Masondo raises state capacity urgency as parliament adopts Appropriation Bill

TimesLIVE

5 days ago

Deputy finance minister David Masondo says the Appropriation Bill before parliament has to be approved urgently or the national government cannot disburse funds from May's budget and this will increasingly hamper the government's ability to undertake authorised spending.
He was addressing parliament on Wednesday, as the National Assembly adopted the main Appropriation Bill with 262 MPs in support and 90 against. He said the bill will allow the government to spend R1.2-trillion on basic services, social grants and infrastructure projects to improve the lives of all South Africans.
'We must not delay the passing of this bill or object to it. Because delays in passing this bill carry two consequences. The first is that without passing this bill, the government will be without authority or permission to spend beyond last year's allocation. As a result, the government will not fully provide services, including public servants.
'In the absence of the Appropriation Act, the government may only spend 45% of the previous year's budget until the end of July, which is next week. And thereafter, the government can only spend 10% per month of the previous appropriated budget. Our estimation is that, overall, by October, the government will be without authority when we reach 100% of last year's appropriation.'
He said this had implications for newly presented spending items, including R6.7bn for compensation and essential services in health to hire 800 doctors, the R400m home affairs digitisation programme, addressing shortages in medical goods and R5.1bn for education compensation and early childhood development.
'The second implication of delays in passing this budget is that critical priorities, new priorities, cannot be funded. These priorities include the R4bn for infrastructure for passenger rail transport to modernise signalling technology systems that will improve service, frequency, safety and efficiency.'
After the adoption of finance minister Enoch Godongwana's 2025 budget in May, the Appropriation Bill determines the allocations from the budget to the various departments in the national government. For the first time, it took the finance minister three attempts to table a budget.
The National Assembly plenary, to consider the Appropriation Bill, also considered the budget votes of all national government departments under the GNU, lasting more than eight hours at the Cape Town International Convention Centre.
On the same day, National Treasury released a statement saying South Africa's budget process has not kept pace with the country's fiscal and political realities. It issued the medium-term expenditure framework technical guidelines 2026 in terms of the Public Finance Management Act to prescribe the format for preparing an annual budget.
'A review of the budget process revealed critical limitations of the process, including fragmented decision-making, poor policy-budget alignment, and weak consensus on trade-offs in a context of competing priorities and limited fiscal space.
'The guidelines reaffirm government's commitment to a more disciplined, transparent, and strategically aligned budget process that supports South Africa's long-term fiscal objectives and national development priorities.'
Earlier in the plenary on Wednesday, ANC chief whip Mdumiseni Ntuli moved that the house adopt the report on the bill. MK Party MP Tshikani Makhubele, EFF MP Nontando Nolutshungu and UAT MP Wonderboy Mahlatsi immediately objected to Ntuli's motion.
Tabling the bill report for adoption, standing committee on appropriations chair and BOSA MP Mmusi Maimane said the budget took place in severely constrained economic conditions of low growth, limited fiscal resources, high unemployment and enduring inequality.
'I want to urge that going into the next cycle of budget, please let us ensure that we have established our priorities, we are clear where the economic reforms are, we budget accordingly and create plans that can ensure that the budget process is smoother and that the people of South Africa can experience the fullness of participating in the contribution of the Appropriation Bill.'
He said 22 cents of every rand in the fiscus goes to debt-servicing costs, and the social wage continues to take up a significant amount of spending at 61%. He said South Africa must ensure that it creates room in the fiscus for investment in infrastructure, small business support and innovation.
'If we are not careful in how we prioritise budgeting ... in the outer year of this medium-term, we will be spending more on social grants than we do ... on any other economic area. It is also deeply concerning that ... 1% of the total appropriation is spent on innovation and areas that improve growth.'
Maimane said while he welcomed the stimulus and added spending on doctors in the department of health's budget vote, the strain put on the medical legal claims pipeline was concerning. He urged that the government prioritise spending on education and responses to the termination of the US President's Emergency Plan for Aids Relief (Pepfar) funding.
ANC MP Soviet Lekganyane said the government, ministers and MPs must 'run barefooted [sic]' on behalf of ordinary South Africans to realise the fulfilment of the country's potential. He listed additional allocations to Sars and the Border Management Agency as key positive decisions.
MK Party MP Sanele Mwali said the budget and its appropriations were a missed opportunity to chart an alternative path for growth and prosperity for the South African people and ease the burden of rising living costs.
'We are in this situation because this government does not listen. We tried all we could to present alternatives to make people's lives better. But it's clear that you have a programme that seeks to oppress people, and that this government is controlled by people who were not elected in this house. That is why you oppress South Africans even though we present alternatives.'