Howard Barrell
OVER A BARREL
It is the government’s job to put our tax money where our mouths are. We expect it to allocate revenues to the priorities we have agreed. This makes the annual budget, which sets tax and spending targets, the cutting edge of policy.
But who is to decide how the edge is to cut? Should the minister of finance and the Cabinet alone decide the budget each year? Or should Parliament have a meaningful say? Should Parliament help rank our policy objectives and determine how much we spend on them?
In the apartheid era, Parliament seldom used what powers it had to amend money Bills – despite the best efforts of the opposition. The result was that what were termed “budget debates” deteriorated into general discussions on government policy rather than being targeted examinations of who was being taxed, at what rate and to what purpose.
That is now due to change. Our 1996 Constitution demands it. It states that, “within a reasonable period” of the Constitution taking effect, Parliament must have legislated a procedure under which MPs can amend what are termed “money Bills”. These are Bills that impose taxes and other levies – namely the budget and related legislation.
The Constitution sets a deadline of February 3 next year – three years after the Constitution’s adoption – for the passing of a number of other important laws, such as one guaranteeing equality for all. On this basis, we may be entitled to consider this a “reasonable” deadline for a law on money Bills as well.
So, when MPs return from a three-week break to Parliament in Cape Town on October 18, the pressure will be on them to pass legislation empowering them to amend money Bills and setting out how they can do so. The task will require of them some carefully considered choices.
What is at issue is the ability of the legislative arm of the government, namely Parliament, to mount real oversight over the executive arm, namely the president and the Cabinet, in the exercise of the most significant power in government: control over the purse strings.
“The battle is not the usual one between government and opposition, but between Parliament and executive,” according to Christina Murray, professor of constitutional law at the University of Cape Town.
Our Constitution makes it quite clear that Parliament should be a deliberative body, not merely a rubber stamp for whatever the Cabinet places before it. It also states that “members of the Cabinet are accountable collectively and individually to Parliament”.
The drafters of our Constitution were similarly clear that Parliament’s right to amend money Bills should be asserted in the Constitution itself, where it could not easily be tampered with. They were, however, quite happy to leave setting up a procedure for doing so to ordinary legislation.
It is to Parliament’s credit, therefore, that the Cabinet felt compelled to withdraw an early draft Bill on this procedure which sought to give Parliament the power to amend the budget only in those instances where it had managed to get Cabinet agreement. Parliament’s finance committee felt this contravened the spirit, if not the letter, of the Constitution.
Where do things go from here? When MPs return, Parliament and the Ministry of Finance are expected to set up a joint drafting group to come up with something better.
Basically what this group must decide is what limitations to place on MPs’ powers to amend the budget and what time scale and sequence would best allow Parliament to amend judiciously. Why limitations? Because the conventional wisdom in many parts of the world is that the executive must be protected from gratuitous interference as it tries to pursue a coherent long-term economic course.
The drafting group will have a number of useful models to draw on. In other democracies, parliaments are most commonly empowered to reduce total spending and to increase taxation, but seldom the other way round. Australia, Britain and Canada are pre-eminent examples of this limitation. The intention here is to prevent a populist, pork-barrel orgy, in which MPs decide, say, to build a new town hall in each of their constituencies, with little regard for how taxes or government borrowing will have to be increased to pay for them.
A second major issue the drafting group will need to look at is whether Parliament should have the power to shift funds between votes, or between different programmes within a particular vote. For example, should Parliament be able to reduce the foreign affairs budget by R20- million and pass the benefit on to safety and security? Or, within the defence vote, should Parliament be allowed to deduct funds from, say, the navy and pass them on to the air force?
There is plenty of room for compromise between the Cabinet and Parliament on these issues. After all, the ruling party, which provides the bulk of the Cabinet, also commands a large majority in Parliament.
But, whatever powers Parliament gives itself to amend money Bills, the intelligent exercise of them is likely to depend on Parliament having a dedicated committee of MPs dealing with budget issues and co-ordinating proposed amendments. Parliament will also need greater and earlier access to quality information on government accounts, a longer time frame in which to consider the budget and much- improved research capacity on state finances.
Over the past five years, the Ministry and Department of Finance have greatly improved the flow of budgetary information to the public. Moreover, the Ministry of Finance is keen to involve MPs and civil society earlier in the budget formulation process. Its intention here is to sort out disagreements at an early stage – well before changes to the budget become very difficult to accommodate.
This intention is unexceptionable. But we cannot allow an improved flow of information to be a substitute for significant and formal amendment powers for Parliament over money Bills. Loath though I would be to see current government economic policy overthrown in Parliament by the self-proclaimed tribunes of the working classes, I would not want to be deprived of democracy’s one great sop in that event. If we go down the drain, I want to be able to identify precisely who set us fair for the sewage farm, and who kept quiet.