Budget postponement brings into sharp focus SA’s new coalition reality

The postponement of the Budget was, on balance, a positive sign. It suggests a moderate degree of pragmatism among the major players that is surprising, given how radically different the two largest coalition parties are. 

Last week’s postponement of the finance minister’s budget speech, which also delayed the tabling of the Budget (the 2025 Appropriations Bill) in Parliament, brought into sharp focus just how much the ANC’s loss of its overall majority in Parliament has changed how the executive is required to function.

Maybe the penny is only starting to drop now. Finance Minister Enoch Godongwana, for one, seemed not to have realised that the need to govern in coalition with other parties imposes significant political constraints on Treasury in the crafting of the Budget, and that it no longer enjoyed the kind of power and influence it had when the ANC had an absolute majority in Parliament.

At a press conference after the postponement, Godongwana spoke as if Treasury was not part of the coalition government at all, and was therefore not bound by the agreements and conventions of the coalition government.

When he declared that “we don’t negotiate the Budget”, and that “there is a President in this country, who must make those policy choices … that are best for the country”, he might have described how things were actually done when his party enjoyed an absolute majority in Parliament, but this is not how things ought to be done, nor how it needs to be done now, given the demands imposed by coalition government.

In fact, it is the Cabinet, not only the President, which decides collectively on the policy choices of the government (including the policy choices in the Budget), and currently that Cabinet includes 12 members who belong to parties other than the ANC.

The Budget is not an ideologically neutral document; it reflects a range of political choices that any given political party (and the party’s core voters) might feel so strongly about that they could not be seen to support it. It is no longer tenable to treat the Budget process as if it is entirely above party politics, or to act as if the Budget has nothing (or little) to do with democratic processes and outcomes.

Democratic accountability

The Constitution requires Parliament – the only directly elected democratic branch of government – to adopt the Budget, which becomes law only after it is passed. Parliament can also amend the Budget – although its ability to do so is circumscribed – or can vote down the Budget, which would require the finance minister to table a new Budget.

This infuses a necessary degree of democratic accountability into the process, and (in theory, at least) limits the ability of Treasury to introduce politically highly unpopular measures in a Budget.

The democratic Parliament has never amended or voted down a Budget, in part because for the past 30 years, the ANC enjoyed an absolute majority, and party discipline ensured that its MPs’ support for the Budget could be taken for granted.

In practice, this has meant that the finance minister could ignore Parliament, as long as he made sure the President was onside. As long as the minister retained the confidence of the President and ensured that the Budget did not entirely ignore his party’s most cherished pet policies, the finance minister had a relatively free hand to craft the Budget.

After last year’s election, this is no longer the case as the adoption of the Budget by Parliament is no longer a foregone conclusion. But before that, the Cabinet has to approve the Budget which in terms of the coalition agreement requires the approval of at least the ANC and DA Cabinet members.

Coalition partner support

It is therefore now part of the finance minister’s job description to craft a Budget that the Cabinet would support and Parliament might pass, and this might require negotiations with coalition partners to secure their support in Parliament for the adoption of the Budget.

In a coalition government, a minister of finance who dismisses the objections of coalition parties to aspects of a draft Budget out of hand and ignores the fact that this might alienate coalition partners whose support is needed to pass the Budget in Parliament, is not doing his or her job properly.

(This is so even when the coalition partner is as irritating and as entitled as the DA sometimes is.)

The postponement of the Budget has been widely criticised, but (in my view) not always for sound reasons. I am not convinced, for example, that the postponement on its own is a serious crisis or that it erodes trust in the government and reveals how unstable and unpredictable it has become.

This wrongly seems to assume that nothing much has changed with the formation of a coalition government, and that non-ANC coalition partners have no say in the important decisions of the government.

But if you understood that the ANC’s loss of its majority has had a dramatic effect on how government must act to make implementable policy decisions, the current fight about the Budget would not have come as a surprise.

The Budget is by far the most important piece of legislation passed by Parliament each year, as it determines (or reveals) the actual priorities of the government.

The minister of health, for example, can make as many fiery speeches as he wants about the government’s commitment to implement the NHI, but if this is not reflected in the amount allocated for this in the Budget, the minister’s words mean nothing.

