The finance department has been backed into a corner by the ANC, raising fears of the state ratcheting up debt.

The National Treasury has few options to stabilise public finances after the ANC shut down most of its proposals aimed at cutting government expenditure and raising revenue.

For the most part, the ANC is against the Treasury increasing taxes (mainly VAT by two percentage points) in February (months before the national election), permanently withdrawing the R350-a-month grant scheme when it ends in March, and cutting the budgets of provinces.

It is also not warming to the Treasury's proposal to reduce compensation expenses in the state by asking public servants to accept voluntary severance packages and early retirement.

The options the Treasury is considering have been leaked to the media after a meeting between its officials and President Cyril Ramaphosa a few weeks ago to discuss the Medium-Term Budget Policy Statement (MTBPS) due on 1 November, and how to reform strained public finances. Since that meeting and others that have been held subsequently between Finance Minister Enoch Godongwana, trade unions and labour federations, the ANC has seen red.

The head of the party's economic transformation committee, Mmamoloko Kubayi, said Godongwana and the Treasury acted "illegally" by urging provincial government departments to cut their budgets, especially for crucial service delivery programmes in...