2017 Appropriation Bill: briefing, with Minister

Standing Committee on Appropriations

16 May 2017
Chairperson: Ms Y Phosa (ANC)
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Meeting Summary

National Treasury presented the 2017 Appropriation Bill. Economic growth was insufficient, and fiscal constraints were faced. The budget aimed at redistribution to poor and working class families, and the rural poor. Public investment had to support economic transformation. Spending was growing in priority areas like post-school education and training. Expenditure had to be reduced and revenue enhanced through changing of tax rates, while giving departments time to plan lowering of expenditure. Expenditure had grown in aggregate terms, but was reduced in terms of previous planning. Social grant expenditure was revised. There were reductions in conditional grants, especially for housing in the provinces and for goods and services budgets. Expenditure reductions were postponed where possible. For industrial incentive programmes, allocations were not taken out of the budget but allocated provisionally.

In discussion, Members had remarks and questions about the importance of socio-economic history; underspending and irregular expenditure; the need for cheap and reliable information; development of township economies; the needs and the role of black women and youth; the definition of radical economic transformation; the private sector and the promotion of inclusive economic growth; State Owned Enterprise (SOE) governance challenges; the reduction of grants; coordination and reporting on targets by departments; investment in research and innovation; allocation to BRICS capital spending; the Defence account surplus; budget alignment to NDP objectives; the relation between the Treasury and the Department of Performance Monitoring and Evaluation (DPME); BRICS capital payment; consequence management for corruption and underspending, and university and technical training college funding. The Chairperson challenged Treasury about the cuts to the bucket eradication programme at a time when the Department of Water and Sanitation was finally ready to spend. It sparked off emotive responses from an ANC and an EFF Member to the extent that the Chairperson had to appeal for emotions to be controlled.

Meeting report

The Chairperson welcomed the Finance Minister to the meeting. She asked for a moment of silence for prayer and meditation. National Treasury would present the 2017 Appropriations Bill and it was the first meeting between the Minister and this Committee. She hoped that a strong working relationship could be formed. It was the fourth Appropriations Bill to be processed by the Fifth Parliament. Progress with NDP and MTSF targets was not satisfactory. The current fiscal context was a difficult one in which the 2017 budget was situated. There had to be efficient use of limited resources to achieve rapid inclusive economic growth. She hoped for robust and fruitful engagement with free and open constructive discussion. There was an apology from the Minister who had to leave at 10h30.

Ms E Louw (EFF) asked if the Minister had to leave in 30 minutes, who would answer on these issues. It was the first time the Committee had met with him, and there would only be half an hour for questions. The Treasury presentation was long with 29 slides.

The Minister replied that that the Deputy Director General and the Treasury team could answer questions. There were parliamentary procedures to send any unanswered questions to him in writing.

The Chairperson asked Treasury to keep its presentation short, and asked the Minister to comment.

Comments by the Minister of Finance
Mr Malusi Gigaba, Minister of Finance, greeted Members and said that he was looking forward to working with them. The object was to pursue growth and transformation in a tight fiscal environment. The economic growth level had been low for some years, although there was some improvement in the previous year, and possibly more in the current year. It was not as yet sufficient for sustainable reduction of poverty and inequality, and to involve especially black women and youth. It was difficult to increase the revenue base. The budget process reflected difficult choices. Needs of constituencies had to be balanced. The budget had to be used to redistribute to the benefit of the poor and workers, and to provide basic services. The poor was not to be marginalised. There had to be investment in areas like the oceans economy and agriculture. Difficult choices had to be made, whilst maintaining the fiscal framework. The Appropriations Bill had to be finalised within that context. Economic growth had to be inclusive, with greater options provided in future. It had to go beyond merely managing the current budget. Attention had to be given to Small and Medium Enterprises (SMMEs) for infrastructure rollout, and the ability of State Owned Enterprise (SOE) officials to manage governance processes. There had to be work with sister departments to develop a professional public service. Government had to be able to spend efficiently and prudently.

