2019 Appropriation Bill: proposed amendments & Committee Report

Meeting report

Democratic Alliance proposed amendments to Appropriation Bill

Mr A Sarupen (DA) said the amendment the DA was proposing was for an adjustment of R8.5 billion to the Appropriations Bill [B6-2019]. This was not a large a percentage of the overall government budget, and would not require the state to borrow any additional money. Funding would be reprioritised, based on some of the public participation feedback the DA had received, as well as advice from the Fiscal and Finance Commission (FFC) and the Chief Procurement Officer (CPO).

The DA had been told by the CPO that on many occasions up to 40% of the prison service’s spending was inefficient, and that this was related mostly to administration. What the DA had suggested therefore was a 4 % base reduction in all administration programmes. Other savings could be made in parts of the National Health Insurance (NHI) programme, the excessive R3.1 billion allocated for VIP security in the police budget, and reducing the share allocations from the New Development Bank.

He said this was not just about cutting budgets or promoting ideologies, but about meeting the needs of the South African people.

The DA’s proposal was to focus the savings on three priority areas.

• Combating crime

There was a need to combat crime and foster a professional, honest police force. The proposal was to take an additional R2 billion from savings taken from VIP security, and allocating an additional R200 million under Vote 20 towards the investigations unit in the Independent Police Investigative Directorate (IPID) budget.

Considering the needs of rural policing, the DA proposed an additional amount of R500 million to ensure effective rural policing under the police vote. To ensure that the South African Police Service (SAPS) could meet the needs of the people when dealing with issues like drugs, domestic abuse and public violence, it proposed a further allocation of R1.3 billion to the visible policing budget under vote 23.

Mr Sarupen said that the police were overworked and stressed because there one officer had to deal with many crimes, and if the force could be trained and specialised, they could be put in good use with the type of crimes they dealt with.

• Job creation and skills development

Job creation and skills development were the most pressing needs in the country. The DA was proposing an additional R3 billion for this purpose, with R1.5 billion of that allocated to conditional grants in kind to provinces for the creation of schools of specialisation, to teach science, technology engineering and mathematics (STEM). This would be an allocation to vote 14 of the Department of Basic Education (DBE), under the Planning, Information and Assessment programme.

To reskill workers who would lose jobs in the mining sector with the development of the green economy, an additional R1.5 billion allocation was proposed for a Green Economy Skills Development Fund. This would be an allocation to vote 28 of the Department of Employment and Labour, under the labour policy and industrial relations programme.

• Health care programmes

The Committee needed to think clearly about the health care crises in the country on health and ensure that some of them never recur. The DA was proposing an additional R3.4 billion towards health care. The first thing it would like to do was to create a dedicated mental health care programme, for which a R450 million allocation was proposed. The money would be explicitly used to ensure that mental health patients that were dependent on the public sector had adequate access to care. An additional R3 billion should go towards improvements in neonatal care equipment to ensure that no public facility where a child was born had an infant mortality that was higher than it should be because of a lack of equipment. There had also been a crisis last year involving cancer, with the oncology treatment in KwaZulu Natal (KZN) being a travesty, so there needed to be an investment in cancer equipment.

Therefore, an allocation of R3 billion under the Health Facility Revitilisation Grant was proposed. This grant was initially listed under the NHI before it was moved into other sub-programmes as the financial year went on. If the government was indicating that funds for the NHI were not being utilised, they had to be put into something that would achieve results.

Mr Sarupen said that under conditions to amend the Appropriation Bill, the Minister in writing may impose provisions for appropriation. What had not been forthcoming were the conditions for bailing out state-owned enterprises (SOEs). He mentioned the need for Eskom to get back on its feet and the importance of not allowing it to fail. The DA therefore was proposing the following as an additional amendment to Clause 4 – Conditions for appropriations:

Notwithstanding the Minister’s right to impose conditions for appropriations, the following conditions are imposed onto all main divisions, current payments, transfers and subsidies, payment of capital assets and payments for financial assets that are allocated to Eskom Holdings SOC Limited:

(a) All procurement contracts entered into by the entity in terms of subsection (3) must be reviewed and all contracts which are considered to be wasteful or irregular must be terminated;

(b) The entity in terms of subsection (3), must within three months of the promulgation of this Act, fill vacant positions of critical posts relating to the management of its build projects, generating and distribution capacity;

(c) The entity in terms of subsection (3), must within 12 months of the promulgation of this Act, formalize a plan to separate its distribution and transmission operations, and its generating capacity operations, into separate business units;

(d) Municipalities must immediately be allowed to purchase energy directly from independent power producers, regulations for which may be made by the relevant Minister; and

(e) That all staff at the entity in terms of subsection (3), be declared an essential service, pending further recommendations to Parliament by the Essential Services Committee as established in terms of the Labour Relations Act, 1995 (Act No. 66 of 1995).

