Division of Revenue Bill [B5-2014]: Final mandates, Committee Report adoption

NCOP Appropriations

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

All provinces except the Free State submitted their final mandates, noting that their representatives were mandates to vote in favour of the Division of Revenue Bill 2014 [B5-2014].

Consideration of the draft Select Committee Report on the Division of Revenue Bill provoked discussion of the findings and recommendations around the Moloto Corridor, which had been raised in the negotiating mandate of Mpumalanga. Members called for clarity on whether the road was a national or provincial responsibility. The National Treasury responded that the Minister of Transport still had to rule on the present and intended status of Moloto road, although it was noted that the Minister of Transport had said that this road had to be in the hands of national government. Members suggested that time frames were needed, and that the Departments of Public Works and Public Administration also had to become involved in the matter, which should be driven forward in the new Parliament. The wording of the final recommendation referred to the need for the Minister of Transport to urgently clarify the ownership, whilst it was also emphasised that funding was needed to start the upgrade, with reference being made to both the 2014 adjusted budget and 2015 Medium Term Expenditure Framework. Some other corrections were made, and the Report was unanimously adopted, as amended.

The Committee’s Legacy Report was also unanimously adopted, with some changes to the headings. Minutes of the meeting held on 19 March were accepted, with no changes.

The Chairperson concluded the meeting by expressing thanks to Members, staff and stakeholders, and stating that he was pleased with the way this Committee had executed its mandate.

Meeting report

Division of Revenue Bill [B5-2014]:  Presentation of final mandates
The Chairperson noted that no Member for the Eastern Cape was not present.

He noted that Free State had not submitted a final mandate on the Division of Revenue Bill.

The Chairperson then read out the Eastern Cape mandate, which pronounced a vote in favour of the Bill.

Mr S Montsisi (ANC, Gauteng) stated that Gauteng was in favour of the Bill.

Mr M Makhubela (COPE, Limpopo) stated that Limpopo was in favour of the Bill.

Mr B Mashile (ANC, Mpumalanga) stated that Mpumalanga was in favour of the Bill.

Mr C De Beer (ANC, Northern Cape) stated that the Northern Cape was in favour of the Bill.

Mr D Joseph (DA, Western Cape) stated that the Western Cape was in favour of the Bill.

The Chairperson stated that North West province was in favour of the Bill.

The Committee Secretary read out a pronouncement that KZN was in favour of the Bill.

Eight provinces having voted in favour of the Division of Revenue Bill, it was adopted.

Consideration and adoption of Committee’s draft report on the Division of Revenue Bill [B5-2014]
The Chairperson and Committee Secretary suggested that the Committee Members should focus on the findings and recommendations.

Mr Mashile referred to finding 5.4. He noted that much had been said about the conditional grant strategy, and he asked if there was a phasing out process.

Ms Wendy Fanoe, Chief Director: Intergovernmental Relations, National Treasury, replied that conditional grants were introduced through the budget process, so that money made available to the provinces could be in the form of the equitable share or a conditional grant. The process was not cast in stone. The national departments would submit a business plan for the spending of the grant. A new conditional grant could be introduced during the budget negotiation process, and, if so, it could then be tabled as part of the Division of Revenue Bill.
Mr Mashile remarked that the new Select Committee would have to know which grants were intended to be introduced.

The Chairperson asked if the issue (that Mpumalanga had raised, asking that sufficient budget be made available for construction) around the Moloto road and rail corridor should be dealt with under findings or recommendations.

Mr Mashile thought that it might be unwise to say that the construction of a rail line “might take some time”, as this could give rise to speculation.

The Chairperson noted uncertainty about whether the Moloto road was intended to be a national or a provincial road.

Ms Fanoe replied that there was indeed a dispute about whether it was to be a national or a provincial road. The Minister of Transport had to make that ruling, and presently, because of the uncertainty, no department was funding it.

Mr Mashile remarked that the Minister of Transport had been upfront in saying that this road had to be in the hands of national government. Officials were confusing themselves. The National Treasury had to make sure that the issue was cleared so that construction could proceed.

Mr De Beer said that there had to be a time frame for that. The Department of Public Works, the Department of Public Administration and the Appropriations Committee had to deal with the matter. He suggested that those Members who would return to the Select Committee had to drive the matter in the new Parliament.

Mr Joseph remarked that the road surely had to have a current status. It could not be said to be a national matter just because a national Minister had raised it. The Department of Transport had said that Cabinet could still make announcements.

Mr Montsisi asked if the provinces had applied for permission on the status. The Minister of Transport had to facilitate the declaration of the status of the road, and this Select Committee had to follow up with the Minister. The National Treasury appeared to be saying that it was neither here nor there.

Mr B Mnguni (ANC, Free State) stated that an announcement by a Minister could, at times, determine national policy. The construction of the road had been elevated to a question of national interest.

The Chairperson said that the Committee was agreed on what recommendations should be made, and he said that the focus should be on getting the National Departments to deal with the manner. He reminded Members that the President had also spoken on the matter.

Mr Mashile noted, with regard to recommendation 6.1, that it was stated that the South African Revenue Service (SARS) had to explain on revenue projections. Projections came from SARS, but they were actually presented by the National Treasury.

Mr Mashile said that it was necessary to guard against abuse of outsourcing.

Mr Joseph pointed out that in recommendation 6.4, the Committee seemed to be seeking more information than its legal mandate permitted.

The Chairperson agreed and advised that this wording should be taken out.

Mr Mashile said, with regard to recommendations 6.5 and 6.6, that he was worried about who in the sector departments would take the responsibility for liaison with the Financial and Fiscal Commission (FFC).

The Chairperson advised that the relevant committees must be taken on board before the Division of Revenue Bill came into effect.

The Chairperson asked Members to consider if the recommendations about Moloto road (paragraphs 6.8 and 6.9) sufficiently captured the issues at hand.

Ms Fanoe pointed out that this project was still being regarded as a long-term venture, although decisions were needed for 2014/15. The Minister of Transport had to clarify ownership of the road, and state that the aim was for the road to be under national ownership. A report had to be submitted to Parliament.

Mr Mashile noted that no requests for funding had been made, under paragraph 6.9. He emphasised that it was necessary to state that funding had to be requested to start the upgrading.

The Chairperson suggested that the wording should read that the Minister of Transport had to urgently clarify ownership of Moloto road, and had to ensure that funding be made available for urgent refurbishment of the road in the budget process.

Ms Fanoe advised that the 2014 adjusted budget and the 2015 Medium Term Expenditure Framework (MTEF) be mentioned.

The Chairperson agreed, and moved that the report be accepted with corrections.

The report was unanimously adopted, with the necessary amendments.

Committee’s draft Legacy Report: Consideration and adoption
Members went through the draft Legacy Report page by page.

Mr Mashile was not happy with the heading of the section on briefings and/or public hearings, which he thought was inappropriate. He suggested that the heading also had to refer to matters picked up during public hearings, as well as challenges.

The Chairperson made some suggestions as to how it could read.

Mr Joseph said that the sentence following the heading referred to certain findings.

Mr Mashile moved for adoption of the draft Legacy Report, as amended, and Members unanimously adopted that report.

Adoption of Committee Minutes
Minutes of the meeting held on 19 March 2014 were considered and adopted.

Closing remarks
The Chairperson thanked all Members for their hard work and dedication during the term. He also thanked support staff, the National Treasury, PMG and provincial liaison officers for their contribution. He said that he had no doubts and no regrets about the way in which this Select Committee had executed its mandate.

The meeting was adjourned.


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