Private Security Industry Levies Bill: briefing by National Treasury & Department of Safety and Security

Meeting report

SAFETY AND SECURITY PORTFOLIO COMMITTEE
15 May 2002
PRIVATE SECURITY INDUSTRY LEVIES BILL: BRIEFING BY NATIONAL TREASURY & DEPARTMENT OF SAFETY AND SECURITY

Chairperson: Mr M E George

Documents handed out:
Private Security Industry Levies Bill
Briefing by National Treasury [B11-2002]

SUMMARY
The National Treasury briefed the Committee on the proposed Private Security Industry Levies Bill. This Bill makes provision for the imposition of levies by the Regulatory Authority, and also provides a framework for the use and management of levies, payment of levies, consequences of non-payment and for the assessment of the performance of the Authority to inform decisions in this regard. It is furthermore the responsibility of the Department of Safety and Security and the National Treasury to get this Bill tabled in Parliament.

Mr George noted that the Committee received no formal apology for the absence of the SAPS Secretariat. It was suggested that a letter should be drafted inviting the Secretariat to state their case at the next meeting.

MINUTES
Mr M E George, Chairperson, gave a brief discussion on what was not clear in the previous meeting. On the issue of the amendments of a Bill, he emphasised that Bills that have been tabled could not be amended and that any change by the Legislature could create problems.

Advocate P S Swart (DP) asked at what stage could a bill not be changed.

Mr George answered that the moment a Bill is tabled there could not be any amendments. Committee Members only have the right to reject the Draft Bill so that it could go back to the drawing board. He emphasised that Members should consider the implications of rejecting a bill especially in light of time constraints.

Briefing by National Treasury
Mr Overmeyer: Treasury, briefed the Committee on the proposed Private Security Industry Levies Bill.

The Private Security Industry Regulation Act, 2001, provides for the regulation of the private security industry. It was decided that the cost of regulating the industry are borne by registered private security industry members. The funds of the Authority are derived from levies imposed by the Council upon industry members registered with the Authority.

In general terms, the Bill makes provision for the imposition of levies by the Regulatory Authority, and also provides a framework for the use and management of levies, payment of levies, consequences of non-payment and for the assessment of the performance of the Authority to inform decisions in this regard. It is furthermore the responsibility of the Department of Safety and Security and the Department of Finance to get this Bill tabled in Parliament.

Overview of Bill
Clause 1 contains all definitions and it must be conceptualised in the context of the Private Security Industry Regulation Act, 2001.

Clause 2 contains all the powers that have been entrusted to the Council to impose levies on private security service providers and private security officers. Furthermore, this clause determines differential levies payable by different categories or classes of security providers. Furthermore, it dictates that the Minister of Safety and Security is required in certain instances to act with the concurrence of the Minister of Finance.

Clause 3 stipulates that the Authority must manage and use the levies according to the Private Security Industry Regulation Act. Furthermore, levies must be deposited into an approved bank account and proper accounting records must be kept. This clause emphasises that council must submit a budget of estimated revenue and expenditure for the next financial year and a business plan for the following three financial years to the Minister for Safety and Security for approval, with concurrence of the Minister of Finance.

Clause 4 primarily deals with the obligations of the registered security services providers. It must decide that an applicable monthly levy should be deducted and payable to the Authority. The failure to pay levies will lead to the imposition of certain penalties, as will be specified in Clause 5.

Clause 5 states the consequences for security service providers and security officers who fail to comply with the obligations provided for in the Bill. There are certain provisions for the suspension of registration, lapsing of registration, withdrawal of registration, and liability for outstanding levies. The interest is calculated upon unpaid levies. A further 10% penalty is imposed on levies and interest accrued.

Clause s is regarded as the sunset clause, where any levy imposed will lapse five years after the day it was introduced. The Minister of Safety and Security is empowered to consider the re-imposition of a levy, with the concurrence of the Minister of Finance.

