Joint Standing Committee hears that underspending will not solve Parliament’s imminent budget shortfall
The Acting Secretary to Parliament, Ms Baby Tyawa, appeared before the Joint Standing Committee on the Financial Management of Parliament recently to brief the committee on Parliament’s risk management strategy and the implementation of action plans to attend to concerns raised in Parliament’s 2019/20 annual report,
Ms Tyawa told the committee that the Strategic Risk Register covers the key institutional risks linked to Parliament’s strategic outcome-oriented goals, as set out in Parliament’s strategic plan. Parliament is moving towards the establishment of a Risk Management Forum, which should be concluded in April 2021.
Parliament’s Risk Management Forum is comprised of operational managers in the various parliamentary divisions. The committee heard that Parliament has a wide risk management framework and its risk policy is updated annually.
Ms Tyawa used the meeting as an opportunity to share proposals to mitigate the far-reaching implications of reductions in Parliament’s budget over the following three financial years. These reductions were highlighted by the Minister of Finance when he delivered the 2021 Budget Speech in the National Assembly in February.
According to the Finance Minister, Parliament’s budget will be revised downwards by R892 million over three years and R443 million of the reduction will come from employee salaries. In light of this, Ms Tyawa said Parliament needs to revisit its five-year strategy and reprioritise.
According to Ms Tyawa, Parliament’s management has had discussions with the National Treasury on the impact of this budget reduction and weigh the risks of reducing employee compensation. She said if Parliament’s budget is reduced in this way, it will be necessary to consider staff numbers in the context of achieving the institution’s mandate.
Furthermore, Parliament will require a framework to manage its wage bill. Currently, Ms Tyawa said, if all posts were filled, the wage bill would be R1.1 billion and results in a deficit of R5 million from the 2020/21 compensation budget.
The reductions of the compensation of employees as set out by the National Treasury seem to force the institution to retrench, a phase that is contradictory to the wage bill reduction proposal management is busy with.
Ms Tyawa presented to the committee that the budget allocation from the National Treasury for the 2021/22 financial year is R924 million for compensation of employees, which includes R100 million for medical aid contribution of former Members of Parliament (MPs) and Provicial Legislatures.
The actual budget allocation for compensation is R824 million, which will mean a shortage of R303 million if the current staff complement is sustained and critical vacant positions are filled.
Due to the proposed reductions, Ms Tyawa requested the committee and the Executive Authority to engage with the National Treasury to avoid salary reductions and to motivate strongly for salaries to remain as they are.
Ms Tyawa was asked by
the committee about the possibility of using Parliament’s current underspending to sustain the wage bill and avoid retrenchments. In response she said that Parliament only saved R169 million from underspending, which is not enough to address the shortfall. In response to another question about MPs’ perks, Ms Tyawa advised that administrative officials are not in a position to comment on that.
The committee was pleased with the implementation of action plans to attend to concerns raised by the Auditor-General (AG) in Parliament’s 2019/20 annual report. The CoChairperson of the committee, Ms Peace Mabe, said: “We are impressed by your implementation of the AG’s recommendations, especially Parliament’s payment of its service providers within 30 days.”