Budget: ‘Less chance for scrutiny’

Wednesday June 05, 2019 Published in Letters to the Editor
Budget: ‘Less chance for scrutiny’

Dear Editor,

The cavalier way this government approaches its responsibilities in authorising the expenditure of public revenues would be unacceptable anywhere else in the democratic world where representative and responsible government is practised.


Not only has government failed to comment on my challenge to its appropriation antics for the current financial year ending 30 June but from all accounts it intends to continue a practice in respect of the forthcoming financial year which has all the hallmarks of just repeating the fuzzy, deceitful thinking that pervades the corridors of power when it comes to the appropriation process.

The government took the first and second reading of the Appropriation Bill yesterday with the minister of Finance reading his Budget for 2019/20.

There is nothing intrinsically wrong with that in the broader sense except in practice this government has corrupted the process that follows supported by what in my view is a misguided 2016 opinion by the then solicitor-general supported also by the then MFEM economic advisor.

The relevant provision of the MFEM Act at section 33 reads: Timing of first Appropriation Bill for any financial year – Except as otherwise provided by a resolution of the Parliament, the first Appropriation Bill relating to a financial year shall be ‘introduced’ into Parliament before the end of the first month after the commencement of the financial year.

Note the word I have underlined, introduced.  That is where government's duplicity occurs.  It is one thing to introduce the Bill before the end of the financial year. 

It is quite another to pass it before the Estimates which include the actuals for the preceding year and unauthorised expenditure are available to accompany the Appropriation Bill (s13, 25, 26, 27).

In addition, and before the end of the third month of the new year, the financial secretary should also have sent to the Audit Office financial statements of transactions affecting the Public Account with an audit report thereon forwarded to Parliament (s26 and Article 71(2) of the Constitution).

The huge, continuing disconnect between the procedure adopted for the passage of the Appropriation Bill and Audit's responsibilities to Parliament and its performance, and the non-availability to Parliament of all appropriate material (s13), is a terrible indictment upon all those concerned.

How many years now has there been no audit report when it is supposed to be an annual event – five or six?

Apart from some minor departures in language, the New Zealand Finance Act 1989 at s12 says the same thing as our s33 and that would explain why the main Appropriation Bill, and budget are regularly introduced there in late May.

From that point on, the similarity ends with several departures in procedure from the New Zealand practice, and our own statutory requirements, which make a mockery of the entire process not to mention the suspension of Standing Orders and guillotining debating time in Committee of Supply.

For example, in New Zealand, although the Budget is read before the end of the financial year, the main Appropriation Bill is not passed until well into the new financial year.

New Zealand does not have a provision like our Article 70(3)(a) that authorises three months’ spending after the close of the financial year. There is therefore no need here to be rushing as three months should be adequate time to get the actuals and the other matter together which would permit the Parliament to engage in a proper, responsible exercise of examining the Budget with all the supporting material in front of it – not the sham it is at present.

It used to be five months but that was reduced to three in 1997. If government were unable to get its act together in that period there is no reason why taking it back to five could not be considered.

It would, however, require bi-partisan support. Being a constitutional amendment it would require at least 16 members to back it. Some provisions of the Ministry of Finance and Economic Management Act would also need reviewing.

New Zealand gets over this constraint with Imprest Supply Bills that achieve the same thing and allow select committees time to examine the Estimates and the previous year's performance, as well as question ministers and officials. We do not see any of that here.

In fact we go even further, regularly denying Members of Parliament their rightful opportunity to question the management of the public revenues and the chair obligingly participating in all manner of procedural abuses to facilitate that, the contravention of Standing Orders and the guillotine being the prime example.

I have posed the question whether such behaviour is unconstitutional and the Bills passed under this shadow invalid. I understand Crown Law has delegated that question to a private practitioner but it is taking time (one may wonder whether deliberately so).

The way we are doing things here, Parliament is being forced to pass appropriations for an ensuing year without any idea how those given the management of its funds performed against an approved budget for the year just passed, yet that is what this irresponsible Cook Islands Party government foists upon the people year after year.

Unless some strong protest comes from the Opposition, or some other quarter, that is probably what the government will be thinking of again this time round. Why alter a tactic that has worked so successfully before with few voices raised in protest?

I have raised this matter before, although this time, in view of all the adverse publicity, it would not surprise me if, in their inventiveness, they come up with something new.

The other disconcerting feature which disadvantages the Opposition, and other private members, is the inadequate time to prepare for the second reading debate, let alone the Committee of Supply. 

This of course suits the government admirably. 

From its point of view the less chance to scrutinise where the money is to be spent the better. Too frequently members are expected to understand in 24 hours what Cabinet has been deliberating on for weeks. Quite unfair, not only to members, but also the public.

Finally, what continues to amaze me too is the conduct of key players in this budgetary exercise, the minister of finance and the financial secretary, who are required, separately, to sign statements of responsibility (s30). (Statements of responsibility are to warrant the integrity of  the disclosures and consistency with the requirements of the MFEM Act).

They regularly sign these without any apparent regard to the veracity of those statements or the offence being committed in doing so [s64(2)(c)]. I have sounded this warning before.

 John M Scott

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