Parliamentary legal advisor on Appropriations Bill process

Adv Frank Jenkins, Senior Parliamentary Legal Advisor, said there were about ten legal advisors who were involved in providing legal advice to a total of 35 Parliamentary committees. He was responsible for providing legal advice to the committees, and as well as other offices within the Parliament, such as the office of the Speaker and Chairperson, along with their deputies respectively, and the National Council of Provinces (NCOP). The office also advised the administration on labour law, contracts and procurement issues. It assisted Members of Parliament (MPs) and political parties to draft legislation if they wanted to introduce private member bills or community bills. It advised on amendments and draft amendments to bills, and helped the NCOP with legal issues that arising from implementation of the rules.

When Parliament developed the oversight and accountability model, there had been a specific emphasis on doing financial oversight, which had not been developed during the first ten years of democracy. The legislation for the transformation of financial oversight had been in place since 2010, and the budget offices had been established. On the legal side, he looked at the amendments, and at the procedure for amending the Money Bills Act. Regarding the NHI health programme, he had concentrated on the issues involved there.

The Committee should look at this as a process of how Parliament strengthens its capacity to actually engage with amendment bills. The Money Bills Act and budget office were in place, but up to today Parliament had made only a few amendments, and these had been proposed by Ministers. Parliament had also done a few with the tax laws. The process for introducing amendments was not complex, and he envisaged some kind of precedent and record so that Parliament could consider building upon it, but it always seemed to be caught short of time, and this was one of the primary problems.

When dealing with Amendments to the Appropriation Bill, Parliament was dealing with reprioritisation, because there was only so much money available, yet so many people to service. This meant some people would tend to benefit and others would not, so Parliament had to prioritise and when making amendments, the queue of who benefited was shifted around and there were implications. The risk was that there would be unintended consequences when making amendments, because it was an overarching law which had effects on the people on the ground when dealing with certain issues. The need for public consultation was critical, but there was a one-year annual budget cycle. Parliament had tried to put in consultation requirements for the public, various stakeholders and interested parties, as well as the Minister of Finance’s response, which was also critical.

In a specific area of the Appropriation Bill, the Minister of Finance, or any of the Cabinet Ministers affected by votes, had at least ten working days to respond, but parallel to that, the Appropriation Bill had to be passed within four months from the start of the financial year. The time period to process the Bill was much shorter. There were big procedural problems, because there were only four months to get to the end of July, and should the Committee look at the Amendment Bill now and decide to go with it, and assuming that everything was in order, there needed to be Minister’s comments on it, and that may or may not be done in the allocated number of days. This would mean the Committee would get the report only in August -- and it still had to go to the NCOP prior to the National Assembly (NA) if there were any further amendments.

The other procedural issue with regard to a precedent was that the Act requiresd principles of fiscal discipline in Section 85 that created a neutral budget, and the Parliamentary Budget Office (PBO) was ideal to give an input in that regard. Other than the fiscal discipline issues in Section 85, which must be aligned to the Amendment of the Appropriation Bill and the division of the fiscal framework, this should not be a huge problem. The greatest challenge was the short time frame, as each amendment had to be motivated and take into account the strategic priorities and allocations of the relevant budget.

Adv Jenkins said it was important to consult with people on the ground and engage in public participation in the budget process, so that the budget process created a neutral budget. It was necessary to link different reports from different committees so that there was some foundation to work on. If Parliament took funds away from the NHI, was it not taking away the right for people to access health care? In comparison with last year, the allocation of funds to the NHI had increased, and when one looked at this on a surface level, it seemed correct. Health care should be judged by how many people were getting quality health care services that the amount allocated to it was providing.  

As a matter of principal, as a legal advisor, he would not comment on policy as that was not his position.

He concluded that the budgets needed to speak to the people on the ground. More time should also be invested in the different processes involved. The different offices had to working together and consult different reports, and then link their budgets to these reports.

