Financial Administration of Parliament and Provincial Legislatures Bill: briefing by National Treasury

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Finance Standing Committee

16 September 2004
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

16 September 2004

Co-Chairpersons: Dr Rob Davies (ANC) and Mr T Ralane (ANC)

Documents handed out:
Government Employees Pension Law Amendment Bill [B15-2004]
National Treasury PowerPoint presentation on Financial Administration of Parliament and Provincial Legislatures Bill
Draft Financial Administration of Parliament and Provincial Legislatures Bill

The National Treasury briefed the Committees on the Financial Administration of Parliament and Provincial Legislatures Bill (draft dated 11 November 2003). They submitted that there was no need for the Bill as the issues could be adequately addressed by amendments to the Public Finance Management Act. The Committee decided to solicit legal opinion from other stakeholders and the Parliamentary Legal Advisors on whether issues addressed in the Bill should be addressed by the Public Finance Management Act.

Mr I Momoniat (Deputy Director-General: Intergovernmental fiscal Relations-National Treasury) briefed the Committees, and was supported by Mr F Jenkins (Parliamentary Legal Advice Office). Mr Momoniat said that legislatures needed to be exemplary in their practices. They should be seen as better than government departments and entities. The Public Finance Management Act (PFMA) adequately covered Parliament and provincial legislatures. A separate Act for the legislatures would set a wrong precedent. One might find a situation where legislatures and other entities would want to have their own separate legislation. Any problems that had been identified with the financial administration of the legislatures could be sorted out through amendments to the PFMA. National Treasury felt there was no need for the Bill.

Ms R Taljaard (DA) felt that the financial administration of Parliament needed to be tightened up. She said that Parliament is constitutionally different from government departments and other entities. She found it difficult to accept that the financial administration of legislatures should be dealt with in the PFMA. She said that there were serious legal impediments to applying the PFMA. She agreed that Parliament has the potential to threaten not to pass the budget. She felt that it was unlikely that any legislature would hold up the entire expenditure for the country in its own interest.

Mr Momoniat said that the central issue is whether a new Bill is necessary. Initially the approach was to amend the PFMA, but that approach was abandoned without adequate explanation. He conceded that the PFMA does not adequately cover some of the issues addressed in the Bill. Such issues could be covered by amendments to the Act. A new Act would simply replicate the PMFA and the current Bill needs to be improved. There would be problems if Parliament were treated like government departments.

On the threat not to pass the budget, he said that in a case where there is an unreasonable Treasury or Executive Authority the threat might become real. This hardly happens but remains a possibility.

Dr Davies asked the presenter to indicate the section of the PFMA that says that the Secretary of Parliament is the Accounting Officer under the PFMA and that the Speaker of the National Assembly and the Chairperson of the National Council of Provinces acting jointly constitute the Executive Authority. If the PFMA does state this, then the Bill would unnecessarily duplicate what is already covered.

Mr Momoniat replied that the issue is covered by Section 3(2) of the Act.

Ms J Fubbs (ANC) said that as the Committee deals with the Bill a balance should be struck between the principles of separation of powers and co-operative governance.

Mr Momoniat said that the drafters of the Bill should indicate the problems that they seek to address. If there was any transgression of the principle of separation of powers that should be articulated and dealt with accordingly. The reasons outlined seem to focus around the budget process. Some problems might require legislation whilst others needed a change in practices.

Mr S Asiya (ANC) said that the issue of parliamentary accountability is not clear in the PFMA.

Ms R Joemat (ANC) said that the Committees should identify all areas that needed to be amended in the PFMA should they decide to address problems by amending the Act instead of introducing a new Act.

Ms Taljaard said that should the Committees decide to amend the PFMA instead of introducing a new Act they could create a perception that they intend Parliament to be treated like government departments. Problems of interpretation of statutes might arise if the Act was amended. She was opposed to addressing the matter by amending the PFMA.

Dr Davies said that it would be preferable to hear from the Parliamentary Legal Advice Office. He preferred amending the PFMA rather than introducing a new Act.

Mr Momoniat said that the issue was whether a new Act was necessary.

Mr Jenkins said that the question whether there should be a new Bill or amendments to the PFMA was discussed by the Parliamentary Legal Advice Office. It was decided that a new Act should be introduced. The financial management of Parliament is divided between the old Powers and Privileges of Parliament Act of 1963 and the Exchequer Act. The PFMA repealed most of the Exchequer Act except provisions applying to Parliament. The Powers and Privileges of Parliament Act were also repealed except for Section 31 dealing with accounting officers’ responsibilities.

Mr K Durr (ACDP) said that the exercise would have far reaching consequences in terms of constitutional imperatives and financial controls of the country. He felt that it would be advisable to get some opinion from the Constitutional Court on the matter.

Ms Taljaard said that the Committee should seek legal opinion on whether there are any constitutional impediments to dealing with the issues by amending the PFMA.

The Chairperson said that the Committees were not in a position to make a decision on how to proceed with the matter. He felt that there was no need for opinions from the Constitutional court. The Committees should hear from other stakeholders before making a decision on how to proceed with the matter.

Mr Y Bhamjee (ANC) said that the sovereignty of Parliament must not be compromised in the process.

Mr Trent said that the question was what should happen in the meantime. He said that given the public perception of Parliament there was a need for a short-term mechanism to deal with the issues.

Some Members of the ANC were not amused by Mr Trent’s view on the public image of Parliament. They asked if any person has questioned the credibility of Parliament.

The Chairperson said that the implications of extending the PFMA to Parliament and the extent to which the Act covers Parliament should be investigated.

Ms Taljaard said that the route that the Committees should take should be guided by legal opinion from the Parliamentary Legal Advisers. She said that the Bill was still a draft and had not yet been tabled. She asked if it would be tabled by the Minister of Finance or regarded as Committee-initiated legislation.

The Chairperson said the Committee was dealing with a mandate conferred to it by the House.

The meeting was adjourned.


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