IBP: International Budget Partnership: Open Budgets. Transform Lives.

The Development of IDASA's Budget Work Over the Years
by Warren Krafchik
February 22, 1999
Cape Town

I must say, I got a little bit of a shiver when Isaac introduced IDASA as an organisation that's been engaging in budget work for a number of years. I really feel as if we're just starting and every day and every budget process, we learn all the time. I find that often when I talk about our work, I'm reflecting on it and I'm giving it a coherence that it really doesn't have at that moment.

It's on reflection that many of the things that I'm talking about seem to make sense. If you ask me the same question about our budget work tomorrow, I'm probably going to give you a completely different answer. That's what economists are famous for, so I'm going to stick by that.

I'm going to start at the end. I'm going to start by telling the story of the last week and I will then try and trace something of a chronology of how the budget project was created 1995 and is in the process of creation. And for shorthand, I'll probably refer to the Budget Information Services as BIS. We're acronym crazy in this country, but I'll try and restrict my acronyms to just one or two.

Another term that I'm going to use quite frequently, now that I think about it, is the medium term expenditure framework. I call that the MTEF and it refers to a three year spending plan, the type of longer term budget process that South Africa is engaged in.

So let me start from a week or so ago. The budget was presented on Wednesday. A week ago Monday, we all got together as a group, the whole Budget Information Service, and we decided on whose specialities that might be relevant to the upcoming budget. And we split up the work. So Shirley took this area, Alta took this area, Albert took another area, etc.

South Africa has just moved from one year budgets to multi-year budgets. On last Tuesday we actually produced a guide book on multi-year or medium term expenditure framework budgets.

This is a more academic book that provides some of the theoretical background and some critique of the process and then we produce a very popular book aimed at community based organisations. In addition, we produced an update that provides the figures in each medium term budget. We distributed these books to the national and provincial legislatures and there were flyers that went out to radio stations and to NGO's - to try and get as much support and readership as possible.

Before the budget comes out, we spend a lot of time briefing journalists. It's not actually work that immediately goes into the budget, but important as background work. It's the type of activity that helps them to focus before the budget is released.

Sometimes what happens is that the day before the budget, people are looking for stories and so we found last year, that we were sitting on a mine of information about upcoming legislation and about challenges for the implementation of the budget during the year, and that was the perfect day to crack them.

It didn't happen in the same way this year, but opportunities are often created if you service journalists by briefing them. We also sent out a notice, a fax, to as many newspapers and radio stations as we could the day before the budget, saying the Budget Information Service will be available for comment on the day of the budget. That got a tremendous response this year.

Comes budget day: you wake up with butterflies in your stomach, there's no way out of that. First thing we do in the morning is to collate all the material. All of the background material for different projects is produced and then I put it together and send it back to everybody. We review the budget and then we get together as a project for about three hours after the budget is released.

We try and go through an analysis of what we think the main trends are, at a political level, at a departmental level and at a re-prioritisation level. The budget is presented at 2:15, with the presentation over by 3:15. By 6:30 on that day, we have an initial statement, an initial set of ideas. We write these up and use them for radio programmes during that night.

The next morning we get together and we expand that set of ideas into a more coherent statement or submission. Two points here. The first point is that we don't compete with the finance houses for newspaper sound bites on the day of the budget. At the moment we just don't think it's really worth our energy and it might also get us into trouble. It just might lead us to say the kinds of things that we haven't really thought through very carefully.

What we rather do on budget day is to go on the radio. That makes a lot of sense in South Africa. Many more people have access to radio, particularly community radio, than access to the print media. Also, the radio allows us to engage in a broader set of issues than whether the price of cigars has gone up relative to the price of beer. We're able to put the budget into a little bit more context. Also radio interviews are quick, so we can get seven to ten radio interviews done in a night, which is amazing.

Okay, that's budget day. The next thing we do is to prepare for the parliamentary hearings which start normally four days, but this year two days, after the budget. So most of our energies go into preparing quite a detailed statement on the budget and particularly on the likely impact of the budget on poverty.

We go to the finance committee hearing, to the legislature, and present our statement. Then we use that statement as the basis of our response for the next few days. So we come back to the office and we produce a short 10 to 15 minute radio programme for community radio stations. We are then available for interviews on radio and with journalists, etc.

Next we target newspaper coverage. This year and most years, we go to particular kinds of newspapers. The first one is a newspaper called The Soweton, which has the largest newspaper circulation in the country. The Soweton is particularly strong in Gauteng and the northern areas and the centre of the country.

We also go for the newspaper that we had outside yesterday, called the Sunday Independent. This paper tries to position itself as the thinking person's newspaper. It's read by the vast majority of politicians, by public policy people, by government people.

The reason why we do this, instead of going for the sound bite on budget day, is because we have limited resources. We're particularly concerned to put across a considered statement, an in-depth statement, an analytical statement. That's what we want be known for, rather than coming up with a quotable line.

What it means, often, is that it gives us a chance, still on Thursday or Friday morning, to see what other people are saying, how the coverage is going in the newspaper, what's been missed and where we can insert ourselves to establish a niche. So really, yesterday, Sunday, that's when we're trying to make our maximum input and impact.

Reading through the newspapers yesterday, I could see immediately that they cut part of our input out and they left out a couple of important points. So what we do today is we follow up with other newspapers and we try and place those same stories, but at greater depth. What happens this week is the provincial budgets come out as well, so Albert's team is going to start being concerned with responding to those budgets.

One of the exciting and tiring things about budgets, is they take a year to 18 months to produce and, depending on the country, six months to debate. You are always dealing with at least two, if not three budgets at a time. There's always something to deal with. There's never one moment for budget intervention, it's a continuum.

Having said that, I remember I didn't mention that when we come back from the submission to the Finance Committee of Parliament, we produce a radio programme and a brief or a press statement that goes on to the internet.

So having started at the end, let me go back to the beginning and try and tell a bit of a story about how we got to this relative diverse set of activities around budget day. In 1994, South Africa faced two very enormous challenges. One was that thanks to the apartheid regime and various other regimes that had come before, our growth record was extremely poor. From 1970 almost to 1990, we had grown in inflation-adjusted terms at negative rates for 15 to 20 years. Investment was very low. Savings were very low.

