As we prepare to celebrate the 10th anniversary of our much-admired Constitution, our sense of accomplishment as a nation is marred by the ongoing neglect of one of the Constitution’s most fundamental commitments.
While we have made good progress in establishing and consolidating democratic institutions, building legal and judicial respect for the rights of all our people and enacting enabling legislation to give effect to key provisions of the Constitution, we have not yet fulfilled the Constitution’s mandate to give Parliament meaningful control of the national purse strings.
Section 77 of the Constitution requires that any measure to raise or appropriate public funds be dealt with in a separate legislation, known as a money Bill. It stipulates that Parliament must deal with money Bills in the same manner as ordinary Bills not affecting provinces, but adds: “An Act of Parliament must provide for a procedure to amend money Bills before Parliament.”
The Constitutional Court’s 1997 certification judgement held that the final activation of such “suspended” clauses must occur “within a reasonable period”. At the end of the Constitution’s first decade, this remains the only impediment to the full implementation of our national democratic compact.
Parliament’s money Bill amendment powers are enmeshed in a larger power struggle between the legislature and the executive. This is, to some extent, inevitable in a system where the two branches of government are intended to check and balance each other’s actions. A first attempt to pass money Bill amendment legislation came to an impasse in 1997. Since then, neither the minister of finance nor MPs have made any further effort to address the gap.
As a result, the intended balance between Parliament and the executive is upset. Although Parliament must still approve all appropriations, its inability to amend such legislation puts it in an invidious position. The only way it can signal disapproval of spending plans is to reject the relevant money Bill. But doing so would be tantamount to a vote of no confidence in the government and so is only imaginable in the most extreme crises. In ordinary circumstances, Parliament has little option but to rubber-stamp the executive’s spending plans.
This is not healthy for democratic oversight of our economic and social development. Most importantly, it renders the National Budget — that most significant of all money Bills — immune to parliamentary, and thus popular, intervention. It makes the budgeting process a largely technocratic exercise, firmly under the control of the National Treasury. It stifles opportunities for genuine national debate on economic policy and spending priorities and limits Parliament’s capacity to ensure that actual spending patterns coincide with stated policy. It prevents the legislature from freezing or cutting programmes that have been plagued by corruption or other problems.
To be sure, there are pitfalls in tilting the balance of budgetary power too far in Parliament’s favour. Excessive money Bill amendment powers could increase the risk of budgets becoming mired in parliamentary squabbling or encumbered by the pet projects of powerful MPs. More worrying, Parliament’s limited capacity for independent research and analysis, especially on financial and economic matters, could severely constrain its ability to exercise meaningful money Bill amendment powers effectively.
The members of the People’s Budget Campaign — the Congress of South African Trade Unions (Cosatu), the South African NGO Coalition (Sangoco) and the South African Council of Churches (SACC) — have proposed a phased approach to the amendment of money Bills. This would require Parliament and the executive to agree on major components of the budget: first the macroeconomic targets that determine the overall fiscal “envelope” or total available resources, then the composition (sources) and division (departmental and provincial allocation) of revenue, and finally the detail of allocations within departments.
An agreement on one set of parameters would constrain subsequent decisions. For example, once Parliament has accepted a particular target for total revenue, it would not be allowed to propose further amendments that would alter the Budget’s bottom line. In the event that Parliament and the executive fail to agree in a given year, the executive would prevail for that year. Parliament would acquire enhanced amendment powers in the following year, thereby increasing the pressure on the Treasury to acknowledge and accommodate Parliament’s concerns.
Giving Parliament a real say in budgeting is not the only way of democratising the budget process. Other institutions, such as the National Economic Development and Labour Council (Nedlac), can also play a role.
Parliamentary money Bill amendment powers could help to revive national debate on the appropriate deployment of public resources. Civil society organisations, including the People’s Budget Campaign, that have refused to take part in Parliamentary budget hearings that have no impact on spending patterns would have new incentives to participate in the process.
There would be fresh opportunities for Parliament to consider seriously alternative economic critiques and proposals, such as those propounded annually by the People’s Budget Campaign. South Africans would be empowered to explore their own developmental path, rather than relying on the failed prescriptions of international financial institutions that informed such disastrous experiments as the Gear policy of the late 1990s.
The time has come for South Africa to realise fully the promise of democratic governance embodied in our Constitution. Parliament itself has acknowledged the need to implement Section 77, most recently in its submission to the African Peer Review Mechanism process. The People’s Budget Campaign stands prepared to assist with the drafting and refinement of the relevant legislation. Let us not wait another decade before giving Parliament a say in the Budget.
Eddie Makue is the general secretary of the South African Council of Churches, and a member of the People’s Budget Campaign (PBC). A detailed PBC response to the 2006/07 national Budget is available at www.sacc-ct.org.za