South Africa

Maverick Citizen: People's Budget

Explaining the process of a post-Budget submission to Parliament

At 2pm on Wednesday 26 February, the Minister of Finance will deliver the 2020 Budget speech. Civil society organisations often point out how insufficient budgets constrain service delivery. However, while Parliament’s finance and appropriations committees put out calls for post-Budget submissions, many organisations do not consider participation by making a submission to Parliament. This is usually because public budgets can seem daunting to analyse. This article demystifies the parliamentary Budget process and explains how to prepare a post-Budget submission.

Peoples BudgetIn the run-up to the 2020 Budget speech, commentators are anticipating a tough Budget and predicting which tax types may attract rate hikes. Most civil society organisations (CSOs) do advocacy work that relates to people’s experience of poverty, unemployment and inequality. They see directly how budget considerations impact at a household level.

According to the Constitution, Parliament is meant to support dialogue between the people of South Africa and their elected representatives. A well-prepared written and oral submission can be a contribution to democracy-building. To make the task of preparing a submission simpler, Parliament has developed a short guide. However, as this piece on “people’s government, the people’s voice” which contains a letter from a civil society activist about the experience of making a submission and doing an oral presentation in Parliament illustrates, doing so can induce a mixture of excitement, nerves and pride.

Knowing the system relieves the stress. Here’s what we think you need to know:

Parliament’s standing and select committees on finance and on appropriations are the relevant committees that sit very soon after the Budget speech. It’s important to be aware that both the National Assembly and the National Council of Provinces have these committees.

There are also a range of National Assembly portfolio committee meetings in which members deliberate on each department’s budget and service delivery performance when they do Budget Review & Recommendations Reports. For example, the portfolio committee on basic education and the portfolio committee on social development.

The standing and select committees on finance hold a public hearing soon after the Budget speech. They have already put out a call for submissions and public hearings on the Budget will be conducted at Parliament on Wednesday, 4 March 2020. They have requested written submissions by no later than 12:00 on Monday, 2 March 2020. If you intend to make a written submission, you should also indicate if you would like to make an oral presentation in Parliament.

When preparing a written submission, it is important to know the different mandates of the committees. The select and standing committees on finance consider and report on:

  • National macro-economic and fiscal policy;
  • Amendments to the fiscal framework;
  • Revenue proposals and bills;
  • Actual revenue published by Treasury.

The Select and Standing Committees on Appropriations consider and report on:

  • Spending matters;
  • Amendments to Division of Revenue Bill;
  • Amendments to Appropriations Bills;
  • Actual expenditure published by Treasury;

The key essential distinction is that the finance committees focus more on revenue-related matters (taxes and borrowings) and the appropriations committees more on expenditure-related matters. This is important to note, because most CSOs do sector-based work — for example on health and education. The impulse is therefore to analyse the government’s spending plans for relevant sectors such as looking at the National Department of Basic Education or Health’s budget and to come to the finance committees with this analysis.

However, not understanding the mandates of the committees, organisations may rush to do a post-Budget analysis and submit an expenditure-related analysis to the finance committees. This can be a source of frustration to MPs, who while they do listen, may refer a CSO to a more relevant committee, such as the National Assembly’s portfolio committee on basic education. In turn, CSOs may battle to understand the specifics of committee mandates and how to locate which committee to highlight injustices that people experience.

The Parliamentary Monitoring Group’s website is an excellent tool for understanding what different parliamentary committees deliberate on.

The finance committees

The finance committees’ key mandate is to look at macro-economic and fiscal policy, fiscal framework amendments and revenue proposals.

For example, in order to balance the Budget, what did Treasury say in relation to taxes and borrowings? Did it propose a mixture of measures including increasing VAT and “sin taxes” and increasing borrowings?

Macroeconomic policy is a set of policy measures that is supposed to promote inclusive and sustainable economic growth and in turn increase the number of jobs available in the country. Fiscal policy is essentially the fine balancing act of setting spending levels and balancing the Budget through revenue generation (the mix of taxes that are collected and money that is borrowed). Fiscal policy choices influence a country’s economy and they can also have an impact on poverty, inequality and employment.

While many organisations may find the technical language in which these considerations are presented a bit removed from their daily work, they do impact directly on households and so it is worthwhile analysing. For example, after the 2018 VAT rate increase, various CSOs concerned about the impacts of the percentage point increase to the VAT rate affecting the poorest households, made submissions to the finance committees.

Appropriations committees

The appropriations committees hold public hearings a bit later after the Budget speech than the finance committees. The appropriations committees deal with expenditure considerations. Knowing this is useful for civil society, as it provides a bit more time to do analysis on spending plans!

For example, if you are concerned that austerity budgeting (spending cuts coupled with tax rate increases) will affect a range of outcomes on key socio-economic rights, including education and health, the appropriations committee is where to make your submission.

Post-Budget civil society submissions that make the most impact are the ones that relate to the lived realities on the ground of budgetary decisions. So, while an understanding of economics or accounting helps, relating budgetary considerations to the experience and knowledge of specific CSOs is what makes for an excellent, relevant submission.

Vulekamali!

As soon as the Budget speech begins, National Treasury publishes the Budget documents to their website. You can access them in order to do your analysis.

National Treasury, in partnership with a range of CSOs, has also developed a budget portal called Vulekamali. This portal was designed to help cut through the economic jargon and lengthy documents, to make the country’s finances more understandable. The Budget data is published to Vulekamali slightly later than to Treasury’s website, but still in advance of public hearings.

Despite the barriers civil society may encounter when preparing a submission, there are tools such as the PMG website, Vulekamali website and people’s guides that make the task considerably easier.

Finally, in concluding your submission, committees are also keen to know what you recommend should be done about the challenge you are highlighting. The best recommendations are aligned with what is within the ambit of MPs’ power to do.

A strong executive summary will be a final, important touch for a written submission. MPs are usually sent quite a number of submissions to read in preparation for public hearings. This will help them understand the essence of your submission quickly. MC

The Budget Justice Coalition (BJC) aims to collaboratively build people’s participation in and understanding of South Africa’s Budget and planning processes.

Kirsten Pearson is a steering committee member of the Budget Justice Coalition and a Research Fellow with the Rural Health Advocacy Project (RHAP).

Gallery