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COSATU is deeply disturbed by the manner in which the Department of Finance is approaching the 1998 budget.
Both in discussion in Parliament and at NEDLAC, it has been clear that the Department of Finance is not prepared to subject its macro-economic parameters to public debate and input, neither does it seem prepared to fulfill the constitutional obligation which requires that parliament be given the right to oversee and amend the budget.
This has become even more important with the introduction of the Medium Term Expenditure Framework, which commits the country to particular expenditure patterns over the next crucial three year period. In this context, the adoption of inappropriate restrictive budgetary parameters, as a result of lack of public scrutiny, will spell disaster for the economy.
In terms of the constitution, "an act of parliament must provide for a procedure to amend the money bill before parliament" (s77). To date no such procedure has yet been put into place, as legislation in this regard (the Money Bills Amendment Procedure Bill) tabled by the Minister of Finance was rejected by Parliament's Finance Committee on the basis that it did not confer effective amendment powers to parliament.
Indeed COSATU questions whether the tabled legislation could have been considered to be in line with the letter and spirit of the constitution as it proposed to severely curtail-both procedurally and substantively- the role of Parliament in overseeing money bills, such as, the budget.
Procedurally, the tabled legislation would have given parliament only one day to consider whether it wished to make any amendments to a money bill. Substantively, the Bill proposed to restrict the role of Parliament to the extent that without the written permission of the Minister of Finance, Parliament could not : - increase expenditure provided for in any budget vote - effectively shift expenditure from one department to another - introduce new expenditure items - increase total expenditure - alter the tax rate, tax base or timing of the tax, or - exempt anyone from tax
As a result of its problematic character the Bill was withdrawn.
During our submission to Parliament on last year's budget, COSATU made it clear that we would not be prepared to continue legitimizing a parliamentary process that has no teeth.
As Deputy General Secretary Zwelinzima Vavi told Parliament's Finance Committee last year: " We are frustrated by the constraining nature of the budget process which renders meaningless both contributions by civil society and the deliberations of the elected people's representatives. For this reason we have, after some deliberation, decided that unless the budget process is fundamentally transformed to accommodate real public input and effective parliamentary oversight, this submission on the 1997/8 budget will be our last. We will only participate in future parliamentary budget hearings if meaningful participation is made possible through a reformed budget process"
The firmness of COSATU's position on budget reform is informed by the historical fact that South Africa has inherited a budget process from a most undemocratic and non-transparent apartheid regime, which used the budget to advance its programme of social inequality and race privilege.
Therefore one of the key challenges of our new democracy is to see to it that the budget process is transformed in line with the commitment to democratic and transparent governance, to empower our elected representatives, and society as a whole, to engage in and scrutinize the budgetary process to ensure that it is in line with the implementation of the RDP. Elected representatives oversee expenditure and revenue decisions in most democracies and COSATU believes - in line with our constitution- that South Africa should not sell itself short in this regard.
COSATU, therefore announces that, in line with the position we articulated in 1997, we will not be participating in this year's budget hearings organised by the Parliament's Finance Committee.
COSATU is unable to participate in a Parliamentary process which, despite a constitutional commitment to the contrary, can have no real impact on budget decision. In our view, meaningful consultation and oversight is all the more important in the current context of significant disagreement over GEAR's anti -developmental budget parameters and the likelihood of many of our members' interests being compromised by unilateral down-sizing of the public service.
We commend members of the NCOP who a few days ago refused to rubber stamp amendments to last year's budget, without the necessary processes of accountability. We similarly call on members of the Finance Ministry to meet its obligation, both in terms of introduce legislation to give parliament its necessary oversight role.
We wish to make it clear that despite our decision not to participate in this year's budget hearings, COSATU intends to continue our close co-operation with members of the Finance Committee and note that they themselves have consistently called over the last several years for legislation and mechanisms to see to it that Parliament can play a more effective oversight role.
Moreover, COSATU still intends issuing a further pre-budget statement, as to our expectations for this years budget, tomorrow (10 March1998) and a detailed analysis and comment on the substance of the budget at a major press conference on Thursday (12 March 1998) in Cape Town.
Nowetu Mpati COSATU Head of Communications