The DA and the ANC are locked in a fierce battle over the passing of the Budget, with the future of the Government of National Unity (GNU) hanging precariously in the balance.

A day before the Budget was due to be passed in the National Assembly on Wednesday, at the heart of the dispute is the proposed 0.5% Value-Added Tax (VAT) increase, which the DA vehemently opposes.

The party has demanded that the ANC repeal the National Health Insurance (NHI), Basic Education Laws Amendment (BELA), and Expropriation Acts in exchange for its support of the Budget.

However, according to sources close to the ANC, the party did not budge on the DA’s proposal, but was still engaging with it to have the VAT increase temporarily scrapped while they proceed with the negotiations.

The source added that the ANC, which is the largest party within the GNU, followed by the DA, was considering not imposing a VAT increase a day before the Budget is due to be passed.

ANC Secretary-General Fikile Mbalula, while briefing the media following his party's National Executive Committee (NEC) meeting over the weekend, warned that if no agreement is reached, the GNU may have to be reconfigured.

"If we use the Budget for political scoring, that would lead to situations where the GNU itself, given the outcome, may have to be reconfigured," Mbalula cautioned.

Although he could not divulge the status of the negotiations, Mbalula emphasised that the ANC was committed to the GNU, but stressed that the majority of its partners were crucial.

"The ANC is not wielding an axe to cut people from the GNU. The people will cut themselves out, and we will proceed... but if people come with political agendas, it will affect the GNU in the long term," he warned.

Mbalula said both sides had been locked in negotiations from Monday night until Tuesday morning.

“We have a team that has been engaging with political parties in the National Assembly from late last night until the early hours of this morning, engaging in matters of the Budget, primarily with all partners in the GNU and even those that are not partners of the GNU.

“We recognise that the conditions that we are now operating in are not the same as before. We are now operating under the conditions of power sharing.

“There have been issues among the GNU parties around the issues of VAT, as well as those parties that are outside… We need the Budget to be passed in order for us to proceed to govern and stabilise the economy and pursue economic growth,” Mbalula said.

However, Mbalula also said the two parties were close to an agreement, which was mirrored by DA national spokesperson, Karabo Khakhau.

“Our negotiating team has told us that conversations with the ANC are more constructive right now and may have found each other but there is no conclusive agreement that we have signed on,” Khakhau said.