Division of Revenue Bill [B2-2013]: Negotiating Mandates

NCOP Appropriations

08 April 2013
Chairperson: Mr T Chaane (ANC; North West)
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Meeting Summary

The Committee met to consider final mandates on the Division of Revenue Amendment Bill.7 provinces submitted their mandates and all supported the bill. It was noted that North West and Mpumalanga would submit their mandates later that day.

The Eastern Cape Legislature had raised a few concerns; one was about the equitable share formula. In response, Members argued that the National Treasury had delivered a very detailed briefing on the matter, which addressed all the provinces. Added to that the Member of the Executive Council (MEC) of the province was a Member of the Budget Council who had approved the equitable share formula. The Chairperson was asked to not entertain the matter, but rather to write a letter to the Chairperson of the Finance Committee in that province, referring him/her to the relevant sections of the briefing given by National Treasury. Researchers were also asked to find out about the amount of money which were returned by the provinces.
 

 

Meeting report

Chairpersons opening remarks
The Chairperson said that the Committee would deal with the negotiating mandates from each province on the Division of Revenue Bill. He also noted that quorum was reached; therefore the mandates could be adopted.

Division of Revenue Bill [B2-201]: consideration of negotiating mandates
The Chairperson called provinces to present their mandates.

Eastern Cape
No delegates from the Eastern Cape were present, so Mr B Mashile (ANC; Mpumalanga) was asked to present the Eastern Cape’s mandate.

Mr Mashile relayed that the Eastern Cape Legislature supported the mandate, and would support the adoption of the Bill. However the following matters were raised as concerns;

●There was a need to urgently review the equitable share formula so that it took into account factors such as poverty levels, the number of indigent people in a municipality as well as the infrastructure backlog in various areas.
●There were municipalities whose equitable share had declined or had increased by less than the Consumer Price Index (CPIX), these municipalities were therefore unable to operate.
●There was a need for the Expanded Public Works Programme (EPWP) grant to be significantly increased as it was the vehicle for job creation.

The Chairperson responded that the issues raised by the Eastern Cape Legislature would be attended to at a later stage.

Free State
Mr D Bloem (COPE; Free State) said that the Free State Legislature voted in favour of the Bill.

Gauteng
The Chairperson said that in the absence of delegate from Gauteng, Prince M Zulu (IFP; KZN) would relay that province’s mandate.

Prince Zulu stated that the Gauteng Provincial Legislature supported the principle and the detail of the Bill and therefore voted in favour of it.

Kwa-Zulu Natal
Mr A Lees (Alt)(DA; KZN) said the KwaZulu-Natal Provincial Legislature supported the Division of Revenue Bill.

Limpopo
Mr W Makhubela (COPE; Limpopo) said that the Provincial Legislature had mandated the permanent delegate to negotiate in favour of the Bill.

Northern Cape
Mr C De Beer (ANC; Northern Cape) said the Portfolio Committee on Finance, Economic Development and Tourism held public hearing on the Bill, and had voted in favour of it.

Western Cape
Mr J Bekker (DA; Western Cape) said the Standing Committee on Finance and Economic Development conferred on the Western Cape’s delegation in the National Council of Provinces (NCOP) the authority to support the Bill.

The Chairperson stated that there were 2 provinces that were yet to send their mandates; the North West and Mpumalanga. These provinces were set to meet later that day (9 April 2013) and would relay their mandates in due time. However the majority of the provinces were in favour of the adoption of the Bill.

Mr Mashile said that Mpumalanga sat in the morning that day (9 April 2013) and promised to deliver its mandate before 9am. He suggested that this should be faxed. The Committee therefore needed to communicate with the Chairperson of the Provincial Finance Committee in Mpumalanga to make sure that all documents were received on time.

The Chairperson agreed and stated that a letter would be written to the Provincial Finance Chairpersons in both legislatures.
The Chairperson noted that the Eastern Cape had expressed concern about the equitable share. He was not sure whether the Legislature was referring to the Local or national government equitable share. Members were asked for their input on the matters raised by the Eastern Cape.

Mr Mashile argued that it was unfortunate that no member from the Eastern Cape was present in the meeting. He asked the Chairperson to contact the Chairperson of the Finance Committee in that province to ask for clarity on the issues it had raised to avoid misunderstanding.

Mr Bekker responded that it was very strange for the Eastern Cape to raise the issue on equitable share. The Member of the Executive Council (MEC) was a Member of the Budget Council which had approved the equitable share formula. Added to that, the Chairperson of the Portfolio Committee on Finance attended the briefing by the Minister and should have raised such concerns there. Researchers were also asked to find out about the amount of money which was returned from the provinces.

Mr Lees said that National Treasury did an excellent job in its briefing, and so it was very surprising that such issues were being raised again. This therefore indicated a huge misunderstanding by the Eastern Cape’s Legislature. The matter should therefore not be entertained.

The Chairperson agreed that the National Treasury had provided a very detailed briefing which was addressed to every province. A letter would then be written to the Chairperson of the Eastern Cape with clear references to the relevant sections of the Minister’s briefing.

Mr Mashile informed the Committee that the Mpumalanga report had just been emailed.

The Chairperson responded that the report would not be considered because the document was not presented at the current meeting.

Mr Bloem stated that a decision was taken on the issue of Mpumalanga, and it should not be reopened.

The Chairperson reiterated that 7 out of 9 provinces voted in support of the Bill.

Mr Lees asked whether the 2 outstanding provinces would be allowed to vote in the House.

The Chairperson responded that they would be allowed to vote; only after all final mandates were dealt with. If their provinces did not submit their mandates by then, they would not be allowed to vote. The current mandates were negotiating mandates.

Consideration of Minutes dated 26 March 2013
The Chairperson tabled the Minutes 26 March 2013 for consideration.
The minutes were approved with no changes.
The Chairperson announced that the final mandates will be dealt with in Limpopo on 24 April 2013.

The Chairperson was adjourned.
 

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