2014 Division of Revenue Bill: Negotiating mandates

NCOP Appropriations

19 March 2014
Chairperson: Mr T Chaane (ANC, North West)
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Meeting Summary

Committee Members presented the negotiating mandates of their provinces on the 2014 Division of Revenue Bill, with the exception of North West, who did not present a mandate as it had only held the public hearings that morning.

All the provinces essentially expressed themselves in favour of the Bill. However, Gauteng said the eradication of bucket sanitation must be clearly monitored and funding allocated. The Committee also recommended that national and provincial treasuries should plan carefully around the influx of learners and give adequate budget for them. National Treasury responded to this, at the request of the Chairperson, saying that it agreed with the first suggestion for monitoring. The representative explained that in fact the provincial and local equitable shares already took into account the numbers of people using the services; they were not based purely on population numbers, and that the increased learner influx was already taken into account. Gauteng should also ensure that its own budgeting was responsive to this point. The Limpopo province also made two recommendations, which were noted. Mpumalanga asked that certain projects, specifically the Moloto road and rail corridors, must be fast-tracked, with sufficient budget allocated to ensure that this happened. National Treasury explained that these projects were not actually covered by the Division of Revenue Bill as they were being run by public/private partnerships, and explained that there was an inter-Ministerial committee chaired by the Department of Transport to deal with them. The representative from Mpumalanga accepted that point, but urged that National Treasury could not simply be absolved of responsibility to see to it that the projects were implemented speedily. National Treasury offered to provide more comprehensive input in the following week.

The Committee noted that the draft Legacy Report had been circulated, but there was a technical problem in that the report covered the work of the original joint Finance and Appropriations Committee, then the work of each of the committees into which it had split. It was suggested that more information was needed from the records to verify which committee had dealt with the items, and it was suggested that the Report could be adopted in the following week, together with the Legacy Report of the Select Committee on Finance.

Members adopted minutes of 18 March and noted that the draft Report on the Division of Revenue Bill would be finalised in the following week, and dealt with in the House on 26 March.

Meeting report

2014 Division of Revenue Bill: Presentation of negotiating mandates
The Chairperson said that eight negotiating mandates on the 2014 Division of Revenue Bill (the Bill) had been received, with the exclusion of North West, which had held the public hearings on the Bill only that morning.

Since the Eastern Cape representative was not present, he read out the negotiating mandate provided by that province, which was for its representative to vote in favour of the Bill.

Mr B Mnguni (ANC, Free State) read out the negotiating mandate for the Free State,  to vote in favour of the Bill

Mr S Montsitsi (ANC, Gauteng) noted the mandate from Gauteng, which said that it supported the Bill, although comments were noted.

The Chairperson asked that Mr Montsitsi read out the recommendation as set out in item 11.

Mr Montsitsi said that Gauteng noted the recommendations to eradicate bucket sanitation, and the province said that this must be clearly monitored and funding allocated. The Committee also recommended that national and provincial treasuries should plan carefully around the influx of learners and give adequate budget for them, to Gauteng province.

The Chairperson noted that there had been a response from National Treasury (NT). The first suggestion was agreed upon. In the second matter, NT had given some further details, and he asked that the representatives from NT should outline what the response was.

Ms Wendy Fanoe, Chief Director, National Treasury said that an important point needed to be made about the provincial and local equitable share. It took into account not only the numbers of people in the province, but the numbers of people using the public facilities, and that influenced the allocations. The components were updated annually, in terms of the data available, so, amongst others, the numbers of learners as provided by the Department of Basic Education were taken into account already. However, Gauteng must also make sure that its own budgeting was responsive also to these points .

The Chairperson noted that the representative from KwaZulu Natal (KZN) was not present at this point, and thus read out the negotiating mandate, which authorised the KZN representative to support the Division of Revenue Bill.

Mr M Makhubela (COPE, Limpopo) said that the negotiating mandate from Limpopo reflected that this legislature was in favour of the Bill.

The Chairperson noted that there were recommendations set out in two paragraphs, 5.1 and 5.2, and said that these were noted.

Mr B Mashile (ANC, Mpumalanga) read out the mandate from the Mpumalanga Provincial Legislature. He noted that legislature had supported the Division of Revenue Bill and conferred a mandate on him to vote in favour of the Bill. It had also made some recommendations about the projects that must be fast-tracked, including the Moloto corridors, and said the next DORB must reflect sufficient budget to settle these long-overdue matters.

The Chairperson asked for the NT response.

Ms Fanoe said that the Moloto Rail and Road Project was a public private partnership (PPP), and all PPP approvals were obtained by the Minister of Finance, so there were in fact no division of revenue implications. That project would proceed once the approvals were given. She also added that the Minister of Transport had established an inter-ministerial committee to ensure that road / rail solutions were developed and implemented, and there would be re-prioritisation of existing budgets at provincial level, with the support of South African Road Agency Limited (SANRAL) in the provinces. She noted that SANRAL did the implementation also of the Eskom roads. There was acknowledgement that different budgets were used. In the 2015 budget, there could be consideration of re-prioritised funding being reflected as an indirect grant. It was true that it was critical to monitor it on an ongoing basis.