This was compounded by a second problem and that was of inequality, as is well known. Through the 1970's and 1980's, South Africa held the world record for inequality. Our Gini coefficient was something around 0.70, which, I think, tops anything that Brazil has ever reached. If I'm right about that, Brazil’s highest level was 0.66. So we were way out there on the inequality spectrum and we had to find a way, as I think many developing countries at the moment have to find a way, to meet both growth and equity goals simultaneously.

We'd had also had only one election. The vast majority of people in this country had two ticks as their total experience of democracy and this was the only opportunity that they could impart to the government their views or mandate. To the same extent, the government had only two ticks on which to interpret their mandate.

Idasa had always been concerned with the consolidation of democracy and of identifying obstacles to that consolidation, and it seemed to us in 1994 that one of the fundamental obstacles to democratic consolidation was the flow of critical, timely and accessible information from citizens to the legislature and back again. This is a role that Idasa started trying to create for itself.

Let me talk now about our mission. For me, our mission has got three important parts to it. The first part has to do with information. We're about information. We're about selecting information, analysing information and disseminating information, not just any information, but critical information, timely information and accessible information.

In defining the type of information we're concerned about, we're particularly concerned about budgets, not just any aspect of budgets, but particularly the impact of the budget on low income people. Those are the first two parts of the mission. The third part of the mission is our aim to really enhance the participation of civil society and legislatures in the budget process.

There are two reasons why we think this is important, a view shared I’m sure by most people in this room. Firstly, we feel that to the extent that we can involve civil society and legislatures in budget decision making processes, the commitment of society to the difficult trade-offs that we face, will be greater. So the first reason is important, but the second reason, which I think is almost as important is that the more people who are involved in budget decision making, the better are those decisions.

During our work, this is partly what we're starting to uncover. We want to show that if you involve civil society in budget processes, you will end up with a better policy.

This mission implies that we have a couple of target groups. I wanted to talk, briefly, about our relationship to three different factors: government or the executive; legislatures; and civil society.

I think we see our work, in the first instance, as being an ally of the transition. South Africa is going through an incredibly difficult stage, it's a multi-layered transition, there's several transitions occurring simultaneously and in the first instance, we're a supporter of that transition. But because we're in civil society, we retain the right to be critical. We are a critical ally.

This places us, I think, somewhere in the middle of the classical civil society literature. What's key in this role as critical ally is maintaining a balance between analysis that is critical and activities that are supportive. This is the difficult part of my job I feel. I spend most of my time trying to maintain this balance.

There are frequently moments when we stray, sometimes too far on to the side of the critic. We go too hard on too many issues at one time and you suffer for a month, six weeks. But there are times that we sway too far to the other side as well. Sometimes we come too close to government. We engage too much in training. We work too much with the legislature. That can alienate parts of civil society. So maintaining a balance somewhere in the middle, I think is quite essential to our role in a transition economy.

When I talk about the recent budget work, I think part of that critical ally role was evident. On budget day we gave books to legislature, we helped the executive in putting out a popular book on the medium term expenditure framework, but we also came out with relatively hard hitting analysis of the budget, all at the same time.

One of the big debates we have is whether this kind of balance, this position, is sustainable? Do you have to choose at any one point or do you just shift or slide to different points on the continuum, depending on where the country is in the transition?

The second target group we have is legislatures. Legislatures are essential to impact on the budget process. South African legislatures have been through an incredibly steep, uphill battle over the last few years. In the first week of arriving in the legislature, for many members after decades of being part of a liberation struggle, inside and outside the country, legislators were faced with a mound of data, the 1994/1995 budget, and they were completely flummoxed. What do you do? Where do you start?

At that time, I was actually sitting in my office, engaging in a very similar question. We had just set up the Budget Information Service and I was thinking, what do I do, where do I start? And so there was a confluence of interest. As I was thinking this, the phone started ringing off the hook, literally from every single chair of a committee in the legislature, saying can you help us, can you give us some training? And so the first thing I did, was to personally and through a set of subcontracting arrangements, help train legislative committees. That was really the niche that started us, that training niche. We literally went in, went through the budget with them and helped them prepare questions to present to the legislature, to ask experts during hearings.

In 1994, at the time of the elections, there were something like 54,000 non governmental organisations in a population of 37 million. Many of these organisations were very directly concerned with service delivery. In fact, in the absence of a legitimate government, civil society was often the most legitimate authority in the country. That was a strength. Maybe one of the weaknesses was that civil society was largely concerned with what, perhaps, one could call liberation advocacy. Similar to legislatures, they had very little experience to engage in parliamentary advocacy. They knew how to topple the government, but they did not have the same depth of experience in how to work through legislation to influence policy.

And so what's prevented this? I'm sure this is similar in many countries. There was a lack of skills, for example. There was a lack of history of involvement and there was a particularly complex new budget process.

What we tried to do in enhancing the activities of civil society, is to try to divide it into two sectors, basically, because you can't be everywhere at the same time. What we do is create something of a division between what we call public policy organisations and community based organisations.

Public policy organisations are those organisations that already engage in public policy work or have the potential to engage in public policy work. We work, in the first instance, very closely with them. The second group of organisations, community based organisations, for reasons of geography and language and size, we largely can't get to. We try and overcome this problem by identifying a set of civil society or CBO nodes or networks in each of the provinces and we target our activities to each of these nodes or networks.

We rely on them to help translate our material and pass it further down the line, to use our material in their own provincial advocacy. And, in turn, to try and assist us with collecting information on what's going on in provincial legislature. So there's something of a partnership that we create between them.

I wanted to move from here to just talk about the different projects at the Budget Information Service. I've already told you that we started off by training. And now I'm going to talk about the project on re-prioritisation.

When we started budget work, or when we started with the transition, I said we had two problems that we had to meet simultaneously, growth and equity. The government faced this problem as well and it had two responses, to some extent contradictory. Examining those responses lies at the heart of our work.

The first response was in a programme called the reconstruction and development programme. This was a largely populist, election platform of what the government wanted to provide over the next five years. It emotionally bound the nation and all parties into a programme of social delivery.

