National State Enterprises Bill: Treasury and FFC Raise PFMA Conflict Concerns

Posted 10 July 2025 Written by Acts Online
Category Parliament

Brought to you by SA Legal Academy: National Treasury and the Financial & Fiscal Commission (FFC) have raised formal objections to the National State Enterprises Bill, citing significant conflicts with existing financial legislation and fiscal oversight frameworks.

In terms of the briefing provided to the National Assembly Planning, Monitoring & Evaluation Committee, National Treasury has indicated that certain provisions of the National State Enterprises Bill may conflict with the Public Finance Management Act, No. 1 of 1999 (PFMA). The Treasury’s primary concern involves the potential dilution of fiscal oversight and the creation of parallel governance structures that could undermine the established financial management framework for state-owned entities.

The Financial & Fiscal Commission (FFC) further highlighted several risks associated with the Bill’s current draft, including:

  • Potential fiscal risks arising from the proposed holding company structure;
  • Overlapping mandates between the new entity and existing regulatory bodies; and
  • Ambiguity regarding the accountability mechanisms for state-owned enterprises under the new legislative framework.

Following these submissions, the National Assembly Planning, Monitoring & Evaluation Committee issued a media statement indicating that it will seek further legal advice and guidance. The committee must determine whether the Bill, in its current form, is sufficiently aligned with the Constitution of the Republic of South Africa, 1996 and the PFMA before proceeding with further legislative processing.

What this means for you, your business, or your clients

  • For yourself: Monitor the legislative progress of the Bill as it may redefine the professional standards and reporting lines required for practitioners serving on boards or as officers of state-owned enterprises.
  • For your business: Firms providing auditing or advisory services to state-owned entities should prepare for potential shifts in the governance landscape and the possibility of dual reporting requirements if the Bill proceeds without amendment.
  • For your clients: Clients operating within the state-owned enterprise sector or those in public-private partnerships must assess the risk of regulatory uncertainty and potential changes to the financial oversight protocols currently governed by the PFMA.

Originally published at https://legalacademy.co.za/news/read/state-enterprises-bill-sparks-treasury-ffc-concerns

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