The Minister continued that budget spending had to improve. Some distance had been covered, with provinces and municipalities presenting their budgets. The Appropriation Bill had to carry programmes forward. State procurement processes had to improve. Inefficient spending had to be curbed. There had to be transformation with regard to SMMEs and cooperatives.

Briefing by the National Treasury on the 2017 Appropriation Bill
The briefing was presented by Mr Michael Sachs, Deputy Director General: Budget Office. Economic growth was currently insufficient. The budget aimed at redistribution to poor and working families, and to the rural poor. Public investment had to support transformation. There was a Cabinet decision in the previous year to lower the budget. Departments that wanted to increase compensation had to approach Parliament. Government spending was aligned to the objectives of the NDP. Spending was growing in priority areas, with yearly re-allocation to post-school education and training. Fiscal constraints were faced. Expenditure had to be reduced and revenue had to be enhanced. Expenditure reduction was postponed where possible. Tax rates could be changed, while giving departments time to plan lowering of expenditure. Expenditure had grown in aggregate terms, but had been reduced in relation to previous planning. Chapter 5 of the budget review provided more detail on expenditure reduction. Expenditure to social grants beneficiaries was revised. It was revised upwards too much during the last budget round, and hence had to be revised downwards. Departmental baselines were reduced, with regard to goods and services budgets. Chapter 5 dealt with provincial allocations. It was allocated but not assigned to the baseline in the Estimates of National Expenditure (ENE). In the industrial incentive programme, allocations were not taken out of the budget but allocated provisionally. The expenditure ceiling of the contingency reserve was reduced. There were large reductions in conditional grants, especially for housing in the provinces, and to goods and services budgets.

Discussion
Ms S Shope-Sithole (ANC) said that she wished to congratulate the Minister, as she had followed the public statements he had made. It was good that there was a focus on history. There could be no transformation if history was not taken into account.

Mr A Shaik Emam (NFP) remarked that departments had to come with strategic plans for utilising resources. There was much evidence of underspending and irregular expenditure, which did not do justice to radical economic transformation. The NT and the Auditor-General (AG) were frustrated. Existing structures could only recommend, work done was often futile.

Dr M Figg (DA) referred to slide 5, in which a number of households were cited. He asked which survey of the number of households determined allocations.

The Chairperson remarked that the Minister had highlighted the need for accelerated economic growth. Cheap and reliable information could provide a boost to rapid growth and transformation. It was important to ensure that initiatives in agriculture happened on time. Development of township economies was needed. Attention had to be given to the needs of black women and youth, military veterans and township suppliers. She asked what had to be done.

The Minister replied to Ms Shope-Sithole that it was misleading to refer to the historically disadvantaged. Conceptually the term presupposed that those historically disadvantaged were no longer so. Statistics showed the stubborn persistence of being disadvantaged. The OXFAM report indicated that three billionaires in SA owned as much as the whole bottom half of the population. One percent of the population owned 48 percent of the wealth. It was an indictment. It had to be attended to in the interests of sustained growth and stability. The issue had to be united around, not just as MPs and government, but as political and business leadership, labour and civil society. There was not only a need to create employment, but also to create assets. There had to be economic opportunities for entrepreneurs and industrialists, opportunities to access assets, and assistance with access to supply chains, logistics and infrastructure. The SA debate had to focus on those initiatives. There was a need for SMME development through funding, and partnerships between SOEs and industry, like the automotive sector and emerging farmers. Issues had to be united around. There was a greater need to work towards solutions. There was a need to create inclusive growth.

The Minister replied to Mr Shaik Emam that the important issue was accountability. A capable state had to be built, and a developmental public service. Work had to be done at the interface of national, provincial and municipal structures, to deal with underspending and irregular expenditure. There were gaps in the system. Where decisions were made about infrastructure rollout, conditions required approvals, and there were delays at that level. Project implementation did not consider those who had to approve projects. Institutional infrastructure had to be created. The Presidential Infrastructure Coordinating Committee was created to look at loopholes related to implementation of infrastructure programmes. Time needed for approval of projects had to be reduced. South East Asia had resolved such challenges. There had to be capability at state level to spend timeously within the budget for programmes and projects.

