Puppets and purse strings

A draft law seeks to balance budgetary control between government and Parliament
Also read Len Verwey’s counterpoint to this article

It has been an embarrassing question for would-be defenders of constitutional democracy for the best part of a decade now: would you prefer to have crucial state-spending decisions adjudicated by the one government department with a reputation for intellectual and ethical rigour, or by the scandal-prone party hacks who fill up too much of our Parliament courtesy of the party-list proportional representation system?

The Constitution is unambiguous: legislation must be formulated to give expression to the principle that Parliament has the power of the purse, and with it a truly potent curb on abuses by the executive.

Currently, only the nuclear option of rejecting the budget outright, with potentially calamitous consequences for the business of government is available, and it is really no option at all.

So the finance minister’s “spending proposals” arrive fully formed, and pass through the parliamentary digestive tract entirely unscathed, despite the elaborate show of degustation that goes on around them.

That should make democrats uncomfortable, and not just because the Constitution says so.

But for anyone who has spent time around the legislature in recent years, the truthful answer is not the comfortable one.

You need spend only 10 minutes watching the director general in the national treasury, Lesetja Kganyago, wryly schooling MPs in economics, or his top officials patiently answering banal questions, to learn that there is more capacity, more will and more efficacy in the treasury approach to government oversight than in the legislature—a few bright and dogged MPs notwithstanding.

With some striking exceptions—more marked in the immediate post-Polokwane interregnum—government departments have too much influence with most parliamentary committees.

Cabinet ministers serve on the ANC study groups that determine what line will ultimately be taken on legislation, the party’s powerful political committee enforces the decisions of its national working committee on the most sensitive issues and few key party operatives work assiduously to limit dissonance with government.

To make matters worse, too many members of Parliament have webs of overlapping business interests that may influence their decisions.

The mandarins of the treasury have resources to weigh competing demands of departments, provinces, and individual politicians within a broadly reasonable spending framework in a way that Parliament, in its current form, simply does not.

That doesn’t mean the eggheads never bow to pressure. They eventually signed off on the Gautrain all, and the arms deal, but they have also consigned to budgetary oblivion a thousand expensive and pointless schemes, notwithstanding political pressure.

For most people, those realities were enough to ensure that legislative reform to bring Parliament into the budgetary process languished at the bottom of the democratic agenda.

To be sure, Cosatu complained about it more and more loudly as the Gear ratchet tightened, and Barbara Hogan, who had lost the chair of the finance committee because of her outspokenness, compiled research into international alternatives. But these were seen as marginal voices, carping from the sidelines of Trevor’s biannual surprise.

A combination of lack of capacity at the legislature and lack of enabling legislation has ensured that, according to a study by the London School of Economics’s Joachim Wehner, South Africa scores lowest on a global index of parliamentary influence on the budget process, behind even Britain, Canada and Australia, where latter-day Westminster systems consign the power of the purse to the status of a “constitutional myth”.

It is that Westminster culture, living on, in attenuated form, in our post-1994 legislature, combined with the obvious competence of the treasury that has lead to such widespread acceptance of the current system of technocratic sovereignty.

At the other end of Wehner’s scale, not surprisingly, is the United States, where the budget presented to Congress is an outline of what the White House wants, subject to detailed, line-by-line revision and intense haggling before a final agreement is reached on what the government can spend.

This gives voters, who choose individual representatives and the president directly, a real say in how government money is spent.

It also leads to the ludicrous abuses that the US Congress is famous for, most recently the raft of totally unrelated spending and tax-breaks that representatives insisted on attaching before they would pass the government’s bail-out plan for the financial sector.

And it can lead to total paralysis when two sets of elected representatives disagree, as they did in 1995, when the Republican Congress and Bill Clinton’s White House failed to settle not just on the budget, but on the “continuing resolution” that is supposed to kick in to keep government going while such disputes are resolved. The giant machinery of the federal bureaucracy literally stopped.

These are potential pitfalls for our Parliament, but ones it is unlikely to fall into in the short term.

Until we get a new electoral model that includes an element of direct constituency representation, the risk of pork-barrel spending comes not from MPs beholden to their home voters but from much more opaque, and therefore more dangerous, party and business interests.

For similar reasons, but so far with more positive results, ANC discipline will likely ensure that disagreement over the budget is contained, preventing US-style gridlock.

Even if there is to be more open budgetary warfare between MPs and the treasury, that kind of democratic contest would be infinitely preferable to the Kremlinology we are currently forced to indulge in after each of the party’s policy conferences and alliance summits.

The inelegantly titled Money Bills Procedure and Related Matters Bill currently before Parliament seeks to do justice to the demands of the Constitution, without handing Parliament a blank cheque.

MPs can adjust the fiscal framework—the broad parameters within which spending and taxing take place—but only on the basis of a “reasonable” consideration of just about everything the treasury must currently consider, from equity and efficiency to the balance of revenue and borrowing, and the imperative not to burden future generations with debt. The same goes for line item changes.

Clearly the portfolio committee on finance does not begin to have the expertise to do that at present, which is why the legislation proposes a parliamentary budget office to provide “independent, objective and professional advice and analysis to Parliament on the budget and other money bills”.

This is a long overdue innovation, and the success of the legislation will depend on its ability to do that work, and the willingness of MPs to listen.

It will also depend, however, on Parliament reclaiming its place as one of the foundations of our constitutional architecture.

Will the ANC, mindful of the real power that it is vesting in MPs, be more careful who it sends to Cape Town?

Will a new electoral system give MPs more confidence in wielding that power? Or will we watch the same elaborate ritual that has kept us happy since 1994, cloaked in the formal appurtenances of constitutional compliance, but empty of democratic substance?

In a fast-changing political environment, perhaps the most we can hope for is that those questions, at least, get a less embarrassing answer.

Nic Dawes

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