Discussions on the second day of the National Council of Provinces' (NCOPs') Budget and Fiscal Oversight Workshop focused on Parliament's powers to amend the national budget, as well as oversight on government spending in terms of the Public Finance Management Act (PFMA) and the Municipal Finance Management Act (MFMA).
Financial experts, academics as well as officials from the National Treasury and related state institutions in the finance and economics cluster were among stakeholders who joined Members of Parliament in a virtual platform for the two-day Budget and Fiscal Oversight Workshop.
Commenting on the sub-topic Parliament's Scrutiny of the Budget: Money Bills Amendment Procedure and Related Matters Act, Dr Seán Muller from the University of Johannesburg's Public and Environment Economic Research Centre said the act gives Parliament wide-ranging powers and even allows the legislature to propose an alternative budget. However, Parliament lacks the capacity to do so.
"However, as much as the act gives Parliament the powers to amend the budget, there are requirements to be followed, such as ensuring that any amendments to the budget do not harm service delivery," Dr Muller said. He said the executive opposes the idea of Parliament amending the budget, as it believes that the money bills provide enough opportunity for Parliament to make inputs on the budget in advance.
"The executive argue that amendments by Parliament are not a requirement if there is that kind of engagement, but the legislature should not downplay the amendment powers that it has," said Dr Muller. He also told the workshop that the fact that Parliament has never made any substantive amendments on all the money bills tabled by National Treasury could create an impression that Parliament is simply rubber-stamping.
Another academic, Professor Jacobus Pauw from the University of South Africa, in support of Parliament's powers provided in money bills said: "The exercise of greater powers on the budget by Parliament will not be against fiscal discipline" and "the amending powers should be taken seriously".
There were also proposals to make money bills less onerous. Some participants mentioned the difficulty of Section 85 in particular, saying that the relevant parliamentary committees do not have adequate resources to deal with it.
The workshop also heard that South Africa has numerous pieces of legislation governing the management of public finances, yet there is not enough improvement. In addition, reports show that Parliament's oversight role does not take place as it should, resulting in inadequate accountability.
Poor understanding of the budget cycle has been identified as hampering effective oversight by Parliament's committees. Parliament committees do not use reports from Treasury and the Auditor-General to hold the executive accountable on spending. "Parliament should hold us accountable in terms of what the PFMA says; whether as Treasury we are playing our role as articulated by law," said Treasury Director-General Mr Dondo Mogajane.
NCOP Delegate and Chairperson of the Select Committee on Cooperative Governance and Traditional Affairs, Water and Sanitation and Human Settlements Mr China Dodovu questioned why with all the legislation, good systems and structures, the country continues face challenges, including deteriorating finances in municipalities, provincial government and national. "The big problem we are failing to confront is poor ethical leadership, both administratively and politically, and it inhibits accountability," said Mr Dodovu.
NCOP Chief Whip Mr Seiso Mohai said the workshop has identified the need to facilitate public participation in the budget process and fiscal policy. "The budget is inherently a policy function residing in the National Treasury, and the question to be asked is whether Parliament has the requisite capacity to amend the budget," he said.
The Deputy Chairperson of the NCOP Ms Sylvia Lucas said: "We need to strengthen oversight to make sure the budget responds to the socio-economic needs of our people."