The Committee considered negotiating mandates from provinces on the 2014 Division of Revenue Bill. Support for the Bill was unanimous amongst the nine provinces. There were however some provinces which had made some recommendations. For example The Northern Cape Province had noted that no additional funding to provinces had been made by National Treasury when amalgamation of municipalities had taken place. It was felt that it was a legacy issue and needed to be addressed. Another concern was the erroneous withholding of the Flood Disaster Relief Grant from the Province’s provincial Department of Agriculture, Land Reform & Rural Development which was ascribed to an administrative glitch. Further, only metros received extra funding from the Fuel Levy. Local and district municipalities did not benefit despite the fact that road users in these areas paid the fuel levy as well. The Committee will consider final mandates on 18 November 2014.
Negotiating mandates from provinces on the 2014 Division of Revenue Bill
The Chairperson said that provinces would present their respective negotiating mandates on the Bill to the Committee. If there was no member to represent a province, the Committee Whip Ms Tasneem Motara (ANC, Gauteng) would present the negotiating mandate.
Eastern Cape Province
Mr Xolile Nqatha (ANC) representing the Eastern Cape Provincial Legislature noted that the Eastern Cape Province supported the Bill.
Free State Province
The Chairperson stated that the Free State Province supported the Bill.
Ms Motara said that the Gauteng Province supported the Bill.
In the absence of a delegate from the province, Ms Motara pointed out the KwaZulu-Natal Province supported the Bill.
Mr V Mtileni (EFF, Limpopo) asked that the Committee proceed with other provinces whilst he familiarised himself with the negotiating mandate document of his province.
The Chairperson asked whether he had been present at the briefing in the Province.
Mr Mtileni responded that he had not been present at the briefing.
The Chairperson said that the negotiating mandate document from the Limpopo Province was before the Committee and asked the Committee Whip to present the negotiating mandate on the Bill.
Ms Motara noted that the Limpopo Province supported the Bill.
Mr F Essack (DA, Mpumalanga) said that Gauteng Province supported the Bill.
Northern Cape Province
Mr C De Beer (ANC, Northern Cape) stated that the Northern Cape Province supported the Bill but had some issues on which the provincial legislature had deliberated upon. The observations made were that no mention was made of additional funding to the provinces to assist with the inherited former Kgalagadi Region (John Taolo Gaetsewe) and some areas in Frances Baard. The John Taolo Gaetsewe District was also affected by the amalgamation of municipalities albeit 15 years ago and was never adequately funded by National Treasury. He noted that it was a legacy issue and needed to be addressed.
Another observation was the erroneous withholding of the Flood Disaster Relief Grant from its provincial Department of Agriculture, Land Reform & Rural Development which was ascribed to an administrative glitch. A further observation was that only metros received extra funding from the Fuel Levy. Local and district municipalities did not benefit despite the fact that road users in these areas paid the fuel levy as well.
Recommendations made by the provincial legislature in relation to the aforementioned observations were that funding should be made available to the Province to address challenges that had come with taking over the former Kgalagadi Region (John Taolo Gaetsewe) and some areas in Frances Baard. The demarcation fund had not been sufficient to cover the merger, especially on issues of infrastructure. The erroneous withholding of the Flood Disaster Relief Grant should be rectified in order to assist affected farmers. Lastly National Treasury should ensure that municipalities especially districts should also benefit from the Fuel Levy and not only metros.
North West Province
Mr T Matlashuping (ANC, North West) said that the North West Province supported the Bill but had raised some issues as well.
Western Cape Province
Mr Essack noted that the Western Cape Province supported the Bill and wished that the contents of the attached annexure be noted.
The Chairperson asked National Treasury to respond to the issues raised in the negotiating mandates.
Department response to negotiating mandates
Ms Wendy Fanoe, National Treasury Chief Director: Intergovernmental Policy, responded to the Northern Cape’s concerns. On the issue of additional funding to provinces where municipalities were amalgamated she said that National Treasury would backtrack to see what had taken place and what had been done. Focus should be on areas that had been deprived with the action being that conditional grants should be targeted to them. The National Treasury would provide feedback on this to the Committee. On the flood disaster funds, the simple explanation given was that if funds were received but not spent then the unused funds should be returned. She agreed to do a follow up to check on why funds had not been spent. On the benefits derived from the fuel levy and that the benefit should not only accrue to metros, the benefits derived from the fuel levy were dependent on fuel sales. Metros had huge fuel sales. She nevertheless felt that the Department of Cooperative Governance and Traditional Affairs needed to look at an appropriate role for district municipalities.
She responded to the North West Province concerns. It was pointed out that a follow up by National Treasury with the Department of Cooperative Governance and Traditional Affairs had taken place over the National Disaster Centre. COGTA had done quite a bit of work with the North West Province. She did wish to make it clear that as of the day prior to the present meeting no funds had been requested from National Treasury as yet. The deadline for a request for funds was the end of November 2014. If National Treasury received a request for funding for disaster relief before the deadline, it would processed in the appropriate manner. If however no request for funding for disaster relief from the Province was received by the end of November 2014, there was no cause for alarm as the funding could be provided for in the Division of Revenue Bill 2015.
Mr Essack commented on the fuel levy, noting that Nelspruit had received city status and was the capital of the Mpumalanga Province. Its location made it a hub for interlinking areas. Fuel sales for Nelspruit were consequently high. Why then did Nelspruit not receive part of the proceeds of the fuel levy if high fuel sales were the criteria?
Mr T Matlashuping (ANC, North West) noted that part of the problem was an administrative one which was about a lack of capacity. Officials were lacking in capacity. National Treasury was asked to assist with capacitating officials.
Mr De Beer added that it was the Committee’s responsibility to facilitate engagements between the Financial Fiscal Commission and provinces. He said that this was what was intended in the Northern Cape. Interactions by provinces with the Financial Fiscal Commission once a year was considered not nearly enough. There had to be interaction at least twice a year.
The Chairperson noted that the Limpopo Province had also raised issues in its negotiating mandate. The Limpopo Province noted and acknowledged the amendments on the Bill. It had also made certain findings and recommendations.
He placed all the negotiating mandates from the provinces before the Committee for adoption.
The Committee adopted the negotiating mandates from the provinces.
The Committee adopted the minutes for the committee meetings of 26 August, 24 and 29 October, 7 November 2014.
The Chairperson addressed Committee Staff and asked what the schedule for the Committee was for the remainder of 2014.
The Committee Secretary said that once the meeting was adjourned the Committee Minutes of the meeting would be completed and forward it to all the relevant provinces. Provinces would be interested in the Committee’s adoption of their respective negotiating mandates. The Committee would meet on Tuesday 18 November 2014 to consider the final mandates on the 2014 Division of Revenue Bill and its Committee Report on it. Another Committee meeting scheduled for 26 November 2014.
The Chairperson stated that the management committee of the Committee would still have to meet to consider the Committee’s schedule for 2015.
The meeting was adjourned.
No related documents
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.