The Minister replied to the Chairperson that timeous interventions for accelerated inclusive economic growth were needed. The Minister of Small Business Development had spoken about programmes for township economic development. Projects were implemented. The NT had a city support programme to develop integrated strategies linked to infrastructure rollout. Business had to assist the development of township economies. Most townships suffered challenges of no productive economic activity. There was no infrastructure connection between townships and cities. Government services were lacking in townships. In townships people lived in 40 square metre houses, were 40 minutes away from the city, and had to spend 40 percent of their income on transport. Few townships had Home Affairs offices, hence people had to spend their income to get to those services. There were courts, and plans to establish government malls, but people in the townships did not shop there, as they had to go to town for government services, and preferred to also shop there. They did not support the township shops. Inclusive growth in rural areas was a challenge. There was a large scale movement to urban areas. There were inclusive growth and procurement reform issues. Focus was not only to be on national government. SOE infrastructure could be used to drive black industrialist programmes. Countries like Italy in the EU did that to change the structure of production and ownership. Alignment with the fiscal framework had to be pragmatic, it would not do to bite off more than could be chewed. For the revenue base and fiscus to grow, the focus could not only be on government. There was a need for a developmental public service. Resources had to be aligned with government mandates, as was done in South East Asia and China.

The Chairperson excused the Minister, who had a commitment to Cabinet. It was expected of the Minister to account to Parliament. If he was elsewhere committed, he had to send his deputy.

Mr Dondo Mogajane, National Treasury Acting Director General, answered about data underlying the Equitable Share (ES) allocations. Official statistics from Stats SA was used.
 
The Chairperson asked how it would be ensured that commitments to availability of cheap, accessible and reliable information were adhered to timeously.

Mr Mogajane replied that there was a commitment in the budget review to ramp up engagement with that. It would be asked how departments were performing within their budgets, in that respect. Key reforms were related to spectrum allocation, as it applied to accessing information by schools, hospitals, and government services. The Department of Telecommunications and Postal Services had to ensure timeous adherence.

Mr Sachs added that a 50 percent reduction in ICT costs could aid the supply of information to generate economic growth. It depended on spectrum allocation. It was contingent on the migration of the TV broadcast system, which had been delayed. There were government programmes to extend broadband services to households. 6000 schools were to be connected, but the programme was delayed.

The Chairperson noted that 2020 was cited as completion date. The Committee wanted to see a plan of action.

Mr Sachs replied that it would be best to come with a plan together with the relevant departments involved.

The Chairperson noted that there was a plan in place at the end of 2014. It was a key project for the MTSF, and it was already 2017. The country was in the radical transformation phase. There had to be a broken down plan.

Ms Shope-Sithole asked if the challenge was that people were not given permission, or were not financially ready for implementation.

Mr A McLaughlin (DA) remarked that there had been much talk of radical economic transformation since the SONA. He asked what that meant, and what was to be done differently. The Chairperson used the term socio-economic transformation. Transformation implied movement from and towards. He asked what was moved from, and where to.

The Chairperson replied to him that the Minister could unpack that.

Ms Senokoanyane (ANC) asked if the private sector was being taken on board to promote inclusive economic growth. The private sector had an important role to play in economic transformation. The SOEs were there for a purpose, but there was a lack of movement because of governance issues. Solutions had to be found, as the SOEs were part of the problem. She referred to the reduction of grants. The Chief Procurement Officer had mentioned that there were plans to reduce expenditure. The bulk of expenditure was on transfers and conditional grants. She asked why there was underspending.

