Enhancing Parliament's role in the budget process: briefing

Oversight & Accountability

27 February 2002
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Meeting Summary

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Meeting report

27 February 2002

Chairpersons: Ms Chohan-Kota (ANC) and Ms Nkuna (ANC)

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Mr Mahlangu said that Parliament has to look at ways of influencing the budget from the onset. That is, in the early stages, when Treasury does its rounds of gathering information and engaging stakeholders on the budget cycle. It does not help that Members try to effect changes only after the budget has been finalised and is tabled in Parliament because this upsets the budget. Amendment of the budget by Parliament should take place only in exceptional circumstances.

A Budget Committee pilot scheme was established by Parliament to look at assisting Committees with their oversight role regarding the budget. The view is to continue with the budget council as a clearing-house for budget matters from Committees. Committees would forward their proposals to the Budget Committee, which would then engage with the Budget Council to influence the budget. It is planned that in order not to limit the inherent powers Parliament has at the moment, the Budget Committee be allowed to function and that once lessons have been learnt from it, legislation would then be considered.


The Chairperson of Committees, Mr N Mahlangu, briefed the Committee on reforms planned to enhance Parliament's role in the budget process.

Mr Mahlangu said the Budget Reform Task Team, when looking at the issue, considered Parliament's Constitutional Responsibilities. These are as follows:

- Legislative [Section 43(a)], which provides that the legislative authority of the national sphere of government is vested in Parliament.
- Oversight [amongst others, Section 92(2)], which states that Members of Cabinet are accountable collectively and individually to Parliament for the exercise of their powers and the performance of their functions. Section 55(2), which provides that the National Assembly must provide mechanisms to ensure the executive organs of state are accountable to it and to maintain oversight of exercise of authority by the executive, including implementation of legislation; and the Public Finance Management Act.
- Budgeting [Section 77], which provides for money bills.
- Amending the budget [Section 77(2)], which provides that an Act of Parliament must provide for a procedure to amend money bills before Parliament.

He said Parliament has to look at ways of influencing the budget instead of amendment which international experience has shown upsets instead of influences the budget. Parliament has to consider the establishment of a Budget Committee to assist Members in engaging with the budget. This Committee would serve as a clearing-house for Parliamentary Committees' interaction with the budget.

Guiding principles of Reform
Mr Mahlangu said one of the guiding principles in this regard is that the budget is an Executive creation and that Parliament should maintain its integrity. Parliament should concentrate greater effort on influencing the compilation of budget and only rely on amendments as a last resort. Parliament has to draw on its oversight role to inform and influence the budget. The manner in which the budget is interrogated at the moment is ineffective. Rather, Members should influence the budget from the moment Treasury starts its work on the budget.

Ways in Which Parliament can Influence Budget
Parliament should look at influencing the compilation of the budget through interaction with the Executive at the consultative stage, which is a year before the tabling of the budget. Parliament can also influence the budget by amending it at the end of the process. Parliament can also influence the budget by continuing its oversight of government spending to ensure that spending is in accordance with the budget objectives or expenditure priorities.

Influencing the formation of the Budget
This can be achieved through formal response from Parliament to the MTBPS and MTEF. Formation of the budget can also be influenced by Parliamentary input to the Budget Council and Portfolio Committee input into Departmental budgeting. He said if there is to be a meaningful budget there should be a move away from the notion of departments fighting for a larger slice of the budget but rather to look at whether in a cluster the budget allocated is meaningful to meet its requirements.

Amendment Powers
The guiding principles in this regard are to preserve the integrity of the Executive budget. This can be achieved by not coming in the back door legislation on the budget. Another guiding principle is to limit amendments to most severe cases such as:
-Significant incongruence between spending and delivery; policy and spending priorities not matching; and extreme Departmental waste and inefficiencies.
Another guiding principle is to limit the scope and impact of amendments.

Structure and Processes
The proposal is to utilise Committee oversight expertise and allow clusters to deal with interdepartmental issues. A Budget Committee would coordinate the overall process and serve as clearing line. The NCOP also has to be brought into the process.

Division of Revenue and Intergovernmental Fiscal Relations
Mr Mhlangu said the NCOP should lead Parliament in budget process for policies that impact on provinces as it is uniquely suited to do this. More time in Parliament, especially the NCOP, has to be spent debating and working with the Division of the Revenue Bill.

Other issues
Mr Mahlangu said Parliament has to formalise relations with the Executive for sharing relevant information. Parliament's attention has to be channelled towards budget issues and more effective performance of oversight. Capacity within Parliament has to increase in relation with new tasks taken on through budget reform.

Ms D Smuts (DP) asked at what stage of the cycle one would anticipate the amendment of the budget taking place.

Mr Mahlangu said his view is that the mechanism contemplated should allow a process where Committees interrogate the budget and send their input to the Budget Committee, which in turn engages with the Budget Council so that Members' concerns are accommodated. The Budget Committee pilot scheme was run but the problem is that it was established at a very late stage. If Parliament proceeds with the Budget Committee, the view is to establish it early and brief it on its work. They are sketching Parliament's amendment powers, bearing in mind separation of powers.

Mr Lever (DP) asked if some thinking has gone into who initiates the amendments when inefficiency results in lack of spending. His view is that the Budget Committee would be the right place to do this.

Mr Mahlangu said if this were done by sectoral committees it would result in them fighting. However, if it is done by the Budget Committee as the clearing-house it would be in a better position to engage the Budget Council.

The view is to establish the Budget Committee first and learn from it and then do the legislation. At the moment Parliament inherently has an oversight role and the Executive is accountable to Parliament. It is foreseen that legislation, if begun with, could have the effect of limiting the inherent powers Parliament has and Parliament should not feel boxed in by legislation at the end of the day.

The meeting was adjourned.



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