What Is The Budget?

Welcome back to Parliament 101 and, after today’s column, farewell until the start of the new school year in 2015. Parliament 101 wishes all students successful results in their examinations
24 Nov 2014 09:20
What Is The Budget?
Permanent Secretary for PSC, Pramesh Chand (left), with Jenny Seeto and Tupeni Baba after the budget announcement in Parliament last Friday. Photo: Rama

Welcome back to Parliament 101 and, after today’s column, farewell until the start of the new school year in 2015. Parliament 101 wishes all students successful results in their examinations and a very happy summer break.

The parliamentary recess is some weeks away yet, however.   Indeed, the next few weeks are likely to be amongst the busiest and most significant in terms of the parliamentary year.

The Finance Minister moved the annual Appropriation Bill last week and so sets off several weeks of robust debate.

In the United Kingdom, the day of this event is called “Budget Day” and is accompanied by some colourful customary rituals leading up to the moving of the bill by the Chancellor of the Exchequer, which was the historic term for the English Treasurer.

As readers of Parliament 101 will recognise by now, any parliamentary event that is surrounded by ancient rituals probably has had a significant role in some way for the development of democratic values.

So what is the democratic value behind the Fiji’s “budget day”?   To establish, this we need to clarify a few terms.

Many people confuse the budget with the appropriation bill that was introduced into the Parliament on the 21st of November. There is a good reason for the confusion, however, since the two terms are closely related.

Technically, the budget is the set of policies and spending priorities for which the Government will seek funding authorisation from the Parliament.   The appropriation bill is the Government’s formal request to the Parliament to spend money on its budget.

The Government’s budget is like your own home budget. If you make a budget for yourself, you count up the amount of money you will get from whatever source and then decide what you want to spend this money on.

If your income and expenses do not balance then you will have to make some choices. You may have to decide on whether to find more money or to give up something you wanted to buy.

On the other hand, if you have more money than you intend to spend, you can balance your budget by saving the extra or by finding something else to spend your surplus on.

The Finance Minister’s Budget Speech before moving the Appropriation Bill set out the Government’s budget for the year in pretty much the same way. He outlined to the Parliament where the Government expects to find the money to pay its bills and what it expects to spend the money on.

The Finance Minister’s Appropriation Bill is the Government’s request to the Parliament to raise the money the Government wants to enable it to meet its planned expenditure.

As Parliament 101 noted previously, the fact that the Government must ask the Parliament to raise the money to allow it to pay its bills is what gives the Parliament its “power of the purse”.

Parliament can use its control over the Government’s money in two ways.

The more fundamentally important way is the power of the Parliament to decide on the right of the Government to remain the Government.

Historically, an English king who needed money had to ask the Parliament to supply these funds. Over time, the Parliament used its power to grant “supply”, as these appropriations were known, to decide who should advise the king on how to spend these funds.

This is why today Ministers have to be Members of Parliament. The Parliament did not trust the king to choose his own advisers.

Rather they wanted some of their own members advising the king on how to spend the money that the Parliament granted to him.

But, as part of this bargain, the Parliament’s ministers had to be able to guarantee to the king their Government could deliver the money the king requested.

To do this, the Government had to keep the support or “confidence” of the Parliament.

Thus, modern Governments that cannot obtain supply by passing the Appropriation Bill treat this failure as a vote of no confidence in the Government and are obliged to resign as the Government.

Given the Bainimarama Government’s substantial majority in the Parliament, of course, there is no real likelihood that the Parliament will deny it supply. Thus the practical effect of the Parliament’s power of the purse with regard to the Appropriation Bill will be more muted.

The debate on the Appropriation Bill will be where the Parliament exercises its power of the purse. The fact that the Government must ask the Parliament for supply gives the Parliament the opportunity to debate the Government’s financial priorities.

Whether the Government changes any of it policies or spending priorities will depend, in part, on the cogency of the Opposition’s assessment of these during the Appropriation Bill debate.

The Government may find it convenient to clarify its position on any points of controversy as the reaction to its budget plans are covered in the media or views from rank and file party members through the FijiFirst party mechanisms filter through to the parliamentary members of the party.

Even if nothing changes, the debate itself is an important element of the Parliament’s power of the purse. It will provide transparency to the public not only on how the public’s money is to be spent but, importantly, why it is being spent in the way the Government thinks important.

This will influence the voters’ impressions of both the Government and the Opposition and this is a vital link in the chain of democratic accountability leading to the next election.

Response to Reader’s Questions

– Vinaka to Zibran for his question, which wins this week’s prize.  He asked, “What is the role of the (Government) MPs who are not given portfolios?” Parliament 101 will have to address the role of non-ministerial members much more fully in 2015.  However, to give a brief response to Zibran, this answer assumes that his question refers to the FijiFirst members who do not have ministerial responsibilities.  These members sit on the “backbenches” (that is, in the row of seat behind the Ministers who historically sit on the front row of seats on the right hand of the Speaker.  Backbenchers play a number of important roles in the Parliament.  They are the ones who sit on committees for the Government since Ministers cannot usually serve on committees.  Because ministers are very busy with their portfolio duties, the Government’s backbenchers are often the ones who deal with much of the party’s constituency work in Parliament.  They also are responsible for engaging constructively in debates and promoting the Parliament’s outreach activities.
There is much more to say on this matter but hopefully Zibran you can see that a member does not have to have a portfolio to contribute to the work of the Parliament.

While this is the last column for this year, Parliament 101 will return in 2015 with some new elements to make it more interactive.  We hope to include in the school’s programme and a mock election and a senior forms parliament.  More on these when Parliament 101 returns in 2015.  Moce mada and have a great festive season!


Professor Richard Herr is Adjunct Professor of Governance and Ethics at the Fiji National University. The FNU acknowledges the support of the Fiji Sun and that of the Embassy of Japan through the Candidates’ Manual School’s programme. 



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