Passing any legislation becomes difficult when no party enjoys a parliamentary majority, but given the stakes, the passing of the Budget each year is by far the most difficult thing the coalition government has to do.

Postponement a positive sign

But South Africa is not the first and will not be the last democracy in which a coalition government struggled to reach agreement on the Budget, or where the adoption of the Budget was delayed due to these disagreements. For now, the Budget drama is therefore not a serious crisis – although it could become one later.

I would go further than this and argue that the postponement was on balance a positive sign, signalling a grudging acceptance by some ANC leaders of the political realities created by their election loss.

The fact that the parties are now trying to resolve the problem is also encouraging as it suggests a moderate degree of pragmatism among the major players that is surprising, given how radically different the two largest coalition parties are.

While the minister of finance mishandled the matter by assuming he (not Parliament) had the final say on the Budget, and while this may have eroded trust in him, it will become a real crisis only if no agreement is reached and Parliament rejects a Budget then tabled by him.

But it would have been far worse if he had gone ahead with tabling a Budget that does not enjoy majority support in Parliament.

The postponement also raises my hopes that the Budget process might become more responsive to democratic pressures as a result of the ANC’s loss of its parliamentary majority. Put differently, there is some hope that future Budgets may over time better reflect the priorities and needs of the broader public – although this will largely depend on how coalition parties respond to the political dynamics created by the ANC’s loss of its majority.

Technocratic vs democratic responsiveness

The current approach to budgeting seems to be more technocratic than it needs to be, which tends to limit the influence of our democratic representatives serving in the Cabinet and in the legislature on the Budget, at the expense of unelected (if widely lauded) bureaucrats working at Treasury.

I would therefore argue – as a matter of principle – that inserting more democratic responsiveness into the Budget process would be a good thing – no matter which parties form part of the coalition.

The drama around the tabling and adoption of the Budget is also significant because it is the first real test of the stability and workability of the multiparty coalition government.

The brouhaha sparked by President Cyril Ramaphosa’s signing of the Bela Act and the Expropriation Act has been less significant than it seemed.

This is, in part, because the two pieces of legislation had been adopted by Parliament before the coalition government was established, which meant that the President had a constitutional obligation to sign the Bills – unless he believed them to be unconstitutional, in which case he could have referred the suspected unconstitutional clauses of the Bills back to Parliament to have them fixed.

The President could not, as so many people have suggested, delay the signing of the Bills or refuse to sign them merely because some of his coalition partners objected to the Bills or alleged that they were unconstitutional.

Moreover, the signing of the Bills  did not, as many again assumed, bring the Acts into effect, which means the signing of the Acts had no immediate legal effect (the Bela Act was finally brought into operation on 24 December last year after the coalition partners reached agreement on it, while the Expropriation Act is still not in effect.)

The DA made lots of noise about both Acts, but even it would have known that their signing was not the provocation it pretended this to be.

The Budget is different as it does pose a real test for the stability and longevity of the current multiparty coalition government. If the current disagreement is not resolved, it would be surprising if the coalition in its current form survives.

But even if it is resolved, it points to a seldom-discussed consequence of the ANC’s loss of its parliamentary majority, namely its likely impact on Parliament and specifically on the adoption of new legislation.

Passing legislation

It has become much more difficult to pass legislation as even if ANC MPs support a Bill, up to 22 MPs from other parties would be needed to reach a majority. Even amending existing legislation has become more difficult. We might, therefore, see a drastic drop in the number of Bills (at least of Bills introducing major policy changes) tabled in Parliament.

It is, therefore, not surprising that the multiparty coalition government has only tabled one Bill in Parliament since the government was formed (the Non-Stop Border Post Bill).

One private member’s Bill was also tabled after the election. All Bills tabled in Parliament before the May election automatically lapsed at the end of the Parliamentary term, but three of these Bills were revived after the election. Parliament has, however, not passed any of these Bills and only one is being processed.

As significant changes in policy usually require the adoption of new legislation, this suggests that one should not expect many major policy changes from the coalition government, even if it lasts for the full five-year term.

DA ministers will mostly continue to implement the policies adopted through legislation during previous ANC administrations, while ANC ministers will find it difficult to implement major policy changes (also those adopted by the party conference) in government.

How the government will deal with this problem, and whether it might result in damaging policy paralysis, is impossible to say at this early stage.

BACK TO TOP