There were several problems with it though, it wasn't costed out; it wasn't prioritised; and the bureaucratic management was particularly complex. After two years, it was dumped, rather unceremoniously, and in its place the government created a new macro-economic framework, called GEAR (Growth, Employment and Redistribution Programme). GEAR is a complete antithesis to the RDP, the Reconstruction and Development Programme.

Whereas the RDP is a demand-led macro-economic strategy, GEAR is a supply led macro-economic strategy. Whereas the RDP is expansionist, GEAR is contractionary. GEAR is in the best sense of the IMF programmes, a structural adjustment programme. It relies predominantly on the reduction of a deficit, from something like 10.2% or 10.8% of the economy in 1994, all the way down to 3.7% this year and 3% next year. It's a very strong deficit reduction programme.

The question is, how do you meet both plans at the same time. When we started engaging in this question, the first answer we had was to say, we need to take money from defence or from other unproductive expenditure like administration and we need to shift it into social expenditure, health, welfare and education. But our first analysis suggested that most of those opportunities had already been exhausted.

From about 1985, the National Party, our previous government, had anticipated some form of transition in the 1990's and began to shift budgets from administration, from defence into health services and education services, particularly for black people, in a bid to win a future electorate. This meant that by 1994, most of those opportunities for inter-department shifts had been exhausted. I have a slide here that shows that all of our expenditure amounts for health, welfare and education are completely flat post 1994.

We also had another problem and that is a massive inherited debt, internal debt, that's held by South African insurance houses, as opposed to external investment house or banks. That consumes something like 21% of our budget. So there's a serious constriction here. The only way out of this constriction, the only solution to this, has to be to re-prioritise expenditure, has to be to focus on shifting monies within departments from tertiary services to primary services. Within departments, from shifting expenditures from those that used to benefit a minority to those that benefit the majority.

And, in fact, if you compare South Africa's social expenditure in health, welfare and education to virtually any other middle income developing country, you'll notice that we spend as much as, if not more, than every single one of those countries, yet our social indicators are considerably poorer. So this underscores the point.

Our primary budget challenge is not really to spend more money, even though there are places where we could try and do that. The primary challenge is to spend money better. To spend it more effectively and more efficiently. And that's what we try and focus on. I'm saying our challenge is not to expand the envelope, even though we can have debates on maybe tweaking that envelope. Even if we reduced debt to any reasonable level, the primary challenge is still going to be to shift expenditures within departments.

Now in order to respond to this, the first set of projects we created was the women's budget and the children's budget. Four years down the line, these projects have started differing, so I'm going to talk at a fairly general level and give you a sense of them both.

What we wanted at the outset, was a method to track the link between policies and budgets and that's what we do in this programme. We track the women's and children's budget on to United Nations conventions, the convention on the rights of a child and the convention for elimination of discrimination against women. South Africa signed those conventions and the constitution establishes women and children as a priorities.

So we take those conventions and we assess to what extent government expenditures and taxation policies are sufficient to meet the goals of those conventions by the year 2000, 2005, etcetera. That's the first point. The second point is that this is a method, I think, that's sensitive to the data constraints that you find in developing countries. You don't need to engage in a line by line budget audit. You do need to match trends to each other and that's often more appropriate or more possible.

The third point is that each of these projects focus on votes or sectors themselves. We don't engage in the inter-vote or inter-department issues, we focus on what's happening in health, what's happening in welfare, what's happening in education for reasons that I explained.

So in the first instance, it's a research programme and to some extent an intervention and advocacy programme, but it's also a training programme at the same time. What we do in these projects, is that we use civil society researchers from outside Idasa, each of whom has experience in children's research or in gender research, and they have experience in particular sectors, health, welfare, or education. But they don't normally have budget experience. What we do during the research programme is, in effect, train researchers on the job.

It means that four years down the line, in the women's budget, for example, we've trained between 40 and 50 researchers, that have gone back to their organisations and many people have continued this work or continued budget work in those organisations.

We also allocate to each researcher a reference person, drawn from civil society, but more likely from government or the legislature. The trick here is to enable our access to data and to ensure that the outputs of the programme are inserted into the correct debate at the correct time, with the correct people.

So, to summarise these programmes, they are research programmes, and they are training programmes, but there are also partnerships. There are partnerships between civil society and the legislature in a way that tries to maximise the impact.

There's one further project that really messes up my chronology, but I have to talk about it quickly, because it does fit in here. That's a project that we established with the Centre on Conflict Resolution two years ago. It's called the Southern African Centre for Defence Information. A focus on defence in Southern Africa is very important. The more resources you can extricate from the defence industry, the more resources you have for social expenditure, but defence industries and defence personnel are particularly important and powerful in Southern Africa, and so it's important to engage in the transparency of defence issues as well.

This issue is particularly acute at the moment in Zimbabwe, for example, where, over the last two weeks, we've had a number of journalists detained and tortured, simply for reporting on Zimbabwe army's activities in the Democratic Republic of Congo.

This project maintains a set of data on Southern Africa military expenditure, Southern African arm sales and Southern African defence budgets on the internet. We then form the network of researchers that engage in military work and we try and get them to work closer with each other. The project also produces a set of defence briefs and a set of working papers that try and explore the information in the database.

I'm going at a fairly general level, so before I move on from this, I want to just introduce you to some of the people in the Budget Information Service that work on each of these topics, so that you can explore conversations further with them. The women's project is co-ordinated by a person called Debbie Budlender, who is not here this morning, but you'll meet her this afternoon. She's from an organisation Community Agency for Social Enquiry and we engage in this together.

The children's budget is undertaken by Shirley Robinson, who is at the back there and Mastoera Sadan, and the third member is Project Member X, who we are looking for at the moment and should have arrived a couple of months ago! Then the military project is co-ordinated by Peter Bachelor, who is also at the Centre for Conflict Resolution.

That leads me on to the second area, which I'm going to call IGR, Intergovernmental Relations. Prior to 1994 in South Africa, the country was divided into four provinces, white South Africa as it was called and several homelands, quasi-independent structures attached to white South Africa in various ways. The government also maintained a set of feudal warlords across the country and the ethic, a very strong ethic, was one of non participation in governmental affairs. Even white people in the white parliament, did not participate. Parliament was a rubber stamp.

