27 February 2015
For 21 years, the Minister of Finance has tabled budgets announcing that large amounts of money will go to social services that are meant to improve the lives of the poor. But, even the staunchest government supporter would agree that the country has not derived full benefit from this money. Year after year the Auditor General, Public Protector and others report on inefficiency, poor accounting and corruption in all categories of public spending.
Cross-country comparative data show, for example that South Africa spends more than most on health and education, but that citizens derive less benefit than in countries with similar levels of spending. For its part, the National Treasury has developed an impressive array of laws, regulations and mechanisms (the PFMA, DORA, MFMA, MTEFs, MTBPS and so on) to ensure service delivery by departments, provinces and local government. But in democracies budgets lead to better service delivery because voters hold governments to account for how they allocate and spend money, not because finance departments make stricter and stricter rules.
For South Africa’s budget to unlock development, the solution is not more and more complicated treasury regulations. Instead, it is to enable citizen efforts to hold government to account by expanding budget transparency and ensuring deeper participation in government finances. Government will never have the eyes and ears that it needs to monitor service delivery at schools, public toilets or clinics. For that, they need citizens and civil society. Government innovations in the Philippines, India, Brazil, South Korea and elsewhere have shown that citizen monitoring of budgets and service delivery can be harnessed to help governments ensure value for money. It is time for South Africa to follow suit.
The South African government lead by the National Treasury has built an international reputation for budget transparency. Indeed, the Treasury publishes budget data and reports that are world class.
In tabling the 2015 budget, Minister Nene assured us that
“[t]he budget documents I table today are designed to make our budget choices and their implications transparent. The processes which follow in this House, bringing medium term plans and programmes under the scrutiny of portfolio committees and subjecting Ministers and officials to Parliamentary accountability, are essential disciplines in the translation of plans into service delivery programmes.”
But, civil society work in South Africa is uncovering glaring gaps in government budget data, especially as regards service delivery in provincial and local government. Budget documents released by national, provincial and local government provide some of the information needed by citizen efforts to hold government to account (such as data showing that budgets for school infrastructure are under spent), but not all of it (such as information about what specific renovation and buildings that private contractors are meant to provide at individual schools, and how much government money they received for this).
To plug these gaps government will need to extend the same high budget transparency standards adhered to by the National Treasury to service delivery departments in provincial and local governments.
A related challenge is to provide human-size budget information. Citizens, particularly poor citizens, are not excited by the big numbers that the minister tabled in his budget this week.
The work of the Social Justice Coalition, Equal Education, Section 27 and other civil society organizations show that citizens become interested in budgets when they tell them something that has a direct bearing on their lives, such as how much money is spent on antiretrovirals at their local clinic and therefore what drugs should be available there. On this scale budgets become a powerful support to citizens in their quest to ensure that public spending results in concrete improvements in their lives.
Armed with budget information, citizens also need the opportunity to do something with it. A second challenge therefore is to provide opportunities for citizen engagement in government finances. South Africa has extensive legislation and policy to guide and enforce citizen participation in the budget process (especially at the local government level). But local governments and legislatures tend to implement the letter rather than the spirit of this legislation.
For example, many local governments issue written calls for written submissions and unsurprisingly only receive submissions from business interests with the ability to respond to such calls. This satisfies the letter of the participation clauses of legislation like the Municipal Systems Act. Beyond that very little is done to proactively encourage participation by poor and marginalized communities – exactly those communities that are meant to be protected by the spirit of the constitution.
A related problem is that official mechanisms for participation in South Africa focus almost exclusively on the formulation rather than the implementation of the budget. The Municipal Systems Act and the Money Bills Amendment Act provide for citizens to engage with government on decisions about how to spend public funds, but not to give feedback on how this money is actually spent.
South Africa already spends more than most middle-income developing countries on social services. The real participation challenge in South Africa revolves around the quality of expenditure. Yet, South Africa’s progressive constitution and elaborate legal frameworks have little to say about citizen participation in the implementation and audit phases of the budget. Government reform should therefore focus on mechanisms of citizen engagement in the implementation and audit phases of the budget process. Parliament has been exploring these avenues through regular public hearings on budget implementation, but this needs to go much further. The audit phase of the budget cycle also still remains largely closed to the broader public.
For the last 21 years, the Treasury and others have valiantly tried to ensure that its large investments of public money result in adequate service delivery. If government can find ways to deepen budget transparency to provincial and local government and can engage citizens in budget implementation, then the rest of us will find it much easier to support this quest. The alternative is to keep on pouring public money into a broken system and to deal with the outpouring of grassroots frustration that is fast becoming the default route for engaging government.
Albert van Zyl is with the International Budget Partnership
The opinions expressed in this article are solely those of the author. No inference should be made on whether these reflect the editorial position of GroundUp.