Standing Committee on Finance: Medium-Term Plan

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Finance Standing Committee

02 February 2010
Chairperson: Mr T Mufamadi (ANC)
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Meeting Summary

The Committee discussed the medium term plan, which primarily comprised the function, strategic objectives and activities of the Committee. The functions of the committee included exercising oversight and facilitating for public participation. Capacity and acquiring human resources were key issues that had to be dealt with in order for the Committee to carry out its functions. The Committee had to participate in the establishment of the Parliamentary Budget Office and appointment of the Budget Officer.

The Committee was in consensus concerning the inaccurate capturing of its powers and functions in the document. The Committee was very concerned about the lack of definition on the activities outlined in the document. The document also failed to give time frames for various activities. The Committee’s oversight function was not the only one as seemingly suggested by the Medium Term Plan. The Committee was content with the framework but the Mandate, Method of Work and Strategic Priorities had to be expanded and altered accordingly. The Committee would ensure that the Parliamentary Budget Office would be established and the Budget Officer would be appointed soon.

 

The Medium Term Plan was adopted with amendments.

Meeting report

Opening address by the Chairperson
The chairperson welcomed the committee and informed them that the schedule for 2010 would be very hectic.

Presentation of Medium Term Plan
Mr Kevin Christian, Project Manager: Project Management Office, presented a summary document from the Committee’s joint meeting with the Select Committee on Appropriations. It was a discussion document that belonged to the Committee that also served as a medium term plan. The committee derived its mandate from Act 9 of 2009. The functions of the Committee were to exercise oversight and facilitate for public participation. The Committee also exercised a monitoring and oversight function over legislative processes and National Treasury (NT). The Committee’s oversight role was a key point. The key issues for the Committee over the next 2-3 years were the mandate and its capacity. The Committee also had to ensure that it had sufficient human resources at its disposal. The establishment of the budget was an important consideration for the Committee.

He stated that the Committee should forge closer relationships with other committees, statutory bodies and agencies in order to ensure proper service delivery. The Committee had to ensure that government priorities were reflected in the Departmental plan. The time frames for the review of the Medium Term Budget Statement and interaction with stakeholders was a concern. Government departments and agencies had to be appropriately funded and receive value for money whilst delivering services. The operational plan for the Committee had been put together. One of the key issues of this plan was the establishment of the Budget Office. Key areas that were identified as important were the appointment of a director, the structure of the office and where the budget office would fit within parliamentary structures. One of the objectives of the Committee was to ensure the facilitation of public hearings; therefore the Committee had to ensure that the public was informed of the Committee’s activities. They also had to invite submissions from public hearings and consider them. The Committee had to ensure that there was co-operative governance between itself, the provinces and local municipalities. The Committee still had to decide on the facilitation of its international policies over the next 2-3 years, and it had to identify training workshops and study programmes.

Discussion
The Chairperson thanked Mr Christian and asked members to comment on the document.

Mr M Ambrosini (IFP) informed the Committee that there was a perception from the Committee for Trade and Industry that the Finance Committee was concerned with matters of private finance and wanted to know if this was correct.

The Chairperson responded that if what Mr Ambrosini meant by “private finance’ was the banking sector then the perception was correct.

Mr Ambrosini continued and said that perhaps the Committee should schedule a meeting with experts or have submissions and public hearings on the matter of the banking system of South Africa as well as the financial sector. The system was in favour of the financial sector but not the manufacturing industry, this was concerning.

The Chairperson said that this issue should be flagged so that the Committee could track its progress.

Ms Z Dlamini-Dubazana (ANC) commented that the document had certain omissions, one being the input of the Statistician General and the differential point system.

Mr S Swart (ACDP) said that the overall structure was not a problem however under the heading Method of Work of the Committee there was only oversight. This surely could not be the sole function of the Committee. Method of work should include legislation and public hearings etc. This was not to detract from the function of oversight.

The Chairperson agreed with Mr Swart.

Mr Swart continued that Method of Work should be expanded in the document. The wording of the sentence: “Taking into account the mandate of the new Government, the Committee will influence the executive to implement policy measures” needed to be changed as the Committee was more than capable of influencing the executive. Paragraph 4 clearly related to what was said in the State of the Nation address and the last bullet point reflected this. Would this be a strategic priority of the Committee? Consensus as to where the Committee was going had to be reached and therefore the wording of such a document had to be completed with caution.

Mr D George (DA) was happy with the framework. The third last bullet point on the Mandate of the Committee had to have the word ‘amend’ as well. An extra bullet point had to be included, stating that the Committee would exercise oversight over the financial regulatory framework within which the economy operated. This was important work for the Committee.

