2016 MTBPS: Parliamentary Budget Office briefing

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Finance Standing Committee

01 November 2016
Chairperson: Mr Y Carrim, Standing Committee on Finance (ANC), Ms Y Phosa, Standing Committee on Appropriations (ANC), Mr CJ De Beer, Select Committee on Finance (ANC), Mr SJ Mohai, Select Committee on Appropriations (ANC)
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Meeting Summary

The PBO presented its MTBPS analysis to the four Committees. It gave members highlights from the Ministers MTBPS speech and some highlights included stabilising debt as a share of Gross Domestic Product (GDP), stimulating growth, increasing revenue growth and creating more government efficiency. PBO gave an outline of reprioritisation to take place which was mainly towards the National Student Financial Aid Scheme (NSFAS), and local government equitable share. Additional allocations were proposed for post school education, health services and social protection. Some projections made were that measured and balanced fiscal consolidation would continue over the period ahead, with the budget deficit declining from 3.4% this year to 2.5% in 2019/20. Debt was also projected to stabilise at just less than 48% of GDP.

PBO focused on the revised growth forecast of the country and noted that economic growth was key to avoid a ratings downgrade. The impact of a downgrade may increase debt costs and the MTBPS linked a possible credit ratings downgrade to capital flight, rapid exchange rate depreciation and a spike in interest rates resulting in lower growth outcomes. PBO highlighted that National Treasury assumed household consumption and private investment would drive growth and government had to consider stimulating the economy through increased targeted spending and infrastructure investment.

PBO also noted that contingent liabilities presented a significant risk to public finances according to the MTBPS. In the event that an entity such as Eskom or the Road Accident Fund was not able to service a guaranteed obligation, government was obliged to step in. When provisions and contingent liabilities were added to net debt, the country’s balance sheet position deteriorates increasing to about 70% over the Medium Term Expenditure Framework (MTEF) from 46%. A lot of focus from the MTBPS was also on post-School Education and Training System (PSET). These allocations were expected to grow on average by 9.2% over the medium term. However, this was still below the average growth of 11.4% between 2012/13 and 2015/16. The MTBPS announced additional allocation over the medium term to also cover government commitments of 8% for Higher Education to receive the highest proportion of PSET budget allocation over the years. However, both funding allocation for student support and student enrolments remained below government targets. It was therefore necessary that the rationale behind the budget allocation be aligned to government enrolment targets or the enrolment targets be aligned to budget allocation in the PSET. With regards to cost containment measures, PBO noted that total spending on goods and services grew by 2% in real terms since the introduction of cost containment measures, mainly driven by strong growth in spending on maintenance of government infrastructure and equipment.

The MTBPS suggested that not all budgetary needs could be funded and there were going to have to be some trade-offs. There was a need to balance economic and social objectives as well as short-term and long-term objectives. The effect of spending on the economy and employment differed according to sectors and as a result expenditure reviews questioned governments’ effectiveness.

Members questioned the methodology used by the PBO to do its forecasts and also if it found National Treasury’s forecast the most accurate. They complimented PBO on its proposed amendments to the Appropriations Bill and a member from the DA said it would be proposing extensive amendments as well to support National Treasury to stop wasteful expenditure. They were concerned about the possibility of a credit ratings downgrade and felt it was important to have measures in place to mitigate against it. Agriculture and Economic Affairs did not get enough allocation as opposed to Education and Health. However, poverty had created a lot of health challenges and some members felt that the National Health Insurance (NHI) was not allocated enough funding. The huge amounts going towards the leasing of buildings by government was a great concern as a discussion was needed to look at purchasing versus leasing buildings. Members were also worried about Human Settlements and the fact that it would take 30 years to eradicate the estimated backlog of 2 million housing units at a cost of R600 billion. Overall, members felt that it was important to make the proposed amendments to the relevant legislation which would enable an increase in service delivery to the most marginalised persons in the country and allow services to reach people it had not reached before. 

Meeting report

Chairperson De Beer noted apologies from Chairperson Mohai and Chairperson Phosa who was unable to attend the meeting.

Briefing by the Parliamentary Budget Office (PBO)


Prof Mohammed Jahed said the PBO had taken a different approach to the presentation as a result of consultations with Chairpersons of the Finance and Appropriations Committees and its members with regards to what it was they wanted PBO to present. In addition to highlighting and responding to what the Minister of Finance and Treasury had presented in its MTBPS, a key aspect to highlight was around issues of allocation efficiency and effectiveness as well as reprioritisation. The PBO looked at the fiscal framework and whether there was alignment on focus of critical objectives. He wanted the presentation to provide guidance to members around resource allocation. Equity issues was also important and resource allocation. Potential areas for reprioritisation would come out of the presentation such as economic growth and employment creation.

