1. 1 Parliament and the National Budget Process 8 July 2014

2. PRESENTATION OUTLINE Overview Legal Framework Role Players in Budget Cycle Budget Cycle Expectations Supporting Documents 2

3. OVERVIEW What is a budget –The process of how revenue raised by national government will be allocated to national, provincial and local governments. –The budget is a process through which choices have to be made about competing priorities –A planning tool that translates policy into service delivery through the allocation of scarce resources –The budget can potentially act as a powerful tool for redistribution and development in society and can enhance the stability of the country’s economy. 3

4. Overview Oversight is a Constitutional mandated function of the legislative organs of state, to scrutinize and oversee Executive action and any organ of state. The Constitution Section 215 provides that –National, provincial and municipal budgets and budgetary processes must promote transparency, accountability and the effective financial management of the economy, debt and the public sector. Public Finance Management Act (PFMA) - The main objective of this Act is to ensure transparency, accountability, and sound management of the revenue, expenditure, assets and liabilities of all public institutions. Municipal Finance Management Act (MFMA)- The main objective of this Act is to ensure sound and sustainable management of the financial affairs of those institutions which fall within the local government sphere. The Money Bills Amendment Procedure and Related Matters Act, (Money Bills Act) puts in place the procedure to amend money bills, as per Sec 77(3) of the Constitution. It defines the processes and procedures that will be undertaken to pass the Budget 4 LEGAL FRAMEWORK

5. ROLE PLAYERS IN THE BUDGET CYCLE Legislatures (Portfolio Committees, Finance and Appropriations Committees, SCOPA) Cabinet (National and Provincial Departments, National Treasury) Auditor-General. Public Entities. Constitutional entities. Financial and Fiscal Commission (FFC) South African Local Government Association Civil Society Parliamentary Budget Office 5

6. THE BUDGET CYCLE In January, Cabinet Lekgotla discusses the government priorities for the next financial year. In February, the President presents the State of the Nation Address (SONA) and the Minister of Finance introduces the National Budget. In his budget speech, the Minister of Finance tables in Parliament the ENE chapters, Appropriation Bill and The Division of Revenue Bill. Between March and July, Parliament passes the Division of Revenue Bill and Appropriation Bill which includes considering each departmental vote. These confirm the allocation of funds to each vote. In September to November, the National Assembly considers Annual Reports and submits BRRR reports, adopts the fiscal framework and passes money bills. –The MTBPS sets out the budget policy framework proposals for the outer three year years (MTEF) –BRRR – provides an assessment of the Department’s service delivery performance given available resources, must provide an assessment on the effectiveness and efficiency of the Department’s use and forward allocation of available resources and may include recommendations on the forward use of resources. 6

7. EXPECTATIONS As the peoples’ representative, Parliament: Approves or amends the Budget (guided by Money Bills Act Section 10) Ensures that the Budget matches the nation’s needs with the resources that are available. Parliamentary committees will be ready to consider and report on their respective budget vote Money Bills Act provides that when considering the Appropriation Bill, the National Assembly must also assess the budget votes of departments together with their strategic and annual performance plans. In the next few months: –Quarterly Expenditure and Performance Reports –Annual Reports tabling in September 2014 –BRRR in September-October 2014 –MTBPS in October 2014 7

8. DOCUMENTS FOR BUDGET OVERSIGHT Key Government policy documents that are relevant: –SONA –Sector Relevant Documents –National Budget Documents –Division of Revenue Act of 2014 –Budget Review, –Estimates of National Expenditure (ENE), –Appropriation Bill –Minister speeches and presentations to committees of Parliament –Updated Strategic Plans –Annual Performance Plans –Auditor General and SCOPA –Reports of other relevant institutions (FFC, DPME) 8

9. Ndza Nkhensa 9