National Treasury Assures Public: Critical Services Secure Despite Delayed Budget Approval

In response to these concerns, National Treasury issued a statement on Wednesday clarifying the legal framework governing government spending during this interim period.

The National Treasury has reassured the public that critical government services will remain unaffected despite the delayed approval of the 2025 national budget by Parliament. This year, the budget was tabled on March 12, deviating from the usual February schedule, sparking questions and concerns regarding the government's capacity to continue providing services while the budget is still under review.

In response to these concerns, National Treasury issued a statement on Wednesday clarifying the legal framework governing government spending during this interim period. The department cited Section 29 of the Public Finance Management Act (PFMA), which allows funds to be withdrawn from the National Revenue Fund (NRF) if the national budget has not been approved before the start of the new financial year.

Under this provision, the Treasury is authorized to withdraw funds from the NRF to ensure that essential government services can continue without interruption. The statement explained that these funds can only be used for services for which money was allocated in the previous year's budget or any adjustments made in the previous year's budget. Specifically, up to 45 percent of the total amount allocated in the prior budget can be accessed in the early months of the financial year, and thereafter, up to 10 percent per month can be withdrawn.

These withdrawals are subject to strict limits, ensuring that the total amount withdrawn does not exceed the total funds allocated in the previous budget. The Treasury emphasized that these funds are not in addition to the annual budget but are part of the appropriated funds for the current financial year. In this way, departments are able to meet ongoing expenses without waiting for the formal passage of the new Appropriation Bill.

Despite the fact that the financial year officially begins on April 1, the Appropriation Bill, which provides the legal framework for the national budget, is typically passed at a later date. This situation results in a period where government departments begin spending before the official approval of the new budget, a process that happens every year. As such, National Treasury clarified that departments will continue with their operations as normal, even though the budget for the upcoming year has yet to be finalized.

However, there are limitations on the types of spending allowed during this period. According to the Treasury, any funds withdrawn from the NRF cannot be used for new programs or projects. These funds can only be utilized for ongoing services and activities that were already funded in the prior year's budget. New policy initiatives, projects, or spending programs can only begin once the Appropriation Act for the current financial year is passed by Parliament.

The Treasury stressed that there is no reason for the public to be concerned about the delivery of essential services during this period. Social grants, healthcare services, education programs, and other critical functions of the government will continue uninterrupted. The department assured the public that despite the flexibility afforded by the Public Finance Management Act, it is committed to supporting Parliament to ensure the timely approval of the 2025 budget.

While there are legal provisions in place to ensure continuity in government services, the National Treasury's statement reiterated that the process of passing the budget is vital for the long-term financial health of the country. The Treasury further committed to working closely with Parliament to ensure that the final budget is passed as soon as possible to allow for the full and effective implementation of government programs for the 2025/26 financial year.

The National Treasury's statement serves as an important reminder that the delayed budget approval does not pose a risk to the delivery of essential services. Government departments will continue to function, with their funding secured through the provisions of the Public Finance Management Act, allowing them to operate smoothly until the formal budget approval process is concluded.