Acting Director-General on state of Department of Communications; South African Postbank Bill [B14-2009]: deliberations

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Communications

09 August 2010
Chairperson: Mr I Vadi (ANC)
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Meeting Summary

The new Acting Director-General of the Department of Communications briefly commented on the state of the department which had recently had its Director-General dismissed. He said that the Department was characterised by a total collapse of staff morale and an absence of a collective sense of purpose due to many things that happened over the past six months. The Department’s service delivery system had been weakened by the irrational deployment of staff to positions for which they did not have the intellectual capacity or appropriate skills. The Committee replied that they did not know the full story of what happened. However, there seemed to be a disagreement between the Minister and the former Director-General regarding powers and functions. There was also an issue about the actual dismissal process itself. The Department would be called in to give the Committee a full briefing on what was happening.

The Department of Communications and National Treasury briefed the Committee on the amendments made to the South African Post Bank Bill based on the suggestions made by the Committee during its previous deliberations on the Bill.

Amendments had been made to the definitions and the Objects of the Act. The Treasury thought that the new object mentioned in Clause 2(e) was too broad and dealt with operational matters as opposed to high-level objectives. The Committee was insistent that there had to be something about the objective of “ensuring that the rates and charges of the Postbank must take into consideration the needs of people in the lower income market”. A compromise was reached and the wording of Clause 2(e) was restructured and approved by the Committee.

The Committee discussed Clause 3 of the Bill, which looked at incorporation. The Department reminded the Committee that it had asked them to look at alternative proposals for the governance structure for Postbank that would give greater power to the Executive Authority to intervene in governance matters at the Postbank
. The State Law Advisers had been asked for their opinion. One mechanism to ensure greater power to the Executive was to make the Minister the shareholder in the Postbank. However, the State Law Advisers had said that if the Minister was the shareholder, the Postbank would no longer be a subsidiary of the South African Post Office (SAPO) and the Post Office would not have a relationship with the Postbank. If the Post Office remained the shareholder of the Post Bank, the State would be able, through the Post Office, to hold the Postbank accountable for its actions. The Department and the Treasury were not in favour of establishing the Postbank as an independent State-Owned Enterprise (SOE) and preferred the current structure in the Bill that created the Postbank as a subsidiary of the Post Office.The current structure allowed for sufficient power for the Executive to intervene. The Committee accepted this.
 

Clause 4 was amended in light of the Dedicated Banks Bill that the Treasury was busy working on. It now provided for the Postbank to be registered in terms of the applicable legislation. This would allow the Postbank to register under either the Banks Act or the Dedicated Banks Act if the latter was promulgated. Members argued that the clause was too broad as they did not know under which Act the Postbank would be registered. The Committee was told that Clause 4 created legal flexibility should another law come in to operation some time in the future. It was an enabling mechanism. The amendment was flagged.

The amendments to Clauses 7, 9, 12 and 15 were approved. Clause 14 was amended to provide for the nomination committee to obtain the approval of the Registrar of Banks that a person was a fit and proper person to hold the office of board member. The Department explained that the nomination committee recommended the exact number of board members that were required. Members noted that this in fact meant that the nomination committee was appointing the board members for the Postbank board. They wanted the Minister to have a selection of names. The Committee would still decide on the number of nominations made by the nomination committee.

Clause 16 looked at fiduciary duties of board members. The Committee stated that it would look at deleting the sub-clause because the Bill was already subject to penalties mentioned in other legislation. If they included the sub-clause, they would have to stipulate which actions would receive which penalties. They suggested that the drafters return with recommendations.

Clause 20(2) had been amended to remove the requirement that the managing director and the Minister of Finance should be consulted before the board determined conditions of service for staff. The Committee advised that the NEDLAC had to be consulted on this. Clause 21(1) was amended to ensure compliance with the Public Finance Management Act about submission of reports to the Minister. The Committee approved the amendment that the reports had to be submitted within five months, not six months. Clause 25(1) had been amended to ensure that the Registrar of Banks would be consulted before regulations were made. The Committee wanted this redrafted. The also discussed the difference between
“in consultation with” and “after consultation with”.

The Bill would be finalised at the next committee meeting.

Meeting report

 

Introduction to new Director General
The Chairperson welcomed the new acting Director-General, Dr Harold Wesso. He reminded the Committee that they had asked National Treasury and the Department of Communications to meet with the legal advisers to discuss the amendments proposed by Members to the South African Post Bank Bill. The Committee hoped to start finalising the Bill today, as they had been sitting with the Bill for a very long time. He asked Dr Wesso to say a few words.

