 14, followed by input from the Parliamentary Budget Office and Financial and Fiscal Commission on March 18. Public hearings on March 25 drew 51 submissions, manytargeting the VAT hike.
On April 1, after ActionSA chose to join the ANC’s side, the committee passed the fiscal framework, including the increases, despite counterproposals from the DA, MK and EFF to hold VAT at 14%. The radicals proposed adjusting personal income tax for inflation, raising corporate tax by 1.5% in 2025/26 and 2% in 2026/27, a wealth tax and R800 billion in tax recovery.
But the National Assembly passed the budget on April 2 by a vote of 194 to 182, with ActionSA and other small parties overcoming DA resistance. Under Section 7(4) of the Value Added Tax Act, the May 1 increase will proceed regardless of delays.
The April 1 finance committee meeting which assessed Godongwana’s March 12 fiscal framework - the first step before departmental budget scrutiny - could reliably be expected to see the ANC steamroll opposition with its majority. The dearth of ANC support however, doesn’t seem to have affected this at all. The hatred of the DA, not only for their ethnic composition, but for their shrill, brittle and condescending attitudes, has galvanised all potential allies against them.
The Vryheidsfront, despite opposing the budget, reaffirmed its allegiance to the ruling coalition, though its influence remains negligible and and its participation pointless, tossing aside their opportunity to establish themselves as the establishment’s only meaningful opposition.
DA leaders are now weighing up their coalition stance, on its shakiest footing yet. It appears they have started to realise how entirely superfluous they are in the face of anti-white resentment and the national consensus of black majoritarianism.
Pointless
The DA intends to challenge this budget in court, citing procedural flaws in the Standing Committee on Finance - the committee allegedly failed to vote on a key clause and passed the framework conditionally, prompted by ActionSA’s recommendations, which the DA deems invalid.
But this is a fruitless dispute. Without approval, the VAT hike would still take effect for 12 months under the VAT Act, reverting to 15% if unlegislated thereafter. The ANC has until May 2 to enact the Rates and Monetary Amounts Amendment Bill, but the VAT rise is more or less inevitable. Departmental committees will now review their budgets, with votes due by July, culminating in a final budget vote.
ActionSA counters that new coalition dynamics justify their faith in the deal, offering the ANC a chance to retreat from the VAT plan while sustaining the budget cycle. But the ANC’s past dismissal of non-binding recommendations is considered standard operating procedure. ActionSA, after decrying the VAT rise and claiming victory, has prompted sharp and mocking exchanges with DA members on social media.
But the DA has shown what their priorities are here, and it is pretty unimpressive. And in the process, they have aligned the entire GNU, constituting an (albeit slim) majority in the Assembly, against them.
Meanwhile, they have failed to push back on the discriminatory language policies written by the ANC to accompany the BELA Act, they passed their AgriBEE policies in Steenhuisen’s department, they failed to stand by Roman Cabanac despite no wrongdoing on his part, and they voted for the Climate Change Act, which gives plenary power to the Minister to control any aspect of the economy and set environmental targets down to the level of individual businesses.
They haven’t gotten anything on devolution of powers, BEE is accelerating, they have no ability to cut the size of the budget, and they have defended the ANC and their land reform process from critics in public.
Worst of all, the VAT hike is utterly marginal compared to the truckload of pork in the budget, which is certain to continue us on the path towards the fiscal cliff, and eventual economic dissolution and potential state collapse.
...and cynical
The DA have stated publicly that they don’t want to make substantial changes, because that would constitute “austerity” - a word that means cutting the budget in any way. Heaven forfend we ever do that. No, they aim to save a measly R70bn by shifting a few line items around. But South Africa's annual debt servicing costs are R435 billion a year.
If this was the limit of their offer, then the DA would just be penny-wise and pound-foolish. But it appears that the idea was to push the VAT issue as an economic populist one - cheaper goods for the poor.
But it appears they would have raised these costs by the back door. According to Minister Godongwana, the DA's budget proposals in committee included other tax increases:
"their number at the time was R16.5 billion. An increase on the fuel levy - their number was R4 billion; medical credits, 1.5 billion; alcohol and related matters, R1 billion. That was their proposal. Now, to suggest, as they do, that they do not want any other increases is inaccurate."
With the fuel levies already choking the economy and driving up the price of consumer goods, and medical costs straining many middle-class households, it appears that the end product of the DA's measures would have been more or less the same, only less directly noticeable.
But this is also stupid, because their voters read economic news, while the voters they are aiming to appease and acquire do not.
Leverage
But assuming they actually wanted to avoid the coming fiscal cliff, they could be doing a hell of a lot more, and actually push back against the ANC. This is not fun and games, this is not Queensbury boxing rules, this is a contest for the survival of the state, and the rights of those who live in it. The budget is merely an essential part of the functioning of this state.
If they want to fight the ANC and actually get them to agree to the necessary measures, they have to start fires, and demand cooperation from the ANC before they put them out.
They could:
A few of the things I mentioned up there would likely get challenged in court, but they are extremely disruptive anyway, which is the main point. By disrupting the ANC’s patronage networks, they can put their fingers on the jugular vein and create leverage for meaningful demands.
They could have stood up to every single one of the ANC’s insane and disastrous policies, but they have chosen not to, and when they finally stood up for something, they hit their head.