The constitution in 1994 completely altered the situation. I don't think this was the ANC's first choice, but largely as a result of a compromise with the other parties, South Africa is now divided into nine provinces. Some of these provinces are relatively intact from before, the Western Cape, the province that you're in, for example, or Gauteng, a very strong province in the north.

Some of these province are entirely new creations, such as the Northern Province or Mpumalanga. Many of them contain an amalgamation of two to three different homelands, with two to three different accounting systems, two to three different corruption systems! (Everybody laughs). As in, I think, many state systems, particularly ones that have been recently constructed, provincial capacity is very uneven. What you typically find is that the poorest people live in the weakest provinces.

One of the most important issues from a public finance prospective that compounds this problem, is that the constitution devolves responsibility for socio-economic expenditure to these provinces equally. The implication of that is that something between 55% and 60% of the budget is planned and spent at a provincial level.

There are several problems that have emerged from this. I've mentioned the inter-provincial inequality. It's a new system. Nobody really knows what's going on at times, it's still under construction. There's enormous capacity problems in the provinces, particularly with leadership, with financial skills, with budgeting skills. Many of the best civil servants have left, in a particularly unfortunate programme of voluntary severance packages. Many of the most recalcitrant civil servants have remained and remain in charge of the budget processes, with corruption, etcetera.

There are several debates around this in South Africa, this issue is raging at the moment. One debate, for example, is to what extent do provinces really have flexibility or not. Personnel expenditure which takes up most of the expenditure in health and education and in social service functions in general, is still negotiated centrally, in a central bargaining chamber. So a great proportion of provincial budgets are constrained in that respect.

The constitutionally-created Financial and Fiscal Commission, an institution that assists in this process, granted or suggested that the provinces have taxation powers. To date, taxation enabling legislation has not been passed and so there's a substantial vertical imbalance. Provinces only raise 5% of their total revenue and they rely on the national government for the remainder.

One of the big debates at the moment is to what extent can the symmetrical relationship between national and provincial be retained. One of the points we're trying to explore is what would it mean to have an asymmetrical relationship between national and the state. Clearly, there's a chasm between the national and provincial capacity. We try and argue at the moment that there are creative ways in which you can bring weaker provinces on line, as you allow stronger provinces greater flexibility, and thereby create a greater equality in the system.

There are a number of ways to do this. You can hold housing funds for particular provinces, for instance. Then there are more unfriendly ways that the current government seems to prefer, which is using section 100 in the constitution, which basically gives them the ability to take over a province. But there is a debate on how you allow for greater equalisation over time.

The project that takes up these issues, is a provincial

fiscal analysis project and the people who work on that project, are Albert van Zyl and Luvuyo Msimango and Lydia Ntengo who just joined us and, again, the infamous researcher X, whom we're looking for.

Very briefly, what Albert and his colleagues engage in, is firstly, to try to understand the intergovernmental system and put out a set of guidebooks on what the system is and how people engage in it. Secondly, to monitor the system. We've got a set of monitors in each of the provinces. Thirdly, to enhance civil society capacity by building nodes and by building partners in each of the provinces.

I think one of the benefits of this project, for the Budget Information Service as a whole, is they're starting to push us more and more into flexible work, more and more into quick responsive work, and monitoring what's going on, rather than looking at deeper system issues and producing long books. I'll talk about that in a moment.

Okay, so these are two areas of IDASA work. Subsequently we noticed that there was a set of issues that was being raised in each of these projects, but neither project had the capacity to explore. There was also a set of issues between these projects that included interaction between these two sides, that as a project we couldn't explore.

And so from being a project that developed first through a series of separate or distinct project areas, we started developing a set of, what I'm calling, integration projects. Projects that help share the information between the two different sides. And the first one that I mean to mention briefly, is the area of budget process reform.

If you aggregate the problems and issues that I've mentioned in re-prioritisation and the problems and issues in inter-governmental relations, the required changes amount to no less than an entire system change. Now it's not unique to South Africa. This is happening throughout the world. Budget systems are being reformed and part of the work we try to do, is to obtain a bit of expertise on the system issues.

When I say system issues, I'm talking about a couple of things here, for instance, budget documentation. In this area, there is great improvement in the last year, but our budgets are more or less still controlled by second world war commonwealth statute. That second world war commonwealth statute says, account for every last cent of expenditure, but in a way that nobody knows where any cent has gone to and I think that's common to several countries!

A second issue is multi-year budgeting as opposed to single year incremental budgeting. We now have a multi-year or a medium term expenditure framework in the country. A third issue and the last two issues just mentioned are the battles that we're still engaging in.

The third issue is effective civil society and effective legislature involvement in the budget process. The budget process is still relatively closed and civil society is still gathering the skills to intervene substantively. For example, one of the issues that constrain involvement is the legislature doesn't have the power to change the budget yet. One of our major campaigns is trying to push through the bill that gives legislatures the power to change the budget, to change them from a rubber stamp into an effective participant.

And then, finally, in budget reform, the link that holds it all together, is the link between the budget process and the civil service review process. Once we've completed that chain of accountability, we'll be happy, but that's an enormous programme, that's a 15 year programme as probably best practised in Australia and New Zealand at the moment. That's what I mean by the system issues.

Our focus at the moment in budget reform is really to follow through some of these enabling pieces of legislation. The treasury control bill, which is the fundamental process on accountability in this country, and the money bills amendment procedure. Those are two that we're following through at the moment. And Joachim Wehner, who works with me on this, will talk to the money bills amendment bill on Wednesday.

A second project that we are just establishing now is the project on government employment. As I mentioned, one of the big issues that is constraining this budget, is the fact that civil service issues are negotiated at the national level and civil service salaries consume most of the budget.

If we were able to find a way to reduce the public service, but at the same time to improve the effectiveness and efficiency of spending, we would be going a long way. So we've set up a project, particularly to track this issue. We've already actually felt some of the benefits of this effort in the last week. A large part of our budget analysis this year rested on an analysis of how accurate or how reasonable the government's projections of the civil service bill for the year are. We think that's an issue that's actually going to bring down this budget and push out socio-economic expenditure. The person that is running this project is Alta Folscher.