Dr Wesso stated that he was asked to stand in as acting Director-General, not knowing that he would find himself on a “sinking ship”. However, he believed that with the support and leadership of the Committee and hard work from senior managers of the Department of Communications, the Department would be fine. He said that the DoC was
characterised by a total collapse of staff morale and an absence of a collective sense of purpose due to many things that happened over the past six months. The DoC’s service delivery system was weakened by the irrational deployment of staff to positions for which they did not have the intellectual capacity or appropriate skills. The DoC had to be rebuilt so it could contribute to building the information society and knowledge economy in the country. He was looking forward to better vision and leadership within the DoC.

Ms P De Lille (ID) stated that the Committee should be allowed to ask the acting Director-General questions on the DoC’s current situation.

The Chairperson agreed that this was a reasonable suggestion. He stated that all the Members had had questions when the former Director-General was dismissed. The dismissal took Members by surprise. There seemed to be a disagreement between the Minister and the former Director-General regarding powers and functions. There was also an issue about the actual dismissal process itself. The former Director-General claimed that the dismissal was unlawful. This issue was before the courts. The Committee did not want to intervene in this matter; however, there were other matters that were raised that had to be addressed. Dr Wesso painted a bleak picture of what was happening within the DoC. The Committee had to hear what he had to say. The DoC would be called in to give the Committee a full briefing on what was going on.

Ms De Lille commented that the Committee did not have all the information. From what was said in the newspapers, the former Director-General’s performance had never been mentioned as one of the reasons for the dismissal. A few months ago, the DoC had presented its Strategic Plan to the Committee. The Committee also requested a Business Plan and an Operational Plan. She thought that the Committee should be judging the DoC against these documents. Another meeting had to be held with Dr Wesso where Members could engage with the DoC’s Strategic Plan, Operational Plan and Business Plan. The Committee had to be careful not to embroil itself in a dispute that was between the DoC and the former Director-General.

Ms J Killian (COPE) asked how much time Dr Wesso needed in order to give the Committee a better understanding of the deployment, redeployment and current situation with staff that were not qualified for their positions. Which deployments were made unlawfully?

Mr S Kholwane (ANC) noted that the agenda for the meeting stated that the Committee was going to deliberate on the Postbank Bill. He did not understand why Members were discussing such matters. The issues needed to be resolved at another meeting.

Mr N van den Berg (DA) stated that Mr Kholwane raised a good point. However, it was important for the Committee to know what had led to the current situation in the DoC, so they could assess the issues and try to resolve them.

The Chairperson informed the DoC that the Committee would be calling them in for a meeting. The DoC would then have to tell Members what was happening. The Committee would also need an update on the Strategic Plan and the steps that would be taken to improve service delivery.

South African Postbank Bill: deliberations
Mr Willie Vukela, Director: Legal Services (DoC), took the Committee through the changes made to the Bill since the Committee had last met on the Bill on 18 May 2010. He was assisted by National Treasury officials.
 
Definitions
Mr Vukela stated that to avoid conflict with the Public Finance Management Act (PFMA), Clause 1 of the Bill had been amended to ensure that words as defined in the Bill had the same meaning as in the PFMA.

The term “business of the bank” was deleted and replaced with “banking business” wherever it appeared in the Bill. The “Registrar of Banks” definition was inserted in the Bill.

The Chairperson noted that the Committee approved the amendments.

Clause 2: Objects of the Act
As an emphasis to the departmental role of the Postbank, and in line with COSATU’s proposals, a few objectives were added to the Bill.

The Act provided for the incorporation of the Postbank Division of the Post Office as a legal person with the aim of:
(c) expanding the range of banking services and developing into a bank of first choice in particular to  the rural and lower income market as well as communities that have little or no access to commercial banking services or facilities; and
(d) promote universal and affordable access to banking services; and
(e) ensuring that the rates and charges of the Company must take into consideration the needs of people in the rural and lower income market as well as communities that have little or no access to commercial banking services or facilities.”

Mr Vukela said that Treasury was of the view that Clause 2(e) was too broad and should be omitted.

Mr Omega Shelembe, Acting Chief Director: Financial Sector Development (National Treasury), stated that the sub-clause spoke to operational matters. Treasury’s understanding of the Objects of a Bill was that it needed to speak to high-level objectives in the long term rather than short term operational matters.

