N5 – Module 3
(c) any other allocations to provinces, local government or municipalities from the national government’s share of the revenue, and any conditions on which those allocations may be made.
2. The Act referred to in subsection (1) may be enacted only after the provincial governments, organised local government and the Financial and Fiscal Commission have been consulted, and any recommendations of the Commission have been considered, and must take into account – (a) the national interest; (b) any provision that must be made in respect of the national debt; (c) the needs and interests of the national government, determined by objective criteria; (d) the need to ensure that the provinces and municipalities are able to provide basic services and exercise the functions allocated to them;
(e) the fiscal capacity and efficiency of the provinces and municipalities; (f) developmental and other needs of provinces, local government and municipalities; (g) economic disparities within and among the provinces; (h) obligations of the provinces and municipalities in terms of national legislation; (i) the desirability of stable and predictable allocations of revenue shares; and (j) the need for flexibility in responding to emergencies or other temporary needs, and other factors based on similar objective criteria.
National, Provincial and Municipal Budgets 1. National, provincial and municipal budgets and budgetary processes must promote transparency, accountability, and the effective financial management of the economy, debt and the public sector.
2. National legislation must prescribe – (a) the form of national, provincial and municipal budgets; (b) when national and provincial budgets must be tabled; and (c) that budgets in each sphere of government must show the sources of revenue and the way in which proposed expenditure will comply with national legislation.
3. Budgets in each sphere of government must contain – (a) estimates of revenue and expenditure, differentiating between capital and current expenditure;
(b) proposals for financing any anticipated deficit for the period to which they apply; and (c) an indication of intentions regarding borrowing and other forms of public liability that will increase public debt during the ensuing year.
Treasury Control 1. National legislation must establish a national treasury and prescribe measures to ensure both transparency and expenditure control in each sphere of government, by introducing (a) generally recognised accounting practice; (b) uniform expenditure classifications; and (c) uniform treasury norms and standards.
2. The national treasury, with the concurrence of the Cabinet member responsible for national financial matters, may stop the transfer of funds to an organ of state only for serious or persistent material breach of the measures established in terms of subsection (1).
3. A decision to stop the transfer of funds to a province may be taken only in terms of subsection (2), and – (a) may not stop the transfer of funds for more than 120 days; and (b) may be enforced immediately but will lapse retrospectively unless Parliament approves it following a process substantially the same as that established in terms of section 76(1) and prescribed by the joint rules and orders. This process must be completed within 30 days of the decision by the treasury.
4. Parliament may renew a decision to stop the transfer of funds for no more than 120 days at a time, following the process established in terms of subsection (3).
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