As calls grow for budget reform in South Africa, National Treasury’s pre-budget consultations create an opportunity to improve financial transparency and enhance public participation in fiscal policies.
There are two points on the national financial calendar that have increasingly gained prominence in the public domain: one is the tabling of the Budget, which is held in Parliament in February; and the other is the Medium-Term Budget Policy Statement, which is held in October.
Each of these constitutes an important opportunity not only for Cabinet to signal fiscal priorities, but also for members of Parliament to exercise oversight over budget decisions and execution. However, the opportunity for members of the public to meaningfully participate in such processes has traditionally been neglected.
Improved public participation has been shown to enable governments to respond more effectively to people’s needs. In addition, civic participation in the budgetary process can improve efficacy in the allocation and use of public resources.
Over several years, the results of the International Budget Partnership’s Open Budget Survey have lauded South Africa as a global leader in fiscal transparency. At the same time, however, the survey has highlighted South Africa as one of several countries that does not provide adequate opportunities for those affected by fiscal decisions to inform relevant discussions. This includes making available opportunities for public comment before, during and after public funds have been allocated and spent.
Civil society’s constrained space
Parliamentary budget hearings constitute the primary formal space for civic actors to engage committees on tabled or enacted budgets. However, this space is constrained — first, by the limited scope for informing the Budget before it is “too late” and decisions are finalised; and, second, by the intermediary role of parliamentary committees.
Since 2019, National Treasury has worked with an advisory group comprising civil society representatives, other government representatives, the Global Initiative for Fiscal Transparency and the International Budget Partnership to identify a mechanism by which the public can participate in fiscal policy processes. This multistakeholder partnership is part of a five-country initiative called the Fiscal Openness Accelerator (FOA) project.
This year is National Treasury’s second year of pilot pre-budget consultations. South Africa is well placed to leverage its advanced public finance environment, progressive policy and high-ranking budget transparency scores in the Open Budget Survey to enable more participatory, democratic budget processes.
To inform systemic, sustained reform, Treasury must continually consider ways of partnering with civil society beyond the conclusion of the FOA pilot in September 2022. Although the outcomes are positive so far, as with most pilots, there is room for improvement.
Participation exists on a continuum and the pre-budget consultations in the current format can do with some enhancements. If effectively enacted, this may be a significant opportunity to effect budget reform and foster more accountable decision-making where public resources are concerned.
The deadline for public submissions in response to a call from the National Treasury for inputs on the medium-term budget was on Friday, 19 August 2022.
This second call invited the public to submit written proposals containing key recommendations under the following guiding themes: unemployment, social security funding, energy choices and fiscal subsidies, safety and security, health and food security. These written inputs will be analysed, and the recommendations shared with the Medium-Term Expenditure Committee.
The opportunity for the public to contribute to these deliberations in advance of the Medium-Term Budget Policy Statement is significant given that Medium-Term Expenditure Committee hearings interrogate the links between departmental budgets and government’s policy priorities.
It further involves key government role players, such as the National Treasury’s director-general and deputy director-general, senior Treasury officials and directors-general from other departments including the Presidency.
The Medium-Term Budget Policy Statement itself provides an opportunity to review the country’s fiscal policy positions and is an important participatory space. Following deliberations of the National Treasury and the FOA Advisory Group, the 2022 pre-budget consultations were designed to align with the medium-term allocation process, which is driven by the Medium-Term Expenditure Committee.
How has the pilot changed in its second year?
Provincial treasury offices were called on to promote the call and to receive handwritten responses from members of the public who do not have access to technology or the internet.
Although the first year of the pilot afforded participants the opportunity to engage in a live dialogue between participants and senior National Treasury officials, this second iteration of the pilot limited feedback to written submissions.
Although this option may allow officials more time to prepare more considered responses and produce a more comprehensive (written) public record, this change constrains the opportunity for robust engagement because there are no direct exchanges between participants and officials.
But there is scope for submissions received from participants and official feedback in the form of response to contribute to later iterations of the pilot that are more interactive, as well as for further innovation.
The pre-budget consultations are a welcome and necessary step towards budget reforms envisaged in section 215 of the Constitution; section 195 of the Constitution, which obliges the government to encourage public participation in policymaking; in the UN’s Sustainable Development Goal 16; and in the objectives of the National Development Plan to ensure the participation of all South Africans in the process of achieving their own development. Public feedback from the first pilot informed key aspects of the second pilot.
More direct links needed
The proverbial ball is now in the hands of National Treasury about how and whether this participation mechanism will be further developed to become an integral part of engaging civil society around the Budget.
This will hopefully include heeding some past suggestions from civic actors. For instance, pre-budget consultations should be progressively deepened and institutionalised within fiscal policy and budget processes.
The potential for forming more direct links between public inputs and critical decision-making structures such as the Ministers’ Committee on the Budget Technical Committee, for one, is significant, because these deliberations inform key executive structures, such as the Ministers’ Committee on the Budget, and ultimately have an impact on national policy and planning priorities.
Providing citizens a lever to access resource allocation in decision-making is an astute governance choice and mechanism for balancing the power differential between state and citizenry. Moreover, it is a critical tool in democratic participation for keeping and holding the government accountable.
As we approach the Medium-Term Budget Policy Statement in October, it is worth reflecting on how the second iteration of the pre-budget consultations can promote participation in fiscal policy in South Africa.
Increasing opportunities for public participation in the Budget is not only necessary, it has the interest and support of a cross-section of government and non-governmental actors. This level of public consultation can serve as an opportunity for budgeting and policymaking processes to centre on the country’s most vulnerable citizens and to ensure allocation of resources in a participatory and human rights-based manner.
This moment is an important opportunity for improving engagement and building trust between the government and its citizens. DM/MC
The authors are members of the advisory group of the National Treasury’s FOA.
Zukiswa Kota is programme head: South Africa at the Public Service Accountability Monitor. Matshidiso Lencoasa is a treasury researcher at Section27. Gary Pienaar is a senior research manager in the Human Sciences Research Council’s Developmental, Capable and Ethical State research division. Celeste Fortuin is a member of the FOA administrative support team. Kailash Bhana is the FOA lead consultant to National Treasury.