Ms E Louw (EFF) noted that the Parliamentary Budget Office (PBO) had presented about challenges related to coordination and reporting on MTSF targets by departments. She asked what Treasury was doing about that. It was difficult to make sense of the 2017 Appropriation Bill. It was like buying a car one had not seen. For radical transformation there had to be transformation of the way things were done, else transformation would merely be a buzz-word. There had to be transformation of the way Parliament worked. She referred to investment in research and innovation (slide 3). It had appeared over the previous three years. The question was how it would transform the economy. Students at UCT and UWC were making cellphone batteries, but the question was how innovations could become part of the economy. Workers and the poor had to have access to markets. Economic infrastructure in the townships were related to the 40 by 40 constraints the Minister referred to. There were Shoprite and Pick and Pay centres popping up in the townships, but those were not owned by blacks and women. It was not transforming the economy. Women would sell vetkoek at spaza shops to support their families, but Shoprite was able to sell it cheaper. The question was how transformation for black women could be achieved, and how male domination could be moved away from.

Dr Figg referred to the 45 percent spending by departments allowed before the Appropriation Bill. He asked if it was possible to reduce that in the following year. He asked why it could not be closer to 33 percent. Government spending had to be allied to the NDP (slide12). Revenue was not aligned to the NDP in previous years. There was a larger deficit gap.

Mr D Maynier (DA) referred to vote 7, programme 6. He asked what had been allocated for BRICS capital payment, and where it was situated in the budget. He referred to Budget Vote 19 (Defence), and asked what amount of the surplus in the Defence account was committed, and what amount was not committed. He referred to Vote 19, Programme 2, Subprogramme 5, and asked about spending in the current year on Operation Corona. He noted that the presenters might possibly not have the details at hand at the current moment, and would find it acceptable if it could be forwarded in writing.

Ms M Manana (ANC) asked where the BRICS budget came from (slides 26 and 28).

Ms Shope-Sithole noted that a prominent academic had hailed BRICS as able to assist with the funding of infrastructure. She asked when a DG for the New Development Bank would be appointed. It was taking too long.

Mr Shaik Emam remarked that budget alignment to NDP objectives was nowhere near to being achieved. Targets for Health, for example, would not be achieved. There were shortfalls of billions of Rands. He asked about obstacles faced by departments that submitted strategic plans. He asked if it was a true account of what they were actually doing. There was little engagement with districts, with a lack of planning based on need. National, provincial and local government worked in silos. Basic Education had to work with Health and Sport and Recreation.

The Chairperson referred to the statement by the Minister that there had to be a capable State and a developmental public service. There was a well resourced Department of Performance Monitoring and Evaluation (DPME). Yet monitoring and evaluation across the three levels of government was not effective. It could be that there was a lack of training programmes. It had to start with the DPME. The SC did not get what it wanted from that department.

Mr Mogajane replied that pages 9 and 10 of the budget review stated what transformation entailed. Needed changes were spelled out on page 9, with regard to education and skills. The object was to break the barriers of Apartheid township planning. There was a radically different approach to funding. Cities were seen as centres of economic growth. All services had to be brought together. Inclusive growth had to follow a radical approach. The budget was beginning to address that. It had to be established what kind of unemployment interventions were needed in the township economies. There had been close engagement over the preceding 18 months with black business and labour towards cooperation. It had to be ensured that targetted groups were reached by SMME funding. The YES (Youth Employment Services) aimed at giving one million young people a taste of working in a formal environment. Nedlac had agreed to an extension of the employment tax incentive. There was a tight fiscal situation with taxes not collected. The PFMA and MFMA required monitoring of whether schools were built and roads constructed. The NT only had a monitoring unit to look at the performance of Treasury itself. There had to be engagement with the DPME. The NT had approached the Standing Committee with a public expenditure review, to show how resources could be unlocked in departments. It was recognised that radical economic transformation had to change people’s lives. Corruption and maladministration had to be fought.

