Establishment of the Parliamentary Budget Office
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Establishment of the Parliamentary Budget Office. Contents. Act Preparations for PBO establishment Work-plan development Research Current Legislative Fiscal oversight Defining Legislative oversight

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  • Act

  • Preparations for PBO establishment

  • Work-plan development

  • Research

  • Current Legislative Fiscal oversight

  • Defining Legislative oversight

  • Proposal for PBO: Functions, Organisational design, Stakeholder engagement, Implementation plan, Budget

  • International seminar


  • The Money Bills Amendment Procedure and Related Matters Act came into effect in April 2009

  • Section 15 of the Act established a Parliamentary Budget Office

  • Objective of the PBO is to provide independent, objective and professional analysis and advice to Parliament on matters related to the budget and Money Bills

Section 15 2 outlines the core functions of the budget office as follows
Section 15(2) outlines the core functions of the Budget Office as follows:

  • reviews and analysis

  • advice and analysis on proposed amendments

  • reports tabled and adopted in a House with budgetary implications

  • abreast of policy debates

  • unfunded mandates

Preparations for pbo establishment
Preparations for PBO Establishment Office as follows:

  • DBSA Research

  • Study tours- Kenya, Germany, Sweden, Japan and the Republic of Korea

  • secondment of MI Jahed

Work plan development
Work Plan Development Office as follows:

Critical Factors:

  • Interaction with Exec Authority, Political Task Team for guidance and advice

    Political Task Team:

    • House Chairpersons-Committees: NA & NCOP

    • Chairpersons of finance committees: NA & NCOP

    • Chairpersons of appropriations committees: NA & NCOP

    • Co-Chairpersons: Review of Rules Committee

Work plan development1
Work Plan Development Office as follows:

  • Interaction Senior Management and Specialists

  • Engage external stakeholders

  • Research, international best practices, lessons of experience, understanding SA needs, implementing Act

Research Office as follows:

What do PBOs do?

  • evidence-based budget analysis

  • economic forecasts

  • fiscal projections

  • examine proposals

  • impact of alternative spending policies

Pbos international trends
PBOs: International trends Office as follows:

  • PBOs relatively recent phenomenon

  • Growth in PBOs in line with more democracies

  • In many countries there is growing trend of rising Executive capacity over Parliament

  • Legislatives generally lack technical, analytical capacity and information

  • Decline in Legislative oversight abilities

  • Limited oversights often leads to poor fiscal outcomes

  • PBOs have improved legislators ability to interpret, review and make better decisions on Budget process

Study visits
Study Visits Office as follows:

  • Germany, Sweden, Japan, South Korea, Kenya

  • Budget offices across the globe are influenced by the roles played by their legislatures in the budget process:

    • Budget approving legislatures: cant amend and approves Executive budget(Sweden, UK)

    • Budget influencing legislatures: can amend, but can’t formulate budget(Italy, Netherlands)

    • Budget making legislatures: has legal & technical capacity to amend or reject Executive budget proposals and substitute its own( Japan, USA)

  • Study visits1
    Study Visits Office as follows:

    • The varying influence of legislatures in budgeting reflects differing authority to modify executive budget proposals.

    • Countries reported that their legislatures have unrestricted powers to amend the budget.

    • Legislatures however, can make amendments only if they do not change the overall fiscal position, while they may only decrease, not increase, proposed spending.

    • Legislative influence is also affected by the time available to consider requests: a legislature that has limited time to examine budget proposals is at a disadvantage.

    • Legislatures established a more regularised process with more time to consider budget requests e.g. Mexico had changes requiring presidents to present their budgets earlier than before.

    • Committee structure is the heart of legislative influence, legislatures have found it essential to divide the task of reviewing the budget into committees.

    Study visits2
    Study Visits Office as follows:

    • Staff establishment , Reporting line, Functions

    • PBO: International Experience and Lessons

    • No “one size fits all model”

    • Roles influenced by: type of political system, Legislature’s formal powers i.e. to amend, political environment, technical capacity of Parliament

    Lessons for sa pbo
    Lessons for SA PBO Office as follows:

    • Budget transparency (Parliament & Civics)

    • Enhance credibility of budget process

    • Increase accountability

    • Discipline in public spending

    • Capacitate Parliament to exercise oversight functions

    Legislative fiscal oversight
    Legislative Fiscal Oversight Office as follows:

    • In SA, oversight takes place in Committees with significant part occurring in the Parliament

    • Legislative oversight takes the form of:

      • Questions to the President, Deputy President

      • Questions to the Ministers, Deputy Ministers

      • Debates

      • Motions

      • Committee reports flowing from interaction with departments and oversight visits

    Fiscal oversight
    Fiscal Oversight Office as follows:

    However fiscal oversight is about:

    • Government expenditure

    • Government Borrowing

    • Tax

    • Regulation

    Fiscal infrastructure
    Fiscal Infrastructure Office as follows:

    Oversight over Institutions:

    • Parliamentary Committees

    • National Treasury

    • SARB

    • SARS

    • Now: PBO

    Fiscal reform
    Fiscal Reform Office as follows:

    • Fiscal Reform: Reform of the budgeting system and Public service reform

    • 2 imperatives for reform of budgeting system: budgeting system is key for attaining objectives and ability of Govt to employ limited resources with maximum effect

    • Budget systems have 3 basic functions: fiscal discipline: “allocative efficiency” i.e. resource allocation in line with govt priorities: “delivery efficiency” i.e. which means the least-cost provision of public services

    Fiscal oversight1
    Fiscal Oversight Office as follows:

    • Budgeting System most important component of public service delivery

    • Key instrument for translating govt priorities, strategic plans into public goods and services

    • Any policy or plan which does not consider budget constraints is unlikely to be successfully implemented

    • Good Governance: budget captures & implements principles of accountability, transparency, democracy, participatory governance

    Functions Office as follows:

    Organogram Office as follows:

    Pbo reporting line
    PBO reporting line Office as follows:

    Internal stakeholders
    Internal Stakeholders Office as follows:

    • Organisational Design

    • Human Resource: JD, market- related performance contracts

      • IT: Web design

      • Process mapping between LOD and PBO

    • Legal

    • SCM

    External stakeholders
    External Stakeholders Office as follows:

    Auditor General

    Amendments to the act
    Amendments to the Act Office as follows:

    • The Money Act envisages that the Director will appoint the Deputy Directors/Senior Analysts and other support staff. This process is currently with the Standing Committee on Finance.

    • Amendments to the Act will focus on the following:

      • Time frames and sequencing

      • Section 15 on the Parliamentary Budget Office

      • Textual amendments

    Implementation plan the following must be considered during the budget period
    Implementation Plan Office as follows: The following must be considered during the Budget Period

    Budget Office as follows:

    Way forward
    Way Forward Office as follows:

    • Implementation be prioritised

    • Office space

    • Support and advise on Act amendments

    • Presentations: Exec Auth, Pol Task Team, POA

    • Continue stakeholder engagement

    • International Seminar

    Thank you Office as follows: