Madam Deputy Speaker, I've been asked to be very brief. [Interjections.] Unless you put a chair here, I'm not going to stop.
In terms of section 77(3) of the Constitution of the Republic of South Africa, "all money Bills must be considered in accordance with the procedure established by section 75". It goes on to say that "an Act of Parliament must provide for a procedure to amend money Bills before Parliament". The Bill before this House today gives effect to this injunction and reaffirms our commitment as Parliament led by the ANC that we take oversight seriously. This was perhaps one of the outstanding pillars in our legislative and governance toolkits of ensuring total accountability of the executive arm of the state as envisaged in our Constitution.
I am truly humbled to have been part of the team of midwives that brought to life this offspring of a democratic and developmental state. Allow me to give a little bit of background to this piece of legislation which most of us are familiar with. I am aware that as early as 1997, the National Treasury drafted a Bill which sought to give effect to this constitutional requirement. Parliament could not accept this as its powers to draft legislation were going to be abdicated to the executive.
My information is that in 1999, a task team was established to look at the question of oversight in its totality and to research the enactment of this legislation in the process. The process took its course, and there are volumes of documentation and information that came from it. I must admit that we benefited tremendously from the research. In 2004, the Joint Rules Committee established a task team to take the process forward under the auspices of the oversight and accountability task team. This task team had three focus groups, namely the focus group on projects, the focus group on committees and the focus group on budgeting processes. The mandate of the focus group on budgeting processes was none other than giving effect to section 77(3) of the Constitution that I spoke about. Having commissioned research of our own, we ended up being overwhelmed with the information and documentation. But the biggest challenge was for the focus group members to be able to prioritise the focus groups' tasks above other committees' work.
It is the culmination of these focus groups' hard work that produced the draft Bill that was ultimately presented to the oversight and accountability task team, subsequently tabled before the Joint Rules Committee. Just when I thought I was done with this daunting task, the draft Bill was also tabled in Parliament and was referred to the Portfolio Committee on Finance for consideration and for report. Today the committee reports as directed by this House.
The Money Bills Amendment Procedure and Related Matters Bill seeks to establish a procedure to amend money Bills before Parliament within the context of oversight findings and the adoption of the fiscal framework. It also provides for the establishment of a parliamentary budget office to provide research and technical support to Parliament and its committees, pursuant to maintaining oversight over the budgeting process and the possible amendments to money Bills.
Section 77(1) of the Constitution defines a money Bill as a Bill that does the following: appropriates money; imposes national taxes, levies, duties or surcharges; abolishes or reduces, or grants exemptions from any national taxes, levies or surcharges; or authorises direct charges against the National Revenue Fund except a Bill envisaged in section 214 authorising direct charges -the Division of Revenue Act.
Therefore, it is understandable why the first people's Parliament, when drafting the Constitution, put in a clause that requires a different procedure for the amendment of money Bills. By their very nature, money Bills tend to be at the centre of the entire governance system such that if not properly handled, they would upset the entire state machinery.
There are a number of principles that guided us when we drafted this legislation, and they are as follows: we have a legitimate democratic state based on the will of the people as envisaged in our Freedom Charter; our budgeting process has undergone an extensive reform that is transparent and participatory; the Medium-Term Expenditure Framework presents Parliament with an opportunity to influence the Budget and other money Bills; the advances that we made in relation to physical stability should not be eroded; and the amendment of money Bills is an oversight tool that must be used as a last resort in parliamentary processes.
This Bill makes provision for the establishment of appropriations committees in both Houses that will deal with appropriations and other money Bills and amendments thereof. The finance committee will continue to play its role in terms of the broad mandate of oversight over the macroeconomic policy, including the fiscal policy. The establishment of these committees is provided for in clause 4.
In terms of this Bill, parliamentary committees will be required to assess the performance of government departments by adopting budgetary review and recommendation reports. This is meant to strengthen the current annual reporting of departments as required by the Public Finance Management Act.
One of the key features of this Bill is that Parliament will be required to vote on the fiscal framework which should be part of the Medium-Term Budget Policy Statement. In terms of this Bill, the fiscal framework will be referred to the Portfolio Committee on Finance, and the committee must report to Parliament after 30 days of its tabling.
Some sections of the MTBPS that relate to spending priorities of national departments and the division of revenue will be referred to the committee on appropriations. The committee on appropriations will be required to consult with other committees in its deliberations on spending priorities and the division of revenue.
Section 7 of this Bill reaffirms compliance with section 27 of the Public Finance Management Act when tabling the national annual Budget. But in addition to section 27 requirements, it includes a number of other things, which are as follows: the proposed fiscal framework for the financial year; the key macroeconomic assumptions underlying the fiscal framework over the short, medium and long -term; the key fiscal ratios for the financial year and subsequent two years, including revenue expenditure, primary and overall balance and outstanding general government and public sector debt at the end of the financial year as a percentage of gross domestic product; tax and other revenue proposals, including the contribution of different revenue categories to national revenue for the financial year and the subsequent two years; taking into account the cyclical factors in the formulation of the fiscal framework as presented; and any other information as may be required by the House from time to time.
We also set out a clause for adopting the fiscal framework, which my colleague Ms Sibhidla will be talking to, and requirements that have to be reported to Parliament within 16 days. Should the need arise to amend the fiscal framework, utmost care should also be taken that Parliament does not undermine macroeconomic stability. The same caution should also be exercised when amending money Bills or taking any decisions in terms of this Act. These considerations are outlined in clauses 8(5)(a-g) and 8(6)(a- c).
As members would have noticed, the bulk of the Bill deals with budgeting processes and the amendment of the Budget because of its importance among money Bills. But provision is made for the procedure to amend other money Bills, and that is spelt out in section 13 of the Bill. Even in this section, emphasis is placed on the committee on appropriations being at the centre of these amendments and being consistant with the fiscal framework whilst ensuring compliance with section 8(5).
The Money Bills Amendment Procedure and Related Matters Bill proposes the establishment of the parliamentary budget office with the main objective of providing Parliament with independent, objective and professional advice and analysis on matters related to the Budget and other money Bills. Again, my colleague will be dealing with this in more detail. In reporting the Bill, the committee also tables the recommendations of amendment to Rules to make provision for the establishment of this office.
Allow me to take this opportunity to thank everybody that has played a role in seeing this Bill to this stage. The Portfolio Committee on Finance, the focus group, the task team on oversight and accountability, Parliament's support staff, outside assistance in the person of Ms Folscher, the parliamentary legal support team -particularly Adv Jenkins - and all stakeholders that made submissions. A particular thanks to the Joint Budget Committee and members of the Standing Committee on Public Accounts who attended, and to the former chair of the Standing Committee on Auditor- General, Ms Hogan, who has taken a new position, and all my predecessors.
On behalf of the committee, I present this draft Bill for adoption. Thank you. [Applause.]