South Africa’s nascent unity government faces a critical test as the Democratic Alliance (DA), the second-largest party, broke ranks and voted against the national budget.
The DA cited concerns over a proposed VAT increase, arguing it would disproportionately burden the country’s impoverished majority.
This defiance has cast a shadow over the government’s stability, formed after the African National Congress (ANC) lost its parliamentary majority.
The contested budget proposes a one percent increase to the Value Added Tax, implemented in two phases.
Finance Minister Enoch Godongwana expressed skepticism about the DA’s continued participation in the government following their dissenting vote.
Julius Malema, leader of the Economic Freedom Fighters (EFF), a leftist opposition party, celebrated the division, questioning the unity of the coalition.
The VAT hike aims to generate over 15 billion rand for essential public services like health and education.
However, critics argue that raising taxes on basic goods and services will exacerbate the financial strain on vulnerable populations, with over 20 million South Africans relying on welfare grants amidst a 32% unemployment rate.
The budget had already been adjusted due to reductions in foreign aid from the United States.
This budget clash highlights the deep ideological rifts between the ANC and the DA on crucial issues such as economic policy and social welfare.
Unexpectedly, ActionSA, a smaller party outside the formal unity government, voted in favor of the budget, ensuring its passage despite the DA’s opposition.
The future cohesion of South Africa’s unity government now hangs in the balance as these fundamental disagreements persist.