Auditor-General Terence Nombembe. Picture: TREVOR SAMSON
Auditor-General Terence Nombembe. Picture: TREVOR SAMSON

PARLIAMENT has set in motion the process of establishing the long-awaited parliamentary budget office, which will provide "independent, objective and professional advice" to the institution’s portfolio committees on matters related to the budget and other money bills.

Provision for the office was made in the Amendment of Money Bills Procedure and Related Matters Act, which was promulgated in 2009 in accordance with an injunction in the constitution that Parliament adopt such a law.

Parliament seconded a specialist from the Development Bank of Southern Africa, Prof Mohammed Jahed, to design a model for the budget office, which was announced with fanfare on Tuesday in Parliament in the presence of auditor-general Terence Nombembe, Financial Fiscal Commission chairman Bongani Khumalo, political party leaders, university vice-chancellors, chairmen of portfolio committees and representatives of civic organisations involved in fiscal oversight.

Speaker of the National Assembly Max Sisulu said giving effect to the money bills law required Parliament to have the capacity, which the budget office would provide. The process of setting up the office was "far advanced", he said.

International study tours to Kenya, Sweden, Germany, Japan and Korea had been undertaken to assist in the development of a suitable budget office for South Africa. According to Mr Sisulu what was learnt from the study tours was that there was "no one size that fits all".

Parliament had decided on a phased introduction of the budget office, which would at first consist of 12 people who would initially provide technical and analytical input to the finance and appropriation committees. After 12-24 months the process would be reviewed and the structure would be expanded to provide technical support to all Parliament’s portfolio committees.

The budget office will be run by a director supported by an office manager and three deputy directors responsible for economics, public finance and public policy. The office will engage with academics, nongovernmental organisations and other institutions of civil society to collect technical information, which will be fed into parliamentary committees.

The director of the office will be directly accountable to the executive authority of Parliament.

Prof Jahed said the budget office would provide "independent, objective and professional advice and analyses" to Parliament on matters related to the budget and other money bills. It would produce evidence-based budget analysis, economic forecasts and fiscal projections, and examine proposals and the impact of alternative spending policies.

He noted that "fiscal oversight is a function performed by legislatures to promote wise stewardship of public resources and efficient service delivery". This oversight related to government expenditure and borrowing, tax and financial regulation.

Internationally there had been growth in a the number of parliamentary budget offices "due to the emergence of more democratic governments and the subsequent rise in multiparty forms of government".

Prof Jahed said legislatures generally lacked technical, analytical capacity and information and this led to limited legislative oversight and consequently poor fiscal outcomes.

"Parliamentary budget offices have improved legislators’ ability to interpret, review and make better decisions on the budget process."

He said South Africa needed transparency of its budget as this enhanced the credibility of the budget process.