Appropriation Bill [B4-2014]: Committee Report

Standing Committee on Appropriations

22 July 2014
Chairperson: Mr P Mashatile (ANC)
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Meeting Summary

The Committee met to consider for adoption the second draft of the Committee report on the 2014 Appropriation Bill.  The Committee had read through and considered the content of the first draft on 15 July.  However, there was considerable discussion about the content and procedure in the current meeting, as the EFF called for alterations and additions to the document. The EFF wanted the insertion of a column to a table produced by the National Treasury, and the highlighting of the decrease of funding for schools infrastructure. The Committee, guided mostly by the Chairperson, countered that changes could not be made to a table produced by the Treasury.

The issue of the reduction of the schools infrastructure grant was also reflected in the Committee observations and recommendations. The Chairperson cautioned against the introduction at such a late stage of new figures, which the EFF was calling for. The primary objective for the day was to adopt a credible and unflawed report that accurately reflected the deliberations of the Committee on stakeholder briefings.  The EFF, and other parties with reservations, could state those during the budget debate.  EFF suggestions would be noted and minuted, and could be returned to at a later stage.

The EFF stated that it did not support adoption of the report, and the DA reserved the right to neither oppose nor support adoption. The Chairperson told the parties that adoption of the report was mandatory, and that it was not a political matter. The Committee had to adopt the report as a committee. Opposition parties could state party positions in the budget debate. Discussion of the above matters proceeded amicably. There were minor changes of spelling, grammar and formulation made to the report.


Meeting report

Adoption of Committee Minutes
Committee minutes of 15 and 16 July were read through and adopted without changes.

Consideration and adoption of second draft of Committee report on 2014 Appropriations Bill
The Chairperson reminded the Committee that the report had to be presented to the House on Friday 25 July. The final copy had to be adopted on the day to be ready for the National Assembly presentation.

Mr Tshepo Masoeu, Committee Content Adviser, proceeded to take the Committee through changes to the first draft, which had been underlined in the second draft.

Mr G Gardee (EFF) remarked that there had to be a sentence that would state where the country was coming from, in terms of public debt.  The increase in debt had to be indicated. The amount that the State owed to financiers had to be indicated as a progression.

Mr Masoeu agreed that there was no specific reference to the increase in debt in the report.  However, concern over the intergenerational fairness of debt, and with current rather than capital expenditure, had been expressed on page 7 of the report.

The Chairperson noted that such concerns had also been expressed in the budget review. The matter could be dealt with when page 7 was read through.

Mr Gardee felt that there had to be a sentence alluding to the R231 million taken from school infrastructure funds. The decrease in that funding was despite increases in the overall vote, from R240 to R253 billion. The problem of mud schools was receiving less attention.

The Chairperson said that a reference to expenditure in schools could be inserted.

Mr Masoeu responded that there was reference to that on page 10, paragraph 2.

Mr Gardee said that the matter of the reduced funding had been raised with the Committee by a stakeholder. It had been noted by the Content Adviser, but it had to be elevated, analysed, and singled out for attention.  The content and overview of the Bill had to state what had been elevated.

Dr C Madlopha (ANC) remarked that whatever the Committee raised had to be done in a structured manner. She suggested that the reading be gone through page by page, and that the discussion on the school infrastructure funds be deferred until the appropriate page was reached.

Mr M Figg (DA) said that funds would be used from money returned. The budget had not been returned.

Mr N Gcwabaza (ANC) agreed that the discussion had to proceed page by page. He could recollect that the Financial and Fiscal Commission (FFC) had pointed to a shift of money from the infrastructure building programme. Concerns had been raised.

Mr Gardee protested that he did not see any section of the report that dealt specifically with education. The report was structured in terms of public hearings. Serious issues had been raised by stakeholders in a scientific, factual and objective manner. The Content Adviser had to elevate those issues, to prevent it from being drowned in Committee rumblings. The FFC had clearly declared a decrease in the schools infrastructure vote, as an item in the overall budget vote.

Dr Madlopha responded that the Committee did not disagree with that. All it was saying was that the matter should wait until the appropriate page was read.