Ms De Lille explained that the reason why the Committee proposed the insertion of Clause 2(e) in the Bill was to make a distinction between a commercial bank and the Postbank Bill in terms of interest rates. She disagreed that the sub-clause was too operational.

Mr Kholwane added that the sub-clause did not talk to specific interest rates. It was just talking broadly about rates and charges of the bank. He did not see an operational issue within the sub-clause.

Mr Shelembe replied that Treasury had looked at what the sub-clause was trying to achieve. The practical implications of including it in the Bill were unclear. This was because there were people who took out loans that wanted low interest rates but there were those depositing money who wanted high interest rates. There needed to be a balance between these two rates.

The Chairperson stated that the Committee was really talking about user charges when they asked for the sub-clause to be included in the Bill. The Committee did not want the Postbank to be a typical commercial bank; it had to be a bank for the poor. If there were high user charges, it would make it difficult for the poor to access the bank. He wondered if this could be captured in the clause.

Mr Shelembe commented that there had to be a trade-off between depositors and lenders in terms of interest rates.

Mr Kholwane wondered how Clause 2(e) would hinder the balance between the two rates.

Ms Killian added that she did not think there was any problem in including the sub-clause. However, she thought that it was very clumsily structured. She did not think that the sub-clause had to be very detailed.

The Chairperson proposed that the clause should read “ensuring that the rates and charges of the Company must take into consideration the needs of people in the lower income market”. He asked if Treasury was fine with this amendment.

Mr Shelembe said that Treasury had taken note that the sub-clause stated that the rates should be sensitive to lower income people. In other words, lending interest rates had to be very low. However, Clause 2(e) did not talk to very poor people that were striving to save their money and gain from high interest rates.

Mr van den Berg wondered if it was possible to have a commercial bank with high savings rates and low lending rates.

Ms De Lille commented that the Objects of the Bill had to include the state’s vision that was captured in the White Paper.

The Chairperson asked if the Committee agreed with the amendment that he proposed. He noted that they did.

Clause 3: Incorporation
Mr Vukela reminded the Committee that Members had asked the DoC and Treasury to look at alternative proposals on the governance structure of the Postbank that would give greater power to the Executive Authority to intervene in governance matters at the Postbank, should the need arise. One mechanism to ensure greater power to the Executive was to make the Minister the shareholder in the Postbank. The State Law Advisers had been requested to provide their views on the legal implications of the Minister being the shareholder. Their response had been that if the Minister was the shareholder, the Postbank would no longer be a subsidiary of the South African Post Office (SAPO) and the Post Office would not have a relationship with the Postbank. If the Post Office remained the shareholder of the Post Bank, the State would be able, through the Post Office, to hold the Postbank accountable for any of its actions. The Post Office was a major public entity listed in Schedule 2 of the PFMA and had to comply with all its requirements. In terms of the Schedule, any entity under the control of the Post Office was also seen as a public entity. Therefore, the Postbank would have to comply with the PFMA. If the Minister became the shareholder, the Bill would have to be scrutinised for any unintended consequences. The Bill was drafted based on the fact that the Postbank was a wholly owned subsidiary of the Post Office. The Post Office would also have to be given an opportunity to respond should change of ownership of the Postbank be considered by the Committee.

Mr Vukela stated that the DoC and Treasury were not in favour of establishing the Postbank as an independent State-Owned Enterprise (SOE) and preferred the current structure in the Bill that created the Postbank as a subsidiary of the Post Office. The current structure allowed for sufficient power for the Executive to intervene. As suggested by the Committee, provision was made in Clause 14 for the designation of two members of the board of the Post Office to serve as members of the Board of the Postbank. The Minister would remain responsible for the appointment and removal of members of the board.

The Chairperson clarified that the Minister would remain the indirect shareholder of the Postbank and that the Postbank would be a subsidiary of the Post Office.

Mr Kholwane said he was not completely convinced by the reasons given for the structure to remain as it was. He wondered what the implications were if the Postbank was a subsidiary of the Post Office but the Minister still had to appoint the board. It did not make sense to him. If the Postbank was a subsidiary of the Post Office, then it should mean that Postbank’s board had to be appointed by the SAPO board.

Mr Vukela replied that the Committee had asked for this amendment to be made. The DoC’s role was to reconcile the Bill with what the Committee wanted.

Mr Kholwane stated that he knew that the Committee had asked for this amendment to be made. However, there seemed to be consequences to the amendment.

