Gauteng Provincial Legislature Money Bills Act Discussion 27 March 2019

Outline Introduction Role of Committees Role of the PBO Outputs of the PBO Stakeholder Relations Gauteng Provincial Legislature Money Bills Amendment Procedure and Related Matters Bill Summary

Introduction The passing of the Money Bills Amendment Procedure and Related Matters Act (No. 9 of 2009), required the re- organisation of some of the committees dealing with finance Each House had to establish a committee on finance Each house had to establish a committee on appropriations It empowers Parliament to make changes to the budget by amending money bills. It also provides for the implementation of public participation processes and The establishment of the Parliamentary Budget Office

Role of Committees The committees on finance consider and report on: The national macro-economic and fiscal policy Amendments to the fiscal framework, revised fiscal framework and revenue proposals and Bills Actual revenue published by the National Treasury Any other related matter set out in this Act. The committees on appropriations consider and report on: Spending matters Amendments to the Division of Revenue Bill, the Appropriation Bill, Supplementary Appropriations Bills and the Adjustments Appropriations Bill Recommendations of the Financial and Fiscal Commission Reports on actual expenditure published by the National Treasury Any other related matter set out in this Act

Role of the PBO The Parliamentary Budget Office (PBO) offers independent and objective advice and analysis mainly to the Finance and Appropriations committees in both Houses of Parliament on money bills and other bills with financial implications Providing reviews on the documentation tabled in parliament Monitoring and synthesising matters on reports tabled and adopted in a House with budgetary implications Advice on policy debates and developments in key expenditure and revenue areas Undertaking any other work deemed necessary by the Director to support Committees

Outputs of the PBO Medium Term Budget Policy Statement analysis Budget analysis Quarterly Economic and Fiscal Brief Policy analysis focusing on the monitoring of the implementation of the NDP In-year revenue forecast Forecast audits: Growth estimates Research Other depending on capacity Fiscal Policy: Fiscal consolidation and efficiency measures The effectiveness of efficiency measures Risks Debt Capital spending Expenditure trends Strategic direction: NDP, SONA, mandate paper and Economic stimulus and recovery plan Policy expenditure priorities Shift in expenditure per function Economic performance: The budget depends on the economy to generate the resources to finance these investments Topical from risks: Credit rating, wage bill, SOEs and contingent liabilities

Stakeholder Relations Stakeholder relations are established for networking, information sharing, learning of best practices and for peer- review purposes. Our stakeholders include: Research structures (internal and external) Government departments Business Civil society Academic & research institutions and International networks

Stakeholder Relations The PBO established relations with international stakeholders in: Africa Multinational institutions such as The OECD Network of Parliamentary Budget Officials Independent Fiscal Institutions, and The Global Network of Parliamentary Budget Offices The networks meet annually to share experiences with respect to: Mandate Functions Knowledge sharing around different types of analysis performed by PBOs The PBO RSA established the African Network of PBO’s in 2016/17. The aim is to establishing, solidifying and maintaining strategic relations on the African continent Since establishment, the PBO has managed to establish relations with a number of key international stakeholders on the African continent including relations with established multinational institutions. The international networks to which the PBO include the OECD Network of Parliamentary Budget Officials and Independent Fiscal Institutions, and The Global Network of Parliamentary Budget Offices. The networks meet annually to share experiences with respect to the design, mandate and functions of PBOs, enhance knowledge around different types of analysis performed by PBOs and undertake network business and decision making. It is, therefore, essential for the PBO to participate on such platforms. Such exposure ensure the alignment of the PBO to international counterparts. The PBO RSA established the African Network of PBO’s in 2016/17 . The aim is to establishing, solidifying and maintaining strategic relations on the African continent. This objective is line with the Policy Priorities of the 5th Democratic Parliament, AU Agenda 2063.

Gauteng Provincial Legislature Money Bills Amendment Procedure and Related Matters Bill Discussion of specific sections in the draft bill. Blue font: Suggestions for consideration

Gauteng Provincial Legislature Money Bills Amendment Procedure and Related Matters Bill S.(5) Functions Establishes a Budget Committee to: Examine the draft budget policy statement – Medium Term Budget Policy Statement including the Fiscal Framework Evaluate: Budget estimates – Actual and Estimated MTEF Economic policies - Economic review and outlook Budget policies - Budget Policy Priorities Function of the Budget Committee is to consider and report on: Provincial Macro-economic and fiscal policy – Revised macroeconomic outlook and Fiscal Framework Amendments of the Provincial Appropriation Bill – Revised Appropriations Bill Actual and estimated Revenue collection and Expenditure Recommendations from the FFC The Budget Committee must receive reports on budgets from committees: This is not clear

Gauteng Provincial Legislature Money Bills Amendment Procedure and Related Matters Bill Sec. (7) Budget Review and Recommendation Reports: Committees to submit prior to the tabling of the MTBPS- Why? Consider after the tabling of the MTBPS to inform the Budget. This will also provide an opportunity to include the most recent Auditor General Reports Sec. (8) Gauteng MTBPS: Consider more specific content Consider more realistic timeframe for revenue and expenditure analysis Timing of the House resolutions are important to provide enough time for the Provincial Treasury to include it in the following years Budget Sec. (9)Introduction of the Provincial Annual Budget, Appropriations Bill, Departmental Annual Performance Plans. (2) (f) Check relevance i.t.o “Borrowing Powers of Provincial Governments Act, 1996 (No.48 of 1996) Include Contingency Reserve

Gauteng Provincial Legislature Money Bills Amendment Procedure and Related Matters Bill Sec. (11)Amending Revenue Bills and Revenue Proposals Check relevance of this section Relevant MECs are responsible for the determination of tariffs and levies and fees for their sectors. Sec. (13)Provincial Adjusted Budget and Adjustments Appropriation Bill Also see PFMA Sec. 31 for specific conditions for adjustments to consider for inclusion Sec. (15)Provincial Legislature Budget Office Unpack transfer of funds from the Provincial Budget. Unpack the outputs (main issue as mentioned in the brief is the gap between planned and actual spending) Consider reporting on responsiveness, credibility and implementation. Unpack structure

Summary Each House established a committee on finance and appropriations Parliament established a PBO with a specific function to assist Members with the implementation of the Act Administrative matters are still a challenge for the operation of the PBO Gauteng legislation requires the legislature to establish a Budget Committee as well as a PBO Although lessons could be learned from the National Parliament, specific provincial practices need be considered