Not for the first time the various requests for information about the reasoning underlying many decision in the 2020 budget suggest that if there is one aspect of government business that needs to be reformed it is the manner in which budgets are conceived, constructed, examined, passed and monitored by the general public, stakeholders and parliament. The annual budget is the most popular and important annual statement of a government: it sets out how and to what end the government intends to acquire and distribute the resources of the country. In modern times, budgets are conceived after wide public consultations and their outcomes disaggregated to allow for their actual impact to be properly assessed and monitored.
For this to happen it is imperative that stakeholders be given sufficient time to be involved in the actual crafting of budgetary policies, to understand, for example, what the government’s 2020 budgeted objectives will concretely deliver when it claims that it will protect the Guyanese people in a COVID environment, strengthen democracy and the rule of law, incentivize economic growth and job creation and enhance welfare (Budget Speech 2020). To arrive at this understanding international best practices suggest that ‘The government’s draft budget should be submitted to parliament far enough in advance to allow Parliament to review it properly. In no case should this be less than three months prior to the start of the fiscal year. (https://www.oecd.org/governance/budgeting/Best%20Practices%20Budget%20 Transparency %20-%20complete%20with%20cover%20page.pdf. In the United Kingdom, this process takes almost a year: ‘Policies will be announced at the Budget in the autumn, and consulted on in winter and over the spring. Draft legislation will then be published in July for technical consultation ahead of the Finance Bill (the proposals announced in the Budget) being introduced in the autumn’ (https://www.gov.uk/government/publications/the-new-budget-timetable-and-the-tax-policy-making-process/the-new-budget-timetable-and-the-tax-policy-making-process).
Guyana’s Standing Orders of Parliament (SOP 2014) provide a procedure for legalizing the budget that appears to have been in existence since colonial times when the budget was much smaller and the level of transparency expected was less demanding. It states that a budget must be laid by the government in the Assembly within 90 days after the commencement of the financial year. At least 2 days shall then elapse before the debate begins and a further 5 days may be allotted for a general debate which ‘… shall be confined to the financial and economic state of the country and the general principles of Government policy and administration as indicated by the budget speech and the Estimates.’ After the general debate is completed, the National Assembly shall resolve itself into a Committee of Supply – a committee of the whole Assembly – ‘There shall be allotted a maximum of seven (7) days for consideration of the Estimates of Expenditure in the Committee of Supply.’ Instead of three months, the parliament of Guyana has less than three weeks to debate upon and complete a proper examination of the national budget!
Here a differentiation must be observed between the process of consultation and the capacity of the legislature to actually amend and/or propose alternative budgets, for this issue has become an important benchmark of what constitutes a modern parliament. Remember the debacle over the capacity of the National Assembly of Guyana to amend the budget during the 2011 hung parliament that ended in court in 2014 in the matter of the Constitution of the Republic of Guyana between the Attorney General of Guyana and Raphael Trotman, et al.. Note too that ‘Parliamentary systems tend to be, by virtue of their design, conducive to cooperative legislative-executive relations. The government is directly dependent on majority support in the legislature. As a result, the composition of parliament and the executive are inherently intertwined, as are their electoral fortunes. For parliament to fundamentally rewrite the entire executive budget proposal would be tantamount to a vote of no confidence in the government’ (http://www1.worldbank.org/publicsector/pe/befa05/WBI-Wenher%20(Final).rtf).
The situation in Guyana is in the footsteps of this tendency but this is not a necessary outcome. The role of parliament depends on many factors: (a) where it (parliament) 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 (Ian Lienert (2010) Role of the Legislature in Budget Processes. IMF).
Thus a reform process could consider the following measures. The Guyana Constitution could require that the government adopt relevant best international budgetary practices periodically but certainly every 10 years. Using the framework in the previous paragraph Article 171 of Constitution could be expanded to give the National Assembly broad scope to amend the budget. The controversy in 2012 that surrounded National Industrial & Commercial Investments Limited’s use of extra-budgetary expenditures suggests that the Constitution could also discourage parliament approving laws that authorize off-budget spending unless there are highly transparent arrangements for recording, monitoring, reporting, and auditing all associated transactions. Parliament could also require the government to provide full and regular reports on all extra-budgetary spending, contingent liabilities, and quasi-fiscal activities ((https://www.imf.org/external/pubs/ft/tnm/2010/tnm1004.pdf). Importantly, given Guyana’s deep seated ethnic problems and the need for national consensus, consideration could be given to a superior majority, with an appropriate tie-breaker, to pass the national budget.
The Standing Orders could be amended to provide a better structure and more time for the budget to be scrutinized. It is absurd to believe that 65 MPs in a single body could properly scrutinize the entire budget in 7 days! ‘An effective amendment system must combine conferred powers with an entrenched role for committees. In systems where parliament is granted power of amendment without an effective role for committees … the ability of Parliament to change the Budget is limited … (but) In systems where Parliament is granted power of amendment, combined with an effective role for committees, its ability to change the Budget is strengthened (e.g. Germany)’ https://www.internationalbudget.org/wp-content/uploads/The-Role-of-Parliament-in-the-Budget-Process.pdf)
Reform must insist that the National Assembly be properly supported by the establishment of a non-partisan budget office if it is to be effectively involved in the budgetary process and ‘Provide budget analysis and independent advice to parliamentarians from both the majority and minority parties represented in the legislature. … Indeed, parliament can only perform an effective role if it is adequately funded and has autonomy in the preparation of its own operational budget’ (Ibid).
The above suggestions relate mainly to the parliamentary budgetary process. However, today budgets cannot simply speak in general terms of economic growth, providing jobs and improving national welfare. After all, inequality has bloomed in the midst of the substantial growth that has taken place globally over the last 50 years. Modern methodologies now allow us to know where the growth is going, who is getting what, are the pro-poor policies working, are the gender and ethnic gaps being addressed, etc. For example, Thomas Piketty et al have developed the Distributional National Accounts that match survey and National Accounts data to show how income growth looks across income groups: connecting aggregate economic data with the real-life circumstances of individuals. (Boushey, Heather (2019) Unbound: How Inequality Constricts Our Economy and What We Can Do about It. Harvard University Press).
The modern budget must be targeted to adequately address real needs, concerns and disparities and most importantly should be developed within a national consensual framework that allows sufficient space for the entire country, particularly the media, to contribute to and understand the nature of the process, one’s particular role in it and the expected and actual outcomes.