Ms Nelia Orlandi, Deputy Director Policy, PBO, gave members a background to the presentation. She said this time it took the highlights from the Minister of Finances’ speech and was trying to respond to those highlights. Fiscal policy still focused on the stabilizing of debt, stimulating growth, increased revenue collection and efficiency. In terms of efficiency, there were two things PBO focused on namely introducing the expenditure ceiling and introducing efficiency measures.

She said the Minister focused on the reprioritisation of R9 billion for the NSFAS, a supplementary R1 billion for the local government equitable share in 2018/19 and R45 billion to promote industrialisation, economic transformation and sustainable resource management. Infrastructure investment would be over R900 billion over the next three years, mainly in energy, transport and telecommunications. The PBO analysis was based on these highlights raised by the Minister but it also added other instances for members’ consideration.

Mr Seeraj Mohamed, Deputy Director: Economics, PBO, shared the revised growth forecast. He indicated a downward turn from 2013/14 to 2015/16. But the revised forecasts showed poor levels of growth. In PBO’s pre-MTBPS analysis as well as the Ministers’ MTBPS, the framing of the issues around the financial crisis that South Africa had in 2007/2008 was still important. He said the key issue in the MTBPS was how to get to growth and that the MTBPS said there was a need to maintain fiscal consolidation. The concern was about avoiding a downgrade so that South Africa could have growth that was based on household consumption increases and private sector investment growth. He stressed that the future levels of household consumption and private investment were not controlled by Government. He suggested that Government consider a prudent increase to Government expenditure and investment, which are controlled by Government, above the levels proposed in the MTBPS. He said by increasing spending in areas where Government controls spending levels there would be a better chance of ensuring growth than relying on possible increases in private household consumption and investment. He reiterated that the issue of the downgrade looming was an issue that should be taken seriously.

The MTBPS linked a possible credit ratings downgrade to capital flight, rapid exchange rate depreciation and a spike in interest rates resulting in lower growth outcomes. South Africa had experienced these types of events (such as capital flight, depreciation etc..) a few times since the 1990’s and this was not precipitated by downgrades but rather by global events. Many commentators from the media especially had been saying that markets had already been acting on a possible downgrade and that was something that had to be considered as well. Economic growth was key to avoid a ratings downgrade and to realise South Africa’s fiscal objectives. Therefore government had to consider stimulating growth through increasing targeted spending and infrastructure investment. Household consumption contributed 60% to GDP and government spending could be used to stimulate household consumption and target infrastructure investment.

Mr Mohamed went through multipliers for growth and employment in the public as well as private sector. Looking at the consolidation path, the 2016 MTBPS outlined a more gradual consolidation path than what had been presented in the 2016 Budget Review. The level of spending over the next three years was expected to be slower. Similarly for revenue, there had been downward revisions to estimates over the medium-term. The increase in the anticipated budget deficits was the result of the revenue estimated falling by a greater amount than the expenditure estimated. He said in response to rising debt and slow growth, credit ratings agencies have downwardly revised South Africa’s long-term foreign currency rating. In response to potential downgrade and the country’s foreign currency credit ratings, the 2016 MTBPS sought to stabilise the debt level as a share of GDP over the MTEF. Net debt was now expected to increase from 44.3% of GDP in 2015/16 to 46.2% in 2018/19. This was higher than was presented in the 2016 Budget. He explained that worsened debt outlook was due to higher projected debt stock as well as downwardly revised growth forecasts. Contingent liabilities presented significant risk to public finances. In the event that a State Owned Entity (SOE) was not able to service a guaranteed obligation, government was obliged to step in. The likelihood of contingency liabilities being called on varied according to the type of contingency liability and entity concerned.

