Role and Responsibilities of the Joint Budget Committee A conceptual framework 3 June 2003

Background and TORs Build on BRTT’s work TORs 1.Consider allocations in MTEF and Appropriation Bill, conduct hearings, report 2.Consider MTBPS & report 3.Monitor actual revenue and expenditure and report 4.Make proposals regarding processes Parliament should follow in line with Constitution. Task of WG to set out –Immediate processes for 1,2 & 3 –Developing institutional arrangements for 4 over medium to long term –Seeds of long-term processes lie in immediate solutions

Principles for Parliament’s interventions GENERAL PRINCIPLES Provisions and spirit of Constitution is bedrock Parliament will not duplicate or take over role of Executive Parliament’s role should not disrupt integrity of the budget Role should not allow 2 nd bite at the policy apple Process should be cooperative and consensual in interest of quality decisions Role should strengthen overall budget reform programme Role should be focused on influencing outer years, rather than amending appropriation year Role should minimise loss of predictability of policy and fund flows Role should balance influence over policy, with right to make amendments with oversight over execution.

PRINCIPLES FOR THE PROCESS 10.Parliament should define what information it needs 11.Parliament should define its capacity needs 12.Internal process should be aimed at reaching consensus in Parliament 13.NCOP’s role uniquely in interest of provinces: should not mirror or duplicate NA processes, but should be complementary DEMARCATION PRINCIPLES 14.NCOP for the time being to take lead in DOR 15.Macro-economic and fiscal policy not within JBC mandate 16.JBC mandate limited to oversight over the allocation and use of funds between and within the functions of government (distribution of budget between sectors and economic categories of spending) Principles for Parliament’s interventions

Issues and Challenges ISSUES Legal matters NCOP, MTBPS and consulting provinces Legislation for the future CHALLENGES Information and capacity Asserting JBC Protecting Parliament’s integrity

Conceptual Framework JBC’s intervention has 3 main aspects: –Influence budget policy (MTBPS and Expenditure Chapters in Budget Review) in drafting phase –Amend (eventually) allocations (Expenditure Chapter in Budget Review, NEE, Appropriation Bill) in legislative phase –Oversight over actual expenditure (in-year reports on National Departments) in implementation phase Influence supported by requiring response Eventual amendment powers to be used only in the last instance

Conceptual Framework 1 Process to influence policy and amend –Focused in 3 months following budget –But draws on year-round work in portfolio committees Output of this process report on MTEF and Appropriation Bill –Distinguish between amendments for appropriation year, and concerns for outer two years –Timing should coincide with start of executive expenditure cycle for first of outer two years –Possibility of two reports, given different time pressures 2004 target implementation year –But is election year

Conceptual Framework CRITERIA FOR INTERVENTION 1.Mismatch between policy and proposed allocations –Strategic objectives –Interrogate measurable objectives and congruency with SP –Interrogate link between outputs and objectives –Interrogate planning assumptions 2.Past performance shows up inefficient or ineffective proposed use of funds 3.To address identified waste and inefficiency (ie realise identified savings) CONSERVATIVE APPLICATION TO PROTECT INTEGRITY

Conceptual Framework PROCESS (Budget and MTBPS) 3 types of committees –JBC, cluster and portfolio JBC active at start and conclusion –At start hold hearings and identify areas of concern –At conclusion scrutinise portfolio and cluster committee recommendations and make decisions Portfolio committees engines of process Cluster committees act as clearing houses Portfolio committees to motivate every amendment JBC can create ad hoc committees Executive mirror institutions integral part of process Information requirement and NCOP input to be reviewed Similar but smaller process for MTBPS

Cluster Committees Two questions outstanding –Will cluster committees have formal status? –What will sequencing be of their involvement? Take up with Rules Committee Tasks in Budget Process –Coordinate portfolio inputs –Highlight cross-cutting issues –Integrate proposals –Recommend to JBC Principles –Practical, effective, simple –Clusters not take decisions themselves –Configuration along functional lines, aligned with Executive functional clustering

Conceptual Framework ACTUAL SPENDING Focal point for parliamentary oversight over implementation Comparison of revenue and expenditure against budget –Take account of effects of seasonality –Highlight end of year ‘dumping’ –Track contingency reserve use –Incorporate adjustment budget –ID underspending early –Expand eventually to monitoring outputs Integrate with portfolio committees Quarterly report drives process Immediate implementation Institutionalise executive response

Way Forward Discussion with other stakeholders JBC to forge role Immediately address capacity building Clarify –Time lines –Timing and vehicles for executive responses –Output documentation and timing –How to enforce PFMA provisions for Annual reports etc –Clarify composition, status and powers of Cluster Committees and sequencing of their involvement –JBC’s ability to create ad hoc committees –Hearing process (fairness; equity) –Additional information required –NCOP participation outside of JBC –NCOP role in MTBPS process