An International Symposium for Chairpersons of Parliamentary Budget Committees of OECD Member countries HOLDING THE EXECUTIVE ACCOUNTABLE : THE CHANGING ROLE OF PARLIAMENT IN THE BUDGET PROCESS 24-25 January 2001 Palais du Luxembourg The Finance Committee of the French Senate TABLE OF CONTENTS Pages ACKNOWLEDGEMENTS ........................................................................................................ 5 FOREWORD ............................................................................................................................. 7 I. INTRODUCTION ............................................................................................................... 9 I. Opening Remarks, by Mr. Alain Lambert, President, Finance Commission, French Senate ................................................................................................................................. 9 2. Are Control and Support Incompatible? by Mr. Christian Poncelet, President, French Senate ................................................................................................................................. 10 3. Legislatures are a Vital Part of the Budget Process, by Mr. Donald Johnston, Secretary-General of the Organisation for Economic Co-operation and Development (OECD)............................................................................................................................... 1 1 11. PARLIAMENT, DEMOCRACY AND THE ROLE OF THE BUDGET PROCESS ........... 15 I. Keynote Address, by Mr. Luciano Violante, President, Italian Chamber of Deputies............. 15 2. Can National Legislatures Regain an Eflective Voice in Budget Policy? by Mr. Allen Schick, Maryland University, United States.... .... ... ..... .. .. .. ... ... ... ... .. .. .. .. 20 111. WHAT DO PARLIAMENTS NEED FOR EFFECTIVE OVERSIGHT? .......................... 45 I. The budget process in the Swedish Riksdag: Expectations and Experiences fiom the Reforms in the 1990s, by Mr. Mats Odell, Vice-Chair, Finance Committee, Swedish Parliament ........................................................................................................................ 45 2. What Do Parliaments Need for Effective Oversight on the Budgetary Planning and Execution? by Mr. Che Shik Chang, Chair, Special Committee on Budget and Accounts, Korean National Assembly ..................................................................................50 3. Making MPs Work for Our Money, by Mr. Edward Davey, Member, Treasury Select Committee, United Kingdom House of Commons.................................................................. 53 4. Planning Framework, Purposes and Content of Legislative Decisions, by Mr. Augusto Fantozzi, President, Budget Committee, Italian Chamber of Deputies............... 100 IV. ACCOUNTABILITY, AUDITS AND NEW MANAGEMENT TECHNIQUES ................. 103 I. Budgets Should Take More Account of the Future, by Mr. Geert Van Manen, Secretary-General, Ministry of Finance, The Netherlands, and Chairman, OECD Working Party of Senior Budget Oflcials............................................................................. 103 2. Audit Agencies and their Relations to Legislatures, by Ms. Maria Kaisa Ada, Chair, Committee on Finance, Finnish Parliament......................................................................... 109 3. The Case of Hungary, by Mr. Imre Szekeres, Chair, Finance Committee, Hungarian Parliament .......................................................................................................................1 14 4. The EU Constraints Impacts, by Mr. Giorgio Benvenuto, President, Finance Committee, Italian Chamber of Deputies.............................................................................. 1 18 V. MULTILATERAL SURVEILLANCE OF PUBLIC FINANCE AND POLITICAL POWER................................................................................................................................. 121 I. International Multilateral Surveillance of Public Finance and Political Power, by Mr. Michel Bouvier, University of Paris I - Panthe'on-Sorbonne........................................... 121 2. The European Budget: the Role of the European Parliament, by Mr. Terence Wynn, Chair, Committee on Budgets, European Union Parliament. ................................................ 129 VI. CAN PARLIAMENT IMPROVE THEIR BUDGETARY OVERSIGHT? RECENT CHANGES ............................................................................................................ 135 I. Holding the Executive Accountable. by Mr. Alain Lambert. President. Finance Commmission. French Senate ............................................................................................. 135 2. Parliamentary Process for Budget Approval and Control in Spain by Mr. Joaquin Almunia. President. Committee on Budget. Spanish Chamber of Deputies .............................................................................................................................. 139 CONCLUSIONS .......................................................................................................................147 A. CONFERENCE STATEMENT ..........................................................................................147 B. CLOSING REMARKS....................................................................................................... 148 by Mr. Alain Lambert. President. Finance Commission. French Senate MINUTES OF THE CONFERENCE ........................................................................................ 151 ANNEXES .................................................................................................................................. 179 I . Annotated Agenda................................................................................................................ 179 ACKNOWLEDGEMENTS This book is based on the first meeting of the Presidents of OECD Member Country parliamentary budget committees, 24-25 January 2001. It is the sum of the collective efforts of the delegates to the conference. The OECD would like to thank M. Alain Lambert, President of the Commissions des finances, SCnat de la RCpublique franqaise, for his vision in conceiving the need for this work and his generosity in hosting the meeting. The OECD would also like to thank the staff and services of the SCnat, especially Fabrice Robert, CCline Finon and Alain Hortal for their hard work and support. Many thanks also to ElsaPilichowski, Mike Ruffner, HClkneLeconte and Jennifer Gardner of the OECD for their diligence in co-ordinating and organising the meeting. Finally, a special thank you to Allen Schick for his keen insights and unique contribution. The OECD has translated the original texts as follows : - in french : speeches by Ms. Aula, Mrs. Violante, Odell, Chang, Davey, Fantozzi, Van Maanen, Szekeres, Benvenuto and Wynn ; - in english : speeches by Mrs Poncelet, Lambert and Bouvier ; - the spanish text by Mr. Almunia has been translated in both languages. FOREWORD The first Symposium of the Chairpersons of Parliamentary Budget Committees of OECD countries, at the dawn of the 21st century, constituted a step towards the regaining of budget powers by the legislatures of the major industrial democracies. The manner in which the symposium came about is enlightening. On the one hand, the Public Management Service of the OECD had promoted the idea of such a meeting, which it considered necessary, given that Senior Budget Officials have been convening in that forum for many years. On the other hand, Alain Lambert, Chairman of the Senate Finance Committee, had been working towards a reform of the budget process in France, as had Laurent Fabius and Didier Migaud in the National Assembly. Thus the OECD recognised the beginnings of a comeback of parliaments to the budgetary stage, whilst the Senate of the French Republic took a hand in the process. Fittingly, this symposium took place in the Palais du Luxembourg. The record of its proceedings and work follows. The role of parliaments in the budget process is a difficult one. It is fundamental, since the original purpose of parliaments has often been to sanction the levy of taxes in the name of the peoples they represent. Parliaments must be sufficiently informed in order to authorise government expenditures and revenues knowledgeably. But they must play no part in the management of government finance. Parliaments must oversee the action of governments but let responsibility rest with them. A clear definition of the budget role of parliament was the goal of the legislators and budget executives taking part in the symposium. I - INTRODUCTION 1. OPENING REMARKS by Mr. Alain Lambert, President, Finance Commission, French Senate I am very pleased and honoured to introduce the work of the first Symposium of the Chairpersons of Parliamentary Budget Committees of OECD Member countries. I am pleased first of all because the OECD is an organisation that habitually hosts meetings involving the executives of the major industrial democracies, but rarely Parliaments. That is why, Mr. Secretary-General, when you proposed to me that we host this first symposium, on the initiative of your Public Management Service, I accepted enthusiastically. I would therefore like to express my warm thanks to Donald Johnston, who will shortly be describing to us the subject of our work. I am also pleased because I take a special interest in the subject on which our work will be focusing during these two days, as it lies at the very