Parliament’s Legal Services gave a thorough briefing on this Act which provided the procedure for Parliament to amend money Bills. The Finance and Appropriations Committees were central to the consideration of the annual national budget by Parliament and interact with the Portfolio and Select Committees in the process of recommending amendments to the fiscal framework, Division of Revenue Bill, Appropriation Bill, Taxation / Revenue Bills, and the adjustments budget. Oversight reports (BRRR) and reports on the MTBPS by Portfolio Committees provide the bases for the consideration of the fiscal framework and the Division of Revenue Bill. Portfolio committees must use the reports of SCOPA to conclude this function. The implementation of the Act, including research and analytical support to the committees established by the Act, is supported by the Parliamentary Budget Office. This Office must provide “independent, objective and professional advice and analysis to Parliament on matters related to the budget and other money Bills.”. The importance of having a “super competent” PBO was emphasised.
In answer to the question, “what if a Portfolio Committee had proposed an amendment to a money Bill and the Appropriations Committee disagreed, what would follow?”, the response was that the Act did not prevent the Portfolio Committee from taking its recommendations to the House. The House would give the Appropriations Committee the opportunity to provide reasons within a report on why it had turned down the amendment. Ultimately the House would decide.
The committee members asked if public hearings needed to be held at each stage of the budget process, as well as the use of more effective oversight models, the powers of the Minister and the opportunity for the voicing of minority views within a committee.
Money Bills Amendment Procedure and Related Matters Act briefing
Parliamentary Legal Advisor, Advocate Frank Jenkins, explained that the Act aimed to provide for a procedure to amend money Bills before Parliament such as the Division of Revenue Bill, Appropriation Bill, Adjustments Appropriation Bill and the Taxation Laws Amendment Bill.
The Bill was put into context with regards to Parliament’s oversight function, its budgetary review and recommendation reports (BRRR) as well its reports on the Medium Term Budget Policy Statement (MTBPS). The Finance and Appropriations Committees are central to the consideration of the annual national budget by Parliament and interact with the Portfolio and Select Committees in the process of recommending amendments to the fiscal framework, Division of Revenue Bill, Appropriation Bill, Taxation / Revenue Bills, and the adjustments budget. Oversight reports (BRRR) and reports on the MTBPS provide the bases for the consideration of the fiscal framework and the Division of Revenue Bill.
This budgetary review and recommendation report (BRRR) must include a reference to the financial statements of a department plus any SCOPA (Standing Committee on Public Accounts) reports on that department. The Act encouraged synergies between the committees by requiring that when the committees on appropriations consider the Division of Revenue Bill, the participation of the chairs of other committees was expected. Similarly, when the Appropriation Bill and Adjustments Appropriation Bill came before the committees on appropriations, there must be a consultation process with other committees.
The MTBPS was submitted to Parliament by the Minister of Finance three months before the national budget and sets out a revised multi-year fiscal framework, the spending priorities of national government for the next three years, and a review of actual spending by national and provincial departments. The revised fiscal framework is referred to the committees on finance, the spending priorities to the committees on appropriations. Committees must report within 30 days from the date of the tabling of the MTBPS, and the reports may recommend amendments to the fiscal framework or the division of revenue and be submitted to the Minister of Finance within 7 days after its adoption by the House. The committees on finance or appropriations may consult with other committee in considering the matters referred to it.
The “fiscal framework”, defined in the Act, is the relationship between revenue and expenditure.
Procedurally, the Act requires a certain sequence, starting with the introduction of the fiscal framework and its adoption, with or without amendments, by Parliament. Any amendments to the Division of Revenue Bill, the revenue Bills or the Appropriation Bill must be consistent with the adopted fiscal framework. Amendments to the Appropriation Bill may only be considered after the Houses passed the Division of Revenue Bill and must be consistent with the adopted fiscal framework and the Division of Revenue Bill passed by Parliament. The procedure therefore hinges on a sequencing of the fiscal framework, Division of revenue Bill and the Appropriation Bill, each stage determining the next.
