Standing Committee on

Appropriations - Induction -04 July 2019

Dr. Dumisani Jantjies

Dr. Seeraj Mohamed

Ms. Nelia Orlandi

Outline

• Introduction

• International understanding of what is PBO?

• Establishment of the SA PBO

• Money Bills and Related Matters Act 2018

• PBO organisational structure

• Legislated Parliament Committees

• PBO workflow and outputs

• Stakeholder engagements

• Standing Committee on Appropriations

• Conclusion

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Introduction

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Background : After the 2008 Global Financial Crisis:

• Continued expectation that governments will deal with socio economic challenges;

• Parliamentary Budget Offices (PBOs) were established by many legislatures who

recognized the need for more technical capacity, analysis and advice;

• PBOs enhance the role of the legislatures to hold governments accountable on budgets

and service delivery;

• More countries established PBOs after the global financial crisis,

• PBOs were also established on the African continent with Uganda being the oldest;

• A Network of African Parliamentary Budget Offices (AN-PBO) was set up in 2016 and

some new PBOs have been established since then;

• RSA PBO was established in 2013, even though the Money Bills Act was promulgated in

2009 (the Act was further amended in 2018);

• The Act says, in line with the RSA Constitution, that Parliament should establish rules to

deal with money bills;

Thursday, 04 July 2019

International common understanding of what is PBO?

• Entity set-up within the parliaments to provide members with independent analysis and advice as part of support to fiscal oversight;

• International experiences shows that, some PBOs are set-up independently from the legislature’s administration and others within;

• PBOs differ internationally in terms of their functions:• Support legislatures that provide an alternative budget to that of executive;

• Support legislatures to amend the budget proposals of the executive;

• Support legislatures to understand the budget proposed by the executive;

• An extension of the executive, yet report to both the executive and legislature;

• Operations of PBOs are affected by many dynamics:• Whether established by legislation or not,

• Provide support to Committees or MPs or publishes its work,

• Accountable to Administrators, or Legislature or both;

• Publish its work, or share its work to other stakeholders

• Common issues confronting PBOs:• Implication of lack of a specific legislation on PBOs (e.g. Source of mandate or protecting

the office from undue influence)• Governance and reporting structures (Administration vs Parliament)• Budget or funding of PBOs (direct transfer or not)• Access to information needed for analysis

• Work flow arrangements and Office size• Access to human capital

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Establishment of the South African PBO

Money Bills Amendment Procedure and Related Matters Act 2018

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• Established the PBO as a juristic person;

• The Director is the Accounting Officer of the PBO, and accountable

to Parliament;

• The Director, in consultation with the Advisory Board (2 House Chairs

and 4 Chairs of Finance and Appropriations Committees) determine

the structure and conditions of service of the PBO;

• The transfer of funds to PBO from Parliament will be in accordance to

the Financial Management Act of Parliament;

• The PBO may obtain information from any organ of state or person

that derives funds from the National Revenue Fund;

Thursday, 04 July 2019

Money Bills Amendment Procedure and Related Matters Act 2018 - Core functions

• Undertaking research and analysis for the 4 committees

• Annually providing reviews and analysis of the documentation tabled in

parliament by the executive in terms of the act

• Providing advice and analysis on proposed amendments to the Fiscal

Framework, Division of Revenue Bill and Money Bills and on policy proposals

with budgetary implications

• Monitoring and synthesising matters and reports tabled and adopted in a

House with budgetary implications, with particular emphasis on reports by

other committees

• Keeping abreast of policy debates and developments in key expenditure and

revenue areas

• Monitoring and reporting on potential unfunded mandates arising out of

legislative, policy and budgetary proposals

• Undertaking any other work deemed necessary by the Director to support the

implementation of the act

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PBO: Organisational Structure