He highlighted that National Treasury had taken several steps to improve the composition of the country’s debt and mitigated these risks. It included:

(a) Currency risk: Maintaining a small share of debt dominated in foreign currency, presently at 9.9%. Given the volatility of the Rand, this limited the unpredictable foreign currency commitments arising from exchange rate volatility

(b) Refinancing risk: Placing a limit of 15% on short-term (money market) debt. As short term debt required significant and frequent financing, it increased uncertainty regarding the annual financing costs. Treasury had also set a limit on long-term debt maturing within five years (25% of total debt)

(c) Inflation risk: Keeping Inflation Linked Bonds (ILB’s) within the range of 20% to 25% of domestic debt. Interest paid by government on ILB’s increased with inflation. If inflation was considerably higher-than-expected, governments’ financing costs would also be higher


Ms Orlandi continued the presentation by explaining expenditure growth trends and where government had prioritized. She said when there was a reprioritisation of funding, there would always be “winners and losers”, because funds were taken from the one and given to the other. The “winners” in the new MTEF were Health, Higher Education and Training, Human Settlements, General Public Services and Social Protection. Some “losers” were Basic Education, Defence and Economic Affairs.

She said that if the Committees wanted to propose any changes to the budget or reprioritisation, PBO provided some guiding criteria. There were dimensions of the budget that needed to be considered as well as efficiency and effectiveness. Treasury had done a review and published a few of those outcomes already. The historic trends had to be considered as well as multipliers and the benefits thereof. The four dimensions of the budget included:

(1) The principle of function budgeting which clustered institutional activities and resource allocation around policy objectives or outcomes

(2) The economic allocation of spending, which balanced resources between the purchase of inputs such as human capacity (compensation), physical assets (capital spending) or goods and services

(3) The Constitution required that resources were shared equitably between the spheres of government. The budget included a process of intergovernmental fiscal planning through which national, provincial and local government cooperated to design intergovernmental fiscal instruments and allocated resources towards common objectives

(4) A consolidated budget approach to public finances integrated departmental budgets of national and provincial government with the financing of agencies, entities and other institutions that were largely funded by the fiscus.


Ms Orlandi gave an outline of the efficiency cost containment measures. Total spending on goods and services had grown by 2% in real terms since the introduction of the cost containment measures. One example was catering, entertainment and venue rental. The amount had increased but at -5.0% of inflation. One area of concern was with leases of buildings and infrastructure where government had spent R11 million showing an annual real growth of 9.3% from 2012/13 to 2015/16 which raised the question whether government should be buying or leasing buildings and infrastructure.

On effectiveness, she gave three public expenditure reviews done by National Treasury. On Housing and the Human Settlements Development Grant, it was found that it would take 30 years to eradicate the estimated backlog of 2 million housing units. An intervention for this was shifting the Human Settlement Development Grant to the Social Housing Regulatory Authority. In terms of Water and Sanitation, it had weak revenue management, failure to bill consumers, low payment levels, ineffective debt collection and it was found that repairs, maintenance and refurbishment could realise an additional R800 million per year for municipalities studied. An intervention for this was to add R1 billion to the local government equitable share for above inflation increases and household growth. Funds were also shifted to establish water catchment agencies. With regards to TVET, government funded over 85% of them but the throughput rate for the National Certificate Vocational was 1 out of 10 (2013) yet government was still giving additional funding to subsidise fee increases. Another two areas identified for effectiveness was the employment tax and learnership tax incentives. National Treasury would still conduct studies to evaluate the effectiveness of both these incentives but has expanded the timeframes for these incentives because it didn’t have enough data at this stage to do an evaluation.

She then went through the changes to the Division of Revenue Act which indicated that the main allocation to national government was reduced by R5.4 billion. An amount of R1.3 billion was declared unspent of which R243.3 million was from Compensation of Employees. Home Affairs had R45 million unspent, as well as R20 million for leave gratuities and R12 million for goods and services. Planning, Monitoring and Evaluation had R30 million unspent, Water and Sanitation had R62 million unspent and R65 million reallocated.

On the adjusted Appropriation Bill, there were specific virements which may only be approved by the legislature. Some examples were:

(1) Adjustment to personnel remuneration from cost containment (Vote 7)

(2) Vacant post to fund foreign government programmes (Vote 24)

(3) Vacant posts to fund goods and services, etc. (Votes 5, 20, 28, 36, etc.)

(4) Reallocation of funds from energy project to fund performance bonuses (Vote 33)


Also, the reallocation of cell phone contracts should affect all departments not only one and the reallocation of savings due to cost containment measures should be for travel and accommodation for ministerial outreach (Vote 17), vehicles for judges and vehicles for the Minister (Vote 34). It was important to ask the question why was cost containment in place, if it was to reduce the deficit or to fund other areas of departmental needs.