The Chairperson added that he understood the need to have school infrastructure featured in a prime spot. The report contained important issues, from the first page to the last. The Committee had to agree on the report in totality.  Some of Mr Gardee’s concerns were included in the Committee recommendations, on page 15.  It was not advisable to over-emphasise the introduction. There had to be some flow to the discussion. The report had to be read against the background of the budget review and the Estimates of National Expenditure (ENE).  Mr Gardee could highlight issues that concerned him in his budget speech to the House. The report could simply not do all the things Mr Gardee referred to.

Mr Gardee referred to table 2 on page 6.  Column 1 showed Rands in millions. He asked if it was possible to insert another column between the revised estimates for 2013/14 and 2014/15. Such a column could help to indicate the increase as a percentage share, year in and year out. It was not sufficient to see the increase in Rands only.

The Chairperson responded that the table was not drawn up by the Committee, but by the National Treasury. It had to be reproduced as it was.  Ideally, the change could be suggested to Treasury, but currently there was no time for that. The Committee could also produce a table of its own in due course. The Committee could have suggested a change in the table to Treasury so that it reflected a percentage increase, but that had not been done. As things stood, the table had to be recognised in the House as the work of the Treasury.

Mr A McLoughlin (DA) asked for clarity about the table of revised estimates referred to on page 6. He asked if the increase in the size of the budget appropriation figure would appear in the adjusted budget.

Mr  Masoeu replied that the revised figures estimated the final outcome. Figures at the end of the third quarter could be compared to that, which would be more meaningful.

Mr Gardee asked if the table compiled by the Treasury could be tampered with, if the footnote “Source” was removed. It was essential to have a column that reflected variances in the percentage share of the aggregrates of departments. It could be added to the report as an addendum. As it stood, the statistics could not be analysed and interpreted properly.

The Chairperson responded that it could be done in future, but to do it hurriedly would be to run the risk of stating incorrect figures. The fact was that the Committee report had to stand as a public document by Friday 25 July – in only three days’ time. Changes would have to wait at least until the Medium Term Budget Policy Statement.  Addenda to reports were not accepted practice in the National Assembly. Time was needed for the exercise that Mr Gardee had suggested. It was unacceptable to present flawed statistics in the National Assembly.   However, his point would be taken and noted.

Mr Gcwabaza said that changing the table would cause complications. To do so would mean that the effect of inflation on all figures would have to be reckoned in.

The Chairperson reiterated that there would be time in the future for the suggested changes, but the Appropriation Bill was already late. It had to be presented on Friday 22 July, at 9h00. Members could be creative in their own debates in the House, but not in the report.

Mr Phelelani Dlomo, Parliamentary researcher, said that budget votes of all departments had been analysed for the report. Nominal and real increases were considered. However, they could not be part of the Committee report. The Estimated National Expenditure (ENE) had been used.

The Chairperson remarked that after the budget had been dealt with, the Committee could look at the best way to analyse tables and figures.  However, once it reached the National Assembly it was a Committee report and it had to be owned. It would not do to include figures that did not make sense. It was better to play it safe in the report, and rather be creative in the budget speeches. The report had to be credible.

Mr Gardee said that the question had to be posed as to how the Appropriation Bill conformed to the principles underlying the fiscal policies and imperatives of the State.

The Chairperson responded that issues had already been dealt with in the reading of the first draft report. The task at hand was to make sure the report was not flawed. It was too late in the process to introduce new issues. It had to be ensured that the report clearly reflected the deliberations of the Standing Committee. The Appropriation Bill had been presented within the context of principles outlined on page 2, such as the fiscal outlook.

Mr A Shaik Emam (NFP) suggested that the cost of servicing government debt be stated (page 7, paragraph 3).

The Chairperson agreed that the figure could be factored in. There was a difference between debt and debt service costs. The latter was the amount paid to service debt. If the right figure could not be found, it would be better to leave it out.

Ms S Shope-Sithole (ANC) cautioned that care had to be taken with figures at such a late stage. Debt service costs could vary.

