Parliamentary Budget Office key to monitoring government finance
CAREFUL scrutiny over government spending and revenue collection is key to Parliament fulfilling its constitutional mandate of maintaining oversight over executive action and policy implementation.
The Parliamentary Budget Office (PBO) of the South African Parliament, established in 2013, supports Parliament’s oversight.
The PBO was set up as a result of the Money Bills Amendment Procedure and Related Matters Act of 2009.
This act also provided for establishment of Parliament’s standing and select committees on finance, and standing and select committees on appropriations.
The act has its origins in the Constitution’s provision: “An act of Parliament must provide for a procedure to amend money bills before Parliament.”
It has empowered Parliament to make adjustments to the Budget as a whole, as well as to the Budgets of specific national government departments and entities.
This is in keeping with the recognition in the Constitution that it is necessary for Parliament to engage actively with the budget process in the interests of good governance and financial transparency.
Before the act, Parliament could approve or reject the Budget, but not make amendments to it.
The act places great responsibility on Parliament and has begun to reframe the nature of the relationship between Parliament, as the legislative authority, and the national executive, as the custodians of service delivery.
Parliament’s oversight over the Budget and public participation in the Budget process has been enhanced.
However, it became apparent that there are several technical challenges hindering the full realisation of the original intentions of the act.
That is why the National Assembly, in 2016, instructed the standing committee on finance to review the act to further the realisation of the its original vision.
One of the practical challenges which the standing committee on finance has identified is the time frames within which the Budget and related legislation must be passed.
The short time frames within which Parliament must consider and approve tabled legislation limit the extent to which it is able to sufficiently consider the merits of government’s proposals, their suitability for the country, and meaningfully consult the public.
The committee has also agreed to follow international best practice by furthering the administrative independence of the PBO through establishing it as a juristic person, at arms length from Parliament’s administration.
Despite these challenges, Parliament’s PBO has provided independent, objective and professional research, advice and analysis to its standing and select committees on finance and appropriations and to other committees of Parliament on specific issues.
The PBO has, for instance, provided analysis and advice to Parliament during the Budget and medium-term Budget policy statement through briefings on these to joint meetings of the finance and appropriations committees, reports on key macroeconomic factors affecting the economy, assessments of revenue and expenditure patterns and contingent liabilities and potential fiscal risks.
It has also provided analysis about whether the government’s performance plans, Budgets and outcomes are in keeping with implementation of the National Development Plan.
Specific issues also have been addressed. In 2016, the PBO provided a report and analysis on the sustainability of the current social grant system, outlining scenarios and key areas.
The PBO has produced reports and analyses of Eskom’s financial position, finances and energy choices for new generation, as well as on university funding and fees.
Research has shown that meaningful public participation and parliamentary oversight over Budget processes increases social ownership of the Budget and effective allocation of funds, while reducing waste.
There is agreement the specialist, independent, objective and technical research and analysis available from PBOs is useful and helps to enhance transparency in how public funds are managed.