Last week I completed my article with the contention that the budget cannot be properly scrutinized by the Committee of Supply of our National Assembly. This conclusion resulted from technical/managerial concerns, and would be valid regardless of what political conditions exist, for it has long been noted that in cases such as Guyana: “Where the parliamentary committee stage is less dominant than the debate on the floor of the House, substantial amendments are unlikely.” (Krafchik, Warren and Joachim Wehner – 1999 – “The role of parliament in the budget process,” Institute for Democracy in South Africa: Budget information service).
Internationally, budgeting practice varies widely and many historical, political and social factors influence the role of parliament in the budgetary process, including the ethnic composition and level of political development of the country; the nature, organisation and role of political parties; the way consensus is arrived at in the political system; the nature of and composition of the legislative system; the information asymmetries between members of the legislature and the government and the administration and facilities available to the parliament.
Constitutional reform, which must result from a dialectical relationship between our specific condition and international best practice, is on the agenda of the present parliament and rather than simply making some isolated suggestions for reform as I promised to do this week, I will root my discussion in what are considered international best practices in the area of parliamentary involvement in the budgetary process. However, before doing so, some additional factors, particularly our Westminster tradition and bi-communal nature, must be uppermost in our minds and thus require some preamble.
“Perhaps the starkest contrast between the United States polity and its British counterpart is the lack of formal separation of powers. The British Executive has relatively few checks on its powers. … The British Parliament has no ways and means committee, no budget committee, no appropriations committee.
The committees that scrutinize government departments lack the power to authorize new government programmes and spending. Britain has one dominant figure who controls most of these functions: the Chancellor of the Exchequer.” (The finance minister in Guyana.). This is how Stuart Young began his “The British Budget Process: A Case study” (2006 – Harvard Law School) and his statement is true for vast majority of Westminster/Commonwealth type parliaments whether or not they have coalition governments.
However, while this type of executive dominance may be more typical in parliamentary as opposed to presidential systems, it is not a necessary outcome of parliamentary governance. For example, Germany has a parliamentary system and by “contrast, during the 1998 Budget deliberations, the German Budget Committee cut total expenditure by DM 4.2 billion and shifted more than DM 17 billion between votes. Over the past years, controversial capital expenditure projects, such as the construction of a high-speed train line, were effectively limited by tens of millions by attaching stringent conditions to such expenditure.” (Krafchik, Warren and Joachim Wehner above).
Indeed, given the opportunity afforded by the United Kingdom devolution process to establish its own budgetary arrangements, the Scottish Financial Advisory Group established a budget process which meets international best practice standards and allows for much greater parliamentary input and scrutiny. “Parliamentary subject committees are involved in the budgetary process and like the parliamentary Finance Committee are free to make alternative budget proposals to the Government’s Draft Budget.” Maybe of some interest to us, a Parliamentary Equal Opportunities Committee could also make inputs into the budget. (Ross Burnside (2011) “Guide to the Scottish Budget:” SPICe Information Center).
In Guyana our approach to budgeting is essentially the same as existed in colonial times, when our budget was only a fraction of what it is today and notions of citizens’ involvement and ownership were underdeveloped. Added to this, others and I have persistently argued that for an ethnically divided society such as ours to prosper it requires a level of community involvement and checks and balances that go far beyond what is usually offered by the Westminster/ Commonwealth system. Even in the UK, where the system has worked because of its general racial homogeneity and well established political traditions, there is tremendous pressure for change.
In normal circumstances, our parliament’s main role has been to more-or-less formally debate and authorize the governments’ budget proposals and examine, ex post, spending. Even in the present unusual situation of a minority government, parliament only has negative powers, i.e. it can cut the budget but cannot determine new programmes. According to the Standing Orders it cannot even make increases: “An amendment to any head of expenditure to increase the sum allotted thereto whether in respect of any item or sub-head or of the head itself may only be moved by a Minister who shall signify to the Committee the recommendation or the consent of the Cabinet to the increase.”
The litmus test of modern parliamentary involvement in the budgetary process may be a parliament’s capacity to make amendments to the draft budget presented by the executive and even suggest alternative budgets. However, there are many other important factors.
For example, an International Monetary Fund paper (Ian Lienert – 2010 – “Role of the Legislature in Budget Processes”) concluded that a parliament’s effectiveness would depend on: (a) where it is located in the budgetary process, e.g. are there pre-budget discussions and sufficient time given for parliamentary interventions; (b) what parliaments have the authority to review and approve e.g. fiscal rules and debt strategies, macroeconomic assumptions underlying the budget, revenue projections, medium-term budget frameworks; (c) the structure, classification, type and duration of annual budget appropriations e.g. flexibility to swap budget line items, power to amend the budget, extra budgetary funds and internal audit controls; (d) the support parliament has to deal with budgeting e.g. the existence of parliamentary committee establishments, a budget office and adequate funding for parliament, and (e) accountability of the executive to the legislature in budget matters, e.g. the existing budget rules, internal procedures of the legislature and its capacity to hold public hearings and question the executive.
Next week I will consider a few of these suggestions to give an indication of our parliamentary possibilities in this area.