Mr Gardee suggested that there could be a footnote that the R114 billion debt service costs were taken from the ENE. The State owed R1.3 trillion. There was a reference to State expenditure on page 6 of the report. It was stated how money had been allocated, but it also had to be said where the money would come from. It could be cut and pasted into the report.

The Chairperson advised against a cut and paste approach at such a late hour. Some innovations could be introduced, but there were only two days left before the Bill had to be tabled in the National Assembly. The Division of Revenue Bill was already through. The Appropriation Bill was the next step. One had to be careful about throwing around figures already included in the budget review and the DOR.

Mr Gcwabaza said that the information would be going into the public domain. The ENE was already a public document. Adding figures would be like rewriting the Bible. It was better to stick with the figures already in the report. There could be no secrets.

The Chairperson agreed.

Ms R Nyalungu (ANC) agreed with the Chairperson that it was too late to cut and paste.  Mr Gardee could negotiate with the Chief Whip.

The Chairperson ruled that the report be gone through page by page. At a later stage, figures from the budget review could be introduced. The Committee used figures at its own risk. All had to be comfortable with the figures included.

Mr Gardee remarked, with some humour, that it seemed that the day was to be devoted to commas and full stops, and not to content input.  He had meant that the Committee officials could cut and paste the report.

The Chairperson reiterated that he was not against cut and paste, but not at such a late hour. Ms Nyalungu had mentioned that when content had been discussed, Mr Gardee had not been there. The final editing had to be done on that day. Fundamental issues could not be tackled, as that would take up too much time.

Mr Masoeu noted that corruption had been added to fraud and maladministration, under investigations conducted by the Auditor-General (page 8, paragraph 2).

Ms Shope-Sithole remarked that when things were quieter, attention had to be given to the education of rural communities.

Mr McLoughlin noted that the Committee had decided on Treasury measures that would encourage and attract the private sector, rather than encourage and “crowd in” the private sector, as it was still phrased.

Mr Masoeu noted that page 17 drew attention to technical corrections related to the new departments announced by the President. The Appropriations Bill, as first tabled on 26 February 2014, did not take the new departments into account.

Mr Gardee stated that the EFF did not support the Bill.

The Chairperson replied that Mr Gardee could state that in his budget speech, but the Committee was duty bound to adopt the report. The Committee report was not political.  Mr Gardee’s party could state in the House that it did not support the Bill.  His statement would be recorded in the Committee minutes.

Mr Figg asked if the debate on Friday would take the form of only questions and answers. The Chairperson had stated that there would be a chance for parties have their say in speeches.

The Chairperson replied that on Friday 25 July, the consideration of budget reports would be debated. There would be decisions and questions about votes.

Mr Gardee noted that according to his information, item one would be a formal reading, and item two would be a debate. The EFF would be granted eight minutes.  Parties would have two minutes to declare on votes 1 to 38, under item three.

Mr McLoughlin noted that he had received an email the previous Friday which advised that there would be questions and statements.

The Chairperson responded that there would be a 90-minute debate on the second reading. Members had to prepare for the debate.

Mr Gcwabaza suggested that the last paragraph of the report be separated from the conclusion, and included as a recommendation.

Mr Darren Arends, Committee Secretary, responded that the paragraph could be included under recommendations, or in the conclusion.

The Chairperson advised that the paragraph should stand on its own.

Mr McLoughlin stated that the DA reserved the right not to support or reject the report.

The Chairperson asked that it be minuted that the DA reserved the right to neither support nor reject the report. The report was about to become a public document and the Committee had to own it. There would be a two-day strategic planning session in the following week, on 29 and 30 July. All stakeholders who had presented to the Committee would be there.

Mr Shaik Emam asked about the availability of Members in the following week.

Mr Arends replied that the Committee was excused from the House on 30 July.

The Chairperson added that Members could attend the strategic planning session if they were not involved in debates in the House.

Mr McLoughlin asked if the strategic session would be held at Parliament.

Mr Arends replied that it would be held at the Arabella Hotel in Hemanus.

The Chairperson called for adoption of the report.

Mr Gcwabaza moved for adoption, and Mr Shaik Emam seconded.

The Committee report was adopted.

The Chairperson adjourned the meeting.

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