Irakli Kobakhidze introduced the draft Constitutional law at the sitting of the Budget and Finance Committee

Today, the Speaker introduced the draft Constitutional law at the sitting of the Budget and Finance Committee. “The main task is to ensure compliance of the Constitution with legal principles and formation of the system to ensure long-term democratic development of the country. This is the principle serving the basis for the Constitutional draft. We improve the Parliamentary administration system and each norm is subject to the common logic the Parliamentary administration is based on”. 

The Speaker introduced the Chapter VII on state finance and control and elucidated regulations and changes thereto. The Chapter consists of 4 Articles and each of them concern state budget and budgetary process, taxes and fees, economic policy, National Bank and State Audit Service. According to the draft, the Parliament shall adopt the law on State Budget with absolute majority instead of the majority of the list composition.

The Speaker spoke about the main elements of the budgetary process provided in the paragraph 2. As he stated, the Government, after consideration of the main data and directions with the Parliamentary Committees, maintains the authority to submit the draft on state budget to the Parliament. However, the Government shall submit the draft budget for 2018 to the Parliament no later than 3 months till the end of the budgetary year. “We speak about the budgetary year and the budgetary process is no longer attached to the calendar year”.

He stated that the changes were not adopted to the Article envisaging the authority of the Government to submit the budget and the authority of the Parliament to endorse the budget. The Venice Commission has respective recommendation that the Parliament should have authority of amendment of the draft submitted by the Government. “We had our arguments and no counter-arguments were provided. Our arguments imply: when both Constitutional agencies enjoy exclusive rights, the process is consensus-oriented. So, it is expedient to maintain regulations unchanged”.

The SCC had the version that the Presidential veto should not apply the state budget. Though, “despite our opinion that it’s far rational to deprive the veto from the President on the state budget, we maintained the record”. He spoke about the regulations of the Article 67 related to referendum in case when new taxes are established or existent taxes increase. “We had dissent regarding taxes. This issue was many times raised within public considerations. There were legal and administrative arguments. We have held the consultations and the Parliament will make the decision on this issue”.

Speaking of the National Bank, he stated that the NB function is defined according to the current edition and the President maintains authority to nominate the Council members. The same is with appointment of the NB President. Though, the novelty in the paragraph 3 envisages that the “Bank is independent in its activity. The Bank activity shall not be subject to oversight by the State Audit Service”. It is the novelty raised by the NB representatives.

The Article on SAS has specifications. It is defined that the in view of facilitation to public administration efficiency and accountability, SAS shall oversee the budgetary funds and other public resource consumption. The Opposition had the remarks about the changes envisaging NB activity to no longer be subject to SAS oversight. T

he first Deputy Chair, Paata Kvizhinadze elucidated that regardless the current Constitution guarantees judicial independence, and the law ensures independence of the Parliament, Public Defender and CEC, SAS inspects hereof organizations, enhancement of NB independence cannot be accepted as an argument.

According to the Committee, the SAS shall be capable to inspect the administrative and capital expenses of the NB. The Chair noted that he shares the change for higher legitimation of NB independence envisaging issue of the decrees by the President with NB consent regarding the NB authority upon state or war and emergency, though the paragraph envisaging NB activity to no longer be inspected by SAS shall be seriously discussed by the Parliament. “No one doubts NB independence but the National Bank is the paramount state institution holding the sensitive resource granted by the state in terms of sustainability and effective functioning of the state – monetary and cash reserves. Information on reasonability and efficiency of disposal of these resources shall be equally accessible for the Auditing Committees of the NB and SAS”.

According to Irakli Kovzanadze, general positive estimation of the draft lies in the fact that it is more compact and effective. The Article 69 serves for enhancement of authority of the Parliament envisaging SAS to ensure public finance management control by the Parliament. As to the disputable Article 94, the investors stay calm with existence of this Article in the Constitution. “It means that no problem with tax increase exists. The investors like the Article 94, though we shall take care of economic growth”. The Committee supported the draft.