Parliament, the Budget and Poverty in South Africa. A Shift in Power: A Shift in Power

Introduction

Introduction Kate Lefko-Everett, Ahmed Mohamed, Len Verwey, Musa Zamisa S ince the transition to democracy in 1994, South Africa has undergone considerable self-assessment and restructuring. In addition to a range of social and economic challenges that had to be urgently addressed, it was also necessary to bring about the fundamental restructuring of democratic institutions and the public sector. Fiscal governance in the apartheid era was largely non-transparent and broader mechanisms of accountability and citizen participation did not exist. Neither Parliament nor civil society organisations were actively involved in decision-making processes, including those relating to budgeting. Even within the cabinet, budget information appears to have been selectively available to ministers, with many items, such as those pertaining to defence and internal security, shrouded in secrecy. Lack of transparency, combined with the unwieldy apartheid bureaucracy, the absence of centralised expenditure monitoring and the practice of in-year resource diversion, meant that spending and budget outcomes often differed markedly from budgetary intentions. Large unintended deficits, for example, indicated failures of the budget system as an instrument of financial management and control, as well as reflecting the dire state of the South African economy. Since 1994, the government, led by the African National Congress (ANC), has worked to build a more transparent, accountable and participatory system of fiscal governance. The foundations of such reforms were laid by the 1996 Constitution , which also recognised Parliament and civil society as key players in democratic budgeting processes. In recognition of the interests of civil society, for instance, sections 59 and 72 of the Constitution require both houses of Parliament, the National Assembly and the National Council of Provinces (NCOP), to facilitate public involvement in their legislative processes. The National Assembly and the NCOP are further required to conduct their business in an open manner. Section 195 further demands that when matters of public administration are considered “people’s needs must be responded to, and the public must be encouraged to participate in decisionmaking ”. The 1996 Constitution also clearly recognises the balance of power between Parliament and the executive arm of government. Section 55 (1) and 144 (1) give the National Assembly and provincial legislatures the power to “consider, pass, amend or reject any legislation” prepared by the executive. This includes any budgetrelated legislation, referred to as “money bills”. Sections 55 (2) and 144 (2) empower both the National Assembly and NCOP to hold the executive to account, and to scrutinise and oversee implementation. Both national and provincial legislatures are, therefore, given the authority to engage with budget policy and oversee the implementation of budgets. The Public Finance Management Act and the Municipal Finance Management Act also embody rigorous requirements for reporting, tendering and the performance of accounting officers. This reflects a shift away from a narrow emphasis on accountability for financial regularity towards a results orientation. Accounting officers have been given greater managerial discretion to structure their programmes to meet|2| PARLIAMENT, THE BUDGET AND POVERTY IN SOUTH AFRICA: A SHIFT IN POWER policy objectives. National Assembly and NCOP legislators and committees have, in turn, had to improve their capacity for effective oversight. However, these reforms have primarily expanded ex post facto oversight, that is oversight of budget implementation. Parliament has lacked the formal power to amend budgets required by section 77 of the Constitution, which mandates the passing of an Act of Parliament that sets out a procedure for the legislative amendment of money bills. Despite a number of attempts to introduce such legislation, it has not been passed into law. A draft bill circulated in 1997 ran into strong opposition, as it significantly constrained the role of Parliament in budgeting. In 2008, however, the Money Bills Amendment Procedure and Related Matters Bill (B75-2008) was introduced. By early 2009, the bill had passed through both houses of Parliament, and days before the 2009 elections, President Kgalema Motlanthe signed it into law as the Money Bills Amendment Procedure and Related Matters Act (No 9 of 2009). The new version of the bill and its relatively rapid progress through the legislative mill can be ascribed to the belief among legislators and civil society that the executive dominated budgetary decision-making to an excessive degree. Also influential were political power shifts in the ANC after the party’s 52nd national conference in Polokwane in 2007. The Polokwane conference saw a resurgence of the “left” in the ANC and its partners in the...