How budget postponement could hurt service delivery

The aftermath of the shock budget postponement by finance minister Enoch Godongwana after a cabinet tiff over a proposed VAT increase last week will be felt by all government departments and parliament.

Parliamentary budget process director Prof Dumisani Jantjies believes this hurdle will introduce practical and procedural challenges.

“Though the constitution does not stipulate a fixed deadline for presenting the budget, section 213 states funds may only be withdrawn from the National Revenue Fund under the authority of an act of parliament [Appropriation Act].”

Section 27 of the Public Finance Management Act (PFMA) mandates that the budget be tabled in parliament before the start of the fiscal year (April 1), except in exceptional circumstances that justify a delay. The PFMA also requires the budget be approved in a timely manner to ensure the continued operation of government functions. 

However, in cases where the budget tabling is delayed beyond the start of the fiscal year, section 29 of the PFMA provides for interim funding.

This allows the government to use a portion of the previous year’s appropriations until the new budget is passed, ensuring essential government services remain funded.

Despite this interim funding, Jantjies said there were constraints.

“Departments must prioritise core functions, deferring new initiatives until parliamentary approval is granted. Provinces and municipalities dependent on national transfers may experience cash flow pressures if delays extend beyond the 45% threshold, particularly in high-cost sectors such as healthcare, education and infrastructure. Prolonged delays in the budget process could strain departments' ability to manage operational costs, potentially leading to service disruptions.”

This affects parliament’s budget review schedule and places pressure on its review process.

“Parliamentary committees rely on sufficient time to review departmental allocations and conduct oversight. A postponed budget reduces this time frame, limiting opportunities for debate and amendments, which diminishes the quality of legislative scrutiny.

“The rescheduled tabling of the budget on March 12 will set in motion a compressed timeline for parliament's budget review process, requiring careful management to ensure constitutional and legislative requirements are met without compromising the effectiveness of public finance management,” Jantjies said.

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