Committee Reports on National Treasury, SARS & Statistics South Africa budgets

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Finance Standing Committee

05 May 2015
Chairperson: Mr Y Carrim (ANC)
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Meeting Summary

Observations and recommendations in the report on Statistics South Africa’s Strategic Plan and Annual Performance Plan were presented individually by the Chairperson for Members to consider. The report as a whole was adopted.

Recommendations in the report on the National Treasury and South African Revenue Services Strategic and Annual Performance Plans were presented individually to Members for consideration. The report as a whole was adopted.

The DA reserved its position on both reports. That party submitted that the energy crisis had to receive sustained attention from the Committee.

Meeting report

Committee Report on Statistics SA Strategic / Annual Performance Plans (Budget Vote 12)
The Chairperson presented noted items under Observations and Recommendations for consideration by Members.

The Committee noted that statistics could significantly influence education policy by revealing the circumstances of learners. The Committee agreed with Stats SA that statistics were important for increasing transparency and accountability towards socio-economic transformation. Factual evidence provided by statistics could influence government plans and assist policy makers. Stats SA aimed to find ways of measuring expenditure to GDP by producing a set of coherent and integrated accounts derived from all GDP approaches under one institution. The Committee expressed concern that it had become more difficult to gather certain information. The dissolution of marketing boards in 1995 had made it more difficult to get economic/price statistics, for instance.

The Committee noted that there were significantly fewer Medium Term Strategic Framework (MTSF) indicators than National Development Plan (NDP) indicators, according to Stats SA, and agreed that the gap needed to be narrowed. It recommended that Stats SA raise the matter with the Minister in the Presidency, and the Committee Chairperson would do the same. The Committee believed that information provided by Stats SA was not being used effectively by government, Parliament and other public institutions, including Stats SA. It was recommended that the Minister in the Presidency for Planning, Monitoring and Evaluation and Administration do more to address this. The Committee believed that Stats SA could contribute to ensuring greater synergy across the three spheres of government and public entities in implementing  the NDP. The Committee stressed the need for Stats SA to work more closely with the National Treasury on statistics to ensure that the Division of Revenue Bills were based on the most accurate statistics possible. The Committee expressed regret at the absence of suitably qualified officials with a background in statistics in the three spheres of government, in particular local government. Stats SA and tertiary institutions had to do more to encourage training and appointment of qualified individuals. Stats SA had recommended state-wide statistical reforms  through changes in legislation to support the creation of a coherent national statistics system to promote planning. The Committee supported the need for legislative changes in principle, but its views on specific amendments would only be decided when amendments were brought to it. The Committee had noted in its 2015 Budget Review and Recommendations Report that it believed that government had to make a decision on which ministry Stats SA should fall under – the National Treasury or the Department of Planning, Monitoring and Evaluation in the Presidency. The Committee believed that it had to be the latter. The Chairperson was mandated to take this matter forward, including with the House Chair on Committees.

The Committee adopted the report.

Committee Report: National Treasury & SARS Strategic / Annual Performance Plans (Budget Vote 7)
The Chairperson presented individual items under Recommendations for the Committee to consider.

Recommendations—National Treasury
The Committee recognised that the 2015/16 budget was tabled under difficult circumstances, and National Treasury had to make significant adjustments in terms of the fiscal policy stance of government. The Committee would more actively monitor Treasury performance through its review of quarterly reports. The Committee welcomed greater synergy between the NDP and the Department’s budget. It would be regularly monitored. Concern was expressed about the divisions in Eskom and the impact that could have on economic growth targets. It was believed that Treasury had to play a more effective role in Cabinet’s “War Room” that dealt with Eskom challenges. The Committee believed that government was not managing its communication on the energy challenges well. Treasury needed to raise that matter in “War Room” meetings. It was noted that the Treasury intended to allocate a first tranche of R9 billion, of a total R23 billion, to Eskom in June. The Committee drew attention to its 2014 Fiscal Framework Report to the effect that Eskom needed to be very clear about criteria  used to define non-strategic assets and the terms of sale of those. Treasury had to ensure that sales of non-strategic assets did not lead to job losses or other unintended consequences that could undermine economic growth and development. The Committee welcomed Treasury's focus on strengthening government financial management by accelerating the deployment of integrated financial systems to all government departments. It also welcomed the Office of the Chief Procurement Officer’s modernising of government procurement through developing a centralised supplier database. The Committee noted that there were far too many different pension funds at the local government level. There had to be rationalisation. The Committee welcomed the decision to launch the Brazil, Russia, India, China and South Africa (BRICS) New Development Bank. It was believed that the NDB had to over time operate with a far more developmental and inequality-reducing approach than the World Bank and the IMF. National Treasury had to cooperate with provincial departments of finance and the South African Local Government Association (Salga) to monitor cost-containment at provincial and local government levels. The Committee had noted in its 2014 Budget Review and Recommendations Report that Treasury had to work with the Department of Cooperative Governance to ensure that the increasing number of people owning huge properties in rural areas were subject to rates.

Recommendations—South African Revenue Service (SARS)
The Committee welcomed the significant improvement in taxpayer compliance over the preceding years, and would monitor progress in that regard. The Committee believed that SARS needed to develop its capacity to deal with base erosion and profit shifting. The Committee noted that SARS was to establish  small business desks to support small business compliance, and would require a progress report. It was recommended that there be enough funds for baggage scanners to be procured for Beit Bridge and other border posts. SARS had to provide the Committee with a comprehensive Human Resource report in terms of the age analysis of its personnel. There had to be a proper succession plan. Concern was expressed about divisions within SARS. There had to be a complementary division of labour between the Joint Standing Committee on Intelligence (JSCI) and the Finance Standing Committee to process matters. The JSCI would deal with legal issues related to the role of the SARS intelligence unit, and the Sikhakhane  and Intelligence General’s reports. The Finance Standing Committee would deal with the possible effect of the exit of senior managers on SARS performance and credibility, and the role of the Judge Kroon Commission in that regard. The Committee believed that there had to be an amicable settlement of divisions.

The Committee adopted the report. The DA reserved its position on the report.

Mr D Ross (DA) urged that the energy crisis receive the sustained attention of the Committee.

The Chairperson adjourned the meeting.

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