The budget of a municipality is the document identifying and stating particular objectives with associated expenditure linked to each objective. A municipality's annual budget is a documented source of anticipated income and expenditure for the 12 months of the financial year.

In the local sphere of government in South Africa, a distinction is made between a capital budget and an operating budget.

Basis in law

The council of a municipality is mandated by the Constitution of the Republic of South Africa, 1996 to adopt an annual budget. The budget should give priority to the basic needs of the community in an attempt to promote the social and economic development of the community. The Constitution also states that national legislation must prescribe the form of municipal budgets, when they must be tabled etc. This is done in the Local Government: Municipal Finance Management Act 56 of 2003. The consequences of failing to adopt an annual budget are severe. See sections 151(2), 160(2)(b), 139(4), 153(a) and 215 of the Constitution.

Environmental application

None of the environmental objectives or plans of the municipality can be realised without such objectives or plans forming part of a) the IDP and, b) the annual budget.   For the budget to bear relevance for environmental management and environmental protection in the municipality, it would be necessary to first ensure that the necessary environmental objectives appear in the IDP. 

Expenditure items in the municipal budget may typically provide for environmental by-law development and enforcement for matters such as the eradication of invasive plants within the jurisdiction of the municipality or the conservation of water.

Every municpal budget must be developed in such a way that it gives priority to the basic needs of the community and to the advancement of developmental local government. Developmental local government must be understood as aiming to strike a balance between the social, economic and environmental needs of communities. Developmental local government entails the realisation of the constitutional environmental right with its focus on health and well-being, and the right of access to sufficient water as suggested in s 23(1)(c) of the Local Government: Municipal Systems Act 32 of 2000.