Facts are there for all to see

Economists weigh in on how na­tional trea­sury can im­prove SA’s al­ready world­class bud­get doc­u­ments

Financial Mail - Investors Monthly - - Budget 2017 - Claire Bis­seker bis­sek­erc@fm.co.za

Over the years, SA has en­trenched its rep­u­ta­tion as a global leader in bud­get trans­parency. This is clear from the ex­pan­sive bud­get in­for­ma­tion that is pub­lished for public scru­tiny each year, as well as from SA’s per­for­mance in in­ter­na­tional bud­get sur­veys.

“There was a time, back in the 1980s, when all you wanted to know from the bud­get was gov­ern­ment’s as­sump­tion on the gold price, be­cause tax rev­enue from the gold mines ac­counted for 25% of gov­ern­ment tax rev­enue,” re­calls San­lam eco­nomic ad­viser Jac Laub­scher.

In those days the public had ac­cess only to the bud­get speech and ta­bles of num­bers.

Bud­get trans­parency has evolved steadily over time. In 1993, the Bud­get Re­view doc­u­ment was in­tro­duced. It has be­come an ex­ten­sive re­source of around 235 pages, pre­sent­ing an enor­mous amount of in­for­ma­tion on fis­cal pol­icy across eight chap­ters.

The next big evo­lu­tion came in Oc­to­ber 1999, when trea­sury held its first-ever medium-term bud­get. In these bud­gets it sets out its spend­ing, rev­enue, debt and deficit pro­jec­tions as well as eco­nomic fore­casts for the next three years.

“What is now nec­es­sary is much more than bud­get trans­parency,” says Laub­scher. “The bud­get tells you how the money is spent in terms of ex­pen­di­ture [line] items but it doesn’t tell you who gets the con­tracts.”

Laub­scher feels it would be use­ful in the cur­rent cli­mate for trea­sury to dis­close the iden­ti­ties of the re­cip­i­ents of all gov­ern­ment con­tracts over R10m.

He would also like to be told more about the as­sump­tions that un­der­lie trea­sury’s macroe­co­nomic mod­els and in­for­ma­tion about how sen­si­tive the re­sults are to the as­sump­tions made, whether on the rand, the oil price or mat­ters such as SA’s tax buoy­ancy ra­tios.

Stan­lib chief econ­o­mist Kevin Lings iden­ti­fies a few pieces of in­for­ma­tion he would like to see in­cor­po­rated in the bud­get. These in­clude:

A de­tailed time-se­ries on in­fra­struc­ture spend­ing. This should pro­vide bud­geted ver­sus ac­tual in­fras­truc­tural spend, ex­plain why key projects had been de­layed or shelved, and give in­for­ma­tion about which projects had started in the past fis­cal year;

An in­di­ca­tion of the suc­cess of tax incentive mea­sures such as the youth wage sub­sidy and tax-free sav­ings plans; and

A more de­tailed break­down of gov­ern­ment em­ploy­ment, in­clud­ing wage costs per de­part­ment, de­tails about mu­nic­i­pal salaries and the amount spent an­nu­ally on con­sul­tants.

In 2010, SA came first in the Open Bud­get In­dex sur­vey, but in 2015 — a year when the rules placed a greater em­pha­sis on for­mal public par­tic­i­pa­tion and bud­get over­sight — SA dropped to third place out of 102 coun­tries in a closely fought race with New Zealand and Swe­den. Even so, SA was one of only five coun­tries that per­formed solidly across all three main ar­eas of public ac­count­abil­ity and scored above 80 out of 100.

In 2015, SA and New Zealand got equal scores on public par­tic­i­pa­tion, bet­ter than Swe­den. On the other hand, SA and Swe­den got equal scores on bud­get over­sight, which were bet­ter than those of New Zealand.

SA scored lower on a sub­cat­e­gory of public par­tic­i­pa­tion be­cause the of­fice of the au­di­tor­gen­eral lacks a for­mal mech­a­nism to se­cure public in­put. In SA this is done at the dis­cre­tion of the au­di­tor-gen­eral.

Past sur­vey re­sults have been used to iden­tify gaps in bud­get trans­parency, ac­cord­ing to na­tional trea­sury. The im­prove­ments im­ple­mented be­tween 2010 and 2015 in­cluded the ini­ti­a­tion of pro­cure­ment re­forms by the chief pro­cure­ment of­fi­cer to en­hance trans­parency in the bid­ding for gov­ern­ment con­tracts.

Na­tional trea­sury is also con­tin­u­ing to en­gage civil so­ci­ety and academia in the quest to ex­pand bud­get par­tic­i­pa­tion. A bud­get out­reach pro­gramme is rolled out ev­ery year af­ter the na­tional bud­get has been tabled in which trea­sury takes the bud­get dis­cus­sion to fo­rums around the coun­try, hosted by univer­si­ties.

Civil so­ci­ety work­shops are also held an­nu­ally to present the bud­get as well as to so­licit civil so­ci­ety or­gan­i­sa­tions’ in­puts.

Fur­ther­more, an on­line bud­get data por­tal project with civil so­ci­ety rep­re­sen­ta­tives on its steer­ing com­mit­tee is in the ini­tial stages of im­ple­men­ta­tion.

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