Municipal pay rises may need Treasury sign-off. Comment by 29 January

Municipalities would no longer be able to give staff salary increases without the finance minister agreeing to them, under draft laws National Treasury has put out for public comment. You have until 29 January 2027 to have your say (Government Gazette notice).

The proposals sit in two draft bills: the Public Finance Management and Related Laws Amendment Bill, 2026 and the Local Government: Municipal Finance Management Amendment Bill, 2026. They were published in the Government Gazette on 21 October 2026 (gov.za). Treasury officials describe it as the first major legal overhaul of the country's public finance rules since 2003 (TimesLIVE).

These are drafts. Nothing changes until the bills are finalised, passed by Parliament and signed into law.

What would change for municipal pay increases?

Today, increases agreed through municipal wage bargaining are implemented without anyone checking whether the municipality can afford them, according to Wayne McComans, Treasury's chief director for MFMA implementation. Under the draft, Treasury would assess the cost first, and any municipal salary increase could only be implemented with the finance minister's concurrence (TimesLIVE).

McComans said the change is not meant to undermine collective bargaining, only to make sure councils can pay for what they agree to (TimesLIVE).

What else is in the municipal bill?

Treasury's memorandum on the bill lists these among the main changes (National Treasury):

• CFO appointments: National and provincial treasuries get an oversight role when municipalities hire chief financial officers.
• Misconduct committee: A new Municipal Financial Misconduct Investigation Committee to investigate financial misconduct.
• Personal penalties: Administrative fines that can be imposed on councillors and officials personally.
• Legal fees: Municipalities would be barred from paying the personal legal fees of councillors, officials or directors.
• Budgets: Budgets would be assessed before approval, and a budget may not be funded from cash already committed for other purposes.
• Tariffs and billing: Every municipality must have a tariff policy, customer care systems and an indigent management policy, and the bill limits when rates and tariffs can be raised during a financial year.

Officials who run unfunded budgets or implement unapproved salary increases against Treasury's advice could face "compliance orders", Treasury said (TimesLIVE).

Why is Treasury doing this?

Accountant-General Shabeer Khan said the changes partly carry out Zondo commission recommendations that politicians and board members be held personally liable for breaking the PFMA and MFMA. Senior managers would have to report unlawful instructions from politicians, including verbal ones, to the new misconduct committee and to law enforcement (TimesLIVE).

Finance Minister Enoch Godongwana flagged the overhaul in his medium-term budget policy statement on 21 October (BusinessTech).

How do I comment?

Read the draft bills and memorandums on the National Treasury website, then email written comments by 29 January 2027 (Government Gazette notice):

• Municipal bill (MFMA): [email protected]
• Public finance bill (PFMA): [email protected]

Treasury says your name and submission may be made public, and can be disclosed under the Promotion of Access to Information Act (Government Gazette notice).