Director

Vacant

Deputy Director: Economics

Dr Seeraj Mohamed

Economic Analyst

Mr Rashaad Amra

Economic Analyst

Ms Fatsani Banda

Deputy Director: Public Finance

Dr Dumisani Jantjies

Finance Analyst Mr Siphethelo

Simelane

Finance Analyst

Ms Gloria Mnguni

Deputy Director: Public Policy

Ms Nelia Orlandi

Policy Analyst

Dr Mmapula Sekatane

Policy Analyst Vacant

Office Manager

Mr Alfred Monnakgotla

Executive Assistant

Ms Linda Mangwani

Office Co-ordinator

Mr Alan Van Zuydam

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Legislated/Primary Parliament Committees

Standing Committee on Appropriations:

National Assembly (NA)

Select Committee on Appropriations: National Council

of Provinces (NCOP)

Standing Committee on Finance: National Assembly (NA)

Select Committee on Finance: National Council of Provinces

(NCOP)

PBO Primary Committees as per

Money Bills Act

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PBO Workflow

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Outputs

• Pre-MTBPS and Budget briefings• Medium Term Budget Policy Statement analysis• Adjusted Budget analysis• Budget analysis• Quarterly Economic and Fiscal Briefs• Policy analysis focusing on the monitoring of the

implementation of the National Development Plan(NDP)

• In-year revenue forecast

• Forecast audits:• Growth estimates

• Research on request from Members• List of details of work done attached in PBO’s annual

reports

Outputs we have done for SCOA

•Work done previous:• Analysis on Appropriation Bills (Budget Review and MTBPS)

• National Development Plan and alignment to budgets;

• SOE financial analysis (e.g. Eskom, SAA)

• Business Incentive analysis

• Analysis of Free Fee Higher Education

• Electricity generation technology choice: Costs and considerations

•Proposed amendments to appropriation bills: • Proposed amendments to adjustment appropriations 2018

• Proposed amendment to the appropriation bill 2017

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PBO Stakeholder Engagement

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• Established African Network of Parliamentary Budget Offices (AN-PBO) in 2016;

• African PBOs and Canada-PBO and OBR-UK,

• Annual AN-PBO Conference, 2016, 2017 and also August 2018 in Cape Town; 2019 to be in Accra, Ghana in August 2019

• AGSA, FFC, DPME, NT and other domestic stakeholders;

• Non-African PBOs;

• Multilateral Institutions (IMF, WB, OECD);

• International agencies in Africa (e.g. CABRI);

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Standing Committee on Appropriations

Each house established a Committee on Appropriations to

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;

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Standing Committee on Appropriations

Money Bills considerations and processes- Money Bills and Related Matter Act 2018:

• Division of Revenue Bill-Sec 9

• Tabled during the budget review February

• To be passed 35 days after adoption of fiscal framework, around April

• Appropriation Bill-Sec 10

• Also tabled during the budget review

• To be passed within 4 months after the start of financial year, by end of July

• Adjustment Appropriation Bill- Sec 6

• Tabled during the Medium Term Budget Policy Statement (MTBPS), around October

• To be passed 30 days after tabling of the MTBPS,

• Amended Money Bills and Related Matters Act 2018 makes provision for extended time in adopting the Bills;

• The Act further makes provisions for amending the Money Bills, with

specific measures to be taken into account,

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Conclusion• PBO was established in line with international best experiences while

taking into account the South African context;

• Established as a juristic person within Parliament, led by a Director and

accountable to Parliament;

• PBO provides independent and objective advice and analysis on fiscal

issues to Parliament’s Committees, but does not give recommendations;

• PBO is established in terms of Money Bills and Related Matters Act 2018

to support Finance and Appropriations Committees; but other

committees subject to capacity;

• Mandate set-out in the Money Bills and Related Matters Act 2018;

• PBO provides both regular analysis and demand driven research and

analysis to Committees; including SCOA

• Due to limited capacity, PBO’s work flow system processes requests

through the Committee Chairperson, as opposed to individual MPs;

• PBO prioritises budget and MTBPS analysis and related money bills or

instruments;

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Thank you

PARLIAMENTARY BUDGET OFFICE

Tel: +27 403 2360

Fax: +27 402 3153 and Fax-to-Mail: +27 086 718 2531

Email: pboinfo@parliament.gov.za

Website: https://www.parliament.gov.za/parliamentary-

budget-office

Location

4th Floor, Parliament Towers

103-107 Plein Street