Then, finally, on to the other integration project. It's a project called Chapter 2, which is co-ordinated by Tiro Holele. What we find in the budget service, is our skills in advocacy are not as good as our skills in budget and we needed, actually, to create a programme in conjunction with a sister project in Idasa, the political information project, that helps build civil society advocacy capacity.

Some of its projects for the moment are training. We produced a very nice budget advocacy game which sets up a scenario and gets groups of people to work through the best budget advocacy strategy for it and we're busy engaging in that training with an organisation in attendance here, the South African NGO Coalition. We're going around the country this year with this training.

Tiro's project is also undertaking an executive power research project at the moment. Trying to locate where decisions are taken in every department and in every tier of government. Who are the most important people, and how do you contact them? They're also tracking several campaigns that are happening at the moment, to write up a set of case studies that we can distribute to civil society, including ourselves I might add.

Let me complete this, by just talking, very quickly, about dissemination. Over the years we've built a couple of dissemination tools which are very helpful, all of which we've drawn on during budget week. In order of creation, the first one was a magazine called Budget Watch, which, I think, a number of you receive. It's a newspaper which comes out every six weeks and its niche is that it goes predominantly to people in the executive and the legislature. It's a technical publication. We try and concentrate on very technical system issues.

Its benefit is that whenever we have civil society issues that we want to relate to the executive we have a vehicle that can do that and it is respected as a technical chronicle. More recently we have produced something which we call Budget Briefs, that's a much simpler, much shorter analysis of many of the articles that we produce in Budget Watch or many of the issues that are just floating around the Budget Information Service. We disseminate these briefs to a very broad range of NGO's and CBO's that we maintain on a database.

Much of our work goes immediately on to the internet and we more and more try to mine this opportunity. We used to produce Budget Watch in partnership with another organisation, we're now producing it ourselves. We're debating one of the most cost effective options, which is actually to take away the print completely and producing only on the internet, with an electronic publication. We're busy talking through the implications of that, but it will save a lot of costs.

And then, finally, a year ago, and with much fun, we started a radio project, called democracy radio. This is a current affairs, weekly radio programme. That departs from the principle that community people or community radio stations, have an advantage in collecting community news, but are at a disadvantage in getting access to national, political and economic information. That's the niche we try and fill.

Democracy radio is actually about to change. In our first year, democracy radio went to approximately 35 community stations. There were community stations that were most likely to carry current affairs news and there were community stations that were distributed throughout the entire country.

What we found after a year of this, is a couple of things. Firstly it's too long, they're a half an hour, we need to cut them down to 15 minutes. Secondly we found that many of the stations are not sure what to do with the material and sometimes they also can't cope with the barrage of questions that they get following a particularly interesting programme.

So in the next year, we're cutting down the size of the programme and we're integrating a training component into the democracy radio programme. It remains weekly, but instead of going to 35 stations, it's only going to about ten stations. Each of those stations, we're integrating into a training project. So we go around to those stations, during the production of democracy radio, show them how it is being produced and try and create a capacity in that organisation to deal with a phone in on current affairs questions.

We're also hoping, I hope it's not too ambitious, but we're also hoping that community radio stations will add to our ten to 15 minutes, another five minutes of their own content in a variety of languages and enrich the programmes in that respect.

Okay, I've talked for a long time and I'm going to end, but I thought just one way of ending this presentation, was to mention five or six challenges that I think we faced during the establishment of the Budget Information Service - from just doing training to producing quite a wide variety and a rich diversity of projects.

Each of these decisions, I see more as a continuum. We're sliding on each of these to one extent or another. The first one I will mention is maybe a continuum between training and analysis. We started off doing training, it was a fantastic niche, we created a lot of allies.

We are good at training. But more and more our niche is analysis, more and more we focus on the numbers and tell a story about what the numbers say. So we specialise to an extent.

Another debate that we've had over time, is the difference between subcontracting work and forming partnerships and doing work in-house. At the beginning of the Budget Information Service, subcontracting work was fantastic. It allowed us to spread ourselves over a variety of areas, it allowed us to test a whole range of projects which we weren't sure about, but there may, at times, be something of a disadvantage in that. It's difficult to keep control of those projects and it's difficult, quite frankly, to retain a lot of the credit for these projects.

Partnerships are difficult. Partnerships work well with the Centre on Conflict Resolution, because we work very well together. The partnerships with some other institutions, is not always equal. A partnership with the legislature, is not an equal partnership and you need to take that it into account.

So more and more we undertake our work in-house and it means sometimes we cover fewer topics and we focus and go further in depth, but that's a decision over time, not exclusively. We do, obviously, maintain partnerships.

Another debate is a debate between big books and flexible response. At the beginning we wanted to establish ourselves, we wanted credibility and so we produced big books. We went for the big questions. Each year the women's budget came out with a book, the children's budget came out with a book and it's relatively inaccessible to most of the people who want to read it. So we started producing popular versions of those books, but more and more over time, what we found is those books have established a great baseline of information. What we do now is to use that background in order to respond flexibly to issues as they happen and that's more and more, as I explained from Albert's work, what we're engaging in as a project.

Another continuum is the continuum between information and advocacy. We've, over time, established ourselves largely as an information organisation, critical information, but in the first instance, I want to talk to everybody. I want to give information to other organisations, who have greater contact with communities and who are able to translate that information into their own advocacy initiatives. That's a decision we have taken. It might be different for other organisations.

And then I've talked about the critical ally relationship. That's also a particularly important balance and it's one that we're engaging with a lot at the moment.

To close let me note where we started off, I started off, thinking only economists can do this work and only people with at least a master's degree can do this work. I've learnt. You don't need economists and you don't even need people with a masters degree, you need people who've got energy and common sense.

We started off really in this line, because I wanted to create a space for people in the organisations to develop their own skills, to develop their own products. This lead to several distinct projects within BIS. And so one of my big missions for this year, is to start thinking about integrating these projects.

To some extent, I think, our maturity as a project reflects and mirrors the maturity of the country and its legislatures as a project. Over time, we are concerned that the government spends its money better, more effectively and more efficiently, that departments talk to each other and integrate themselves in their work.

The challenge for us is exactly the same. We need to find ways for the limited resources we've got to have a bigger impact, to spend our money better and more efficiently. We talk to each other more and, therefore, we have come up with a project with greater impact. I'll stop there, thanks.