Mr Sachs replied to Mr McLaughlin that radical transformation had been a focal point before the current year. Looking at the MTSF there was impatience to move faster, and a new sense of urgency. There was great concern about improved governance in the SOEs. Page 53 of the budget review dealt with the reduction of the expenditure ceiling, and where expenditure would be reduced across the three levels of government. With regard to transfers and subsidies, there were no easy deliverables. It came down to choices between bad options. Ideally it made sense to close down whatever was not performing, but with every closing down someone was affected. All decisions were painful, and it came down to going for the less painful options. It was not desirable to cut infrastructure budgets, but there were high levels of underspending. If only half of housing budgets were spent, it was still not advisable to cut, as at least 50 out of a target of 100 houses would still be built, for example. Public entities accumulated large uncommitted surpluses. Transfers were reduced over a number of years. The question was whether government systems acted to achieve a relationship between budgets and outcomes. Budgets were supposedly aligned to the NDP but the impact could not be seen. Effective spending was needed for change, but fiscal constraints were a burden. There were challenges around making money effective. Capital spending was considered good in principle, but to build a bridge where no-one crossed, for instance, would bring no change to people’s lives. To build a bridge between Alexandra township and Sandton could have a good effect, for instance, as it would enable people to reach services. With regard to research and development, there was the challenge of spending on research into irrelevant issues. One of the performance indicators used by Telecommunications and Postal Services was the number of international papers produced on ICT. It did no good. Another indicator was the number of government institutions connected to the broadband plan. The DPME had to look into the coordination of budgets and performance. With regard to the 45 percent spending by departments before the Appropriation Bill, the PFMA erred on the side of generosity. The questions by Mr Maynier could be forwarded to Treasury. Women and markets were considered important. Since the creation of the DPME, Treasury was no longer responsible for monitoring and evaluation. He suggested that Treasury and the DPME be called together.

Ms Shope-Sithole said that she was interested in the remaining questions that Mr Maynier proposed to ask, as Mr Maynier usually asked good questions.

The Chairperson remarked that the reasons for budget expenditure reductions had to be understood. She was concerned about decisions to reduce when spending had been delayed. It was possible that cuts would be made at the point when a department was finally ready to spend. There were cuts to bucket eradication by the Department of Water and Sanitation when the Department was ready to run with it. The Department had been slow, but then cuts were made when they were ready. Sanitation at schools was a problem, as schools were without toilets. Money was available for infrastructure development. She asked if it would not be better to warn departments that cuts would be made if they did not perform. Service was not to suffer.

Ms Louw agreed that Treasury and the DPME had to appear together. Reasons had to be supplied for cutting. There was corruption and underspending in departments. The NT needed a greater ability to put its foot down. There had to be respect for the rule of law and transparent government. Individuals who devoured money had to go to jail or perform community service. Children were dying from falling into pit toilets. Women were raped while they went to the river to get water. There had to be information on women in transformation. Women were left behind in a male dominated economy. The role of women had to be specified. It was unacceptable for women to be relegated to secretarial roles.

Mr Maynier remarked that there was a new division of labour between the Treasury and the DPME. It seemed that the DPME currently played a greater role in the budget process at the expense of the Treasury. He referred to post-school education, on page 9 of the longer document. There was a decrease in spending in the current year, and an increase planned for the following year. There would be an increase of R11 billion over the MTSF with funds clawed back from the national skills fund. He asked how that was being done, and whether it would be a budget neutral intervention. He asked about opportunity costs of funds clawed back. Page 63 of the budget review referred to employment programmes. He asked for a detailed breakdown of the R20.4 billion made available. He suspected that spending on employment programmes was understated, and seemed to be hidden in capital expenditure. It had to be known what was actually being spent.

The Chairperson remarked that despite increases in social grants and pensions, recipients were not better off than in 2016. Increases did not keep pace with inflation. Child support was increased by R20, and old age pensions were upped to R1600. She asked how the Treasury could assist.

Mr Sachs replied to the Chairperson about cuts occurring when departments were ready to spend. Treasury tried not to do that on its own, but sat with departments until there was agreement. There was an intense engagement process. He asked Mr Steven Kenyon to provide background to the bucket eradication programme.

