Budget Committee scrapped, Cabinet takes control

The Budget Committee, that small group of private sector professionals set up more than ten years ago to scrutinize bids by Ministries for funds, has been scrapped.
On 1 February MFEM advised all government agencies that Cabinet would replace the role of the Budget Committee in reviewing business plans and budget submissions, interviewing departments and prioritizing requests.
Cabinet is going to be more involved in policy and planning development, performance review and prioritization over the process for the next Budget.
The scrapping of the Budget Committee represents a key adjustment for the Budget process.
Government’s intention is to use the Economic Summit announcements as the core driver for developing government’s policies for the medium to long term.
However, questions arise over the real purpose and role of the “Economic Taskforce” as opposed to the “Economic Summit.”
MFEM’s advice to Ministries is that the Taskforce’s main role is to develop and prioritize national development policies for the next five years.
The Taskforce is required to present broad strategic priorities by 14 February to Cabinet for adoption and used to drive the Budget Policy Statement.
The Taskforce is then expected to break down the broad strategic priorities into actions by 18 March for adoption by Cabinet and announcement at the Economic Summit on 21 March. This “announcement” is of the key actions that will be progressed over the next five years forming a significant part of the next NSDP.
Once these are adopted, presumably with the Summit’s approval, the Budget Policy Statement will be finalized and published by 31 March.
If the Taskforce has already established the likely direction of the economy, the question arises what then is the purpose of the Summit?
It appears the Summit is to play a secondary role to the Taskforce. What if the Summit disagrees with the proposals from the Taskforce? Is the Summit expected to rubber stamp the Taskforce’s recommendations given that the Taskforce will have already consulted with interested parties?
Cabinet’s move to scrap private sector scrutiny of the funding bids, take a more hands on approach and its issuing of instructions to Ministries that no department driven proposals to increase base expenditures are to be submitted or requested, follows the recent estimates published in December’s Economic and Fiscal Update. No extra funding is expected to be available. Ministries have been informed that if new ongoing expenditure is approved then expenditure cuts will need to be made in other areas of the budget. That’s the new reality.
Departments have been instructed to realign resources where necessary to achieve Cabinet’s broad strategic policies.
Key dates for budget process
February 15 –initial budget estimates to Cabinet.
March 21 – announcement of priorities and recommendations at Summit.
March 31 – publish Budget Policy Statement.
April 29 – Final budget estimates to Cabinet.
May 16- Budget costings confirmed.
June 13 – Budget document to printer.
June 23- Minister tables Budget in parliament.

By Charles Pitt

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