Irritation was visible on the face of Fikile Mbalula, the secretary-general of the ANC, when asked about a desperate plea from the business sector not to implode the grand coalition government.
In recent days, CEOs of the largest companies, including Investec’s Fani Titi, Discovery’s Adrian Gore, Anglo American’s Duncan Wanblad and Business Unity South Africa’s Busi Mavuso, had implored President Cyril Ramaphosa to “stay in the room; hold the line; keep building; compromise”.
The ANC’s national executive had been itching to eject the DA, the second-largest party in the government of national unity, after it voted against approving a much-hated budget that proposes hiking VAT from 15% to 16% over the next two years. But, the CEOs argued, failing to compromise would slam investor confidence and jobs.
It was a well-timed strategic move from the corporate sector. Arguably, it was the pivotal factor that chilled the ANC’s most destructive desires to oust the DA.
And Mbalula, clearly, wasn’t happy about it.
“Business is being erratic because they believe that they are the saviours, and that the most important person is the DA – it’s incorrect,” he said. The ANC, he said, is “not anti-business”. His party is neither socialist, nor capitalist, he said at a press briefing last week.
It is, of course, easy to say this. It’s easy to claim anything, in fact, when you’re a politician in an era where there is little consequence for egregious fibs. But Mbalula’s claim doesn’t stack up with the evidence.
His is a party that has vowed to implement a National Health Insurance plan that, experts say, would decimate private medical aids, cost taxpayers between R450bn and R800bn, and potentially lead to 38% of doctors emigrating. It has also passed an Expropriation Act likely to do little more than spook investors already concerned about the dilution of property rights.
If the test is “look at what we do, rather than what we say”, sadly for Mbalula, the one thing the ANC most emphatically isn’t, is “pro-business”.
Mbalula’s allegation that business is “erratic” stems from his view that the CEOs are wholly in the camp of the DA, a party that – alongside two radical parties, Jacob Zuma’s MK Party and Julius Malema’s EFF – chose not to support the budget.
It’s a deeply revealing slip, illustrative of how the ANC’s secretary-general prioritises loyalty above common sense, arguably the party’s achilles heel for the past two decades. That has led it down the ruinous path of appointing corrupt cadres to pivotal positions in state entities and refusing to axe them when it all went south.
The truth, of course, is that if you’re serious about doing what’s right for the economy, you would vote against a budget seeking to impose a VAT hike, and for a proposal slashing pointless state spending. But, if you’re serious only about playing politics, you’ll see anyone who votes against your plan to leech more blood from taxpayers as a traitor.
It is clear many in the ANC think precisely this way. These ANC members were expecting the party to boot the DA from the coalition after it chose not to support the budget – and are now hopping mad that this hasn’t happened.
As one ANC leader told City Press, unless the DA blindly supported the ANC’s budget, “this is just a meaningless relationship”. Another said the ANC should already have taken the decision to eject the DA – “it’s as if someone is trying to please the DA”, he said.
U-turn on VAT?
Well, the very bad news for those in the ANC who would blow up the grand coalition is that talks on Saturday between the ANC’s top brass, led by Mbalula, and the DA’s, led by Helen Zille, appear to have gone swimmingly.
Zille, not one to sugarcoat events, said the meeting was “constructive”, with both the ANC and DA “speaking respectfully yet frankly about the need to resolve the impasse over the budget and to enhance co-operation between the two parties”.
As it happens, this meeting – which would not have happened had the ANC hawks had their way – may be the straw that breaks the back of finance minister Enoch Godongwana’s VAT hike.
While Zille was clear that “a VAT increase is unaffordable in the absence of meaningful reform”, the ANC is now apparently looking at ways to scrap that tax hike, and find the money elsewhere.
One ANC leader told the Sunday Times as much: “There is nobody who says VAT is the answer, the only thing is where are the alternatives.”
Godongwana, who expects this tax hike to take place, must simply “find alternatives”, he said.
With just more than two weeks to go until the tax hike is due to happen, a late reversal will nonetheless cause chaos for service providers such as the banks and cellphone companies, which have already rejigged their systems to incorporate the new charge.
Still, avoiding a tax hike, with its longer-term chilling effect on the economy, is the better approach. It will be one way in which the ANC can demonstrate to the business sector that it is, at least in this instance, willing to take the saner approach of examining its wasteful spending, rather than simply opening its mouth wider.
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