Mr Steven Kenyon, Director: Local Government and Budget Framework, added that the bucket eradication programme was created in 2014. It was then funded through reprioritisation, as with the expenditure ceiling no new money was available. R900 million per year was reprioritised over two years out of the Human Settlements Development Grant (HSDG). In the first year the function was shifted to the new Department of Water and Sanitation. The level of supply was not to install VIP toilets, but full water borne sanitation, and there had to be a redesign of all projects. There was a Parliamentary recommendation that the Department of Human Settlements not use its entities to implement projects. There were a number of challenges and underspending in the first year, but spending was good in the second year. The programme was extended into 2016/17 with an allocation of R350 million, with further amounts added in the adjustment budget. There was underspending in 2016/17, and the grant was not extended into the current year. The Department of Water and Sanitation completed projects through reprioritisation within two existing grants, namely the water infrastructure grant and the bulk infrastructure grant. The reason was that the nature of projects changed substantially. Most of the individual households and units planned were constructed. The major piece missing was bulk and reticulation infrastructure. It was not about household bucket eradication anymore, but about bulk service provision, normally funded through the regional bulk infrastructure grant. It linked up with cuts to conditional grants and how that was targetted. Money was taken from the HSDG, to the tune of a billion Rand each year. The increase in the outer year landed in 2017/18. Reductions had to be made to the lower expenditure ceiling. Planned expenditure in the HSDG was going to jump from R18.3 billion in the previous year to R21 billion in the current year. Given that there were problems of implementation in several provinces, there was no way that it would be plausible. It would be better to reduce. The largest single reduction was in the HS grant. It was seen as alarming that R1.2 billion was taken out of the HSDG, which sounded dramatic, but the grant went from R18.3 billion in 2016/17 to 19.9 billion in the current year. The grant continued to grow, and would be R21 billion in the following year, and R22.3 billion in the year after that. There would still be steady growth in the HSDG, and growth of 5 percent per year in all local government grants that were reduced. There were cuts to conditional grants. The bucket eradication project was redefined as a bulk service, and shifted to the regional bulk infrastructure grant. Reductions were tailored to sustain the pace of delivery. It was already happening on the ground.

Ms Shope-Sithole said that children were falling into pit toilets. The money was there to rectify the situation. She asked what it meant to those who were sitting in offices to hear that. There was a need to be human. Transformation had to speak to the soul. Government was working with human beings who were tortured by life. Mr Sachs had referred to SA as a noisy democracy, but she was not hearing that noise. People were in pain. If a child of hers had fallen into a toilet, the question was whether she would speak in English or Shangaan.

The Chairperson remarked that the Treasury was hearing an appeal to officials to get out of their comfort zones. Dignity had to be respected.

Ms Louw remarked that it was time for consequences for those who were stealing money from upliftment projects. When she was in Pedi, she encountered corruption around the bucket eradication programme, in the Amatole region. She asked what was being done to defrauders. They had to be punished. It was traumatising to go into those toilets. The issue could not be discussed in isolation.

Ms Shope-Sithole added that it was the duty of Parliament to attend to defrauding. The question was what was being done. The Constitution prescribed oversight as the work of Parliament. Issues like bucket eradication had to be attended to directly during oversight.

The Chairperson noted that Treasury claimed that there was consultation with departments, and not confined to the Department of Water and Sanitation. She appealed to Treasury to try to give departments a last chance, subject to conditions. Monitoring and evaluation had to lead to alternative solutions. She appealed to the acting DG that the Treasury had to have a monitoring and evaluation unit. Expenditure had to be monitored every six months, with intervention where needed. Departments had to explain about accelerated plans, which had to be monitored. That applied especially to conditional grants. There had to be monitoring of consequence management.

Mr Shaik Emam remarked that political will was needed.

The Chairperson disagreed with that. It was an administrative issue, and the DG had to attend to it.