WARREN, IN RESPONSE TO A QUESTION: The question asked was to talk about the relationship with the executive. Wilmot James started talking to this last night. I think a relationship with the executive is ambivalent at the moment. The government, the ANC, has come through a long liberation tradition of civil society involvement and I think in the heart of most people in the ANC, that's still a very strong tradition. There's definitely emotion that supports that.

But at the same time, when you're new in government and perhaps still trying to come to grips with what's going on, civil society can, at times, be a threat. If civil society is receiving a vast proportion of international donor funds, for example, if they're responsible for producing services on the ground, there is a possibility that they could receive much of the credit that you want the government to receive. But perhaps, put more in government's terms, when you've got an enormous reconstruction project, there is an issue about national integration and national co-ordination of development. So, I think, there's some concern in the government that the NGO community might frustrate national co-ordination.

I find that this government has also been somewhat prickly on the issue of criticism from outside of the government circle. It’s quite a difficult issue to deal with in the NGO movement. Many of us have still got strong connections to people who just happen to be sitting in government now. I've often had government people come up to me and say well, I don't understand Idasa, why are you still criticising us? We've been through this long liberation struggle together, we've got this enormous challenge, why aren't you on our side any more?

But I'm saying, I am on your side. You know being a critic is an important part of consolidating this democracy. So there are number of these tensions and the best way I can describe our response to these tensions is to talk about in the terms that I have been of our being a critical ally. Somehow I have to be able to show that in each day of my work, that I am supporting the transition. I'm giving training to government. I'm producing books that assist them. I'm offering help to brief them, but at the same time, I'm a member of civil society and I can criticise them.

WARREN, IN RESPONSE TO A QUESTION: Most of our training is actually with legislatures. To some extent we've done executive training, but not nearly as broad as we have with legislatures. Government capacity is growing. Within the national finance ministry, particularly, it's relatively strong at the moment. The problem is capacity within the executives of each province, it's extremely unequal. That's really where the problem lies.

Legislatures themselves have been through a very steep learning curve. Most of them had never engaged with budgets four years ago. At the moment you'll find in the finance committee that people have specialised in budgets and four years later they've got considerable skills in engaging with the executive. The big battle has been to establish that relationship.

WARREN, IN RESPONSE TO A QUESTION: Let me give you the best case scenario, to start on a positive scenario. In the national legislature, the national finance committee has one researcher and that person does not have specialised budget knowledge. There is a vague system of party researchers, which has been financed, at the moment, through European union funds. That gives the ANC caucus, within that finance committee, another researcher with skills.

In the National Chamber of Provinces, the NCOP, the second house, the finance committee doesn't really have a researcher to speak of, they have a co-ordinator, that's it. If you go to the provinces, there is virtually no research capacity whatsoever and you need to put that together with another small piece of information and that is, most of our problems that we're engaged with, that I haven't talked much about, are problems with the budget process itself.

So the budget takes 18 months to produce, it's presented last Wednesday and by Friday, the hearing starts. By the next Tuesday, the committee has to table a report. So an 18 month process has given a committee with one researcher and a civil society that's struggling to get up the steam, two days to analyse that budget. And then you can't make any changes.

WARREN, IN RESPONSE TO A QUESTION: I'm really talking about Idasa and particularly about the Budget Information Service and this is one where, I think, we haven't really moved that much over time. Primarily I see my role as an information role. I want to give quality, timely, accessible information to other organisations that are better equipped to engage in advocacy.

First prize for me is that I can talk to anybody at any time and link civil society and the government, but the caveat I would mention is that where issues arise in the budget and particularly the budget process, that impact the heart of democracy for us, we do take a line.

An issue having to do with transparency in data, is something where we would never hesitate to take a line. In other areas, for example, on the money bills amendment process, the ability of parliament to change the budget, I'm just very careful when I take a line. So I start off in that process by producing a good document and I try and get that published or credible. Then I try and talk to as many institutions as possible and get them fired up for a debate.

I'm also talking to the legislature to get them to convene a public hearing and only as that public hearing comes very close, do I start putting our position on the money bills amendment forward.

WARREN, IN RESPONSE TO A QUESTION: I will expand on that. I'm putting it in a bit of a sound bite version, but the legislature at the moment can do two things with the budget. It can't change the budget. It can't change line items or change allocations between votes. All they can do is give an up or down vote. You can approve the budget, which is what happens, or you can reject the budget in its entirety.

Only once in the history of South Africa, has that ever happened and that was when an infamous constitutional Minister, Chris Heunis, had his constitutional affairs vote turned down in one of the chambers of parliament. All that happened is, another creation, the president's council, overturned that decision two years later.

Given the current configuration of our parliament, where you have a very large ANC majority, where you can't cross the floor, the chances of that happening, are minimal. That won't happen. Even in some of the provinces where you've got ministers in different parties to the chairs of committees, that hasn't happened.

WARREN, IN RESPONSE TO A QUESTION: There are NGOs that are constructed in a way, but they try and access public money in order to carry out delivery programmes and over time, that's expanding.

There's a very big debate on this in the NGO community and you might want to talk to Vucani later about the efforts of the NGO coalition or even Tsediso about the Human Right Commissions efforts, to try and establish a set of agencies that facilitate that flow of money from the State to NGOs, because to date it's been largely blocked.

WARREN, IN RESPONSE TO A QUESTION: I think we're in the growing phase of NGOs engaging in budget work. As I mentioned last night at dinner, there's a phenomenal growth this year in the amount of institutions that are interested in budget work. There were 14 people at the finance hearings this year, there were three people last year.

NGOs have been particularly fired up, I think, with the debate around debt and it's called the Jubilee 2000 campaign, it's a campaign to try get South Africans apartheid debt eradicated. So, largely, I think NGO involvement is still at the level of, what I would call, macro-economic society problems.

I'm personally hoping and I think more and more NGOs are finding this, that they will engage more and more with the intra-budget decisions, with the numbers themselves and what they mean.

