Proper budget scrutiny will keep parliament in check

ตีพืมพ์25 มิถุนายน 2014

Somchai Jitsuchon

There has been a lot of talk about various kinds of national reform, even before the call for “reform before election” by the People’s Democratic Reform Council.

The military junta also promises to set up a “reform council” that is supposed to gather and sort out reform proposals.

I also want to get on this reform bandwagon by continuing one of my own proposals which I discussed on Feb 19 (“Helping lawmakers hold policies up to the light”) in this newspaper. In that article, I wrote about a new initiative to strengthen democracy in this country through the establishment of a unit that helps members of parliament analyse the fiscal impacts of the government’s proposed annual budget or of some particular policy.

The analysis could be the estimation of a policy’s fiscal cost, such as the cost of the rice-pledging scheme, or the overall economic impacts of the annual budget. It would strengthen democracy because the legislative branch is, in comparison to the executive, usually less equipped with analytical capability due to unequal access to fiscal data or lack of analytical and technical support.

Helping the legislature to be on the same level playing field with the executive conforms to the notion of separate but equal powers between these two branches. Such units exist in many countries, and are usually termed a parliamentary budget office (PBO), although some other names are also used.

Some readers might think this would do little good now that Thailand does not have democracy. Others might also argue that Thai parliaments have never performed in a democratic way, in the sense that they tend to serve “owners” of dominant parties instead of their own constituencies. Why would we want to strengthen them if they themselves never want to carry out their noble duties? I disagree with these notions.

Thailand will, one way or the other, restore democracy with elected members of parliament and government. That is how things work these days. You simply cannot shut down the rising demand for political rights of the grassroots, even if you might be able to ignore calls for democracy from the international community. So if we must have elected parliament eventually, let us help it perform its mandate properly.

I thereby propose that we should firmly establish a PBO. By firmly, I mean it should have strong legal support, either with a new law of its own or through amendment of existing laws. The main objective of this article is to highlight what the Thai PBO should establish. Following international best practice that suggests a set of qualities that a good PBO should have, I have come up with the following suggestions.

First, it must be independent. This is to ensure the PBO will be able to perform its functions professionally and without interference. However, independence does not mean it is not accountable. Like most PBOs around the world, it must be accountable to the parliament, as serving the parliament is its primary mandate. One way to achieve independence is to have a law explicitly endorsing the PBO’s legal status as an “independent statutory office under the parliament”. This is the same status as the Australian PBO. On accountability, the Thai PBO should be monitored and scrutinised by other independent agencies, and this should be stated in the law as well.

Second, the PBO must be non-partisan. If a PBO is viewed as partisan, it will lose credibility and may be able to survive only one or two parliamentary terms. Non-partisanship tends to be culturebased, so it is important to create a positive culture from the beginning. Successful PBOs, like the US Congressional Budget Office, created a non-partisan culture by having a good first leader who adhered strictly to this principle. Good leaders tend to build teams of people who also share their beliefs, which will help sustain the organisation in the long term.

This leads to my suggestion that the Thai PBO law should be careful and specific in the appointment of leaders. The process should ensure leaders are chosen based on merit, are able to lead the organisation in the right direction, are non-partisan and believe in transparency.

Third, the PBO should have human resources capable of performing its task to the highest standard. The recruitment process must ensure that this is the case. It is perhaps important in a country like Thailand that the salary scale of PBO staff is sufficiently higher than other public servants so that their integrity is not at risk of being compromised in exchange for “personal benefits” from certain politicians. The law should then make it clear that the PBO may either have its own pay scale or adopt the pay scale of other organisations where capable staff are needed.

That leads to my fourth point on creating a PBO law. The law must guarantee financial independence by explicitly specifying that sufficient financial support must be allocated to the office so it can perform its mandate properly. If possible, the law may determine the exact budget, either as an endowment fund that is large enough so that benefits from such a fund are sufficient to finance the operation of the PBO. Or the law may determine a minimum annual budget. According to my estimation, the fiscal cost of having a PBO would be quite small, in the magnitude of a few hundred million baht a year. This would be a very good investment when compared with the budget transparency that a PBO would be capable of delivering, which usually means large savings from the national budget each year.

I hope the fiscal reform agenda includes the proper establishment of a PBO by giving it strong legal footing. This is an important step to restore belief and confidence in democracy in this country.

 

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Somchai Jitsuchon is research director of the Thailand Development Research Institute. Policy analyses from the TDRI appear in the Bangkok Post on alternate Wednesdays.

First published: Bangkok Post, June 25, 2014