Financial Administration of Parliament and Provincial Legislatures Bill (FAPPL)

1. Financial Administration of Parliament and Provincial Legislatures Bill (FAPPL) Ismail Momoniat National Treasury

2. Constitutional Principles • Separation of Powers between Executive and Legislature • Legislature oversees Executive • Executive is accountable to its Legislature • Legislature is NOT accountable to Executive • Legislatures determine and control own internal arrangements and procedures • Salaries, allowances and benefits of permanent members is a direct charge against relevant Revenue Fund

3. Informal Principles • Legislatures need to be exemplary in their practices • Need to be seen to be as good as, or better, than government depts and entities • Legislature and Executive need to co-operate when determining budget, legislation, etc.

4. National Treasury Perspective on FAPPLB • PFMA adequately covers Parliament/ Legislatures • Small problems identified can be sorted out through coming amendments to PFMA • Separate Act will set wrong precedent to other legislatures • Legislatures and entities will all want own legislation • Provincial legislatures and municipal councils not in the public eye as Parliament, less transparent • Conventions of best practice better than legislation • Should not legislate workings of Parliament • BUT formalise as if it is legislation • Objective of uniformity between legislatures

5. Clarifying/Correcting Governance Arrangements in PFMA • Secretary of Parliament is the Accounting Officer under PFMA, accountable to Exec Authority • Executive Authority the 2 Presiding Officers (Speaker of NA and Chairperson of the NCOP acting jointly) • 2 presiding officers acting jointly to also perform functions of treasury for Parliament • Fix up PFMA to ensure treasury regulations do not apply to Parliament and legislatures • Remuneration of members currently a direct charge

6. What are reasons for FAPPLB? • FAPLL Bill appears driven by a narrow interpretation of separation of powers • Assumes no engagement with Executive • No engagement is a recipe for bigger problems • Major issue appears to be about budgets • Differentiate between internal process for budgeting in Parliament and what PFMA requires • No clear motivation for why Parliament and legislatures need a separate Act rather than PFMA

7. Budgeting Issues • There is ONE national revenue fund • Divided between 3 spheres of govt, with provincial share and debt servicing direct charges • Need for an agreement between Parliament/ legislatures and Executive (thru Minister/MEC of Fin) on budget for Parliament/legislatures • Two types of problems: How much is enough? • Executive cannot abuse its position and force a small budget on a legislature, so it cannot function properly • Legislatures cannot ignore trade-off with service delivery, and needs to ensure its budget is not too generous

8. Budgeting Agreements • First problem can be tackled thru implicit threat that the legislature refuse to pass the budget if Executive is unreasonable • Second problem is dealt with in 2 ways • Commission for Remuneration of PO deals substantially with minimum direct charge allocation • Relevant treasury makes legislature aware of service delivery priorities • Final budget of Parliament and legislatures should be agreed between Presiding Officers and Minister/MEC of Finance • Develop mechanism for dealing with major disagreements

9. Current Budget Problems • No amount of money is enough for any person, department or entity! • How do Parliaments/Legislatures prioritise their budgets? • Staff in Parliament and Provincial Legislatures more highly paid than equivalent members of public service • What is trade-off btw funding researchers and support staff and other services (eg catering)? • Why does Parliament set such rigid internal rules for determining its own budget? • Practice seems to be too rules-driven and bureaucratic • No need for each committee to be treated like a separate dept or vote

10. Comparing Parliament and provincial legislature Budgets • Total budget for Parliament and 9 provincial legislatures R1,46 billion in 2004/05 • Nine provincial legislatures with 344 members have a total budget of R677 mil, whilst Parliament with 490 members has budget of R785 million • Parliament spends less on its staff at R193 mil compared to R224 mil by 9 provinces • Parliament spends more on non-personnel expenditure at R395 mil compared to R176 mil by provincial legislatures • Total average cost per member and support staff is higher for Parliament at R340 735, compared to provinces (high R307 955 to low R165 019)

11. Problems with Bill • Contains clauses that we want to amend in PFMA (eg irregular exp defn) • Provisions on budget submission out of sync with budget process (eg s13(3)) • Are provisions like s14 relevant to a legislature (eg measurable objectives)? • Repeats PFMA and MFMA provisions • Bigger issues like conditions of service of employees not dealt with

12. Conclusions • National Treasury’s view is that no need for FAPPL • PFMA already deals with Parliament/Legislatures • Coming amendments to PFMA can fix up any current problems • Internal rules in Parliament on determining its budget needs modernisation • Parliament free to change its main divisions within its vote

13. Legislatures: Exp & Budgets

14. Legislatures: Comp of employees

15. Number of Members

16. Average Annual Costs