Discussants at the GPL Budgetary Oversight Roundtable Session included Peter Skosana
Although there appears to have been stagnation in terms of amending the Money Bills Amendment Procedure and Related Matters Act to meet specific technical challenges, there is now renewed interest and emphasis on bringing the national parliament’s parliamentary budget office (PBO) — established when the Act was implemented — up to levels that enable improved budget spending.
According to Mbongeni Radebe, chairperson of the standing committee on public accounts (Scopa) in the Gauteng Provincial Legislature (GPL): “More assertive parliaments have realised that they need qualified, skilled and experienced staff to carry the functions of the PBO and for the GPL to be exercising budgetary oversight in a proper manner it requires political will and required resources.”
Constitutionally, in terms of section 120(3), the GPL has the legislative authority to enact a provincial Act that will provide for the procedure to amend money bills. Radebe was the programme director for the round-table discussion on trends and prospects of effective budgetary oversight on Wednesday, the fifth thought leadership session. These sessions form part of the GPL’s ongoing 20 Years of Democracy Project.
Thought leadership conversations are aimed at discussing the core mandates of parliaments and legislatures and finding ways to improve the status quo and to improve their effectiveness. The objectives are to exchange knowledge and formulate concrete ways to improve the current systems within the legislative sector. Each session attracts a variety of legislative sector experts, policy role players and practitioners to ensure a thorough analysis of the subject matter to generate well-informed recommendations.
“Increasingly parliaments need faster and more effective access to information towards better coordinated administrative systems,” said Jahed. “As countries have introduced parliamentary budget offices, they are able to interpret, review and make sound budgetary judgements.” Jahed said that internationally there has been growth in budgetary offices, with more and more legislatures wanting to exercise oversight over the socio-economic welfare of their respective countries, the key battles being about fiscal resources.
He also said that members of parliament are expected to read substantial fiscal policy documents and spend time going through reams of presentations, making it possible to miss or overlook content which may warrant questioning of the budget, which requires technical expert support for members to be effective in their oversight function.
“Using expertise based in a PBO, we have access to evidence-based budget analysis and can provide executive-independent economic forecasts and alternative medium-term fiscal projections or scenarios. We can also examine proposals for new programmes, interrogate existing programmes and calculate the impact of alternative spending policies, new taxes and bills.”
At present, the GPL does not have legislative powers to amend money bills, however it has been stressed that these powers are necessary to enable the legislature to hold the executive fully accountable. Budgetary oversight is one of the key influential mandates of the GPL, as its performance or non-performance thereof directly impacts on service delivery within the province.
One size doesn’t fit all
Prior to establishing the South African PBO in 2013, the parliament placed significant emphasis on research and visiting and studying countries with established budget offices and legislation to amend money bills.
“It was interesting to note that in terms of PBOs, there is no ‘one size fits all’ approach that countries have adopted, particularly when it comes to the selection of skills. In Korea, for example, there is a minimum requirement of a PhD educational level for the PBO support staff [not members],” said Jahed.
“In our case, we work through a committee system so we don’t provide support to individuals, but to the committee itself. It is a multiparty system, needed to breach diversities and arrive at overall general agreement. In our international lessons, we noticed three types of legislatures. Firstly budget-approving, which is what South Africa used to be, where the budget is rubber-stamped and there is no power when it comes to amending budgets.
“Then we see budget-influencing legislature where budgets can be amended and re-allocations requested, but there is insufficient capacity to formulate their own budgets. These are in such countries as South Africa, Kenya, Uganda and Egypt.
“Thirdly is budget-making legislature, where a parliament prepares its own budgets and has the technical capacity to amend or reject executive budget proposals. An example of this is the US Congress, which prepares its own budgets and then negotiates which budget is best.”
Jahed stressed that amendments cannot change an overall fiscal position. “We have to work with a committee system at the heart of a fiscal system, strengthening the function going ahead.
“It has been decided that the South African PBO will adopt a phased-in approach, with support for a communications system, which will be the way we undertake work. It is essential to skip around ideologies and be absolutely independent, reporting to the speaker of parliament with independent information and analysis. Jahed emphasised that stakeholders are critical and while building relationships with all stakeholders, from labour unions, business and private sector and international PBO networks, much can be learned from international best practices and institutions and investigating oversight experiences.
Oversight
“National, provincial and local government must be applying oversight over resources, policy and institutions. The reason we are not there yet is not that we don’t have the expertise, but because our elected representatives are not being given the opportunity through sufficient technical expertise to exercise the function. “We cannot afford to skip on the right technical resources and it is vital to recruit the right people, the average recruit having at least a master’s degree in finance and economics. They must be able to do the job, otherwise they are pointless to have around. “We have started making a lot of noise, which will assist us going forward and already other members of parliament are starting to demand our services,” said Jahed.
Following on from Jahed, the secretary to the GPL, Peter Skosana, outlined the framework of legislative budgetary powers, also saying: “The struggle for budget activism is a struggle that was won over many, many years, starting in Western Europe. This is especially related to legislatures, as representative of their citizens, having a say in taxation followed by issues of expenditure control through budgets and appropriations. We have made the point that while this struggle was won, it is a struggle that has actually started to be lost in other ways, such as in the United Kingdom’s House of Commons, where they still have authority, but have since ceased to make any amendments or [exercise] budget influence.
“There are other factors that could influence the extent to which a legislature can influence budgetary control in a presidential versus parliamentary system.” Skosana said that the character of presidential systems is a form of constitutional ruling where the president acts as the chief executive and uses the authority derived from his election.
Citing the example of US Congress being able to influence, amend and make its own budget and negotiate with its executive base, he said: “Sometime last year, the US government came to standstill as a result of non-agreement over budget. If we are to follow the logic of the power, this could also mean that if a legislature does not approve the budget, this could lead to a vote of no confidence and technically a new election.
“The key issue is that disagreement over budget should not lead to a fall of government, but rather that oversight should prove a powerful tool in the hands of the representatives of the people.”
Useful delays?
Skosana said that the extent to which a PBO is independent is questionable, with funding coming from a parliament’s fiscus. “It is going to be a huge struggle to overcome,” he said. “How legislatures get funded cannot be based on the number of constituents, but on the number of functions the legislature must serve. “There has to be a political will, without which very little can be done. From a legislative perspective and discussing this matter over years, perhaps the delays have become more useful as now we can draw from the experience of PBOs plus our own lessons and frustrations.”
He suggested that it may be better setting up a budget office that can serve the entire legislative sector in this country, particularly given the struggle to fill some of the vacant positions and limited resources. In closing, the chairperson of the finance portfolio committee, Sakhiwe Khumalo, said: “We need to promote and understand economic and fiscal stability. Resources must be aligned so that government of each particular period can address its priorities to ensure value for money, efficiency and effectiveness in how budgets are deployed.”
Participants also pointed out that there is a need to capacitate public representatives so that they can drive this important mandate.
Who decides what parliaments can spend?
The legislative role in budgeting has evolved — particularly over the last century – with most parliaments holding the power to amend their budgets, depending on their individual political systems. In South Africa, the Money Bills Amendment Procedure and Related Matters Act came into operation in April 2009. The primary objective of the act is to provide the legislative sector with the procedures or norms and standards for amending money bills while complying with the Constitution and demonstrating legislative competence. It is also a tool for public representatives to conduct oversight over government departments and the financial resources allocated to them. — Rebecca Haynes