An ongoing topic of this column has been the amount of time it takes for stuff to happen in SA. What on earth was the ANC doing with smaller parties for two and a half weeks before releasing a statement that they didn’t actually like VAT? They haven’t got around to any detailed agreements on what to do next, just lobbed ideas that are largely already in the public domain in the National Treasury’s general direction.

The clock is ticking. Parliament is hardly a star pupil in terms of handing its homework in on time — as has been seen with the time taken to deal with the burnt-out husk of the National Assembly chamber, the Nkandla issues, electoral reforms on independent candidates … the list goes on. Yet the law is clear that we need to have a budget by end-July, though it would not be beyond parliament to just glide past this.

If expenditure-related legislation is not passed by end-July an austerity ratchet kicks in that limits the amount of spending, essentially to the amount spent in the previous year. Given inflation and that no new programmatic spending can be undertaken, this means large cuts in real terms. Already the delays mean new spending cannot start.

Is this an incentive to get on with it after the May 21 budget? On the surface it might be and there is much talk from the ANC on the need to get things done. But talk is cheap, especially when faced with unity government members (now more broadly defined) that want to make their mark on Budget 3.0 in terms of content, and more broadly to assert their primacy on the process. Sticking to time may well fall to second place in favour of political wrangling, or indeed third place after the evident general pace of things.

The role of the law and clearly defined process in all this has been fascinating to watch and more so as Budget 2.0 died a death. The assertions that the Rates Bill tabled before the court case had any legal standing whatsoever to block VAT was completely roll-on-the-floor hilarious. Similarly, the ANC’s narrative on the sequencing of events was equally untenable and should have died a final death in the minister’s settlement request papers, but even then did not.

The battle being waged by the EFF and the DA is a simple one, posing a question about the likely long-term continued decline of the ANC: can logic triumph over spin? Ultimately, parties die when they are seen to not have a real and meaningful, reality-based conversation with the electorate, whether through the media or through a branch network.

The law is exceptionally clear on process timelines for the budget, as it is (at least pending the ongoing court case) on when and how tax changes work. The DA is continuing with its case against the minister’s unilateral VAT hiking powers, and the EFF may well challenge the extent of the powers committees have to amend the revenue and expenditure choices of parliament around the framework the National Treasury proposes. These are all important tests for certainty and clarity. But process grinds on.

An interesting question arises about what happens next and the centre of gravity of the political economy on questions of fiscal policy stance. The past 30 years have seen conservative fiscal policy not because that was necessarily the view of the ANC, but because the party refused to meaningfully engage with the momentum of the Treasury train.

Friendly leftists have often quietly asked me how the ANC manages to talk left but be so fiscally conservative, and they never quite believe me when I say it simply doesn’t engage with what the Treasury is promoting in cabinet or in ANC structures. Of course, this doesn’t mean there haven’t been problems with the fiscal stance over the years, but that broadly the fiscal stance has been kept far tighter than might at first blush be assumed.

The communications of the past week or so suggest that all parties want to be seen to be conservative in terms of their broad fiscal stance, but then start chipping away at that when poked — wanting more spending here and there. The larger problem is that growth is going to be far weaker than the Treasury forecast in February. We expect a R25bn hole added to the R13.5bn hole for this year, arising from the removal of the VAT increase. The parties are talking about filling a R13.5bn hole, not a R38.5bn hole, and we should not forget that more cuts will be needed next year as the hole from the second proposed 50 basis point VAT hike appears. This will further strain the politics, perhaps beyond breaking point.

The Treasury ultimately has the backstop of market and ratings agency discipline behind it, but the market is too sanguine on the logistical and political complexity of what comes next. If politicians really want to walk off the reservation over what deficit is fundable in bond markets, and play with higher debt as a share of GDP, they will get sent a signal soon enough. For sure, many in the ANC caucus and elsewhere do not believe in ratings agencies, or complain about being beholden to the bond markets. This of course misses the point that they can do whatever they like, but must live with the consequences.

After all, the medium-term budget policy statement is not far off, and parliament will soon realise that the budget is a recursive game of choices and reactions of the market. This may well be the most important lesson that ends up getting learnt.

• Peter Attard Montalto leads on political economy, markets and the just energy transition at Krutham, a SA research-led consulting company.

This article first appeared in Business Day.