National Treasury Issues Technical Guidelines For Preparing 2025 Budget

The national treasury issued the Medium-Term Expenditure Framework (MTEF) Technical Guidelines to help national government departments and other state institutions prepare their medium term estimates for 2025 budget.

The government department said that the 2024 Budget aims to stabilize public finances, reduce fiscal and economic risks, promote economic growth, and support vulnerable members of society.

Whereas, the 2025 budget will witness a debt-stabilizing primary surplus achieved in 2025/26, a reduction in the fiscal deficit to pre-COVID-19 levels and a stabilization of debt-service costs as a percentage of revenue.

"A lower debt burden allows the government to redirect resources to important social expenditure and will lower borrowing costs for households and businesses," the national treasury said, SA News reported.

It added, "Resources will be available only within the parameters required to meet the objectives of the medium-term fiscal strategy as outlined in the 2024 Budget Review."

The department explained that if the economic conditions remain unchanged, there will be no additional funds allocated overall. If there are unexpected or higher-than-expected revenues, permanent increases in spending will be avoided.

Furthermore, any financial pressures faced by government departments must be covered using existing budgets including re-evaluating programs that haven't met their goals or reallocating funds from other departments or public entities.

The national treasury emphasized the government's commitment to improving financial credibility and ensuring transparency and accountability in managing public finances.

"The National Treasury has recognized the need for a comprehensive review of the budget process with the objective to identify and implement reforms that will enhance the efficiency, transparency, and effectiveness of the budget process," it said.

It added, "These guidelines are issued while the review is at its initial stages, and it is anticipated that implementation will begin in the 2026 MTEF."

The department stressed maintaining the current fiscal strategy is important as it aims to stabilize public finances and promote sustainable economic growth that benefits everyone. As part of this strategy, changes are being made to the Budget Facility for Infrastructure (BFI) to increase the number of projects and explore new financing methods.

The goal is to use government funds more effectively by attracting investment from private companies and international financial institutions, which will help to maximize funding, expertise and efficiency to accelerate infrastructure development and enhance its impact.