Financial Matters Amendment Bill: adoption; Money Bills Amendment Procedure Bill: meeting with Gauteng Legislature; Legacy Report

NCOP Finance

27 March 2019
Chairperson: Mr C De Beer (ANC, Northern Cape)
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Meeting Summary

The Select Committee on Finance considered and unanimously adopted the draft report on the Financial Matters Amendment Bill [B 1B-2019] presented by the South African National Treasury delegation. The Democratic Alliance reiterated that they approved of all the amendments to the bill, except the amendments pertaining specifically to the Banks Act, which would allow for the establishment of state-owned banks.

The Committee considered and unanimously adopted its 2018/2019 annual report, as well as the Legacy Report of activities it had undertaken from May 2014 to March 2019 during the Fifth Parliamentary term.

It considered and unanimously adopted the outstanding minutes of five March Committee meetings.

The Committee engaged with members of the Gauteng Provincial Legislature (GPL), who had requested its counsel with regard to their efforts to pass a Money Bills Amendment Bill at the provincial level. The Parliamentary Budget Office (PBO) gave an overview of how the passing of the Money Bills Amendment Procedure and Related Matters Act (No. 9 of 2009) required the re-organisation of some of the Parliamentary committees dealing with finance, and the establishment of a PBO. They also offered recommendations on the GPL’s draft Money Bills Amendment Bill.

The Senior Parliamentary Legal Adviser provided further insight and advice to the GPL about their pending bill. He emphasised the difference in mandate when it came to budgetary control in government. While the Money Bills Amendment Procedure and Related Matters Act allowed the legislative branch to amend budgets, this power was firmly rooted in oversight capacity. National and provincial law dictated that the policy imperative -- pertaining to budgets in this case -- belonged to the executive branch, and not to the legislative branch of government. Furthermore, he cautioned against reactionary amendments to the budget by Parliament. Hasty reallocation of the budget could have adverse consequences.

The GPL advised the Committee that they had adopted their draft bill report, and it would be put to the two Houses of Parliament in the sixth legislature.

Meeting report

Draft Report on Financial Matters Amendment Bill

Adv Ailwei Mulaudzi, Director: Fiscal and Inter-governmental Legislation: South Africa National Treasury, guided the Committee through the clauses of the draft Committee report on the Financial Matters Amendment Bill [B 1B-2019]

The Chairperson put forward the draft report for adoption by the Committee.

Mr T Motlashuping (ANC, North West) moved the adoption of the report, and Mr S Mohai (ANC, Free State) seconded.

Mr F Essack (DA, Mpumalanga) emphasised that the Democratic Alliance (DA) did support the amendments pertaining to the Insolvency Act, the Military Pensions Act and the Government Employees Pension Law in the Financial Matters Amendment Bill. However, it opposed the amendments pertaining to the Banks Act, which would allow for the establishment of state-owned banks. He asked that the secretary accurately reflect this in the minutes.

The Chairperson thanked the delegation from National Treasury for their excellent work and asked them to keep working to help restore dignity to the country’s poor.

Select Committee on Finance 2018/19 Annual Report

The Chairperson put forward for adoption the Select Committee on Finance Annual report for 2018/2019.

After each page was individually considered and approved, Ms Z Ncitha (ANC, Eastern Cape) moved the adoption and Mr M Monakedi (ANC, Limpopo) seconded the adoption.

Select Committee on Finance Legacy Report

The Chairperson put forward for adoption the Select Committee on Finance’s Legacy Report on activities undertaken from May 2014 to March 2019. He commented that this Committee had been one of the busiest Committees in Parliament. After each page was individually considered and approved, Mr Mohai moved the adoption and Ms Ncitha seconded..

Outstanding Committee minutes

The Chairperson put to the Members the minutes of 5 March 2019. Mr Monakedi and Mr Motlashuping moved the adoption.

The Chairperson put to the Members the minutes of 6 March 2019. Ms Ncitha and Mr Essack moved the adoption.

The Chairperson put to the Members the minutes of 12 March 2019. Mr Mohai and Mr Motlashuping moved the adoption.

The Chairperson put to the Members the minutes of 19 March 2019. Mr Monakedi and Mr Motlashuping moved the adoption.