Dr Dumisani Jantjies, Deputy Director: Finance, PBO, spoke about the Post-School Education and Training System (PSET). There were four categories of PSET namely Higher Education (HE), Technical and Vocational Education and Training (TVET), Adult Education and Training (AET) and Community Education and Training (CET) colleges. Allocation for PSET took into account both subsidies to institutions and support for tuition fees for poor students as determined by NSFAS. PSET allocations were expected to grow on average by 9.2% over the medium term. However, there was still below the average growth of 11.4% between 2012/13 and 2015/16.


He noted that the 2016 MTBPS announced additional allocation for PSET to also cover government commitment of 8% HE continued to receive the highest proportion of PSET budget allocation over the years. However, both funding allocation for student support and student enrolments remained below government targets, for example, government student funding support targeted to cover around 25% of student enrolment, but only around 17% was covered in 2015/16 financial year. He explained that TVET continued to receive the lower proportion of PSET budget allocation over the years. In contrast, both student enrolments and funding support for students were within government targets. Student funding support significantly exceeded the targets by almost 50%. It was therefore necessary that the rationale behind the budget allocation be aligned to government enrolment targets or the enrolment targets be aligned to budget allocation in the PSET system.




Mr D Maynier (DA) noted that in the introduction to the presentation, Prof Jahed said that the PBO would be doing something different. He wanted to know what it was that other PBO’s did. He asked whether the PBO forecast audit found National Treasury’s growth forecast to be the most accurate as presented on slide 6 of the presentation. Did PBO have its own forecast model and if so what was the forecast model? He wanted clarity also on slide 6 of the presentation where PBO noted government had to consider stimulating the economy through increasing targeted spending. He complimented PBO on its proposed amendments to the Appropriations Bill and said that the DA would be proposing extensive amendments as well to support National Treasury to stop wasteful expenditure. He said it was not surprising that the biggest spenders were the “boardroom communists” in the Cabinet who were buying themselves and allocating themselves millions for ministerial cars.

Prof Jahed replied that South Africa had already indicated what its PBO would do through the Money Bills Act. There were also international experiences and there were no “one size fits all”. South Africa had a conference where international and African PBO’s were present and some PBO’s had 2000 staff providing technical support to each member of its parliament. The Canadian PBO was around 20 staff members and all they did was revenue and expenditure forecasting. In South Africa the PBO was adapted to the current situation. It was a very difficult process but the building block in the legislature was the Committee structure. The PBO was a small team of 6 people who were trying to service the four Committees of Finance and Appropriation which was still a difficult task. Most work was demand driven; PBO could provide the Committee with information but could not give recommendations. 

Mr Rashaad Amra, Economist, PBO said that it did not do its own forecast but evaluated the forecast made by National Treasury and compared it to forecasts made by other institutions like the Bureau for Economic Research in Stellenbosch, the International Monetary Fund (IMF) and World Bank. It was important to note that all forecasts are inherently wrong. A methodology paper was also distributed to members where PBO indicated what the methodology entailed and why it chose that specific methodology. PBO found National Treasury to be the most accurate on the half year horizon, one year horizon and the two year horizon. There was also no biasness found in National Treasury’s forecasts.

The Chairperson Mr De Beer said that responsibility rested with every Committee in Parliament and every Member of Parliament who belonged to a Select or Portfolio Committee and not just the Finance Committees and not just with National Treasury.

Mr A Lees (DA) said that he agreed with PBO that the consequences of a downgrade should be considered. Did PBO have any suggestions as to what the consequences could be and what mitigating steps government could take? He wanted PBO to explain the relationship between debt and contingent liabilities. He wanted clarity on the actual figure of under-expenditure by Water and Sanitation.

Ms Orlandi explained that the figure on Water and Sanitation was only for Compensation of Employees and Water and Sanitation declared R62 million unspent but there was another R65 million that was reallocated within their budget.

Mr A McLaughlin (DA) said on slide 5 there was a continuing trend which was getting worse and wondered whether it was not a concern. National Treasury had a tendency to look at the bright side and not face reality.  Slide 6 noted an impact of a possible downgrade, but was there any scenario where a downgrade did not affect debt cost? How could it be that household consumption was to drive growth? PBO also noted that government had to increase targeted spending and infrastructure investment. How could government not be doing that as it should be doing exactly that? On slide 8 of PBO’s presentation it gave a scenario if things went pear shaped, 70% would be committed to GDP. If things went bad, were there any current contingencies in place? On slide 14 PBO referred to accumulated surplus funds. Were they real funds, actual money or a just a book entry?  A lot of entities liked to use depreciation to balance books. On slide 16 with regards to efficiency and cost containment, he did not understand. What was the actual savings on average of 2%? Was it on the value? If so there would not be any savings.

