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Will Parliament Pass the 2025 Budget? ANC’s Numbers Put to the Test

 

Finance Minister Enoch Godongwana has tabled the 2025 national budget, proposing a phased 1% increase in Value-Added Tax (VAT) to address a R60 billion fiscal deficit. This proposal has sparked significant debate within South Africa's coalition government, raising questions about whether the budget will secure the necessary parliamentary approval.

Coalition Dynamics and Parliamentary Numbers

In the 2024 general election, the African National Congress (ANC) experienced a historic shift, losing its absolute majority for the first time since the end of apartheid. The ANC secured 159 out of 400 seats in the National Assembly, leading to the formation of a Government of National Unity (GNU). This coalition includes the ANC, Democratic Alliance (DA), Inkatha Freedom Party (IFP), Patriotic Alliance, Good Party, Pan Africanist Congress, Freedom Front Plus, United Democratic Movement, Al Jama-ah, and Rise Mzansi, collectively holding 287 seats.

Opposition Within the Coalition

The proposed VAT increase has been a point of contention. Initially, a 2-percentage-point hike was suggested, but due to resistance from coalition partners, particularly the DA, the proposal was revised to a 0.5 percentage point increase from the current 15% on May 1, followed by another 0.5 percentage point rise in 2026. Despite this adjustment, the DA remains opposed, arguing that any VAT increase would disproportionately affect lower-income households and harm the economy.

Implications for the Budget Vote

The ANC's reliance on coalition partners means that securing a majority vote for the budget is not guaranteed. The DA's opposition, coupled with potential dissent from other coalition members, could jeopardize the budget's passage. Without unanimous support from the GNU, the ANC may struggle to muster the 201 votes required for approval in the 400-seat National Assembly.

Potential Outcomes

  1. Budget Approval: If negotiations lead to concessions satisfying coalition partners' concerns, the budget may pass, ensuring continuity in government operations and fiscal planning.

  2. Budget Rejection: Failure to secure sufficient support could result in the budget being voted down, leading to political instability, potential credit rating downgrades, and loss of investor confidence.

  3. Further Negotiations: The budget could be sent back for revisions, prolonging uncertainty but allowing for adjustments that might align with the broader coalition's priorities.


The ANC's ability to navigate internal coalition disagreements is crucial for the budget's approval. The situation underscores the complexities of coalition governance and the need for consensus-building to achieve fiscal stability.

Location: South Africa

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