The Chairperson stated that if the Members looked at the clause, they would see that the appointment of the Postbank board had to be done by the Minister with the concurrence of the Minister of Finance and the board of SAPO. Clause 25 would still give the Minister significant power in determining the overall policy of the Postbank. It was premature to set up the Postbank as an independent bank. It was a good idea to have the Postbank as a subsidiary of SAPO.

Mr Kholwane pointed out that it seemed that there was no role for SAPO to play in the Postbank. He wondered what the consequences would be if the Postbank remained a subsidiary of the SAPO. He was worried that the Committee would be
criticised for not giving SAPO a bigger role in the Postbank.

The Chairperson stated that the Committee would note the concern about what role SAPO would play in the Postbank. He asked if the Committee was comfortable with Clause 3 as it was, as there were no amendments proposed.

The Committee agreed.

Clause 4: Registration as Bank
Mr Vukile said that in light of the pending Dedicated Banks legislation that National Treasury was working on, under which Postbank would be then registered, Clause 4 had been amended to provide for the Postbank to be registered in terms of the applicable legislation. This would allow the Postbank to register under either the Banks Act or the Dedicated Banks Act if the latter was promulgated.

A provision was inserted in Clause 4(3) to exempt the Post Office to register as a controlling company of the Postbank for the purposes of section 43 of the Banks Act, and that the appointment of the SAPO board would not be subject to the approval of the Registrar of Banks.

Ms L Mazibuko (DA) stated that she was very happy to see the insertion of the Dedicated Banks legislation in the Bill. However, she wondered who would decide whether the Postbank stayed in the Banks Act or transferred to the Dedicated Banks Act. Who would decide what the Postbank was once there were two Acts?

Ms De Lille asked when the National Treasury thought the Dedicated Banks Bill would be before Parliament. Was there any rush in getting the Postbank established before the Dedicated Banks Bill was passed?

Mr Shelembe answered that the Dedicated Banks Bill would be before Cabinet before the end of the financial year. It would then be submitted to Parliament. There was a lot of work that had to be done to get the Postbank up and running. Therefore, there was no need to delay this legislation until the Dedicated Banks Bill was passed.

The Chairperson said that the clause created flexibility for the bank to be covered under another Act when that Act was passed. The choice of which Act the Postbank would be registered under would be made by the board and the shareholders.

Mr Alf Wiltz, Director: Legal Affairs (DoC), stated that the amended clause represented a major trade-off between the National Treasury and the DoC. The DoC thought it should be registered under the Banks Act while the National Treasury thought it should be registered under the Dedicated Banks Bill. The DoC had a problem with the National Treasury’s suggestion, as there was no guarantee that the Dedicated Banks Bill would be passed. This meant that the Postbank Bill would be delayed for a number of years once again. Also, the State Law Advisers agreed that the Postbank Bill could not refer to a Bill or be registered under an Act that did not even exist yet. Therefore, the DoC and the National Treasury had compromised and came up with the proposed amendment that was more workable.

The Chairperson commented that all Clause 4 was doing was creating a legal flexibility should another law come into operation some time in the future. It was an enabling mechanism.

Ms Jeanine Bednar-Giyose, Director: Fiscal and Intergovernmental Legislation (National Treasury), stated that the Banks Act provided a regulatory framework for institutions. Even if the Postbank was registered under the Banks Act, it would not have to operate as a commercial institution. The Banks Act did not say that institutions had to act in a strictly commercial way. The Dedicated Banks Bill would be finalised as soon as possible. The Bill was more tailored to specific markets and institutions. The Clause 4 provision provided for legal flexibility, therefore, it was beneficial to include the clause. It would enable the Postbank to be regulated in the most appropriate manner.

The Chairperson asked if Members approved of the clause. Members were unsure at this stage.

Clause 7 and Schedule 1: Transfer of Enterprise of Former Postbank to Company
Clause 7(c) was amended to make reference to the compliance with the Labour Relations Act (LRA), therefore, Schedule 1 was deleted. This was in line with a recommendation made by COSATU.

The Chairperson noted that the Committee approved of the amendment.

Clause 9: Powers and Duties of Company
Clause 9(3) was inserted to ensure compliance with policies issued in Clause 25.

The Committee agreed with the amendment.

Clause 12: Composition of Board
An amendment was made, per the Committee’s request, for the board to compose of nine non-executive members and a managing director who was an executive member instead of fifteen members.

The Committee approved the amendment.

