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Every February the South African Minister of Finance tables the national budget speech to the members of Parliament, the president & most importantly citizens of South Africa.
In this video, we explain the Budget process in South Africa and why you should care about the budget speech.
0:00 Introduction
0:22 Welcome To Our Channel
0:54 Table of Contents
1:26 Subscribe To Our Channel
2:13 What is the National Budget.
2:43 Why governments prepare budgets.
3:47 An overview of the laws governing the budget process in South Africa
7:38 Key Documents used in the national budget process
9:27 Government Budget Process in detail.
14:26 The Budget Calendar
18:34 What happens after the Budget Speech
19:55 Reasons why you should care about the National Budget Speech
21:26 End
What is the National Government budget?
A national budget is essentially the budget of the country.
A national budget budget represents all the money received by the government, which includes taxes, investments, loans & donations &how government intends to spend such money on government services.
Why do government prepare budgets?
The money that government receives, is usually limited. That is why the government would allocated these limited resources to various governmental activities that are strongly aligned with the constitutional mandate & the priorities of the governing party.
These activities include government services such as national defense force, government infrastructure, education, sports, arts and culture, on social and welfare programs such as Social grants, or how its intends to repay its debt.
Therefore every item of expenditure must be well thought-out and properly allocated. And must be according to the law.
The Constitution of South Africa which provides for the equitable share and allocation of revenue among all 3 spheres of government.
The Constitution further provides that budgets and budgetary processes must promote transparency, accountability and the effective financial management of the economy, debt and the public sector.
The Constitution further provides that there must be an Act of parliament which proscribes
(a) the budget formats;
(b) the timelines and deadlines when such budgets must be tabled; and lastly
(c) that such budgets must reflect the various sources of revenue and how the proposed expenditure complies with national legislation.
The Public Finance Management Act:
The PFMA gives the National Treasury the powers to manage the budget preparation process; as well as, control over the implementation of the annual national budget, including any adjustments thereto.
The PFMA further provides for the tabling of the national budget annually by the Minister of Finance to the National Assembly
Division of Revenue Act (DORA) provides for the allocation of funds between the various spheres of government, as required by the Constitution of the Republic of South Africa, 1996.
The Act also provides for the equitable division of the government’s revenue, which has been raised nationally, among the national, provincial and local levels of government for the financial year.
The Appropriation Act which provides for the allocation of money from the National Revenue Fund of the State and prescribe conditions for the spending such funds.
This Act also allows for the appropriation of money from the National Revenue Fund for the requirements of the state for the financial year.
It also prescribes conditions for the spending of funds withdrawn for the financial year before the commencement of the Appropriation Act for that financial year and to provide for related matters.
The Intergovernmental Fiscal Relations Act which essentially translates into promoting cooperative governance between the three spheres of government.
There is also the Money Bills Amendment Procedure and Related Matters Amendment Act allows Parliament, amongst other things, to amend the budget.
The Act provides the procedure for Parliament to amend the budget, which includes the annual Division of Revenue Bill, the Annual Appropriation Bill & the Adjustments Appropriation Bill, revenue Bills, such the annual Taxation Laws Amendment Bill & other Bills.
Budget Terms Explained
Medium-Term Expenditure Framework (MTEF)
Minister’s Committee on the Budget (MCB)
Medium-Term Budget Policy Statement (MTBPS)
Budget Review and Recommendations Reports (BRRRs)
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Disclaimer:
This publication and the information included in it are not intended to serve as a substitute for consultation with a professional. Specific issues, concerns and conditions always require the advice of an appropriate professional advisor. The use of the contained information is at the user's own discretion.