Clause 7 entitles the Minister of Safety and Security to commission an assessment of the performance of the Authority for consideration by the Minister of Safety and Security and the Minister of Finance. This facility of an assessment is viewed as integral to the Levies Bill, as it will inform decisions in terms of the Bill (for example adjustments of the levy and the re-imposition of the levy).

The National Treasury believes that the Private Security Industry Levies Bill is sufficient to ensure that funding is well-managed and that the levy arrangements will operate in a transparent and accountable manner. Mr Overmeyer stated that at this point in time the National Treasury would like to thank the Minister of Safety and Security and Departmental officials for their co-operation and assistance in the drafting of this Bill.

Discussion
Mr George indicated that Clause 7, concerning the assessment of performance of authorities was not clear.

Mr Overmeyer assured the Committee that this was not a general assessment but just a financial evaluation.

Mr B L Geldenhuys (ANC) asked what the possible outcome would be if the two Ministers do not concur.

Mr Overmeyer answered that if there was no agreement between the two parties the Bill will not be approved. This will result in a situation where no budget will be allocated.

Mr George inquired about the clause that stipulates that funds should be deposited in a suitable bank account.

Mr Overmeyer said that the Authority should deposit with any approved listed bank, which includes most of the major banks.

Ms D M Morobi (ANC) asked if the presenter could collaborate on Clause 6(1).

Mr Overmeyer answered that Clause 6 was a sunset clause, which indicates that every five years the Minister of Finance will revise levies.

Mr George asked which Minister had the final say to adopt this Bill and what would happen if it were rejected.

Mr Overmeyer answered that the Minister of Finance had the veto power due to the fact that it is a money bill.

Briefing by Department of Safety and Security
Advocate Kok, representative of the Department of Safety and Security, went through the entire draft bill to ensure that everyone agrees with the contents.

Clause 1 contains a printing error and fortunately it is a nonsensical error that is not seen as an amendment and could be easily taken out.

Clause 2 is the main body of this draft bill and the power of counsel is addressed in this section with the emphasis on the different service providers. This section, furthermore, address the criteria for the allocation of levies. Thus, implying that the bigger, more affluent companies pay a higher levy.

Advocate P S Swart (DP) was strongly opposed to the suggestion that levies would be imposed on the basis of monthly gross income, as it indicates that the success of a company would indicate a higher premium.

Mr Overmeyer indicated that there were three criteria in the draft Bill and that gross income should not be viewed in isolation and that all the criteria and requirement must be met.

Advocate Swart (DP) asked if there are any other levies and taxes that rely on gross income and if this was a new tax regulation in South Africa.

Mr Overmeyer gave the example of the Regional Service Levy and indicated that there was a precedent to use gross income indicators.

Advocate Kok used the example to illustrate the favourability of gross income requirement. If a new company employs large numbers but still do not show a large profit, they should be levied accordingly.

Clause 3 looks at how the authorities manage the levies.

Clause 4 indicates that if a worker is unemployed for even one day he or she is not liable to pay levies.

Clause 5 suggests that suspension is compulsory if people do not pay levies and furthermore that proper hearings should take place to reinstate those after suspension.

Clause 6 deals with the sunset clause, which is a rethink of the entire levy after five years.

Clause 7 deals with financial issues and is linked with Clause 2.

Clause 8 deals with the adoption of the new levy when the old system falls away.

The intention of this law is to give the council the opportunity to establish and distinguish the size of the different companies.

It was decided that the next meeting would be utilized to vote on this Bill, as not all the Members was present.

Mr George noted that the Committee received no formal apology for the absence of the SAPS Secretariat.

Mr V B Ndlovu (IFP) noted that this was not the first time that the Secretariat did not arrive for their presentation.

Mr M S Booi (ANC) suggested that the Committee draft a letter to voice their dissatisfaction.

Mr R P Zondo (ANC) said that the Committee demanded an apology.

Mr George (ANC) suggested that a letter should be drafted inviting the Secretariat to state their case at the next meeting.

The meeting was adjourned.