South Africa

Parliament

Fierce Urgency of Now: Mboweni’s forceful push for Covid-19 emergency Budget

Minister of Finance Tito Mboweni. (Photo: Leila Dougan)

Bucking convention, Finance Minister Tito Mboweni on Wednesday put 24 June as the date to table the Covid-19 special adjustment Budget. But this announcement came before Parliament officially discussed and decided dates. Mboweni’s surprising move underscores the pressure to sort out South Africa’s finances.

The possibility always existed that Parliament’s programming committee sitting on Thursday mornings may well have discussed and agreed to 24 June for the Covid-19 special adjustment Budget.

Speaker Thandi Modise may well introduce, say, under matters arising on the agenda, a letter from Finance Minister Tito Mboweni in which he proposes that date to Parliament. And after a multi-party discussion, 24 June may well have been decided by the House that hosts the Budget as the date for the Covid-19 special Budget.

The draft parliamentary programme Daily Maverick has seen would allow for Mboweni’s 24 June date to bring the special appropriation Budget. The Appropriation Bill, the draft law that gives effect to the February 2020 Budget, is scheduled for adoption, vote by vote, on 23 June. Procedurally once that’s done – and the Division of Revenue Bill is set to be passed by the National Council of Provinces in early June – the way is clear for any changes.

Traditionally, when the national legislature hosts key events like Budgets, or State of the Nation Addresses, dates are set in consultation – and Parliament is left to formally decide. That’s in keeping with the principle of cooperation between separate spheres of state, as set out in the Constitution.

Instead, the net effect of Mboweni’s announcement on the eve of Thursday’s parliamentary programming committee meeting is another example of the executive sphere of state telling the legislative sphere of state what to do.

When approached for comment on why the minister had announced the date before Parliament, National Treasury backtracked. 

The 2020 Special Appropriation Budget Guidelines outlined “processes that the National Treasury plans to run to table a special adjustment budget,” said National Treasury.

“The date of 24 June is the date by when the National Treasury would be ready to table. It does not prescribe whether Parliament must organise for tabling on this date. The date of the tabling will be decided by the Speaker of the National Assembly in agreement with the President and Minister of Finance,” added the Treasury.

The document is quite clear. Under the heading “Critical dates for the special adjustment Budget process”, the column against 24 June reads “Table 2020 Special Adjustment Budget…”

If that is a flexible deadline, then presumably so are the other deadlines – like Cabinet approval scheduled for 10-11 June and the allocations letters confirming rands and cents to departments on 12 June. 

Such flexibility would have an impact on key steps, like approaching the International Monetary Fund (IMF) and World Bank, or the BRICS New Development Bank, for the required R95-billion loans to make the Budget. If the sequencing is out, say because of flexible deadlines, applications may well be dismissed. And that would mean a hole in the already frayed Covid-19 frayed national purse.

And so Mboweni, whose previous request to Parliament to fast-track the budgetary process was dismissed as unfeasible, publicly put 24 June as the date for tabling the special adjustment Budget.

“This time-frame is needed, I believe, if National Treasury wants to hit approval of the RFI [rapid financing instrument] at a key second half of June IMF executive board meeting. Hence, why Cabinet approval is on 11 June,” said Intellidex analyst Peter Attard Montalto.

But this timeline may not go down well in parliamentary corridors.

“Parliament has not received a proposal of that nature. Normally the programme committee considers and schedules such business of the House,” said Parliament spokesperson Moloto Mothapo.

DA MP and finance spokesperson Geordin Hill-Lewis said such a ministerial announcement was unprecedented:

“This is a strange situation to have the Treasury telling Parliament when the emergency Budget will be tabled. That said, the passing of the original February Budget is now merely perfunctory. It must be done, but the fact is that the change in expenditure in the new Budget may be as large as 25%.”

The appropriation committee chairperson, ANC MP Sifiso Buthelezi, said the committee would be ready for the special adjustment Budget. “Aren’t we in unusual times? The R500-billion stimulus is very unusual…” 

IFP Chief Whip Narend Singh said an adjustment Budget is possible, but “he [Mboweni] can’t proceed unless we have passed the Budget first”.  

Right now, Parliament’s committees are briefed on annual performance and strategic plans. While many of those were compiled before the Covid-19 pandemic and lockdown, questions to officials indicate work in progress in departmental backrooms. 

But the new Covid-10 adjusted Budget – the finance minister carefully sidesteps calling it an emergency Budget – is needed speedily.

At last Thursday’s programme committee, President Cyril Ramaphosa’s parliamentary counsellor, Gerhard Koornhof, proposed skipping the mini-plenary Budget vote debates – these usually take two weeks – to speed up the process. 

“The adjustment Appropriation Bill, that’s where the main focus of Parliament will come in regarding oversight,” he told the committee then.

Daily Maverick understands the “Koornhof proposals” as the suggestions have been dubbed, were discussed at Wednesday’s Chief Whips’ Forum – without firm decisions being taken.

With neither Mboweni’s letter appealing for speed, nor the presidential counsellor’s intervention, the finance minister played his cards with the 2020 Special Appropriation Budget Guidelines. 

Mboweni is under pressure.

By mid-April already he talked of the need to table a rejigged Budget given the devastating economic effect of the Covid-19 hard lockdown.

National Treasury’s own modelling shows between three to seven million job losses, depending on the duration of recovery, and an economic contraction by 6.4%.

When on 21 April President Cyril Ramaphosa announced an economic recovery plan – a mix of money kept in pockets due to deferrals of tax payments, international loans, R200-billion loan guarantee support and R130-billion saved from across government – the pressure upped.

It’s now mid-May. Without first approving the February Budget, Parliament can’t approve and adopt the special adjustment Budget that’s brought under Section 30(2) of the Public Finance Management Act (PFMA) that accommodates “significant and unforeseeable economic and financial events affecting the fiscal targets set by the annual Budget”.

When National Treasury briefed Parliament on 30 April, its special adjustment Budget timelines started in July. The 24 June deadline brings this process forward in what has been described as a win for those in the National Treasury pushing for speed.

It’s in that in-house tension and the five weeks it took to get the governing ANC behind applying to the IMF and World Bank for conditionless coronavirus pandemic-related funding – that agreement was clinched only at Friday’s special ANC National Executive Committee meeting – which highlight the political pitfalls in this Covid-19 emergency Budget.

Preempting Parliament’s decision on a date for the Covid-19 emergency Budget on the eve of the parliamentary meeting that may yet agree to Mboweni’s 24 June date seems like a misstep under pressure.

And that bears close watching. DM 

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