The Chairperson put to the Members the minutes of 26 March 2019. Mr Essack and Dr D George (DA, Western Cape) moved the adoption.

Mr Mohai excused himself from the meeting, as he had another meeting to attend.

Engagement with Gauteng Provincial Legislature (GPL) ad hoc Committee on Money Bills Amendment Procedure and Related Matters Bill

The Chairperson moved to the request by the GPL seeking counsel regarding a matter they were dealing with in the provincial legislature. He commended the delegation for requesting the meeting, as there was a need for closer cooperation between the National Council of Provinces (NCOP) and provincial legislatures. He had asked Adv Frank Jenkins, Senior Parliamentary Legal Adviser and the Parliamentary Budget Office (PBO) to be present and offer advice to the Gauteng Legislature delegation on the matter.

Mr Mbongani Radebe, Chairperson: Standing Committee on Public Accounts (SCOPA), GPL, explained that the GPL was engaged in the process to pass a Money Bills Amendment Bill that sought to help Parliament play a more prominent role in committee budget issues. The GPL wanted to make sure they correctly navigated all issues related to this process and therefore sought the counsel of the Select Committee on Finance.

Parliamentary Budget Office (PBO) discussion of Gauteng Provincial Legislature Money Bills Act

Ms Nelia Orlandi, Deputy Director: Public Policy, PBO, presented an overview of the Money Bills Act and its functioning. She explained that the passing of the Money Bills Amendment Procedure and Related Matters Act (No. 9 of 2009) required the reorganisation of some of the Parliamentary committees dealing with finance. It empowered Parliament to make changes to the budget by amending money bills. It also provided for the implementation of public participation processes and the establishment of a PBO. She further explained the role of the committees and the role and outputs of the PBO.

Miss Orlandi presented recommendations on clauses extracted from the GPL’s draft Money Bills Amendment Bill. She concluded by saying the GPL must establish a budget committee, as well as a PBO, and while lessons could be learned from the National Parliament, specific provincial practices needed be considered if such an act was introduced at the provincial level.

The Chairperson invited Adv Jenkins to advise the GPL delegation.  

Adv Jenkins asked whether a draft of the GPL’s Money Bills Amendment Bill had been circulated, as he had not received it. The Chairperson confirmed that the Committee had not received the draft report of the GPL’s Bill.

Adv Jenkins provided some background on the Money Bills Amendment Procedure and Related Matters Act in 2009. It had arisen from a request in 2000 for Parliament to have greater oversight on report back, as the constitution was ’rather broad, very terse and cryptic’ regarding the oversight function of Parliament. The Houses had then adopted an oversight and accountability report which would assist in setting up procedures to amend money bills.

Adv Jenkins stressed that the power of the legislature to amend the budget was firmly rooted in its oversight capacity. National and provincial law dictated that the policy imperative belonged to the executive branch and not the legislative branch of government. The Act of 2009 could amend the fiscal framework and the division of revenue, but strictly in the capacity of oversight.

The challenge was that the legislature was a multi-party arena and a lot of pressure could be exerted on government to shift budgets around during emergencies or in response to civil pressures. Adv Jenkins cited the Fees Must Fall movement at SA universities, which put pressure on the government to prioritise education spending. He warned that re-allocating funds could have adverse consequences on the delicate economic ecosystem the budget sustained, and small changes could have damaging knock on effect. For example, if one cut transport funding, this could indirectly affect education and/or economic activity. He reiterated that the legislative power that Parliament had over budgetary control was strictly in an oversight capacity.

The Chairperson said there must be close dove-tailing between the GPL and National Parliament regarding this issue. When Members briefed their provinces on the division of revenue, the briefing must explain the fiscal framework, and how/why the revenue was divided amongst the three spheres of government.

He asked as to the status of the GPL’s Money Bills Amendment Bill.

Mr Radebe says he appreciated the valuable input from the Committee. He was very aware of the role provinces must play in managing PBOs and harmonising the inputs of the various budget committees.

To answer the Chairperson’s question, he said that during his provincial legislature committee meeting yesterday (26 March), they had adopted the bill report that would be taken to the House for approval in the Sixth Legislature.

The Chairperson thanked the Members for their work in the Fifth Parliament, and wished them the best for the future.

The meeting was adjourned.

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