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Parliament given more power to change the budget

This comes as economic policy is under scrutiny.

(Reuters) – South Africa’s parliament on Thursday adopted a draft bill allowing the legislature more power to amend the national fiscal framework and revenue proposals, an unprecedented move which comes as economic policy is under scrutiny.

International investors are concerned Africa’s strongest economy was tilting to the left since the removal of business-friendly President Thabo Mbeki, who has overseen sustained economic growth around 5 percent the last few years.

Mbeki was toppled by Jacob Zuma as president of the ruling African National Congress, and was likely to become South Africa’s next state president in 2009.

 

But Zuma’s close allegiance to trade unions and communists has scared risk-averse investors already rattled by a global credit crisis, despite assurances from him that South Africa will not change its market-friendly economic policies.

The draft bill, which must still be passed by the legislature before being signed into law, sought to establish procedures to amend money bills before parliament.

“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,” Nhlanhla Nene, chairman of parliament’s finance committee told members of parliament.

Special appropriation committees will help determine spending priorities for government, Nene said, adding the bill made provision for key economic assumptions underlying the fiscal framework to be tabled and debated.

Money bills are bills that appropriate money, or impose, abolish or reduce exemptions from national taxes, levies or surcharges.

However, Nene emphasised any interventions in the budget should take cognisance of the macroeconomic environment.

“Should the need arise to amend the fiscal framework, utmost care should be taken that parliament does not undermine macroeconomic stability,” he said.

Finance Minister Trevor Manuel, in a speech in May, said he supported the proposed reforms.

“I hope that such legislation can be finalised speedily so that parliament can begin to build the capacity required to engage effectively on the budget,” Manuel said then.

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COMMENTS   10

Comments on this article are closed.

Why the whinging? Surely its easier to manipulate 1 person than 100s of people?

It was unclear exactly how the leftist agenda would be inserted into the monetary and fiscal policy. This is the probably the first crack to appear – so much for the maintenance of the independence of the treasury and reserve bank. This is indicative of the slow erosion of the checks and balances that have given South Africa it unprecedented economic growth over the last 10 years. The makes it more critical than ever before that no single political party controls parliament and can steam role idiotic policies through that will unwind all our economic and political gains and as such remove any hope of future reductions in povery, inflation, crime and a better education for all.

There was me thinking it was all due to an unprecedented commodities export boom and then you advised me it was due to South Africas “checks and balances”.

If checks and balances had anything to do with unprecedented economic growth than ZAR would not be over 11 but back at 6, jobs would not be disappearing left right and center and investment returns would still be soaring upwards.

This could well be a good thing as one person in control can easily lose sight of reality. However, the assumption is that those who’re now being given power over this domain live in reality and understand it, something that seems unlikely. I can just imagine the fiasco of Julius Malema attempting to produce coherent and meaningful sentences about economic issues. Still, one can hope that those in parliament will be less influenced by the yammerings of such fools.

The major stumbling point for me is a party that has shown that its members are allowed to think for themselves only if they don’t express their own thoughts or act on them having a 2/3 majority in parliament and now possibly able to control the budget could be cause for concern. I suspect this will have international investors getting even more cautious.

Julius will tell Jacob want to do and all will be well.

Zuma and the SACP in control of our fiscal future? You can’t say you were not warned. Jaap Marais and the HNP said this is just what would happen back in 1962.

This crowd of thieving loonies will make a crew of drunken sailors look the soul of fiscal rectitude.

NOW WE REALLY ARE DOOMED!

Mad Bob did great. In record time he made everyone in Zimbabwe a millionaire! Little MOSCOW is being set up, the ANC cannot see that the SACP virus has attached itself to the ANC very cleverly and covertly, this will destroy the economic life blood of the country. How many of these MPs understand basic economics. Surely there must be some restriction against people in parliment making decisions that have no clue with regard to the consequences of their actions. Have they even heard of stagflation .

You want the Travelgating, arms-dealing Scorpion-killers to decide on something as sensitive as monetary policy?

I definitely see what’s coming down the road – SACP wants us to form a nice relationship with China and go fully communist. This will be the real economic miracle, believe me. They will take a fully-functional economy and trash it in a few years.

The National Treasury is not independent. Never has, and to pretend that it is independent is just dumb. Also, the SARB is only independent up to a point.

From what’s written above I cannot see what’s so bad about the proposed legislation. It might be bad, but that is not obvious from the article.

It therefore seems to me that most of these comments are emotional. What am I missing???

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