EXPLAINED: Understanding the Budget process and what happens next

The budget process in South Africa ensures that government spending aligns with national priorities, maintaining accountability and transparency. It involves Parliament, the Minister of Finance, and the public, and goes through several stages before becoming law.

What is the Budget process in Parliament?

The budget process is a cycle where the government's revenue and spending plans are debated and approved by Parliament. The Minister of Finance presents the budget, but it is not final until it undergoes scrutiny, debate, and potential changes.

Key stages of the Budget process

Drafting & Planning

National Treasury sets spending guidelines

Government departments submit draft budgets

Parliament reviews and provides oversight

Legislative process

Minister of Finance presents the budget

Parliament debates the budget and holds public consultations.

The budget bills are passed.

Implementation

Once approved, government departments use the funds

Parliament monitors spending

Auditing and assessment

The Auditor-General reviews spending

Parliament holds departments accountable

Voting on the Budget Bills

MPs vote on different budget-related bills, not the entire budget document

Voting order

The budget-related bills are considered in the following order:

Fiscal Framework and Revenue Proposals: Sets economic policy and spending limits.

Division of Revenue Bill: Decides how funds are shared between different government levels.

Appropriation Bill: Allocates money to specific departments.

What Happens if the Budget isn't passed by April 1?

If the budget isn’t passed by April 1, government spending continues based on the previous year’s budget. However, the Fiscal Framework should be passed before April 1.

Timeframe for Parliament to vote on the Budget

The Fiscal Framework must be approved within 16 days of the budget being tabled.

Other bills follow a set process to ensure approval before the new financial year begins.

Spending before Budget approval

The government can temporarily spend up to 45% of the previous year's budget while waiting for the new one to be approved.

Voting on departmental Budget

Some votes, like the Division of Revenue Bill, can happen in May, even if other parts of the budget are still being finalised.

Government spending without Budget approval

The government can’t implement the new budget until it’s approved by Parliament. It must follow the previous year’s allocations.

Voting on the Fiscal Framework

The Fiscal Framework must be approved within 16 days, with some flexibility for delays.

Can Parliament change the Budget?

Yes, Parliament can amend the budget, but any changes must comply with the law and consider government priorities.

What happens if the Budget is rejected After April 1?

The government continues spending under legal provisions but doesn't need to "repay" any money spent. Adjustments are made after the final budget approval.

How does VAT fit into the process?

Changes to VAT or taxes are handled through the Taxation Laws Amendment Bills and take effect once approved.

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