Statement regarding the Parliamentary Budget Office and recent CCMA award

The Parliamentary Budget Office (PBO) was established to provide Parliament with independent technical advice to support it in exercising oversight of public finances. The importance of this role should be evident given the recent Cabinet reshuffle and ratings agency downgrades, which have raised concerns about public debt, public service pension funds, a prospective nuclear deal and the finances of state-owned enterprises amongst others. These are all matters about which a functioning PBO would be expected to provide credible insight and guidance to Parliamentarians.

There are, however, serious concerns regarding the functioning of the Office. These relate to the content and objectivity of its advice. This became apparent to me shortly after I joined the PBO in 2014. The resulting dynamics in the office led me to resign in 2016, and were also the basis for an unfair labour practice complaint brought against the PBO at the CCMA.

On the 26th of April 2017 the CCMA issued the commissioner’s award, which did not find in my favour on the narrow labour issues raised. While I am disappointed with this outcome, it is important to place the case in the broader context of the need for a competent, functional and credible PBO that is beyond reproach. In this regard, the Commissioner held that – as I had testified – the Director of the PBO had indeed offered to provide me with the interview questions for the position, I had declined the offer, and he had lied about this in his testimony (i.e. under oath). This example was only one of a number of issues raised in the process, but on its own raises very serious questions about the functioning and management of the office.

The Act governing the PBO is expected to be reviewed and amended later this year. In that process, the end goal must remain paramount: to build an independent, technically and ethically credible institution that the public and Members of Parliament can rely on for non-partisan analysis of public finance issues that is conducted without fear or favour.

Internationally, similar institutions are expected to maintain the highest standards of objectivity and political neutrality; standards that the South African PBO has failed to demonstrate. Perhaps the most famous international example is the Canadian PBO, which in 2011 produced a costing for parliamentarians of the government’s fighter jet procurement plan that was significantly higher than the estimates the government had published. The Office was attacked by the Prime Minister at the time, but supported by society at large and subsequently vindicated: government eventually acknowledged that the costs were higher than originally stated and the procurement remains on hold. The Canadian example is in marked contrast to the South African PBO’s analysis of the desirability and feasibility of the proposed nuclear energy procurement. The PBO’s report failed to cost the project, or assess its implications for public finances. In a more recent example from Kenya, the country’s PBO raised concerns about omission of a large increase in debt repayments from budget documents.

Since some of the issues raised at the CCMA go to the heart of these expectations, and it is my view that the basis for its finding is deeply and materially flawed, I am considering taking the award on review to the Labour Court. This is an expensive option – the estimated cost is R500,000 or more, and is prohibitive for an individual. However, the basis on which staff are appointed to, and promoted in, PBOs is one of the most critical factors in their success. Combined with the importance of the PBO and the upcoming amendment of its governing legislation, public interest organisations may find this case to be an appropriate mechanism through which to contribute to the establishment of the kind of PBO the country deserves.

Author: peripheralecon

Public sector economist, extra-mural academic

Leave a Reply

Your email address will not be published. Required fields are marked *