Government of National Unity (GNU) partners the Inkatha Freedom Party (IFP) and the African National Congress (ANC) held Budget impasse discussions on Thursday, and affirmed their commitment to the coalition government, as well as a view that the May 1 value-added tax (VAT) increase is a “temporary short-term intervention”.

The ANC is meeting with parties in and out of the GNU amid tensions in the new government, following the passing of the Budget in March.

The GNU has been rocked by threats of reconstitution, with the ANC, Democratic Alliance (DA) and other parties at loggerheads over the VAT increase proposed in the Budget.

The ANC met with ActionSA on Wednesday, and both parties expressed a commitment to shield South Africans from the May 1 VAT increase and affirmed that there was no discussion about a reconstituted GNU.

Rumours of ActionSA joining the GNU were dismissed by ActionSA leader Herman Mashaba on Tuesday when he said that his party would not give any consideration to the proposal of reconstituting the GNU to include ActionSA until the issues of the VAT increase and income tax bracket creep had been resolved.

The IFP and ANC’s meeting was led by IFP leader Velenkosini Hlabisa and ANC secretary-general Fikile Mbalula, and both parties lent support to the revised Budget that was adopted by Parliament.

“We emphasise that the Budget is fundamentally pro-poor, incorporating robust social safety nets to protect vulnerable families. This includes, among other measures, the expansion of zero-rated VAT items to ease the financial burden on low-income households. The Parties affirm that the VAT increase is a temporary short-term intervention and agreed that the National Treasury must urgently explore alternative revenue-generation strategies to mitigate the impact of this marginal increase on consumers,” the IFP said in a statement.

Owing to South Africa’s economic challenges, both parties dismissed additional government borrowing as an option and said the current arrangement was the most viable for South Africa’s economic stability and long-term development.

The IFP said it was set to meet with the DA on Sunday as part of its aim to strengthen cooperation and consensus-building in the GNU.