Treasury Prioritises Disaster Planning, Infrastructure and Audit Reform

In the face of escalating climate-related disasters across Southern Africa, Deputy Minister of Finance Ashor Sarupen has announced a transformative shift in South Africa’s disaster management and fiscal planning strategies. Speaking during the tabling of National Treasury’s 2025 Budget Vote in Parliament, the Deputy Minister emphasized that the country can no longer afford to remain reactive in its approach to disaster response and infrastructure financing.

“When disasters strike, government is forced to reallocate funds from other priorities to respond, often at the cost of long-term development. This cycle of crisis and reallocation is unsustainable,” Sarupen cautioned.

To break this cycle, Treasury will finalise and publish a National Disaster Risk Financing Strategy during the 2025/26 financial year. The strategy will fundamentally restructure how government prepares for, funds, and manages climate-related emergencies.

National Disaster Risk Financing Strategy: A New Era of Preparedness

The upcoming strategy introduces a proactive framework to reduce the fiscal and human cost of disasters by embedding climate risk into national and sub-national financial planning. Key features of the strategy include:

• New disaster risk financing instruments, such as climate insurance products, designed to accelerate government response and provide funding predictability.

• Embedding disaster risk management into infrastructure and local government grant frameworks, ensuring that resilience is built into every phase of service delivery.

• Supporting municipalities and departments to incorporate climate risk into their long-term investment and budgeting processes.

“Climate change is not a future threat. It is a present reality, and our budget frameworks must reflect that,” Sarupen stated.

Accelerated Infrastructure Investment: Over R1 Trillion Allocated

In a parallel push to unlock growth, Treasury is committing more than R1 trillion to public infrastructure spending over the next three years. This represents the fastest-growing area of government expenditure and is central to easing structural constraints, expanding social access, and driving job creation.

To boost private sector participation, Treasury has reconfigured the Budget Facility for Infrastructure (BFI) with enhanced flexibility and financial instruments such as:

• Guarantees

• Build-Operate-Transfer (BOT) models

• Concessional loans

In addition, new public-private partnership (PPP) regulations—effective from 1 June 2025—will streamline processes and reduce red tape. Upcoming regulations for unsolicited proposals and municipal PPPs are also in the pipeline.

“We are creating a single National Treasury-overseen structure to consolidate large-scale project preparation, improve PPP technical support, and enhance private sector engagement,” Sarupen added.

Strengthening Municipal Finances: Enforcing Accountability and Sustainability

Addressing the growing number of municipalities in financial distress, National Treasury is rolling out targeted support and structural reforms to improve local government fiscal management and service delivery.

Key interventions include:

• Funded Budgets Mandate: Municipalities are now required to adopt budgets based on realistic revenue estimates and not speculative projections.

• Revenue Value Chain Reform: Treasury is modernising billing systems, boosting collection efficiency, and ensuring revenue integrity.

• Capacity Building: Direct support is being offered to improve the financial literacy and management skills of municipal officials.

• Tailored Financial Recovery Plans: Through the Municipal Financial Recovery Services (MFRS), recovery plans are custom-built for distressed municipalities.

• mSCOA Implementation: The Municipal Standard Chart of Accounts now ensures financial uniformity and transparency, enabling better comparative analysis across regions.

• Consequence Management: Treasury, in partnership with CoGTA and the Auditor-General, is working to ensure that financial misconduct is met with swift disciplinary action.

“Public money must be protected. Where there is wrongdoing, there must be consequences,” Sarupen affirmed.

Rebuilding Trust in the Auditing Profession

Amid continued concerns over audit failures in both public and private sectors, the Auditing Profession Act is undergoing a comprehensive review. The reforms aim to modernize and fortify the role of the Independent Regulatory Board for Auditors (IRBA) and restore public confidence in the auditing landscape.

Proposed amendments include:

• Stronger regulatory oversight of audit firms

• Improved education and accreditation systems for auditors

• Alignment with international auditing standards

• Enhanced powers for IRBA to enforce compliance and accountability

“These reforms are about more than technical adjustments. They are about restoring trust, integrity, and credibility in a profession that underpins financial markets and governance,” said the Deputy Minister.

Planning for the Future, Delivering for the Present

From natural disaster preparedness to infrastructure investment and local government reform, the 2025/26 Treasury agenda reflects a comprehensive approach to economic resilience, fiscal discipline, and institutional accountability.

Deputy Minister Sarupen’s address underscored that long-term sustainability must be embedded into every facet of South Africa’s public financial management system, especially in the face of climate volatility, infrastructure demands, and public trust deficits.