WARREN, IN RESPONSE TO A QUESTION: I can only think of a relatively easy answer. The executive is supportive through their provincial treasury of some of the efforts we've tried to make to train provincial government people. I mean it's an incredibly expensive exercise, but sometimes we engage with them in discussions on how we might co-fund or they might help fund such a training initiative.

The second question, my answer is yes. Legislatures are dying for these powers. They're dying to be seen as effective. They are very sensitive to criticisms from the NGO community of their lack of effective power, that they're largely being perceived as a rubber stamp still, in a very similar way to the previous legislature. One day before the budget was debated in the legislature last year, the most powerful trade union, Cosatu, the Congress of South African Trade Unions, the trade union that's allied to the ANC and the South African Communist Party, pulled out of the budget hearings in a very public manner. The reason why they pulled out? They said we will not participate in these hearings until they are meaningful, until the legislature has the power to change the budget.

So that underscores legislative sensitivity to the lack of amendment powers. But there are people in the legislature that realise the constraints to this debate as well. Even if we were to give legislatures amendment powers today, they wouldn't really be able to use them effectively. There are a number of factors that need to be resolved in order for those amendment powers to be effective.

For example, you have to overcome that problem of the lack of independent research capacity. You have to change the budget process. We want the budget to be presented in January, debated in March. Issues like that. The legislatures themselves, probably need some upgrading in terms of skills. So there's a whole set of issues in addition to the actual configuration of those powers.

Most countries do allow legislatures to make changes in the budget, but there's an enormous differential in those powers. We need to locate ourselves very carefully in that continuum.

WARREN, IN RESPONSE TO A QUESTION: I'm not going to be able to give you a very detailed answer to that question. I don't have that research at my disposal. What I can talk about from my own organisation's point of view, is we very rarely will access state funding but we will do so on a tender basis to produce a set of projects but never, in any way, constrain our capacity to produce critical analysis.

I can't talk about particular organisations that would really fit very strongly in that nexus, though they'd get a lot of state money and do a lot of critical work. I don't have that answer at my fingertips. What we have done recently in the women's budget for the first time, is we've done an analysis this year of donor funding through the South African Government and we've tried to do an assessment of the extent to which those funds have been utilised in a gender sensitive manner. Vukani, I don't know if you've got a longer answer on this issue.

MR VUKANI: Basically I was saying that one wouldn't say there are many NGOs that fit in that particular mold. However, what we've done at the South African National NGO Coalition is to develop a code of ethics. That code of ethics relates not only to government, but also to donor funding. How do you decide what is the agenda and who funds that agenda. Now we've developed that code of ethics, particularly for that. We were worried that one would not be able to get certain funding and criticise government. As you know, you cannot bite the hand that feeds you.

So that code of ethics tries to lay down those relations, tries to regulate those relations, and tries to show that no one is pushing one in another direction.

WARREN, IN RESPONSE TO A QUESTION: It's difficult to answer the first two parts of your question, because it's always difficult to link a change to your own activities. I try and operate in a way that the primary product of my work, is a set of information that, hopefully, I can get more and more organisations to use and thereby change the budget. At that point, who do I give credit to? The prize for me is that I can give credit to a whole range of organisations. That means I'm doing my work properly.

The second issue is that until we can actually change the budget, how do I actually say that, because of my work, specific changes have been made. What I can say, on a more positive note, is two things. I can point to the work of the children's budget, which is being used by the government and by civil society to report to the United Nations on the extent to which they're meeting the convention on the rights of a child. Now those are very specific accomplishments in reporting. So they do feed directly into the budgeting processing departments.

A second example is the women's budget. Unlike the children's budget, one of the objectives of the women's budget is to get the government to do a women's budget. Over the last two years, Debbie Budlender, the co-ordinator of the project, works sometimes within the finance ministry, to get them to design a process and to start budgeting for women. So that will have impact.

The second point I want to make, is that in the legislative side, despite the lack of amendment powers, I'm now seeing for the first time some very strong changes. An example is the treasury control bill. In a nutshell, the treasury control bill sets out the entire system of accountability for the public service and for the spending of money. It deals with issues like mismanagement and corruption. It deals with issues such as these: who takes responsibility for policy and who is ultimately responsible for administration?

When that bill was tabled for the first time a couple of months ago, it contained enormous implications and because it's a relatively technical bill, neither the executive nor the legislature anticipated a programme of public hearings.

We first looked for research internationally. Now as far as budgets and parliament, there is virtually no research internationally, at least in parliamentary systems. So we wrote a very full submission or a very full response paper to the executive. The bill was tabled in the legislature on the same morning as those responses were meant to be in. So clearly, nobody was taking any notice.

So then we went to the legislature and we petitioned for a public hearing. At the same time, I virtually went on a road show around the country, trying to get people interested in the bill, worked up a bit about the bill, and to recognise the extent to which the bill impacted on their own interests.

By the time the public hearings came, there were a good 14 or 15 organisations in those public hearings, they were clamouring against particular sections of that bill. I'm talking about serious issues here. One issue was the issue of vironment. Vironment is the capacity of an executive or a civil servant to shift money between programmes without recourse to parliament.

Normally there's a law that says you can shift 2%, you can shift 5% at the maximum. I don't know of an instance where there is no law governing that. There was nothing in this bill on vironment. So this is one of our campaigns.

Tomorrow morning they're tabling the new bill. The new bill contains vironment. It contains a measure of accountability on the executive that it didn't contain before. Some of the other changes include a substantial redraft of the punishments for mismanagement by an accounting officer. So there are very real and substantial system changes here. So, yes, you can have an effect and yes, you can impact on policy, but again, that's not my fault that happened.

That public hearing set in process a set of detailed discussions, a joint committee between the executive and the legislature, backed by the research that civil society was coming out of. Those changes are the result of that partnership seeking to improve the bill, not of a single NGO or even of just the NGO community by itself.

WARREN, IN RESPONSE TO A QUESTION: We try and engage on both of them. The first one for me, is an issue of the effectiveness with respect to the efficiency of expenditure. Government plans seem like they have a lot for poor people, but often when it comes to the ground, those plans are poorly targeted and they're poorly implemented. So that is a major issue that we try to engage in and when I talk about re-prioritisation it is exactly that.

