Finance Minister Tito Mboweni plans to be ready to table an “emergency” budget which makes provision for Covid-19 relief efforts by 24 June.
Treasury on Wednesday published the special adjustment budget guidelines on its site, which includes deadlines for departments to make submissions on their adjustment budgets.
According to Treasury the guideline document outlines the processes it plans to run to table a special adjustment budget.
“The date of 24 June is the date by when the National Treasury would be ready to table. It does not prescribe whether Parliament must organise for tabling on this date.
“The date of the tabling will be decided by the Speaker of the National Assembly in agreement with the President and Minister of Finance,” Treasury said in a note.
President Cyril Ramaphosa in April announced that government would provide R500 billion in fiscal support to be directed to Covid-19 priorities. Of this amount, R130 billion was to be reprioritised from the national budget which was tabled in February this year.
Treasury said that other adjustments not included in this emergency budget would be tabled in the October Adjustment Budget.
“When unforeseeable economic and financial events affect the fiscal targets set by the budget, adjustments may need to be made.
“In this instance the adjustments are required due to a significant reduction in government revenues and changes in spending priorities in response to the Covid-19 pandemic,” Treasury said.
The finance minister is also empowered to approve the use of unappropriated funds – through Section 16 of the Public Finance Management Act. This essentially brings appropriations intended for future years, forward.
Treasury will also rely on virements – this is when unspent funds under one programme are shifted to another programme within the same department and it will also draw from a direct charge against the National Revenue Fund.
Government departments in the meantime have been asked to identify programmes and activities which can be temporarily halted to free up funds. Departments must show how their resource requirements will respond to the Covid-19 pandemic. They are required to make submissions as early as 22 May.
Cabinet is expected to give approval for the special adjusted budget by 11 June. Thereafter departments will make final submissions on 15 June.
The fiscal response includes a R200 billion loan guarantee scheme, in partnership with private banks an the Reserve Bank, which went live on Tuesday. Treasury has initially provided a R100 billion guarantee and this will be extended to R200 billion depending on the need and success of the scheme.
The package also provides R70 billion in tax relief. R20 billion is to be directed to municipalities and healthcare each and R40 billion has been set aside for wage protection. An additional R50 billion is also set aside to support vulnerable households with social grants for the next six months.
*Update: This article was amended to reflect that Treasury will be ready to table the adjusted budget by 24 June. A previous version said the budget will be tabled on 24 June.