Mr Sachs replied that MPs were elected representatives of the people. The Treasury officials were professionals with skills needed to build the developmental State. When officials responded with facts and it was alleged that issues did not speak to their hearts, it could make them reluctant to present those facts. The Treasury deemed women in transformation to be highly important. There was work with the department of Women to analyse the budget. A broader view of women was needed. A range of projects were being looked at, especially with regard to health and policing. He replied about the relation between Treasury and the DPME Mr Maynier had referred to, that it was not correct in his view. In 2000 an institution in the Presidency produced a strategy. It was raised that the DPME needed a more focused set of priorities. A focused priority paper was produced. There had to be a more effective plan about the role of the DPME. With regard to DHET allocations, government agreed to use National Skills Fund reserves in 2017/18 to fund NSFAS shortfalls. Costs were carried through into the following year. The NT picked up the tab for costs in the following year. The Treasury was reluctant to cut budgets at short notice, it was usually spread out. The Accountant General was looking at how to classify expenditure on employment programmes. Social grants were based on estimates formed at the beginning of the year. The NT did not look at individual years, but looked at a baseline from 2012. Social grant values kept up with consumer index based inflation.

Mr Mogajane replied about spending, that budget analysts were looking at spending in departments. There were quarterly reports. He suggested that both the Standing and the Select Appropriations Committees engage with national and provincial departments. It was hard for the National Treasury to obtain information at the district level. It was only possible to ascertain that Municipal Infrastructure Grant (MIG) spending was not up to date, for instance. In budget bilaterals, Treasury had the DPME in the room with them. The DPME had the facts about bucket eradication. Underspending in the areas had to come to light earlier. To sit with provincial treasuries would make Committee oversight easier. Questions could be asked about what was done with money given. MECs in the provinces could be included. Issues had to be treated at the right level.

The Chairperson appealed to all to be factual, so that engagement with departments could be enriched. The Departments of Telecommunications and Postal services, and Health had to be called. The Committee had to engage with the DHET budget. There were TVET shortfalls. Emphasis on tertiary education was at the expense of TVET institutions. It was not desirable for such institutions to have to protest before they received money. It had to be asked what influence Treasury had on such decisions.

The Chairperson declared that the day’s mission had been achieved. The Minister was listened to. The aim of socio-economic transformation was to empower those who were lacking in resources. Economic transformation had to bridge the gap between haves and have-nots. It was not a time to be emotional. The Committee wanted to see the impact of the budget on service delivery. She appealed to members to try to control their emotions. The Committee had arranged for a public meeting in Khayelitsha on the Appropriation Bill. Relevant stakeholders were invited. It would be appreciated if Treasury could be represented.

Declaration of a motion of desirability for the 2017 Appropriation Bill
The Chairperson read out what a declaration of desirability entailed.

Ms Louw commented that she wished that it had been done earlier, so that she could have had time to consult with her party. She also could not agree to it unless she had seen it in writing.

The Committee Secretary explained to Members that what was required was a declaration from the Committee that it was happy to continue with the processing of the Bill, to conduct public hearings and to meet with departments. A report and adoption would follow later on.

Ms Shope-Sithole commented that she was not happy.

Mr McLaughlin commented that the Committee did not have the power to say whether the Bill could release money.

The Chairperson suggested that the matter be dealt with on the following day. It might be necessary to obtain advice from Mr Frank Jenkins, the Parliamentary Legal Adviser.

Dr Figg suggested that a copy of the declaration be circulated to Members, and that the matter be dealt with on the following day. It was only agreement for the process that was required.

The Chairperson ruled that the secretariat had to contextualise the matter and circulate that to members. It could be finalised on the following day. It had to be linked to the Parliamentary rules.

Correspondence
The Chairperson noted that there was correspondence from Mr McLaughlin to the National treasury.

Ms Shope-Sithole asked that the Committee be informed about the content of the correspondence.

The Chairperson adjourned the meeting.

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