Many of our comments on last year's budget, for example, were to talk about the extent to which budgets were not proper and to raise questions. For example, in the child nutrition programme, a large proportion of the children that were eligible for school feeding were not receiving those school feedings. The food that was being used was not of sufficient nutritional value. So in the end, we were getting something of an improvement in the children's concentration, but no improvement in the nutritional levels.

We also have the problem with a difference between planned and actual expenditures, absolutely that's a problem. This is compounded by the fact, and I'm not sure if this is true in Uganda, that in this country, we do not receive information on actual expenditure. It's always been classified. It's collated by the Department of State Expenditure in Pretoria and contained within that office.

One of the big fights we've been having is for government to give actual expenditure data. Maybe there's a lesson here, because the first breakthrough on the actual expenditure data actually didn't come at a national level. There are a couple of provincial committees who are vigorously pursuing their mandates and have taken the departments to task on this issue. There are three provinces that I'm aware of that have secured through their provincial treasury, monthly reports on actual expenditure, despite the fact that there's no national guideline on it yet.

I just want to make one point about why actual expenditure is so important. I think that in the politics of the budget process, one of the trade-offs is between a focus on amendment powers and the capacity to monitor the implementation of the budget. Government always has better information on implementation.

I think what happens during the debate and what's happening here in this debate, is we trade off, we settle for a compromise in our own power to change the budget, but in return, we maintain our own powers by creating a set of powers to monitor the implementation of that budget. The most important of those is monitoring actual expenditure month on month and speaking to departments about it.

Only if you've gathered information over 12 months can you comment, in a short period of time, on a document that's taken 18 months to produce.

QUESTION: With particular reference to the practice, especially in my country, where the budget is really the mandate of the cabinet, and so when you submit your views to the cabinet, the next time you see the outcome of your input is when the minister is presenting it in parliament. The budget is presented on Friday and the opposition will have to make their position clear by Wednesday and by Friday the budget is passed. How have you managed to get around that?

WARREN, IN RESPONSE TO A QUESTION: That's certainly an issue here and from my research, I think it's an issue in most countries. The executive generally interprets its mandate to govern as incorporating the mandate to produce the budget without recourse to civil society and largely, as far as I'm concerned, that executive principle is upheld in this country.

What I mean by that, is that the more or less one year period in which the macro-envelope is established and cabinet passes the budget, and in which the appropriations document for national and provincial government is developed, there is virtually no public hearing or automatic easy public access.

Now you could, of course, bring out a research report at a particular time that influences a particular civil servant. But you know, you're stabbing here in the dark. There isn't a particular moment in which you can do that. The only way you can intervene during the drafting stage is to make friends, to know who in the department is important, what they're thinking about at the moment, and to get them to take your research seriously.

We haven't really overcome that problem here. What it means for us is that the best point of interaction is through the legislature, but at the moment, given our lack of amendment powers, it's still a relatively weak form of interaction. So we try and focus more and more of our efforts and encourage other people to focus more and more of their efforts on the legislative side of the story, and to get the legislature the powers to make that effective.

But we do know during the year, that certain decisions are taken at particular times and you can roughly try and insert your work at those particular times. You know, there's a first macro-envelope time, then a kind of inter-department allocation time, and then an intro-department allocation time. You can work a bit with that, but we're still talking stabs in the dark here.

To be a little bit more positive, I think our executive has taken one step which goes part of the way to improve the situation. In November of each year, and we've had two years experience in this so far, the executive produces what's called a medium term budget policy statement.

As I have said, we have shifted from incremental budgets to medium term budgets, one year budgets to three year budgets. Each year in November a statement is published, which gives, at a very broad level, the budget allocations between economic categories, for the three year period. It's very difficult to tell anything specific in those categories. So more important than that, is a very detailed statement and review of macro-economic policy.

What we now know, four months before the budget is presented, is what the macro-economic assumptions are on which the budget will be tabled. We don't know the model on which they arrived at those assumptions, which is a problem.

So, the advantage is, we can now in November have a detailed debate on macro-economic policy. What we can't do is have a detailed debate on intra-vote allocations. We still fall into the same trap as you, within the ten day frenzy between presentation and the finance committee's report. That's why a large part of our energies, as I said, is going to trying to shift this budget process, trying to get both the tabling of the medium term framework and the budget, in November, but maybe the medium term framework in November and the budget in January. I think that's important and there's several countries that go this route, by the way.

You might want to look at Sweden, for example, as the most progressive example in this area. They table their budget and decisions several times through the year. First the macro-framework is tabled, then the inter-department allocations are tabled, then the intra-department allocation are tabled, etcetera. You have a number of opportunities to engage. It's probably unrealistic for most developing countries, but one can approach that.

QUESTION: Have you tried to involve the private sector in any way, in terms of what is the commitment or the social responsibility of private enterprises? Also, I know it is difficult, but is there any kind of position statement where you are trying to involve social investment?

WARREN, IN RESPONSE TO A QUESTION: I don't work really with social investment and I don't have a particularly optimistic answer to your question, unfortunately. We have certainly tried in the first years of the Budget Information Service to raise funds from the private sector. I can report that I have not had one cent of success and that's following on from Wilmot's comments last night.

They have been completely unwilling. It's always phrased under the rubric of "we can't really get involved with Idasa's work, because it's too political". Meanwhile they're putting out their own budget statements frequently, which is getting them into trouble. So I don't really buy that, but that's the situation.

On a slightly more positive note, what we found in the last year and a half, is that where we found a piece of legislation, for example, that has an impact on the private sector, such as the treasury control bill, we have managed to get to the private sector and to encourage them to start coming to hearings. Now maybe there will be a positive spin off in a couple of years when they see that there's some potential synergy here.

One way in which we're thinking of milking that synergy in the future, is to try and draw on some of the private sector's macro-economic modelling capacity, for example. We will never be in a position to construct a macro-economic model and to critique government macro-economic policy on that level. Many private sector institutions do have that. They have tax models, they have expenditure models. If we can somehow harness those models, even in a partnership, it could give us quite a powerful tool.

I'm particularly interested in information on tax incidence, which is impossible to get in this country, but there are a couple of finance houses that have a tax model that could give me that information. So I'm working on some plans to negotiate with them on at least having access to that tax model for a portion of the time after the budget. Thank you.