Ms Orlandi replied that the accumulated surplus funds was in the budget review of 2016 and National Treasury had a whole list of institutions that it had already identified where there was accumulated surplus funds. One of them was the Unemployment Insurance Fund (UIF) and the question was how to get that money out for reallocation.  

Chairperson De Beer noted in terms of forecast of National Treasury, it was important as Committees to engage with quarterly reports of South African Reserve Bank (SARB) and National Treasury and not just ask questions now but on a quarterly basis as well.

Ms T Tobias (ANC) said that the policy engagements PBO raised needed clarity. The way the presentation made suggested that Agriculture and Economic Affairs did not get enough allocation as opposed to Education and Health. Poverty had created a lot of health challenges and she felt that the NHI was not allocated enough and should have allocated more. She was raising these points from a political perspective.  Household consumption would spark growth but actually the retail sector has grown so it contradicted that. She wanted clarity as to what the inefficiencies were that was seen in budget. Issues that needed to be addressed by other committee were around learnerships and internships to relook job creation projects and revisit in these figures in three months in order to assess the impact thereof. She suggested that the Committees meet with other Committees involved with Votes 7 and 12 to discuss cost containment measures.

Prof Jahed agreed that the budget was limited and it was important for government to look at policy issues. Education and Health was the biggest and within that Compensation for Employees such as doctors, nurses and teachers.

Dr Jantjies explained that PBO was not saying allocations should not be for Health and Education but governments’ efficiency played a role in how effective allocations would be.

Mr M Figg (DA) said the Minster had spoken about tax to be increased and he felt that this would put further burden on household income. With the forecast given, should expenditure not be adjusted to the fall in revenue? He wanted clarity on slide 9, and wanted to know if the risk on guarantees were the only ones listed? On slide 14 with regards to accumulates surplus, were these unspent funds traded off or saved as a result of favourable buying?

Mr P Mabe (ANC) said the figure of R11 billion on leave payments on slide 16 was worrying. Was this a recurring figure? There should have been some measures to mitigate against this as it did not reflect the country’s’ developmental agenda.

Mr O Terblanche (DA) said that according to his knowledge capital budgets were ring-fenced budgets. He was amazed to learn that people got paid bonuses from that budget. He wanted clarity on this issue?

Ms Orlandi said she was using this as a small example such as if the Department could not buy an item it would spend it for a performance bonus. There was one example in the Division of Revenue Bill where that had happened. However, it was not very common.

Mr A Shaik Emam (NFP) asked which the contingent liabilities risks PBO was referring to were. He also wanted clarity on the TVET colleges as 85 % was government funding and the 1 out of 10 rate referred to. Debt was rising and it was only a matter of time. Human Settlements would take 30 years to erase its backlog but was this taking into consideration increase in demand?

Mr Mohamed said with relation to debt and debt levels, with the MTBPS  and the general government growth in fixed capital formation increased more than the growth in debt and it was a positive thing in the sense that taking its own debt as partly funding was the ability for government. Therefore spending should be targeted on household spending and infrastructure investment and this was related to the literature on fiscal policy especially during the periods of quantitative easing and the success of monetary policy when trying to stimulate the developing countries. What countries were doing on the fiscal side was to use quantitative easing as a main tool but was using fiscal policy in discreet and much targeted means.

Dr Jantjies added that TVET colleges were primarily funded through government. This was in line with governments’ objective to get skills and offer training for communities. The throughput was quite low in TVET in contrast to the contribution from government.

Ms Orlandi said that with regards to cost containment PBO had indicated that some of the items grew slower than inflation. She just wanted to focus member’s attention on the high amounts that grew above inflation.  

Mr N Gcwabaza (ANC) wanted to know on slide 6 with regards to targeted spending, whether PBO was suggesting to look at the priorities of government and whether this would inform spending? He felt that Higher Education was throwing money into a problem but it did not solve the problem. Issues of funding PSET needed more considering. Institutions such as universities had a serious challenge with throughput and did not get desired outcomes. Parliament should be cautious to throw money into free education. He was not suggesting it should not be taken seriously but everything should be costed.

Dr Jantjies agreed that the level of throughput was concerning but emphasised that the figure presented was at 2013. It had been updated since. The Department of Education would have those updated figures and there had been an indication of improvement.

