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New Law To End Abuse Of Supplementary Budgets In The Offing

MP Muwanga Kivumbi

Parliament granted leave to Muwanga Kivumbi (Butambala County MP) to table a private member’s bill Private Finance Management Amendment 2023 in order to streamline the utlisation of supplementary funding to end what he describes as abuse of the provision by Government.

Muwanga informed Parliament that his proposed bill is intended to enhance Government fiscal discipline and prudent planning and management of public funds by prescribing a criteria for approving supplementary estimates by Parliament and to harmonize the provisions relating to supplementary estimates under the Public Finance Management Act with Article 156 (2) of the Constitution.

He argued that although section 25 of the Public Finance Management Act restricts Government to expend no more than 3% of the total approved budget of the financial year without the approval of Parliament and section 26 of the Public Finance Management Act establishes a Contingencies Fund which is replenished every financial year, with an amount equivalent to 0.5% of the appropriated annual budget of Government of the previous financial year these provisions have been abused on many occasions.

“The criteria for approving supplementary expenditure has continued to be abused, resulting in the distortion and undermining of Government planning and budgeting, thereby encouraging fiscal indiscipline in the management of public resources. The expiry of appropriation to the Contingencies Fund negatively affects Government’s timely response to natural disasters since there are no funds readily available to urgently respond to natural disasters. There is need to amend the Public Finance Management Act to prescribe the criteria for approving supplementary expenditure by Parliament and to enhance Government’s ability to respond to natural disasters,” he said.

Muwanga argued that Section 25 of the Public Finance Management Act does not prescribe the sources of revenue to support the supplementary expenditure of Government resulting in abuse of ministerial discretion and in order to fund Government’s supplementary expenditure, the Minister resorts to borrowing or budget suppression which not only distorts and undermines the credibility of Government planning and budgeting but also encourages fiscal indiscipline in the management of public resources.

Minister of State for Finance (General Duties), Henry Musasizi, asked Parliament to deny Muwanga leave arguing, “The Public Finance Management Act is central to the operations of Government,  whereas the MP may have significant issues of concern and which is also beginning to build in the operations of Government, I want to pray that you allow us time we go back, consult with a view of coming up with proposals to amend the Public Finance Management Act 2015.”

However, when asked by Deputy Speaker to respond to Minister Musasizi’s request to put on hold the bill, Muwanga, who’s also the shadow minister of Finance, rejected the request, prompting the Speaker to put a question up for whether he should be granted leave, to which MPs agreed.

 

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