In a heated showdown over South Africa’s budget, DA leader John Steenhuisen takes a firm stance against a proposed VAT hike, arguing for a pro-growth, pro-jobs approach. Is this a turning point in coalition politics?
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BizNes Reporter ___STEADY_PAYWALL___
South African politics just witnessed a defining moment as the Democratic Alliance (DA) took a firm stand against the proposed 2% VAT hike, forcing a postponement of the budget announcement. DA leader John Steenhuisen hailed this as a victory for the people, positioning it as a milestone in coalition governance.
During a conversation with BizNews’ Bronwyn Nielsen, Steenhuisen described the delay as a “watershed moment” that proves Parliament is no longer a rubber stamp for the ruling party’s economic policies. Instead, he argued, the incident demonstrated the power of coalition politics, where multiple voices must be considered before major financial decisions are made.
The VAT battle: A fight for ordinary South Africans
The DA’s resistance to the VAT increase was rooted in its impact on struggling South African households. Steenhuisen pointed out that citizens are already facing immense financial pressure due to inflation and the rising cost of living.
“We mustn’t underestimate the impact of these things on the ordinary lives of people,” he warned. “We’ve seen in Kenya what happens when decisions are made thinking that people will just accept it.”
The proposed increase, if implemented, would have placed further strain on consumers and businesses alike. With economic growth stagnating, Steenhuisen argued that higher taxes were not the answer. Instead, he emphasized the need for bold, pro-growth reforms that would stimulate economic activity rather than burden citizens with additional levies.
Coalition politics in action
Steenhuisen’s remarks also highlighted the evolving dynamics within South Africa’s coalition government. With multiple parties at the decision-making table, the ANC’s ability to push through policies unopposed is weakening.
“The fact that the DA and other parties, including some within the ANC, put their foot down clearly shows that this is a far healthier situation,” he said.
However, the DA leader did acknowledge concerns about the timing of the dispute. Nielsen questioned why the issue wasn’t resolved before Finance Minister Enoch Godongwana was set to present the budget. Steenhuisen responded that negotiations had been ongoing but that the magnitude of the fiscal shortfall—around R60 billion—meant last-minute decisions were inevitable.
The Argentina model: A radical approach?
In a striking comparison, Steenhuisen referenced Argentina’s controversial economic reforms under President Javier Milei. While acknowledging that Milei’s approach is polarizing, he suggested that South Africa could learn from his willingness to take bold action.
“Now, you may or may not like Mr. Milei and what he’s doing in Argentina, but it’s bold, it’s new, and it’s bringing down inflation and creating growth,” Steenhuisen said. “South Africa similarly needs to take the big, bold, brave decisions that will be required to promote growth.”
This means moving beyond the usual options of either cutting budgets or raising taxes. Instead, Steenhuisen argued for policies that create real economic expansion, reducing the need for endless taxation debates.
The tough choices ahead
Beyond the VAT battle, Steenhuisen pointed to other areas where government spending must be reevaluated. One key focus is the public sector wage bill, which continues to grow despite mounting fiscal pressure. He supported early retirement schemes and a more efficient civil service but cautioned against reckless cuts that could destabilize essential services.
“We can’t do everything,” he stated. “We need to focus on what government can and must do well, and fund those things properly.”
Another major concern is South Africa’s expenditure on international peacekeeping efforts, such as the R5 billion spent on operations in the Democratic Republic of Congo (DRC), even as the country faces its own financial crisis.
“These are the tough choices that need to be made,” Steenhuisen said. “We have to put South Africans first.”
What’s next for South Africa’s budget?
As the budget debate continues, the next few weeks will be critical. Steenhuisen called for pragmatic negotiations, where no single party dominates the process. Instead, he emphasized the importance of diverse ideas shaping the final budget.
“No one party, whether it’s the DA or the ANC, has a monopoly on good ideas,” he noted. “We need a budget that is pro-growth and doesn’t burden citizens. That should be the ultimate goal.”
With the VAT increase off the table for now, the battle shifts to finding sustainable solutions for South Africa’s economic woes. Whether the DA’s push for growth-oriented policies will succeed remains to be seen, but one thing is clear: the era of unchecked ANC decision-making is over.
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