Last week article’s generated quite a discussion in the media and elsewhere. We did indicate that several key items in the plan will have to await the approval by the National Assembly of the 2015 Budget. These include: the reduction in the Berbice Bridge Toll; salary increases for government employees; increases in Old Age Pensions; phased reduction of VAT and the removal of VAT from food and other essential items; and waiving of duties on fuel, tools and small scale mining equipment.
Constitutional provisions relating to the National Budget
Article 218 of the Constitution requires the Minister of Finance to prepare and lay before the Assembly before or within 90 days after the commencement of each financial year estimates of revenue and expenditure of Guyana for that year. It should be emphasized that it is not the Minister’s budget but that of the State. We raise this because there had been some confusion as to whose budget it is, following the Court ruling on the 2012 “budget cuts” case. Since the Estimates are in relation to public finance, it has been an established practice for the Minister to introduce them in the Assembly. But this action does not confer ownership, as the Court ruling suggested. The ruling went on to state that the Assembly could not amend the Estimates without the Minister’s approval. What if the Minister refuses to do so? Any reasonable person with knowledge and experience in public management would consider the ruling quite bizarre.
An interpretation by the Courts on constitutional matters relating to public finance cannot be done in isolation of knowledge and understanding of the thought process that underpin such matters. Indeed, without such knowledge and understanding, the Courts run the risk of making inappropriate rulings, as was the case in “budget cuts” case. In such circumstances, it would be entirely appropriate for the Courts to entertain the views of experts in the field before making such rulings.
In accordance with Article 219, the Minister may authorise withdrawals from the Consolidated Fund for the purpose of meeting expenditure necessary to carry on the services of the Government until the expiration of four months from the beginning of the year until the coming into operation of the Appropriation Act. This implies that the Estimates have to be passed in the Assembly not later than 30 April of each year. The amounts to be withdrawn are restricted to one-twelfth of the previous year’s approved budget for each of the four months. However, funds cannot be withdrawn for new capital expenditure since the Minister will run the risk of authorizing expenditure which the Assembly may eventually not approve.
There is no provision for the Minister to authorise withdrawals under Article 219 beyond 30 April. This might have been overlooked when the date of the recently concluded elections was fixed since funds were needed to meet expenditure on the public services for the period 1 May to 10 June 2015, the date when the 11th Parliament first convened. Notwithstanding this, it would not be unreasonable for the Minister to authorise funding for this period within the framework of the “one-twelfth” rule.
Under Article 219 (3), the Minister has up to three months from the date of the first sitting of the 11th Parliament to present the Estimates for 2015. During this period, the Minister may authorise withdrawals of such sums as he considers necessary for the purpose of meeting expenditure on the public services. Unlike Article 218, there is no one-twelfth restriction. However, out of caution, one would expect the Minister to follow the provisions of Article 218.
Reactivation of budget talks with the political Opposition
Last Friday, the Minister met with the political Opposition to discuss the Estimates for 2015, notwithstanding that Opposition Members of Parliament are yet to take up their seats in the Assembly. A few days earlier the Minister had stated that “I have been meeting with several persons and several bodies on the budget. The time for laying the budget as stipulated by the Constitution is already short. And if a hand is to be extended to the PPP and it is dragged out, then I would be under fire and I have to be cognizant of what the Constitution requires of me.” He did say that while this may not be his intention, he was pressed for time to prepare and lay the budget in the Assembly.
It is good that the Minister has found the time to have dialogue with the Opposition notwithstanding that the latter, when holding the reins of Government, did not see it fit the engage the Opposition in any meaningful way. Commonsense would have dictated that, given the combined Opposition’s control of the 10th Parliament, such consultations should have taken place to ensure the smooth passage of the Budget. As it turned out, for three consecutive years, there was a stalemate, resulting in the Assembly amending the Budget, judicial intervention, and subsequent Court ruling on the matter.
In 2014, the situation was rendered worse when the then Minister defied the wishes of the Assembly by authorising sums totalling $4.554 billion to be withdrawn from the Consolidated Fund. This action prompted the tabling of a motion of no confidence on the Government. Instead of subjecting itself to the scrutiny of the Legislature and defending its positon, the Government prorogued Parlia-ment. All key stakeholders and the diplomatic community were loud in their calls to end the prorogation. The Government, however, thought otherwise and dissolved Parliament, thereby paving the way for fresh elections. The life of the 10th Parliament was prematurely brought to an end.
When judicial intervention was sought in relation to the Minister’s action, the Courts this time correctly deemed such action unconstitutional. During the life of the 10th Parliament, if matters were dealt with in the spirit of goodwill and compromise, there might not have been any need to prorogue Parliament, then to dissolve it and to hold for fresh elections. While all of this is now history, they have important lessons for the future.
Article 13 of the Constitution provides for the broadest consultations to take place as part of “an inclusionary democracy by providing increasing opportunities for participation of citizens, and their organisations in the management and decision-making processes of the State, with particular emphasis on those areas of decision-making that directly affect their well-being”. Our National Budget is one of the most important decision-making processes of the State, and it is correct to have meaningful consultations with elected officials representing 49 per cent of the electorate, despite our unfortunate experience in the past. The Minister’s action to invite the Opposition is in keeping with the spirit of the Constitution and augurs well for the future. He has already indicated that he met with the Private Sector Commission but it is unclear whether similar consultations took place with the Trade Union movement and other relevant civil society organisations.
One disappointing aspect of the consultations was the absence of key members from the Opposition who are knowledgeable and experienced in budgetary matters. Here, we are referring to former President Bharrat Jagdeo who was the Finance Minister under the Presidency of the late Cheddi Jagan and who has been identified as the Leader of the Opposi-tion. Although not identified as a Mem-ber of Parliament, Dr. Ashni Singh could have also made a valuable contribution to the discussions, considering that he was the Finance Minister until 11 May 2015.
On a final note, yesterday’s editorial in the Sunday Stabroek gave the new Government’s 100-day action plan a mixed rating. We did mention that the plan appeared to be over-ambitious, and that several of the actions hinge on the approval of the 2015 budget. The 100 days will expire on 19 August. If the Government is seriously committed to achieving as much as possible within the framework of the action plan and to honouring its promise to the electorate, it must present the budget before this date.
The Government should not await the outer limit of 10 September, considering that in effect the budget is a four-month one and that the first eight months of expenditure would have been in relation to essential services of the Government. A budget is a financial plan and is future oriented, and one cannot plan for what would have already happened. All it takes is to integrate into the four-month budget the expenditure already incurred so as to arrive at the annual budget. It would indeed be disappointing if the Govern-ment takes three months to produce a four-month budget! Meanwhile, work should have already started on the 2016 Estimates, as provided by Sections 12 and 13 of the FMA Act. These sections require the Minister to establish a time-table for the preparation of the budget not later than 1 July 2015 and to prepare and distribute the related circular regard to all Budget Agencies.
At the next meeting of the Assembly, the Prime Minister is expected to move a motion to suspend Standing Order 9 to facilitate the presentation and consideration of the budget. That Standing Order provides for the Assembly to go into recess from 10 August to 10 October every year, unless there are special reasons for not doing so.
