Pieter Faber | Executive | Taxation | South African Institute of Chartered Accountants (SAICA) | mail me |
We welcome the positive changes announced by the National Treasury on 23 July 2025. These changes should assist the country in creating a budget and budget process that is efficient and effective. They aim to address the needs of South Africa, its people and the unique challenges and trade-offs we face.
National Treasury announced that it will change the medium-term budget process for 2025. This relates to the 2025/2026 fiscal year that is currently underway. The treasury changes to the budget are driven by a desire to align with the country’s changing realities. They also incorporate learnings from Budget 2025 and inputs considered in this regard.
Key changes to the budget process
The key changes to be actioned are outlined in the 2026 MTEF guidelines. Similar changes are expected to apply to Budget 2026 for the 2026/2027 fiscal year.
Conceptually, the budget process historically could be summarised as follows:
National Treasury process management
*FFC is the Financial and Fiscal Commission, and PBO is the Parliamentary Budget Office
However, due to changes in the political landscape and the fiscal realities, Budget 2025 revealed more challenges than previous years. These challenges included misalignments created by the existing process. This process creates the incorrect impression that the National Treasury and the Minister of Finance are the sole custodians of the budget and solely responsible for its success or failure.
The timing of the budget compilation process
In reality, the National Treasury is the custodian of the compilation process. Parliament remains the ultimate approver and carries responsibility for the budget it approves, including ensuring alignment with constitutional prescripts.
The timing of the budget compilation process, including step approvals, created additional challenges. This review does not address the fact that parliament is left with little time to review, consult on and approve the budget.
The new budget process takes a more consultative approach. It also seeks to obtain approvals at key points in the process. This approach aims to avoid and minimise misalignment by key persons later in the process.
The treasury changes to the budget can be summarised as follows:
National Treasury process management
Treasury’s budget process changes welcomed as a step forward
We welcome the above treasury changes to the budget process. They will ensure that the treasury secures relevant buy-in before the budget process unfolds too far, allowing course corrections where needed without delaying the process.
We hope that steps like consulting with institutions will include the National Economic Development and Labour Council (NEDLAC), the FFC and other legally compelled consultation parties, as well as the PBO. The latter, as advisor to parliament, ensures earlier insights into policy direction and addresses core concerns before the budget is tabled. This ensures the budget is not a surprise and allows parliament the opportunity to apply their minds to complex facts in a complex environment.
The timelines for the 2026 Medium-term Expenditure Framework (MTEF) have been publicly published after cabinet approval on 23 July 2025. It is anticipated that a similar calendar and plan will apply to the budget 2026.
Understanding how timelines adjust when a specific step is not approved
As part of the public engagement on 15 August 2025 on the fiscal framework, it may be prudent to understand at which step the fiscal framework aligns with the economic policy. The current policy is the National Development Plan 2030, and the fiscal framework is the execution strategy for this. It is also important to understand how timelines adjust when a specific step is not approved and the previous steps must be redone, as happened in Budget 2025.
It is not the budget speech and documents that enable fiscal obligation. Rather, it is the broader execution plan underpinned by numerical data and principles. The “budget legislation” embodies and effects the budget as approved by parliament and enacted by the President.
In this regard, there are two sets of legislation. The first includes the Appropriation Bill, which determines what money is to be spent by various National Government departments and entities, and how much each receives. It also includes the Division of Revenue Bill, which divides the budget between the National, Provincial and Local governments.
Lastly, the Rates and Monetary Amounts Bill determines the tax rates applied to taxpayers for the coming tax year. The second set includes the Taxation Laws and Tax Administration Bills. These determine the scope of specific taxing provisions or allowances and regulate SARS’ and taxpayers’ rights and obligations.
In conclusion
Both sets of bills are approved in line with parliamentary processes. Parliament, as the constitutional representative of the people of South Africa, seeks to quality control government proposals. It also measures these proposals against constitutional requirements for responsible spending, debt management, economic growth and fair tax administration. Because South Africa is a participative democracy, parliament is compelled to consult with the public. It has a model and framework for this.
Some processes are time-sensitive. Public comment on the budget is usually due within three business days. For the second set of legislation, the comment period is usually two to three weeks. These timelines may require review similar to the treasury changes to the budget process.
We look forward to the new consultative budget process managed by the National Treasury. We also look forward to participating in it. Similarly, we hope that any learnings can, where applicable, be transferred to the parliamentary legislative process. This will ensure enhanced consultation and consensus that deliver a better outcome and life for all South Africans.