Mr N Kwankwa (UDM) said he was worried about debt management issues of the country. What was happening currently when it came to contingent liabilities? On slide 11, with regards to Compensation of Employees, what was international best practice? He wanted to give some recommendations and felt that government was wasting money on leasing buildings. He also wanted to know whether PBO had done any evaluations into the effectiveness of tax incentives.

Mr Amra referred Mr Kwankwa to a document released the previous month by National Treasury looking at a review of debt. It was important to note the shift in the composition of debt over time. Exposure to inflation was moderated and at the same time exposure to currency risks. National government debt was well managed and South Africa received an accolade on best managed debt in sub-Saharan Africa. However, managing government debt was only part of the sovereign responsibility. 

Ms D Mahlangu (ANC) felt that the private sector was not investing. A global discussion was needed, to talk clearly about it, as the whole world was worried about the lack of private investment. She was worried about ratings agency as it was unpredictable. Ratings agencies was not helping SA as a country. She suggested to move parliament to Gauteng for more cost saving.

Mr Mohamed replied that a change in the global environment could cause a downward push on GDP including in South Africa that then could lead to a credit downgrading not only based on the things happening in South Africa. The experience of what the MTBPS put on the outcomes of the credit ratings as a result of the global financial crisis in the following years was negative, but the years following it South Africa recovered. Therefore government had to think more carefully about what the impacts could be. There was a lot of uncertainty about the impact of a credit downgrade but it would be best to steer away from it.

Mr Amra explained that PBO had divided the contingent liabilities into blocks of 10%. Why it was important to not look at the size of net debt and contingent liabilities was because there was a risk that contingent liabilities, specifically debt guarantees, posed to the fiscus and public finances in general. If looking at entities such as the Road Accident Fund or SANRAL and if it defaulted, government had to step in because it had exposure to these contingent liabilities particularly guarantees. Currently, government only had exposure to 55% of total contingent liabilities. Moody’s recently downgraded a number of SOE’s including Eskom, Development Bank of South Africa (DBSA) and the Independent Electoral Commission (IEC) and noted in its recent statement that this posed a risk to South Africa’s credit rating.

Mr BR Topham (DA) asked if it was possible to obtain a report on the NSFAS debt and whether it could be collected by the South African Revenue Services (SARS) according to best international practices.

Dr Jantjies said there had been improvement in the functioning of NSFAS. The collaboration with SARS was in the pipeline and now beginning to go into its final stages to expedite the debt collection. It was however a complicated situation as some students was unemployed after their studies and some were still students. But the situation had been improving. 

Chairperson De Beer noted that more than 93 COE’s formed a CEO initiative to assist government. It was important for members to go back to their constituencies to explain MTBPS to people and bring feedback to parliament.

Prof Jahed said that it was important to be clear about the macroeconomic objectives as a country. One budget did not address all needs and issues and therefore it was spread out over the 5 year MTEF. Experts and academics had the tendency to comment on one budget as if it was the beginning and the end. Other countries had longer term budgets over 10 to 20 years. This took countries away from short term goals and objectives. Within one budget government had to reprioritise accordingly based on the needs of the country.

Ms Tobias said suggested that the Committee receive the report on the forecast methodology used by PBO. She felt there were no savings in the economy as a lot of consumers were indebted used credit cards and other methods because of poverty.  

Chairperson De Beer said that the finance Minister made it very clear in his MTBPS speech that government would not neglect its responsibility to look after the poor. The social responsibility was still with government and that was an ANC position.

Chairperson Carrim said in previous meetings it was a concern that as Committees it needed better quality input from the PBO. He noted that PBO made significant progress in trying to present information to a range of members where some were new to the Committees. He felt that the PBO team was quite young and still growing. Things were pretty tough for the country economically and government should not try to be oblivious to it and try to spin things. He agreed with the Minister that it was up to government to make a difference and felt that everyone could play a role especially those in the Committees in their oversight roles. In any democracy, one could understand that opposition parties were fighting. In South Africa there was huge inequalities and racial polarisation, however people who should avoid bringing down the country. He was concerned that R600 billion was “laying around” waiting to be used and a discussion was needed as to what had to be done. He believed that the cost containment measures by government was not effective but rather it was about “internalising a culture” of responsible spending. It mattered very much that government was able to save on its spending patterns. He appreciated the way PBO presented the four dimensions of the budget. He highlighted that the four Committees should consider altering the Money Bills Act as soon as January 2017

The meeting was adjourned. 

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