NA passes 2021 Appropriation Bill

Bill allocates money from NRF to provide requirements of state for 2021/22 financial year

The National Assembly passes the 2021 Appropriation Bill

4 June 2021

The National Assembly has at its hybrid plenary sitting this afternoon adopted the Special Appropriation Bill and Appropriation Bill. 

The Appropriation Bill officially allocates money from the National Revenue Fund (NRF) to provide for requirements of the state for the 2021/22 financial year as required by Section 213 of the Constitution and section 26 of the Public Finance Management Act (PFMA).

The national budget of R1.3 trillion for the 2021/22 financial year was tabled on 24 February 2021 by the Minister of Finance together with the Bill and referred to the Standing Committee on Appropriation for consideration.

The committee considered the bill and noted that the 2021/22 budget is centred on two government’s medium-term policy priorities of promoting economic recovery and returning public finances to a sustainable path. It focuses on narrowing the budget deficit whilst stabilising the debt-to-gross domestic product (GDP) ratio by moderating spending and reducing the public-sector wage bill. The committee further noted that while the budget shows continued exercise of restraint on spending growth over the medium term, nearly R3 trillion or 56.6 per cent of public funds are allocated to learning and culture, health and social development. The budget also funds a free Covid-19 vaccination programme.

The 2021/22 budget proposes an adjustment to government spending plans as follows:

- Non‐interest spending is reduced by R27.675 billion in 2021/22, R87.259 billion in 2022/23 and R149.978 billion in 2023/24 financial years. The largest share of these reductions falls on the compensation of employees. 

- A proposed additional R11 billion to the spending framework in 2021/22 for the public employment initiatives. This is part of government efforts to promote economic recovery. 

- An extension of the unemployment insurance benefit through the Unemployment Insurance Fund, increasing the Employer/Employee benefit to R73.6 billion. 

- Recapitalisation of the Land Bank of R5 billion in 2021/22, R2 billion in 2022/23 and 2023/24 to be funded through reprioritisation. 

- A total of R18.3 billion is added over the MTEF to manage further waves of Covid-19. 

- A total of R11 billion over the MTEF is added for payments to the New Development Bank and public entities. 

At the same sitting, the Special Appropriation Bill [B5-2021) was adopted. Section 16 (1) of the (PFMA) authorises the Finance Minister to request Parliament to appropriate funds from the National Revenue to cover the expenditure of an exceptional nature which is currently not provided for and which cannot, without serious prejudice to the public interest, be postponed to a future parliamentary appropriation of funds. The COVID-19 pandemic and the worsening economic conditions confronting the country made this special Appropriation necessary.

The Bill proposes an additional R1.250 billion to the Department of Health for the procurement of Covid-19 vaccines, and implement a related Covid-19 vaccine research project; and R2.826 billion to the Department of Social Development to fund the extension of the Special Covid-19 Social Relief of Distress Grant.

In addition, during the 2020 Medium Term Budget Policy Statement (MTBPS), Parliament approved a total of R10.5 billion through the Second Adjustments Appropriation Bill (B25 – 2020) to allow South African Airways (SAA) to implement its business rescue plan. The Finance Minister may, on request, approve any portion of the funds allocated to SAA or its subsidiary to use in another subsidiary of SAA. The Bill,  proposes the reallocation of R2.7 billion in 2021/22 appropriated funds from SAA to fund the financial assets of its subsidiaries.

Following today’s debate on the Bill, the NA agreed to the Standing Committee on Appropriations (SCoA) reports which recommended that the House adopts the Bills with amendments.

The Appropriation Bill will now be sent to the NCOP for consideration and concurrence scheduled for 18 June.

Issued by Moloto Mothapo, Media Officer, Parliament, 4 June 2021