Mr Mashile urged that the involvement of Passenger Rail Agency (PRASA) and SANRAL should not be seen as an excuse for the NT not to deal with the matters. The Moloto road was leading to numerous road deaths every day. He took the point that the financing was not done through the DORB, but there was direct funding for PRASA and SANRAL, but said that the concerns were still that Mpumalanga needed to ensure that the right allocations were made from somewhere to ensure that the project was actually implemented.

The Chairperson asked if the province was speaking of the road, or the rail corridor.

Mr Mashile explained that the rail corridor was initially proposed to try to solve the problems on the roads. However, that was proposed long ago, but to date had not actually been finalised. However the project was done, practical actions were needed to ensure that the problems were actually solved; it was up to NT to decide how to do so, but the emphasis was that there should be speedy action.

The Chairperson agreed with he sentiments but had problem with the part of the recommendation that referred to what had to be built into the 2015 DORB. He felt that not enough information had been given on the project itself, and the amounts involved, allowing this Committee to take that decision. He agreed that there was clearly a problem with the project and said its completion was long overdue.

Mr D Joseph (DA, Western Cape) did not think there was a problem. This province had only emphasised that it would like to see action, but he did not think it was actually trying to impose any conditions.

Mr Mashile emphasised that preliminary actions had been taken by the Department of Transport, and the province was not asking for extra money, but did want to see a budget allocation that would ensure that the project could be implemented. It thought that this could be done through DORB. However, having now heard the NT points, he agreed that if NT said that it could not be done through the DORB, then it was merely necessary to ensure that, wherever appropriate, budgets should be allocated to ensure that the projects were implemented.

Mr Mnguni noted that the Infrastructure Development Bill had been passed on the previous day, and he thought that this was one of the Strategic Infrastructure Project (SIPs). He thought that this would reduce the delays because the Bill insisted upon better coordination.

Mr Mashile stressed that this was fine, but it did not actually address his point that the project must be actually implemented.

Ms Fanoe said that NT could provide more comprehensive input, together with the Department of Transport, and she suggested that a plan could be presented by NT before the final mandates were discussed.

Members appreciated that input and agreed that it would be helpful.

Mr C de Beer (ANC, Northern Cape) read out the mandate from Northern Cape, which noted that this province was in agreement with the Bill.

Mr D Joseph (DA, Western Cape) noted that the mandate from the Western Cape had given authority to its delegated member to support the Bill.

The Chairperson asked Members to adopt the mandates as discussed.

Mr A Lees (DA, KwaZulu Natal) asked what exactly Members were adopting, although he had no problem with doing so. He had thought that negotiations would continue until the final mandates were presented.

The Chairperson agreed, but said that the usual process was for the Committee to adopt the negotiating mandates as well as the final mandates.

Members unanimously agreed to the adoption of the negotiating mandates.

Draft Legacy Report: Discussion
The Chairperson noted that the Legacy Report had been circulated to Members. It set out the work done over the last years. It would give guidance to the new committee in the Fifth Parliament, set out what had been finalised and what had not, and also commented on the challenges.

Mr de Beer referred to page 6, and made the point that in 2009 there was a combined committee dealing with appropriations and finance and it had dealt with the Appropriations Bill, in June/July. That report had also been tabled in the NCOP, in relation to the budget of 2009/10. He did not have the records to hand but thought that this point must come out clearly in the report.

The Chairperson said he was correct, and there did seem to be some missing information. The person who had dealt with it had been off work for a while.

Mr de Beer asked whether Mr Jeremy Michaels, who dealt with the programming, might have some documents from 2009 on his system, and suggested that he be asked to assist if possible.

Mr Mashile agreed that the records should be available, and he wondered if this could be dealt with when the Committee finalised the Legacy Report for the Select Committee on Finance. He thought that as long as the records were captured correctly somewhere in the files, this report could be finalised in the next week.

Mr Lees said that technically, there should be three reports; one for the Finance & Appropriation Committee, and then the two new committees, one for Finance, and one for Appropriations. The work described had actually been done by the defunct committee.

The Chairperson said that the split occurred in November 2009. He said that it was possible to establish the links, and the two Legacy reports could then be adopted together in the following week.

Minutes of 18 March
The Committee adopted the minutes, without amendments.

Other business
The Chairperson noted that the draft report on the Division of Revenue Bill was being circulated, and it would be finalised in the following week. It would be dealt with in the House on 26 March. The last sitting of the NCOP was on the following Thursday.

The meeting was adjourned.


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