The Act also provides for principles that Parliament and its committees must follow. When taking any decision in terms of the Act – any report concerning Parliament’s oversight function, report on the MTBPS, amendment to the fiscal framework, amendment to a money Bill or the Division of Revenue Bill – Parliament and its committees must ensure an appropriate balance between revenue, expenditure and borrowing; reasonable debt levels and debt interest cost; the cost of recurrent spending is not deferred to future generations; and, adequate provision for spending on infrastructure development, overall capital spending and maintenance. Consideration must also be given to the short, medium and long term implications of the fiscal framework, division of revenue and national budget on the long-term growth potential of the economy and the development of the country. Finally, cyclical factors that may impact on the prevailing fiscal position; and, public revenue and expenditure, including extra-budgetary funds, and contingent liabilities must be taken into account.
In amending revenue Bills, Parliament and its committees must ensure that the total amount of revenue raised is consistent with the approved fiscal framework and the Division of Revenue Bill; take into account the principles of equity, efficiency, certainty and ease of collection; and, consider the impact of the proposed change on the composition of tax revenue with reference to the balance between direct and indirect taxes; as well as regional and international tax trends the impact on development, investment, employment and economic growth. (See document for detail on the specific amendment procedures.)
The implementation of the Act, including research and analytical support to the committees established by the Act, is supported by the Parliamentary Budget Office. This Office must provide “independent, objective and professional advice and analysis to Parliament on matters related to the budget and other money Bills.” The Office is headed by a director who is appointed by resolution of the Houses on recommendation of the committees on appropriations and committees on finance. The Director must report any inappropriate political or executive interference to Parliament.
The budget of the Office is part of the budget of Parliament and the funds are transferred to the Office. The Director is the accounting officer who must account to Parliament.
Section 16 of the Act dealt with the norms and standards for provincial legislatures as Section 120(3) of the Constitution allowed for money bill amendment in the provincial legislatures as well.
Adv Jenkins concluded his presentation by reiterating the interaction between the Finance and Appropriations Committee, the Standing Committee on Public Accounts (SCOPA) and the Select and Portfolio Committees: The Oversight reports (BRRR) and reports on the MTBPS by the Portfolio Committees provide the basis for the consideration of the fiscal framework and the DORB. Portfolio committees must use the reports of SCOPA to conclude this function. The Act further encourages synergies between the committees by requiring that when the committees on appropriations and finance consider the money bills, there must be participation of the chairs of other committees and a consultation process with other committees. When dealing with the amendment of the Appropriation Bill, another committee may recommend to the appropriations committee a conditional appropriation or a specific and exclusive appropriation [sections 10(5) & (6)]. Should the committee on appropriations recommend an amendment to the Appropriation Bill to a House, such recommendation must indicate how it relates to the Auditor-General audit report, SCOPA reports and Portfolio Committee reports.
The Chairperson said that an understanding of the Act was imperative to promote effectiveness.
Mr P Mathebe (ANC) agreed and said that it allowed for greater understanding of the mandates of the committee. He wanted to know at which level public hearings would be conducted. He asked for clarity on whether it would be for the Revenue Bill or Appropriation Bill or for both.
On the appropriate level for public hearings, Adv Jenkins noted that there had been quite a few court cases that had challenged legislation due to the lack of public participation. The specific avenues in the Budget process were the fiscal framework, division of revenue, the Appropriation Bill, as well as the adjustment budget process and revenue Bills.
Dr Z Luyenge (ANC) said that the information in the presentation had been empowering and that it would prove to be beneficial in the oversight function. He wanted clarity if there was still something that could be done to change the already pronounced budget for the department. He viewed the budget committee as a tool for committees to assess the manner in which priorities had been responded to by the National Treasury.
Dr Luyenge made reference to the Auditor-General reports as well as the SCOPA findings and recommendations. Although the findings, reports and recommendations were useful to all portfolio committees, the real challenge was with the level of the oversight model. The levels he referred to were local, provincial or national. It was imperative for activities at every level to be synergized. It appeared as if the municipalities and councils appeared to have more power.
