Municipal Finance Management Bill: deliberations

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Finance Standing Committee

03 September 2002
Chairperson: Ms Hogan (ANC)
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Meeting Summary

The Committee was due to discuss the second draft of Chapter ten but discussion on the Municipal Finance Management Bill was suspended until next quarter. During this time Treasury has to put together a composite Bill and make it available to Members so that they are able to consult. A meeting is scheduled to take place on Tuesday, 10 September 2002, to discuss proposed changes to Chapter eleven.

Meeting report

National Treasury was represented by Mr Momoniat (Deputy Director-General) and Mr Pillay.

The Chairperson started off by saying that the Committee had looked at Chapters 1 - 8. In this session Chapter 9 and 10 would be dealt with. She asked Treasury when a composite Bill would be available.

Mr Momoniat advised that that he had just received the first ten Chapters from Adv Growe and it would take about three days to go through it. He informed the Committee that a clause by clause analysis could be done for the latest on Monday or Tuesday of the following week.

The Chairperson went through the Committee programme and said that deliberations on the Bill are scheduled for Tuesday, 10 September, Wednesday, 11 and Friday, 13 September. Further, the Bill had to be finalised by the following Wednesday. She added that if the composite Bill was not ready there was no point in meeting the following Tuesday. The programme would be sorted out accordingly as the Bill must be through the National Assembly by the end of September.

Mayor Nkosi (SALGA) indicated that a timetable for the implementation of the Bill has not yet been forthcoming from Treasury. Secondly he submitted that Chapter 11 on Financial Emergencies has to be deleted from the Bill. SALGA proposed that the Intergovernmental Fiscal Relations Act (IGFRA) be amended instead. The rationale was that the issue is not financial emergency but rather co-operative governance.

The Chairperson asked for the details of the proposal so that the Committee could look at it.

Mr Momoniat said that the timetable for implementation can be looked at after the process has been complete and the Bill has been agreed to.

Ms Borman (DP) wanted clarity that the Committee would still look at Chapters 1 - 8 because there were changes that still needed to be made.

The Chairperson replied that those Chapters would be revisited when the composite Bill - i.e. the third draft - is before the Committee.

Mr Momoniat said that Chapters 1-8 and Chapter 10 would be ready on Monday.

Ms Taljaard (DP) commented that there may be constitutional issues that arise out of the redraft of Chapters 1 - 8 and wanted clarity on the process forward in that regard.

Mr Momoniat replied that treasury would do a constitutional audit against the final draft.

Ms Hogan added that Adv Trengrove will look at the constitutional amendment and Chapter 11.

Ms Smith (IFP) was still concerned about the consistency between the MFM Bill and the Systems/Structures Act.

Mr Momoniat replied that Treasury will come with clear proposals on the consistency issue. One of he reasons for Adv Growe's delay is that he is looking at the consistency between the pieces of legislation and also considering possible changes to the Systems Act. He added that the Department of Provincial and Local Government (DPLG) will be consulted after the final draft has been completed.

The Chairperson summarised the issues. She said that Chapter 11 has to be looked at by the Committee. Secondly, there has to be enough time for consultation on the third draft but not to the extent that old issues that have been discussed will drag the Committee back too far. Thirdly, the Chairperson felt that SALGA had made a major submission and that their proposal concerning the possible amendments to the IGFRA should be given to the Committee as soon as possible. Fourthly, the consistency issue has to be sorted out. The Chairperson proposed that the Committee not sit on Tuesday and maybe Wednesday of next week. Then the next sitting would be Friday, 13 September. This would provide the necessary consultation time. She proposed further that the Committee obtain permission to sit during the week of 16 September in the afternoon and possibly in recess.

Mr Carrim (ANC) commented that a minimum of 48 hours will be needed to look at the composite Bill and study groups should be formed to facilitate the process. In respect of the consistency issue he said that DPLG and Treasury must sort it out amongst themselves and not burden the Committee with what is essentially their job. If they could not reach consensus then the Committee could decide. He was in agreement that Friday, 13 September should be the next time the Committee meets on the MFM Bill.

Ms Taljaard wanted clarity as to when the Committee can expect to receive the composite Bill because it was vital to consultation that Members have the complete Bill.

Mr Momoniat replied that Chapter 11 might not be in the Bill because it was dependent on whether the constitutional amendment is processed in time. He added that Chapter 11 could be inserted during the NCOP process.

The Chairperson said that she would have to check with the Chairperson of the Justice Portfolio Committee on their schedule. She advised that she would be meeting with the Chairperson during lunch.

Mr Carrim preferred not to sit during recess.

The Chairperson replied that recess might be needed because the pressure on the Finance Committee to finish its legislation was starting to build. She advise that she was just informed that there has been a programme change and Finance Members would be needed in the house on Friday, 13 September, to debate the Collective Schemes Investment Bill. It therefore seems as if there will be no Committee meeting on that day.

Mr Momoniat advised that Chapter 9 would also not be ready in the composite Bill.

Ms Taljaard replied that it was a crucial Chapter and would be needed for consultation.

Ms Hogan agreed with the member but also appreciated the problems National Treasury has been experiencing. She said it was a complex Bill and that the Committee raised many issues that Treasury needed to attend to. At the same time it was important that Chapter nine is complete and the Chairperson said that the Bill might have to be pushed back to next quarter and the Committee start doing other work for the remainder of this quarter. She asked that the Committee now proceed with the discussion on Chapter 10.

Mr Momoniat said that Chapter ten as tabled was clumsily drafted and the redraft has fixed that up. In previous discussions the Committee was in favour of public accounts type committees to be set up at local level. Mr Momoniat said that they had problems in that regard because legislation could not dictate the internal arrangements of local government. The new Auditor-General Bill would be a good place to deal with this but the timing of the Bill could not be resolved. The MFM Bill would therefore contain guidelines that the municipality could choose to implement.

The Committee looked at the first three clauses in Chapter 10, viz. Clauses 67, 68 and 69 whereafter the Chairperson adjourned the meeting to meet with the Chairperson.

At the resumption of the meeting the Chairperson proposed that the Committee not meet on the MFM Bill for the next two weeks and that the process continue only after recess. This will give Members the opportunity to consult on the Final Bill.

Secondly, she said that the constitutional amendment was going through the Justice Committee. She advised that Adv De Lange - Chairperson of Justice - was concerned about the constitutionality of Chapter 11 as it stands. She proposed that the Committee meet on Tuesday 10 September to look at Chapter 11 with the revised amendments that is going to be proposed at the meeting. She also asked for SALGA's submission on the amendment to the IGFRA.

Finally, she advised that there was no point in continuing with the discussion on Chapter 10 because nothing was accomplished during the brief discussion as the Committee was going around in circles. She said the absence of Adv Growe does not contribute to a sensible process.

After tabling these proposals the Chairperson asked for the members comments.

Ms Taljaard thought it was a sensible way forward because the whole Bill is needed to reach an informed opinion.

SALGA was also happy with the approach.

Mr Carrim said that when the Committee looks at the Bill again in the first week of the last quarter, Adv Growe must be present. He also suggested that technical committees be set up to look at the constitutional issues, other than those contained in Chapter 11.

The Chairperson agreed with the suggestion. She informed the Committee that Justice would be meeting to process the constitutional amendment on Thursday, 5 and Friday, 6 September and then on Wednesday 11 September. Tuesday, 10 September would then be open for Finance to meet to look at Chapter 11. Depending on the amount of discussion generated by the constitutional amendment the Chairperson advised that the16-18 September could also be used for further meetings.

The Chairperson adjourned the meeting.


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