Briefing on Money Bills Amendment Procedure

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Finance Standing Committee

22 March 1999
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PROCEEDINGS: Consideration of viewpoints on the design of the Money Bills
Amendment Procedure according to section 77 of the constitution.

SPEAKERS: Ms Maria Ramos and Minister Trevor Manuel (Department of Finance), Ms Samantha Anderson (committee researcher), Mr Warren Krafchik and Mr Joachim Wehner (Idasa: Budget Information Service), Ms Sally Timmel (Fair Share).

Section 77 of the constitution deals with Money Bills. It states that a bill that appropriates money or imposes taxes, levies or duties is a Money Bill. Second, it prescribes that Money Bills must be processed in parliament according to the procedure outlined in section 75 (ordinary bills not affecting the provinces). Third, the constitution demands that an act of parliament must provide for a procedure to amend Money Bills before parliament. This leaves open the exact configuration of parliament's powers to amend the budget, as well as the procedure to be followed should this become necessary. This vacuum is required to be filled by respective legislation in the near future.

1) Ms Ramos presented the viewpoint of the Department of Finance. She contested that the procedure to amend money bills should not include unlimited rights, should be narrow, should require support of the national executive, should not allow funds to be shifted between votes, must not increase the revenue envelope available, and should focus on the procedure that parliament should follow, when considering the budget, rather than actual amendments.

2) Ms Anderson presented the findings of her research, reflecting her opinion on the question. Her presentations considered guiding principles, the passage of the budget through parliament, as well as timeframes for this process. She stated that parliaments should have carefully considered powers of amendment, excluding the right to increase the overall public sector expenditure or borrowing requirements. Second, she noted the importance that parliament become more involved in the phase preceding the tabling of the budget. She recommended a "clearing house" stage for co-ordinating different amendments, drawing on the work of an ad hoc committee comprising members of both the portfolio committee on finance and public accounts, which would also have access to outside expertise.

3) Idasa noted that parliamentary amendment powers in budgetary matters were essential to improve the outcome of the budget process. Parliament had the potential to add value and to ensure reprioritisation within available resources. Civil society access to the budget process was guaranteed through parliament, and a strong parliamentary budget process could achieve greater commitment to the choices and trade-offs that are made. Comparative experience suggested that, as a minimum, parliament should have the power to reduce expenditure and to engage with tax issues. Second, in parliamentary systems, the ability of parliament to process the budget, and to affect changes, was enhanced through an effective role of committees in the parliamentary budget process. Applied to the South African situation, Idasa argued that this would require: the introduction of powers of amendment (to reduce expenditure and engage with taxation, or within the framework of a balanced budget requirement); that committees have the right to suggest changes; that there is sufficient time to consider the budget before the beginning of the financial year (this would require bringing Budget Day forward to at least January); that the finance committee or a budget committee co-ordinates sectoral input from other portfolio committees to negotiate trade-offs; that parliament's research capacity in budgetary matters is enhanced; and that departments provide regular updates on the implementation of the current budget.

4) Fair Share emphasised the need for a "bottom up" approach to budgeting. This would mean that civil society and the public would have to be involved as early as the drafting stage of the budget. Regional committees soliciting public input could negotiate trade-offs and set priorities, and could be the key mechanism for such a strategy.

5) The discussion focused on various principle issues, including the nature of executive-legislative relations, the prerogative of the executive to shape policy, and the danger of budgetary anarchy if amendment powers were introduced. The Minister of Finance explained that the executive should have the right to make policy, which should not be undermined by changes to the budget at such a late, i.e. the parliamentary, stage. A member of the ANC even questioned the need for amendment powers, since it would challenge government's ability to govern, he argued. However, this extreme view was not generally supported amongst his party colleagues. The specific configuration of amendment powers, which should be contained in such a bill, was not discussed. The discussion was followed by closing remarks and farewell messages from members, as this was the last committee session before the elections.

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