ANC Faces GNU Showdown

Debate: Party 'Can't Keep Overspending Like Before'

- Hein Kaiser & Molefe Seeletsa

It is unlikely that the South African government will grind to a halt if adoption of the budget remains up in the air. Unlike in the United States, where disagreement over budgets can grind the country to a halt, it will be closer to a slow bleed.

The South African government can continue without a budget temporarily, said economist Dawie Roodt. South African law provides for interim spending to avoid an immediate halt in services.

However, no money can be withdrawn from the National Revenue Fund, except in terms of an Act of Parliament. This means an approved budget is required to legally spend public money.

But if the new budget isn't in place by the start of the fiscal year, a special provision kicks in rather than an outright shutdown.

The Public Finance Management Act allows interim funding to sustain government operations. During the first four months after a delayed budget, up to 45% of the prior year's budget can be used. Thereafter, the government can withdraw up to 10% per month until the new budget is passed, provided the total amount spent does not exceed the prior year's approved budget.