💰Budgets & IRPs
Budgets
A Budget is the government’s financial plan made every year, it announces all projected expenditure, income and borrowing over the next three financial years (referred to as the Medium Term).
Budgets are informed by political priorities in the medium term strategic framework, as it functions to allocate resources to these priorities, while ensuring improved quality and effectiveness of public spending.
The Minister of Finance uses the Budget Speech to update Parliament and the country on the state of the economy, public finances and on progress on the government’s objectives. The Budget allocates money between the three spheres of government (National, Provincial, Local) based on revenue collected.
An archive of all national budgets can be found on https://www.gov.za/national-budget-0
What are the Key Budget Documents:
What is the purpose of the various budget information?
There are various types of budgets that can be found at https://www.gov.za/national-budget-0
Highlights key government priorities, the size of the spending envelope for the next MTEF period, the proposed division of revenue and major provincial and local government allocations.
Provides detailed information on mid-year actual expenditure and performance as well as revised spending and performance projections for the rest of the current financial year, and also includes roll-overs and unforeseeable and unavoidable expenditure items.
Provides detailed information on departmental and entities’ policy developments, spending plans, as well as service delivery achievements and commitments over a seven year period.
Provides the policy context of the budget; highlighting economic policy, fiscal policy, tax policy, division of revenue and medium term priorities among others.
This is a simplified version of the main points in the budget.
Year Overview of the Budget Process
The national and provincial budget process is a continuous cycle that runs from April to March every year. The following outline illustrates the timetable for one year’s budget process.
April: National Treasury issues departments with guidelines for requests for roll overs of qualifying unspent funds from the previous financial year and at the end of the month; roll-over requests are submitted to National Treasury for assessment.
May to June: Rollover allocation letters are issued to departments after approval by the Minister of Finance. During this period, National Treasury issues the Medium Term Expenditure Framework (MTEF) budget guidelines (expenditure estimates guidelines) to departments.
July: Departments submit their expenditure estimates detail to the National Treasury for the upcoming Budget. Analysis and approval of changes to departments’ budget programme structures also takes place. Cabinet Lekgotla takes place in this month, where policy priorities and implementation considerations are discussed and approved.
September: The Medium Term Expenditure Committee (MTEC)presents its recommendations of funding allocations for key government priorities to the ombudsman, final recommendations on allocations are then taken to Cabinet for approval. The Adjustments Appropriation process also begins in this month where recommendations regarding unforeseeable and unavoidable expenditure are made. These adjusted allocations are appropriated the following month.
October to November: The Adjustments Appropriation Bill and the Amended Division of Revenue Bill are tabled. The Medium Term Budget Policy Statement (MTBPS) which highlights key government priorities, the size of the spending envelope for the next MTEF period, the proposed division of revenue and major provincial and local government allocations, is also tabled in Parliament. Allocations to national government departments are finalised and proposed to Cabinet in mid-November. Once Cabinet approves, allocation letters are sent out to the departments.
December to February: Minister of Finance receives Budget Review and Recommendations Reports on the MTBPS, fiscal framework, and Division of Revenue, from Parliament. These reports are analysed between December and February for response to Parliament. The National Budget, Appropriation Bill, Division of Revenue Bill, Estimates of National Expenditure and related budget information are finalised and then tabled by the Minister of Finance in Parliament.
March to June: Parliament deliberates and adopts a Fiscal Framework for the upcoming year and begins hearings on the Division of Revenue Bill, which is then passed in Parliament.
July: The Appropriation Bill is passed by Parliament, and based on this; funds are allocated to departments on a monthly basis. As the Constitution specifies that government can only spend money if it has been approved by Parliament, the National Assembly votes to pass the budget through the Appropriation Bill.
Vulekamali
Vulekamali is a data portal designed to make government budget data and processes accessible to all citizens & interested parties.
Integrated Resource Plan (IRP)
Access the IRP at http://www.energy.gov.za/ or click the link above.
What is the IRP?
The Integrated Resource Plan in the South African (SA) context is not the Energy Plan - it is a National Electricity Plan which is a subset of SAs Integrated Energy Plan.
The IRP is also not a short or medium-term operational plan but a plan that directs the expansion of the electricity supply over the given period.
The Long-term Electricity Planning goal is to ensure sustainable development considering:
Technical constraints
Economic constraints Social constraints
Externalities
What is its purpose?
In theory, its purpose is to identify requisite investments in the electricity sector that maximise the national interest.
In practice - it identifies investments in the electricity sector that allows the country to meet the forecasted demand in a way that is most cost efficient for the country.
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