Adv Jenkins replied that at local level the municipalities had executive as well as legislative authority but that there was a split between these two branches at the provincial and national levels of government. Parliament could not introduce money Bills but they could amend it as per the Constitution.
Mr G Morgan (DA) thanked the chairperson and Adv Jenkins for a very useful workshop. This was a year for learning by doing and the committee really had their work cut out for them as they were responsible for the oversight of two departments. He proposed that the committee set up a diary of trigger dates to allow for greater focus on the way forward.
Adv Jenkins supported the idea of a trigger date schedule or diary. It would allow for greater focus and that it should be built into the annual programme of the committee.
Ms A Lovemore (DA) echoed Mr Morgan’s proposal of learning by doing. She was concerned that the committees did not have any real power but only that of recommendation. Ultimately all decisions were made by the House. She saw nothing within the Bill that made allowances for differences of opinion within the committee. It would be the overall view of the committee that would go forward as opposed to separate political party views. Previously there had been an opportunity for all parties to indicate whether they agreed and vote and raise objections with the House.
She wanted confirmation that they could not do anything to change the already pronounced budget: were they referring to this year’s Appropriation Bill or the one for next year?
Ms Lovemore wanted to know the actual role of the Minister. The Minister was to consider all recommendations and respond to them but that he did not appear to have any final decision making role.
With regards to the power of the committee Adv Jenkins replied that it depended on what had been viewed and expressed and if there were specific issues that kept arising. The committee could only make recommendations but they were an extension of the House of the National Assembly and they got their mandate from the House. There could be conflicting views between committees especially where funding was concerned. That was why interaction with National Treasury was so important.
Adv Jenkins added that if a party disagreed with a committee’s point of view, there was no reason why they could not express their view within the House.
On the role of the Minister in dealing with the Budget, Adv Jenkins said that the Minister could respond either way with regards to a recommendation. The Minister could agree or disagree with a recommendation from a committee. If the committee wanted to they could report on the Minister’s objection if he disagreed with their recommendation. The issue would then be taken to the Appropriations Committee and then to the House. If the House agreed on the recommendations made by the Committee, the Budget could be amended. The President could then object to the Bill as being unconstitutional fundamentally or in general. That constitutional objection from the President could then be referred back to the House if Parliament refused to change it. If so, the matter could be referred to the
Ms H Ndude (COPE) thanked the chairperson and Adv Jenkins for the enlightening presentation. when there was flaws in the departments that opposition parties pointed out, parties should not view it as an attack on opposition. Sthe committee needed to function with uniformity especially since oversight regarding fundamental rights like water was concerned.
Ms Ndude supported Mr Morgan with regards to his proposal of the committee setting trigger dates. She agreed that the committee needed to be more proactive.
Ms C Zikalala (IFP) proposed that an open workshop be held. She supported the idea of all the chairpersons of committees inviting the National Treasury for greater understanding and engagement purposes. She commended Adv Jenkins for his presentation.
The Chairperson echoed Ms Ndude’s stance on non political affiliation when it came to helping those in need as the issue was really about helping those who had water shortages as opposed to political affiliation. People at ground level were in need of water and that that was the most important issue at hand. The Committee’s mission was to provide basic service delivery to the people.
Mr Mathebe asked Adv Jenkins if the committee had proposed an amendment to a money Bill and the Appropriations Committee disagreed, what would follow?
Adv Jenkins replied that if the Appropriations Committee disagreed with the Portfolio Committee, the Act did not prevent the Portfolio Committee from taking their recommendations to the House. The House would also give the Appropriations Committee the opportunity to provide reasons within a report on why they had turned it down. Ultimately the House would decide.
Dr Luyenge asked for greater clarity on the derivations of allocations made by the National Treasury.
Adv Jenkins responded that there was a progamme for budget training for the entire Parliament which would empower members to understand the entire Budget process. The Act would also implement the programme. The oversight function would largely emphasize how public funds were and should be spent.
The meeting was adjourned.
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