Committee Report on Fiscal Framework and Revenue Proposals

NCOP Finance

07 March 2017
Chairperson: Mr C De Beer (ANC; Northern Cape)
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Meeting Summary

The Select Committee on Finance discussed the report on the 2017 fiscal framework and revenue proposals. The Committee did not deliberate on the report itself but simply noted that the report was of a high quality. In addition, they took note of the recent changes made by the Standing Committee, which were few and technical in nature. The committee adopted the report while noting that the DA was opposed to certain paragraphs in the report. 

Meeting report

Committee report on the Fiscal Framework and Revenue Proposals
The Chairperson explained that the Committee was in the midst of what can be called “phase 1” of the budget process which should be completed by the end of the week. The work done by the Committee is done in cooperation with the Standing Committee on Finance. There had been briefings by the Minister, sessions with the Parliamentary Budget Office, Financial and Fiscal Commission and replies by National Treasury.  Today the meeting would involve looking at the report on the 2017 fiscal framework and revenue proposals.

The Chairperson stated that the parliamentary advisors Ms Ester Mohube and Mr Zakhele Hlophe, had been at the previous meeting of the Standing Committee on Finance (SCOF) earlier that day and were available to explain additions to Members. In his view, the report was of a high quality and the Committee appreciated the work done by the entire staff component.

The Committee agreed that it was a high-quality report. In particular, the input from stakeholders was captured in great detail.

Ms Mohube explained that the additions to the report were captured from the observations section [section six] and onwards. The sections preceding section six were unchanged by the SCOF.

The Chairperson began going through sections page by page looking for changes by the SCOF.

Ms Mohube explained that there were few changes which were technical in nature.

The Committee agreed that it would be better for her to direct Members to the changes instead of proceeding page by page.

She noted the change on paragraph 6.11 which was rephrased to say “decreasing amount of revenue from CIT as a percentage of total tax” rather than the previous text which mentioned a decreasing rate.

Ms T Motara (ANC; Gauteng) stated that technical changes had already been made by the SCOF and that the Committee just needed to note them rather than deliberate on them.

Ms Mohube noted the typo in 6.17 which required chaging the erroneous “bucket creep” to read “bracket creep.” The final change was point 7.2.1 on page 17. There was a typo in the amount which previously read R2.3 billion. The correct amount of the tax leakage was R2.1 billion.

Mr T Motlashuping (ANC) moved to adopt the report and this was seconded by Ms Motara.

Mr F Essak (DA; Mpumalanga) stated that the DA reserves its position of difference on three paragraphs in the report – 6.6, 6.10 and 6.18. The DA’s objection to these paragraphs will be motivations in its declarations to the House on Thursday.

Ms Motara made a point of procedure. She clarified that the DA reserves its position on these paragraphs and is not voting.

The Committee then adopted the report noting the remarks by the DA.

Committee Schedule

Ms Motara then discussed the schedule of the committee for the upcoming weeks. The committee is scheduled to debate and vote on the report on Thursday in the NCOP pending the National Assembly (NA) adopting the report on Wednesday (8 March).  If all goes well in the NA the members will debate and adopt the fiscal framework legislation on Thursday. If the fiscal framework is not passed it will be more complicated in the NCOP but this seems unlikely.

Ms Motara continued. Section 75 legislation governs these proceedings. There needs to be a quorum of 45 members in the NCOP. It is worth noting that there was a resignation that has not been filled and a sick member which will affect the number of members present. A consolidation of the numbers that will be present on Thursday has been requested. It will either be a debate or simply a report with a statement. Either way parties will have the opportunity to interact with the report. On Friday (10 March) the Standing Committee on Appropriations will receive briefing from the National Treasury on the Division of Revenue Bill at 9 am.

The Chairperson said that the Committee is in a hectic phase of processing the budget and encouraged Members to read their emails everyday.

There was brief discussion of the dates for which the briefing to provinces was scheduled. It seemed that the dates were to be somewhere on and/or around the weekend of Friday, 31 March.

Mr Essak stated that there may be a problem as NT is apparently holding a big conference over four days from 28 – 31 March. This means that NT assistance from many directors will not be available. Members should thus try to secure assistance early on.

Mr Zolani Rento, Committee Secretary, stated that members had approval to go to Gauteng and that they needed to confirm their travel routes to him via email. He also asked Members to confirm their votes on the report via email.

The meeting was adjourned.

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