The PFC has immense powers and can even override the decisions taken during the budgeting process. This means that National Treasury has in effect taken a back seat, with the parallel structure created by the President, more so, outside of any recognised constitutional structure. One would not be amiss in concluding that the PFC will serve to undermine and possibly subvert the work of National Treasury.
National Treasury, in terms of the Constitution, is tasked with ensuring transparency and keeping a tight rein on the State’s expenditure. Section 216 of the Constitution, as read with the Public Finance Management Act, as well as its Amendment Act, establishes checks and balances to ensure oversight over the various national and provincial revenue funds. Ultimately these measures are meant to hold the State accountable and to ensure the optimal usage of public assets without corruption, wastefulness or irregular expenditure. These measures reinforce the nation’s foundational values of accountability, responsiveness and accountability.
Precious little is known about the PFC. Speaking recently before the National Council of Provinces (NCOP), the President remarked that “The Presidential Fiscal Committee established in October was working with the Ministry of Finance to help prepare for the 2018 budget and in particular‚ to help us find ways of meeting our fiscal targets in a difficult economic climate‚ with high debt levels and lower revenue.” The PFC is thus fully embedded in South Africa’s future financial planning, despite falling outside of the constitutionally-recognised fiscal structures. The PFC as such lacks the transparency and administrative justice inherent to other legally-recognised bodies, including the Financial and Fiscal Commission (FFC). The FFC, an independent body, is established in terms of the Constitution to ensure fiscal policies. Importantly, the FFC has no political head and reports to Parliament, in line with Parliament’s oversight function over State-aligned institutions. The PFC in comparison, appears to be reporting directly to the President, without any public participation requirements. Public participation demands that the nation be afforded a real opportunity to weigh in and meaningfully influence decisions.
Clearly, the FFC can very well do the work of the PFC. As such, there appears to be no logical reason as to why a parallel body has been established. At best the PFC creates policy uncertainty and at worst, speaks to a sinister move meant to consolidate what is fast becoming a kleptocratic State.
While it has been said that the President wields tremendous powers, it is important to underline that the President can only exercise such powers as are given in terms of the Constitution. It is doubtful whether even the most generous reading of the Constitution would allow for parallel, unaccountable State structures whose very existence undermines key foundational values. Crucially, this is yet again President Zuma’s challenge to the desirability of a constitutional state. When and how will this resistance to the constitutional state end?
Ms Phephelaphi Dube: Director, Centre for Constitutional Rights
16 November 2017