Clause 14: Appointment of Board Members
The clause was amended to provide for the nomination committee to obtain the Registrar of Banks approval if a person was a fit and proper person to hold the office of board member. Clause 14(4)(d) was added to the clause to say that the nomination committee, in making a recommendation to the Minister, must consider “
in consultation with the Registrar of Banks, whether the candidate is, as far as can reasonably be ascertained, a fit and proper person to hold the office of a member of the Board of a banking institution”. Clause 14(6)(a) was inserted to state, “to empower the Minister to designate two members of the Post Office Board as members of Postbank Board by virtue of office”.

Mr Wiltz added that the DoC and the National Treasury tried to clarify the role of the Registrar of Banks, which was to ensure that board members were fit and proper persons. Two non-executive board members would be recommended by the SAPO board to the Minister, but the SAPO board would be acting in consultation with the Registrar of Banks. At the same time there would be a selection panel that, after public nominations, will sit and shortlist the names. The panel would sit with the Registrar of Banks to ensure the people they recommend to the Minister, were fit and proper persons.

Mr van den Berg asked if there was a minimum number of names given to the Minister in terms of nominees for the board.

Mr Wiltz answered that the nomination committee recommended the exact number of board members that were required.

The Chairperson noted that this meant that the nomination committee was in fact appointing the board members for the Postbank board. He wondered if this was what the Committee wanted and what the Minister’s role would be.

Mr Kholwane agreed with the concern; however, the Committee was asking the wrong people. They had to discuss the matter within the Committee.

The Chairperson wondered if they should amend the clause to say that the nomination committee had to give a maximum of ten nominations instead of seven. This would give the Minister some kind of selection process.

Mr Kholwane agreed that more flexibility was needed when the Minister selected the board members. However, the Committee still needed more time to discuss the matter.

The Chairperson noted that the Committee was looking at the possibility of increasing the number of nominations made by the nomination committee. The Committee would discuss the matter and make a recommendation.

Mr Wiltz recommended that the Committee state that the nominations should be one and a half times the number of board members that were needed. This was the same strategy that would be used to fill vacancies.

The Chairperson said that the Committee would keep his suggestion in mind.

Clause 15: Resignation, Removal from Office and Vacating of Office
Mr Vukela stated that Clause 15 was amended to allow the removal of a member if the Registrar of Banks informed the Minister that a member was no longer a fit and proper person as was required.

The Committee agreed with the amendment.

Clause 16: Disclosure and Fiduciary Duties of Board Members
The clause was amended to delete “all” under 16(1)(e)(iii) since it was not possible to attend all meetings. Clause 16(2) that made non-compliance with fiduciary duties an offence was deleted.

Ms De Lille noted that fiduciary duties were very important. She proposed that the Committee leave Clause 16(2), but exclude the part of the sub-clause that spoke of non-compliance being an offence.

Mr Wiltz replied that the Committee had said that it wanted to delete the sub-clause. The DoC and the National Treasury thought it would be okay to delete it because the Bill had provisions that were linked to the PFMA and other banking legislation as well as the Companies Act.

Ms De Lille stated that the clause was merely a reminder that failing to comply with fiduciary duties would have consequences. There was no harm in leaving it in.

Mr Wiltz said that the DoC was comfortable with retaining it; however, it was then appropriate to link penalties to the offences mentioned in the sub-clause.

Ms Ntombebandla Mnyikiso, State Law Adviser, stated that non-compliance with fiduciary duties was a statutory offence. Therefore, certain offences would need to be linked with certain penalties. 

The Chairperson added that the Committee would look at deleting the sub-clause, because the Bill was already subject to other penalties mentioned in other legislation. If they included the sub-clause, they would have to stipulate which actions would receive certain penalties. He suggested that the legal people come back with recommendations and drafting proposals.

Clause 20: Personnel of Company
Clause 20(2) was amended to remove the requirement that the managing director and the Minister of Finance should be consulted before the board could determine conditions of service of staff.

Ms De Lille stated that she did not remember the Committee asking for this amendment to be made.

The Chairperson replied that he did not remember the amendment either; however, he checked his notes and this was exactly what the Committee had asked the DoC and National Treasury to do.

Mr Wiltz commented that he was opposed to the amendment because he thought it was better for the government to have a little more control in the matter. However, given the board’s fiduciary duties, the Committee could place its faith in the board and trust it would do the job satisfactorily.

Mr Kholwane said that the sub-clause was too broad in general.

The Chairperson stated that the Committee would look in to the matter.

Ms Zuraya Adhikari, Parliamentary Legal Adviser, asked if the National Economic Development and Labour Council (Nedlac) had been consulted on some of these matters.

