Division of Revenue Amendment Bill: negotiating mandates

NCOP Appropriations

17 November 2017
Chairperson: Mr C De Beer (ANC; Northern Cape)
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Meeting Summary

All the provinces presented their negotiating mandates on the Division of the Revenue Amendment Bill [B24-2017]. Eight provinces accepted the Bill. The Western Cape did not support the bill and cited the following reasons: National Government did not place strong support of the Division of the Revenue Bill and Equitable Share, Fiscal consolidation; underperforming State-Owned Enterprises; National Government should act strongly against corruption, and support the application from the Western Cape relating to the drought that has an impact on agriculture, economic growth and employment.

National Treasury said in the Northern Cape there is a particular issue about school infrastructure, where the suggestion was that the funding should rather be reallocated to different provinces. The explanation for that is that the money has been returned to the National Revenue Fund, and that money is not drawn out of the National Revenue Fund, which meant that National Government does not have to borrow cash and there are interest costs on that R400m.

National Treasury would respond fully next Monday and give a detailed report on issues of learners in the North-West province and issues of drought in the Western Cape Province

The Committee was briefed by the Whip of the Committee on the Fourth Term Committee Programme.

Meeting report

Consideration of Negotiating Mandates on the Division of Revenue Amendment Bill
The Chairperson said the Committee went through the briefings in the 9 provinces last week and feedback from the Secretariat was that it went well. The Committee would deal with the Negotiating Mandates in alphabetical order as they were sent to them, starting with the Eastern Cape Province.

Eastern Cape Legislature
Mr L Gaehler (Eastern Cape, UDM) said the Eastern Cape Legislature voted in favour of the Bill.
The Chairperson said the Committee noted that.

Free State Legislature
Mr T Motlashuping (North West, ANC) said the Free State Legislature also voted in favour.
Six concerns were raised on bullet point 5 of the report. The province noted the recommendations raised by the Committee in the report.
The Committee noted that.

Gauteng Legislature
Mr Motlashuping said the Gauteng Legislature supported the Bill.

KwaZulu-Natal Legislature
Mr L Nzimande, (KZN, ANC) said the KwaZulu-Natal Legislature voted in favour.

Limpopo Legislature
Mr Motlashuping said the Limpopo Legislature also voted in favour.
There were recommendations in the report that must be noted by the Committee.

Mpumalanga Legislature
Mr F Essack (Mpumalanga, DA) said the Mpumalanga Legislature supported the Bill.

Northern Cape Legislature
The Chairperson said the Northern Cape Legislature voted in favour.

North West Legislature
Mr Motlashuping said the North-West Legislature also voted in favour.

Western Cape Legislature
Mr O Terblanche (Western Cape, DA) said the Western Cape Legislature did not support the Bill.
The reasons for this were:

-National Government did not place strong support of the Division of the Revenue Bill and Equitable Share, Fiscal consolidation

-Uunderperforming State-Owned Enterprises.
-National Government should act strongly against corruption

-National Government should support the application from the Western Cape relating to the drought that has an impact on agriculture, economic growth and employment.

The Chairperson said the Committee noted the inputs from Western Cape.

The Chairperson thanked the delegates.

National Treasury (NT) Input

Mr Steven Kenyon, Director: Local Government Budget Process, NT, said they would submit on Monday a set of responses to the issues raised by Members.

Several recommendations cannot be addressed in the Division of the Revenue Amendment Bill. It should be noted that there are things like taking into account the Financial and Fiscal Commission (FFC) recommendations, and some of the broader Fiscal consolidation issues that touch on the Division of the Revenue Amendment Bill and which NT responded to in their Medium-Term Budget Policy Statement (MTBPS) in other Government documents. Therefore, in its responses they would refer to those issues in appropriate places. Some of the recommendations from provinces are not directed to NT, but some are about the processing of the Bill that are best directed to the National Council of Provinces (NCOP).

Mr Kenyon said in the Northern Cape there is a particular issue about school infrastructure, where the suggestion was that the funding should rather be reallocated to different provinces. The explanation for that is that the money has been returned to the National Revenue Fund, and that money is not drawn out of the National Revenue Fund, which meant that National Government does not have to borrow cash and there are interest costs on that R400m. For those provinces that have expressed concern around fiscal consolidation that R400m which they are not going to spend in this financial year it assists NT in a small way, and they did not think there would be other areas within that grant where realistically R400m could have been spent in the last 3 months of the year. Funds are shifted in this Adjustment Bill can only become available after this Bill is enacted, usually in December and as late as February, which would not have been a realistic option.

Mr Kenyon said they would respond fully next Monday and give a detailed report on issues of learners in the North-West province and issues of drought in the Western Cape Province.

The Chairperson highlighted that 9 provinces had submitted their negotiating mandates, 8 provinces were in favour of the Bill, and 1 province was against the Bill.

The Committee accepted the Division of Revenue Amendment Bill.

The Chairperson said the report of the Division of Revenue Bill will be served on 21 November 2017, at 14:00 pm at G 26 NCOP wing.

Adoption of minutes
The Committee adopted, without amendments the following sets of Minutes: 17, 24, 26 and 31 October 2017 and 1, 7, 9 and 10 November 2017.

Announcements
The Chairperson informed the Committee that he had received a letter from the Chairperson of the NCOP, regarding feedback from the National Treasury. This reply refers to the matter on Early Childhood Development (ECD) which was a matter raised by Members a while ago.

He also informed the Committee that all Members of the Committee were invited to the Association for Public Accounts Committee (APAC) Anniversary celebrations, which would take place on 27 November 2017, in Gauteng.

Fourth Term Committee Programme
Ms Motara updated the Committee on the Fourth Term Committee Programme, noting that next Tuesday they would deal with final mandates.

On Wednesday the Committee would receive a briefing from National Treasury. It is a joint meeting with the Standing Committee on Appropriations and there will be plenary at 9:00 am.

On Friday next week the Committee would have public hearings. The last week of November the Committee will be dealing with two Committee reports on appropriations and there will be Plenary at 2pm.

On Friday 1 December 2017, the Committee would meet to adopt the Committee report. On Tuesday 5 December 2017, the Appropriations Bill is going to the House, that is the Finance Bill and Adjustments Appropriation Bill. The Plenary will start at 10:00 am.


The meeting was adjourned.

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