ATC180607: Report of the Standing Committee on Finance on the Money Bills Amendment Procedure and Related Matters Amendment Act, dated 7 June 2018

Finance Standing Committee

REPORT OF THE STANDING COMMITTEE ON FINANCE ON THE MONEY BILLS AMENDMENT PROCEDURE AND RELATED MATTERS AMENDMENT ACT, DATED 7 JUNE 2018

The Standing Committee on Finance reports as follows:

 

1. Introduction

 

On 19 May 2016 the National Assembly adopted a resolution noting that a number of technical challenges have become apparent with the implementation of the Money Bills Amendment Procedure and Related Matters Act, 2009 (Act 9 of 2009) (the Act). The Assembly therefore instructed the Standing Committee on Finance (the Committee) to review the Act with a view to introduce amending legislation if necessary.

 

The resolution of the Assembly requires the Committee to:

 

1. evaluate the application of the legislation including, but not limited to, the timeframes and sequencing associated with the different financial instruments and bills, the procedures to be developed in the rules;
2. report on any other matter related to the implementation of the Act;
3. confer with the Standing Committee on Appropriations; and
4. report to the National Assembly on progress by 30 September 2016.

 

The Committee reported on its progress by 27 September 2016 (Announcement, Tablings and Committee Reports, page 4). That report sets out the background to the resolution of the Assembly, and is referred to below for ease of reference.

 

The review of the Act presented an opportunity for the Committee to engage stakeholders on the technical challenges in implementing the Act. However, this initial aim revealed further challenges in engaging the public in a meaningful way in the budget process. The Committee considers this report as a first step to deepen the engagement between Parliament and the public when processing the budget. Whilst this step primarily focuses on the technical challenges, a second review needs to  be conducted focussing specifically on the enhancing public consultation in the budget process in Parliament. 

 

1. Background

 

The Act came into operation on 16 April 2009. The procedure to amend money Bills in terms of the Act corresponds to the annual budget cycle and is aimed at effective oversight of the budget process. The Act sets out a procedure to amend the fiscal framework, money Bills, including taxation and revenue laws, and the Division of Revenue Bill.

 

However, the technical challenges referred to in the resolution became apparent during the initial stages of implementation of the Act. Therefore the Assembly, in similar wording as the resolution referred to above, noted the challenges and instructed a review of the Act on 24 May 2012. The then Standing Committee on Finance reported on progress on 20 September 2012. Due to the workload of the then Committee and the national and provincial elections in 2014, no final report was submitted and no amending legislation was introduced.

 

The resolution of the Assembly of 19 May 2016 revived the process of review.

 

1. Process

 

The Committee received briefings from the Parliamentary Legal Advisors and deliberated on the technical challenges inherent in the Act on 2 September 2016, 13 June 2017, 28 June 2017 and 6 February 2018. The latter four meetings were attended by the Standing Committee on Appropriations and the Select Committees on Finance and Appropriations.

 

In view of the staggering legislative and oversight workload of the Committee and the challenges in bringing four Committees together and the need to confer among the Committees, the Finance Committee has not been able to finalise this first phase of the review of the Act until now.

 

1. Technical challenges

 

The technical challenges identified are:

 

1. The timeframes pertaining to reporting on different financial instruments and Bills – that collectively constitutes the annual budget and the adjustments budget – are very difficult to implement and reduce the prospects of meaningful public engagement on very important Bills.

 

1. The establishment of the Parliamentary Budget Office (PBO) in terms of section 15 of the Act has not been fully completed. Planning, budgeting, financial management and reporting proceeds through the administration of Parliament as the provisions of section 15 are not adequate to create an entity at arms-length from Parliament’s administration. Therefore the Committee reviewed section 15 of the Act with the aim of ensuring compliance with the Act, creating an entity with its own accounting officer responsible for the use of funds received through a transfer from Parliament’s funds. The amendments ensure alignment with the provisions of the Financial Management of Parliament and Provincial Legislatures Act, 2009 (Act No. 10 of 2009).

 

1. Section 16 of the Act, read with the Schedule to the Act, provides for norms and standards for provincial legislatures. Section 120(3) of the Constitution provides that provincial legislatures must pass provincial legislation to set out a procedure to amend provincial money Bills. Section 116(1) of the Constitution provides that a provincial legislature may control and determine its internal arrangements, proceedings and procedures. Therefore the Committee reviewed section 16 of the Act to ensure consistency with the Constitution.

 

1. Lastly, the Committee improved the language of the Act to be consistent with language used in parliamentary processes (e.g. definitions), to effect certain corrections (e.g. section 11(4)(c)) and to delete certain obsolete provisions (e.g. section 3).

 

Challenges in co-ordinating the business of different committees involved in the budget process must be addressed in the rules of the respective Houses.

 

1. Public consultation

 

The Committee, in conferring with the Standing Committee on Appropriations and the Select Committees on Finance and Appropriations, then developed a draft Bill and invited public comments in national newspapers on 7 July 2017, in all official languages. The Committees held public hearings on 2 August 2017.

 

The main issues in the comments were:

1. The amendments making revenue proposals part of the fiscal framework is unobjectionable. However, the tension between the in-principle approval of those proposals in February, with the passing of the associated legislation much later in the year, remains.
2. Support for the strengthening the institutional status of the Parliamentary Budget Office (PBO) as a juristic person with its own accounting officer.
3. The inclusion of a ‘fit and proper’ requirement for the appointment of the Director of the PBO was accepted.
4. Timeous access to information requested by the PBO was accepted, although the prescription of the format of such information was rejected. 
5. The oversight of the PBO by the advisory board was supported by some and comments critical of this change, replacing the role of the Standing and Select Committees on Finance and Appropriations, were rejected. 
6. Constitutionality of the schedule of norms and standards for provincial legislatures is welcomed.
7. The Committee accepted that the short title of the Act can be simplified to the Money Bills and Related Matters Act.

 

1. Money Bills Amendment Procedure and Related Matters Amendment Bill

 

The resolution of the Assembly constitutes permission for the Committee develop and introduce a draft Bill as envisaged in rule 273 of the Rules of the National Assembly. The Committee consulted the JTM for advice on the classification of the Bill in compliance with paragraph (b) of rule 274(1). Parliament’s Legal Advisers recommended that the Bill be classified as a section 75 Bill. As envisaged in rule 276, the Committee published the Bill in the Government Gazette (No. 41024, 4 August 2017).

 

1. Recommendations

The Committee recommends:

1.  a further review of the Act to consider the following:

 

1. establish whether a process for tabling and consideration of revenue Bills is required; and
2. how to enhance meaningful public participation in the budget process.
3.  

1. adopting the Money Bills Amendment Procedure and Related Matters Amendment Bill.

 

The Democratic Alliance (DA) reserve their position on the Bill

 

Report to be considered