Parliament on budget frequently asked questions

The budget process in South Africa is one of the most critical functions of Parliament, ensuring that government spending aligns with national priorities while maintaining accountability and transparency. This guide provides an overview of how the budget process works, the different stages involved, and the role of Parliament and the public in shaping it.

1. What is the Budget Process in Parliament?

The budget process is a structured cycle where government revenue and spending are planned, debated, and approved by Parliament. While the Minister of Finance presents the annual budget, it is not a final decision but rather a proposal that undergoes scrutiny, debate, and possible amendments before approval.

The budget is not a single document but a set of interrelated instruments that undergo parliamentary and public processes before becoming law.

2. What are the Key Stages of the Budget Process?

Drafting & Planning (Formulation Stage)

• The National Treasury issues spending guidelines.
• Government departments submit draft budgets based on these guidelines.
• Parliament provides oversight through committees and budget review reports.

Legislative Process (Approval Stage)

• The Minister of Finance tables the budget in February.
• Parliament scrutinizes and debates the budget.
• Public consultations take place before the budget bills are passed.

Implementation

• Once approved, the budget is implemented.
• Government departments use the funds for programs and services.
• Parliament monitors spending through oversight committees.

Auditing & Assessment

• The Auditor-General reviews government spending.
• Parliament holds departments accountable for financial performance.
• Reports are published, and corrective actions are taken where necessary.

3. When Do MPs Vote on the Budget Bills?

MPs do not vote on the budget as a single document but rather on different budget-related bills that follow a structured process.

4. Order of Voting on Budget-Related Bills

The budget bills and related instruments tabled by the Minister are considered in the following order:

1. Fiscal Framework and Revenue Proposals

   • Establishes economic policy and revenue projections.
   • Sets the overall limits for government spending.

2. Division of Revenue Bill

   • Determines how funds are shared between national, provincial, and local government.

3. Appropriation Bill

   • Allocates money to specific government departments and programs.

Each bill must be passed before moving to the next stage.

5. What Happens If the Budget Is Not Passed by April 1?

If Parliament does not pass the budget by April 1, the Public Finance Management Act (PFMA) allows government spending to continue based on the previous year’s allocations.

• The Fiscal Framework should ideally be passed before April 1.
• Government can continue spending as prescribed by the PFMA while awaiting final approval.

6. Is There a Timeframe for Budget Approval?

Yes. The Money Bills Amendment Procedure and Related Matters Act provides specific deadlines:

• The Fiscal Framework and Revenue Proposals must be adopted within 16 days after the budget is tabled.
• The other bills follow a structured process to ensure completion before the new financial year begins.
• Some flexibility exists in case of delays.

7. Government Spending Before Budget Approval

When does the provision allowing government to spend up to 45% of the previous budget take effect?

The PFMA allows the government to continue spending temporarily based on the previous year’s allocations until Parliament approves the new budget. This ensures that essential services continue without disruption.

Can MPs vote on departmental budgets in May if the overall budget framework is not yet approved?

Yes. Some votes—such as the Division of Revenue Bill—can happen in May, even if other budget parts are still being finalized.

• The Fiscal Framework and Revenue Proposals require a one-third quorum, with a majority vote.
• The Division of Revenue and Appropriation Bills need at least 201 MPs present, with a majority vote for approval.

Can the government start spending based on the new budget before Parliament approves it?

No. Until Parliament approves the budget, government spending must follow the previous year’s allocations. New budget allocations cannot be implemented without approval.

8. Legislative Considerations and Amendments

When do MPs vote on the Fiscal Framework?

The Fiscal Framework should be adopted within 16 days after being tabled. However, the law provides flexibility if delays occur.

Can Parliament change the budget?

Yes. Parliament has the power to amend the budget, but any changes must:

• Comply with the Money Bills Amendment Procedure and Related Matters Act.
• Consider government priorities, economic stability, and spending limits.
• Use the Budgetary Review and Recommendation Reports (BRRRs) for suggested amendments.

If the budget is rejected after April 1, does the government have to repay any money spent?

No. If the budget is delayed:

• The government continues spending under legal provisions.
• It functions like an overdraft until Parliament finalizes the budget.
• No actual "repayment" occurs, but adjustments may be made once approved.

How does VAT fit into the process if the budget is delayed or amended?

Changes to VAT or taxation do not require direct repayment. Instead, tax adjustments follow the Taxation Laws Amendment Bills, guiding revenue collection. Any new tax rates or adjustments only apply prospectively once approved.

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