SOUTH AFRICA: THE NATIONAL ASSEMBLY PASSES THE 2020 APPROPRIATION BILL

SOUTH AFRICA: THE NATIONAL ASSEMBLY PASSES THE 2020 APPROPRIATION BILL

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Parliament, 13 June 2020 – The National Assembly (NA) during its hybrid plenary yesterday, passed the Appropriation Bill as required by Section 213 of the Constitution and section 26 of the Public Finance Management Act (PFMA). The plenary also considered the Bill’s accompanying Votes and Schedules.

The two sections require that Parliament must approve any withdrawal of money from the National Revenue Fund (NRF) for allocation and expenditure by state organs.
 
When passing the Appropriation Bill [B4 – 2020], the two Houses of Parliament – the NA and the National Council of Provinces (NCOP), authorise the allocation of money from the NRF to fund the state requirements for the 2020/21 financial year while also prescribing conditions for spending the funds to be withdrawn for the 2021/22 financial year (before the commencement of the Appropriation Act) and to provide for matters incidental thereto.
 
Following today’s debate on the Bill, the NA agreed to a report of the Standing Committee on Appropriations which recommended that the House adopt the Bill without amendments.
 
The Committee noted that the Appropriation Bill proposes major budget baseline expenditure reductions and reprioritisation of funds in line with the government’s proposed fiscal consolidation policy through a total of R66.045 billion reductions in the budget baseline. The Committee also noted that these significant reductions in baseline expenditure by the government are aimed at reducing the budget deficit and level of government debt.
 
However, in its recommendation, the Standing Committee on Appropriations was mindful of the fact that the budget assumptions and allocations that the Appropriation Bill proposes (as Tabled by the Minister of Finance in February 2020) were no longer valid due to the Covid-19 pandemic.
 
Section 16(6) of the PFMA requires that expenditure in terms of subsection (1) must be included either in the next adjustments budget for the financial year in which the expenditure is authorised or in other appropriation legislation tabled in the National Assembly within 120 days of the Minister authorising the expenditure, whichever comes sooner.
 
The Appropriation Bill will now be sent to the NCOP where its provisional consideration and concurrence is scheduled for 18 and 19 June.

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