Mr Z Luyenge (ANC) asked to what extent the Committee would be able to inform the budget, was there allowance for the Committee to say, for example: an amount allocated for the Department of Education was not enough to respond to the infrastructural challenges it faced.

Ms Dlamini-Dubazana referred to page 2, point 3. The sub-topic did not tally with the content below it. There had to be an alignment between the objective and the method. Point 4 had to be changed into the main key deliveries as per the President’s speech.

Mr M Swart (DA) agreed with Ms Dlamini-Dubazana, many of the Strategic Priorities set out were not part of the work of the Committee e.g. the Extended Public Works programme; the Committee must create the environment in which the objectives identified in the State of the Nation address were realised. This section could be deleted and replaced with the bullet point on page 1.

Ms Dlamini-Dubazan remarked that an objective should be measurable, achievable and reachable. The objectives in the document should be reflective of this and also indicate who would be responsible for achieving them.

Mr Ambrosini said that in the present economic climate, the Committee should tackle and deal with the impact of public finance and the achievement of economic objectives. A framework of intervention should be identified to deal with the economic crisis. On the basis of certain premises, the Committee should live up to the responsibility of exercising oversight. The Committee should ask itself if what it was doing was enough and whether a stimulus package was needed. This was important as it related to the creation of decent jobs and employment.

The Chairperson raised the matter of the human capacity that was available at the disposal of the Committee. The Committee was not well resourced to deal with the amendment of the budget within the fiscal framework. The Human Resource Department of Parliament had to be engaged with concerning training programmes for Members of the Committee.

Mr D Van Rooyen (ANC) agreed that the operational plan should be realistic. If the Committee was not clear on who would be responsible for the activities then it would have to sit once again with the realisation that certain objectives had not been met. Some of the activities on the document were lacking time frames.

Mr George pointed out that some of the activities were phrased as questions; this should not be the case. Activities should be phrased as mandates. The activity had to have some sort of action e.g. appointment, clarify, determine etc. The time frame for the establishment of the Parliamentary Budgetary Office was between 2009-2011; it had to be set up very quickly. Did the Committee have a training budget, if so, how much was available and how was it accessed? Was the training budget available to the Committee as a whole or could it be accessed individually?

The Chairperson responded by saying that there needed to be a presentation on the budget of Committees and how they were structured. He agreed with Mr Van Rooyen that there were no time frames in the document. The Committee had to find a way of looking into the financial sector.

Mr Luyenge asked if deliberations concerning the financial implications had anything to do with the current budget processes. Would the Committee be able to influence the consideration of the Member’s input in relation to the budget?

Mr M Swart asked if there was a provision in the budget for the formation of the parliamentary budget. The Committee had to find out more about this because if it were to be non-existent, then there would be no Budget Office.

The Chairperson responded that the appointment of a director for the budget office would be in April sometime. The Finance Committee should drive this process and ensure that the budget office was established. Without the establishment of the Budget Office, the capacity of Parliament to interrogate issues would not exist. The level of appointment of the director was an issue. He wondered if it would be a director’s post or that of a Director General. This would impact on Parliament’s ability to attract the necessary skills. This process was underway and no decisions would be undertaken without input from the Finance Committees.

Mr Ambrosini added that the Committee was in a period of looking at different solutions for the problems facing the country. The Committee could do presentations based on special areas of interest such as finance, taxation etc or have an expert to do the presentation.

Mr N Koornhof (COPE) recalled a presentation by the Reserve Bank of South Africa (RBSA), which was very useful. It had taken place the day before the Monetary Policy Committee (MPC) had met the Committee. The meeting was very informative and explanations had been provided as to what informed some of the decisions that were undertaken. How many times would the Committee interact with the Reserve Bank? Could the Committee request the MPC to make a presentation two days after it had already sat in a meeting? This would be very informative.

The Chairperson responded that it was up to the Committee as to how it utilised the institutions available to it. The Committee should not be constrained by the normal route that was undertaken whereby Departments and Institutions did scheduled presentations in Parliament. The Committee could decide to call the RBSA on certain issues.

Ms Dlamini-Dubazana asked how well informed the Committee was on the RBSA’s inflation policy.

The Chairperson responded by saying that the Finance Committee was within a micro-economic space. One of the frustrating things in Parliament was the fact that a similar budget was allocated to all the Committees regardless of the work they did. Committees also needed to take control of their own budgets and be audited.

Mr Ambrosini commented on the appointment of the Budget Officer adding that structures that were meant to empower Parliament often ended up overpowering it. An ideal situation would be to appoint someone with practical experience as agreed by the Committee.

The Committee discussed the Programme of the Committee in line with the Parliamentary Programme. This included the budget speech as well as the in house debate on the budget speech.

The Medium Term Plan was adopted with amendments.

The meeting was adjourned.

 

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