Mr Gift Buthelezi, Acting Director-General: Policy Development (DoC), replied that they wanted to go to NEDLAC with “one story”. They had met with NEDLAC once; however, the other meeting had been postponed,

The Chairperson decided that the DoC and the National Treasury had to meet with NEDLAC again and then report to the Committee. 

Clause 21: Annual Report
Clause 21(1) was amended to ensure compliance with the PFMA on the submission of reports to the Minister. The report was to be submitted within five months, not six months.

Also, the heading for Chapter 5 was moved from Clause 22 to Clause 21.

Mr Kholwane noted that the Postbank would submit their annual report to the Minister. He wondered if they should submit it through the Post Office or directly to the Minister.

The Chairperson asked the DoC and the National Treasury to come back to the Committee with the answer.

Mr Wiltz replied that the same reporting requirements that applied to the Post Office as a public entity according to the PFMA, applied to the Postbank. The annual report had to be submitted to Parliament through the Executive.

The Chairperson said that he understood what Mr Wiltz was saying, but wondered if the Committee would have to call in the board of the Postbank to report to them or if they had to call in the Post Office. He stated that Parliament should be able to choose whom it wanted to call. He wondered if this would be included in the Articles of Association.

Mr Wiltz answered that the National Treasury could talk from the PFMA perspective on how subsidiaries were dealt with. 

Mr Shelembe stated that it was standard practice for both the company and its subsidiaries to submit their reports to the Minister of Finance, according to the PFMA. The reports then also had to be submitted to Parliament. Therefore, the Postbank had to submit its report to the Committee and could be called in to account for the handling of its finances.

The Chairperson noted that the amendment was approved.

Clause 25: Regulations and Policy
Mr Vukela stated that Clause 25(1) was amended to ensure that the Registrar of Banks would be consulted before regulations were made.

Ms De Lille addressed Clause 25(1), which stated that, “The Minister may, on the recommendation of the board and with the concurrence of the Minister of Finance, and after consultation with the Registrar of Banks, make regulations”. This sentence had to be simplified or the clause had to be redrafted.

Mr Wiltz suggested that the clause could be amended to say that, “The Minister may, after consultations with the Registrar of Banks, make regulations regarding…”. The Minister of Finance could be excluded. The Registrar of Banks was the entity that had to be consulted.

Ms De Lille stated that the Minister had to consult the board before the regulations were made.

Mr Buthelezi added that what Ms De Lille was saying was very important.

Mr Kholwane said that he did not see a problem with the board making recommendations to the Minister.

Ms Killian suggested that they amend the clause as it seemed too clumsy. The clause should be as Mr Wiltz suggested, as the board’s recommendations would have been included during the consultation anyway.

Ms De Lille clarified that only once the Bill was passed, was the Minister able to make regulations and policies. It was only after this process that the board would be appointed, as the regulations would spell out and take into consideration the Act on how the board would be appointed.
 

Ms Bednar-Giyose proposed that the clause should be amended to say, “The Minister may, after consultation with the Minister of Finance, and the Registrar of Banks, make regulations”.

Mr Kholwane wondered why the Minister of Finance and the Registrar of Banks had to be consulted.

Mr Wiltz agreed, saying that the Registrar of Banks was an “official” and the clause would be subjecting the Executive to consultations with an official, which was not appropriate. It was more appropriate to have the consultations with the Minister of Finance.

The Chairperson noted that the amendment would read that, “The Minister may, after consultation with the Minister of Finance,
make regulations”. He asked if the Committee approved.

The Committee agreed with the amendment.


Mr Vukela stated that Clause 25(2) was added to provide a policy-making power for the Minister.

Mr Shelembe proposed that the clause be amended to state “in consultation with” instead of “after consultation with”.

Mr Vukela said that the DoC preferred saying “after consultation with”. Policy could only be made after consultations with the Minister of Finance, not with the Minister of Finance. Regulations could be made in consultation with the Minister of Finance.

Mr Kholwane stated that he did not want the National Treasury and the DoC to be at each other’s throats. The Committee would make a decision on the proposals from both parties. He stated that policy changed all the time, therefore, he thought it was necessary to keep the clause at it was originally amended. The Committee would take a decision on the matter after discussion.

Closing Remarks
The Chairperson remarked that it seemed that the Committee had completed 90% of the work on the Bill. There were one or two areas that the Committee still had to discuss. He hoped that the Committee would be able to finalise the Bill the following week.

The meeting was adjourned. 



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