Never mind election promises, any incoming (coalition) government will be subject to Budget realities

15 Aug 2023

Politicians on the campaign trail for the 2024 general election will promise voters the stars and the moon. But Budget rules and processes leave little wiggle room — also if, as many pundits and pollsters predict, a coalition government takes over.

The governing ANC is planning to hold next year’s general election on 22-23 May, it is understood, as the DA also focuses on a May poll. That’s in line with the past two national and provincial elections that were held on 7 May and 8 May in 2014 and 2019, respectively.

In 2019, the transition to a post-election administration was delayed as then newly elected President Cyril Ramaphosa took several days longer than initially indicated to announce a Cabinet amid factional crosswinds and trade-offs.

That meant the Appropriation Bill, effectively the Budget, which traditionally is adopted in June, was adopted only after an intense July. It had been put back on the parliamentary agenda on 27 June 2019 after a post-election State of the Nation Address (Sona) and debate.

In 2024, such stalling could stretch further — particularly amid coalition negotiations, regardless of whether those are for an ANC-led coalition on the back of the 46% to 47% polling support pundits predict for the now governing party, or an opposition coalition government based on the Moonshot Pact talks.

But the Budget would have been set by the ANC in late February. And any adjustments to allocations can only be brought in October’s Medium-Term Budget Policy Statement (MTBPS), according to the Public Finance Management Act.

That’s a hard reality underscoring electioneering on the campaign trail.

No immediate wiggle room

The Public Finance Management Act (PFMA) allows Parliament to adopt the Budget after the start of a new financial year. But while allocations can be accessed in the meantime, they can’t just be changed.

“Funds may be withdrawn in accordance with this section from the relevant Revenue Fund for the services of the state or the province concerned during that financial year as direct charges against the Fund until the budget is passed,” says section 29(1) of the PFMA, adding that these funds, “may be utilised only for services for which funds were appropriated in the previous annual budget or adjustments budget”.

Funds of up to 45% of what was appropriated in the previous year’s Budget may be withdrawn in the first four months of the new financial year, according to Section 29(2)(b)(i). After that, it’s capped at 10% every month.

Regardless of any potential coalition negotiations that may arise after the 2024 elections, and delays by politicians politicking, for 10 months of this financial year the existing legislative framework, including the Money Bills Amendment Procedure and Related Matters Act, provides the necessary backstops and continuity.

But no matter how much any political party clamours, the PFMA does not allow changes just because there’s been an election between February’s tabling of the Budget and its subsequent adoption.

And that means little to no immediate wiggle room on the structure of government, even if establishing a new ministry or splitting an existing one is done by presidential proclamation.

Changes to February’s allocations or shifting money to follow the transfer of function when ministries are changed only happen from the October MTBPS, according to the PFMA’s section 30(20(e).

Even if the ANC returns to government without needing coalition partners, a real possibility exists that the adoption of the Budget may be pushed back beyond July as happened in the last national and provincial election year.

Parliament rose in March ahead of the early May 2019 elections. After the poll was formally declared by the Electoral Commission of South Africa, MPs took the oath of office on 22 May 2019. Later that day the National Assembly elected Ramaphosa as President — National Council of Provinces delegates were sworn in a day later — and then Parliament went into recess.

After delays in announcing the Cabinet, and various preparations for the new administration, the Sona parliamentary debate was concluded in late June 2019. And on 27 June 2019, that year’s Budget was put back on the Order Paper with a motion that revived the Appropriation Bill, “and resumes proceedings on the Bill from the stage it reached…” before the May elections.

Some three weeks later, on 23 July 2019, amid opposition criticism about the rush, the Budget that gave Eskom an amortised R150-billion bailout over 10 years was adopted in the National Assembly, and a week later, on 30 July 2019 by the National Council of Provinces.

Game on — within the rules

In 2024, the dynamics are set to be different as the ANC’s factional fault lines have shifted into more nuanced territory. Also, the possibility of retaining institutional memory among parliamentarians remains, at least until the release of the candidates’ lists, which in 2019 scattered significant institutional memory from parliamentary benches.

Parliament may rise as early as mid-March 2024 for the campaign trail in what has been described as South Africa’s most important elections since the 1994 democratic transition. That’s because the Easter weekend, which traditionally marks the end of the first parliamentary term, starts with Good Friday on 29 March.

While both the ANC and DA are planning their campaigns around a May election date, it’s up to the President to proclaim the actual date.

From then it’s game on — although politicians’ promises are tempered by realities of the Budget legislative framework and constitutional governance rules and processes. DM

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No immediate wiggle room

Game on — within the rules