Committee programme

Mr Darrin Arends: Committee Secretary, said that the first quarter was going to be very short. By this time, the National Treasury would have given the Committee the first quarter spending report for 2019/2020. Members were aware that part of the Committee’s mandate was to monitor the expenditure, so this term would focus on the expenditure by Parliament during the first term.

Among meetings scheduled, the Parliamentary Democracy Office (PDO) would brief the Committee on the total expenditure brief, as well as an analysis of the National Development Plan (NDP) outcomes. The Committee’s Researcher would also give an analysis on the first quarter expenditure report, as per the directive from Treasury.

At the next four meetings, Members would receive briefings on the departments specifically identified after the briefing with the National Treasury. They would also have to give consideration to the programme for the third quarter.
 

Discussion

 
The Chairperson said that the Committee needed to adopt the budget, and based on the legal opinion it was very clear that without getting into the merits and demerits of the DA’s proposals, the fact of the matter was that there were a lot of legal requirements that had been not complied with. Therefore it did not serve a purpose for the Committee to engage on the merits and demerits of the proposal. His ruling was that the Committee was not getting into the merits and demerits of the DA’s proposal. The Committee would submit a report to the Parliament that the Committee had not looked at the merits and demerits of the proposal because of a number of reasons.

After Members had objected to points of order being raised after the Chairperson’s ruling, the Chairperson advised the Committee to move on to the next agenda item because after a matter had been ruled, it was not correct to want to continue engaging on it.

He went over the proposed amendments and all the sets of minutes, and these were adopted

Mr Sarupen said that the Committee could not “blame the messenger” for some of the structural problems it had been presented with. These were due to the institutional structure and the national elections. He wanted to respectfully clarify an item with regard to the context of what he had meant by his reference to the shortage of time, and of being under no illusion that the Committee would not adopt the DA’s proposal. He had meant that it would not be adopted because of the shortage of time.

He agreed with the Chairperson’s approach on the DA’s proposal, and accepted the Chairperson’s ruling. There were institutional problems with timing and the Committee’s programme, and he could not personally agree with them as a Member of Parliament or as a member of the DA.

Mr D Joseph (DA) asked the Chairperson to quote the page numbers to which Members may object, so that it was easy to refer to them. He added that he wanted to clarify that Mr Sarupen was not trying to undermine anyone on the issue of time, but the context could have been taken up the wrong way by other Members.

Mr O Mathafa (ANC) suggested that the Chairperson accept the document as it was, because the legal opinion had helped to provide clarity. He had had reservations on a number of issues, but after the legal advisor’s explanations, he understood.

Mr A Shaik Emam (NFP) said there was already an opinion in front of the Committee. He asked what the Committee was engaging on, because no matter what the Committee decided, it was out of time already. He suggested that they look at ways of how the Committee could change things for the future and look at ways of preventing the situation which they had currently.

The fact that Mr Sarupen had said that he was not expecting any of the Members to support the proposal, and had a preconceived idea about their support, was unacceptable, because Members come to the Committee open-minded and ready to engage.

Mr Z Mlenzana (ANC) said that Mr Sarupen had continued to articulate the mandate from the DA deliberately after the Chairperson had already made a ruling. If the Committee was going to allow situations, where a Member continues to engage on a matter after the Chairperson had ruled, it would cause problems in the future. He suggested the DA should interrogate the politics involved when the Committee had time. As the legal advisor had indicated, there were manifestos around the issues being discussed, and it was because of these manifestos that the ANC had received the majority vote in the national elections. The ANC was not going to allow these manifestos to have holes punched in them.

Ms E Peters (ANC) asked if the DA’s submission was already part of the body of the Committee’s report. Her concern was how the Committee was going to deal with it if it was already in the report. She had thought that the DA was going to make the presentation, and that the Committee would process the matter.

Mr I Morolong (ANC) also said that it was not correct for Mr Sarupen to engage on the same proposal after there had been a legal opinion from the Adv Jenkins. He thought that the Committee was now expected to respond to the proposal by the DA, or to adopt the legal advice given. The Committee ran the risks of Members debating among themselves on issues which the Chairperson had made a ruling on. The Chairperson should therefore not allow Members to raise a point of order after a ruling, and must develop a consistent principle on applying the rules.

He suggested that since the report had been sent to the Members timeously, it would be wise that if there was anything Members wanted to object to, they should do so rather than going through the whole report.

Ms R Komane (EFF) referred to the submission of the legal opinion, and said it could not be submitted as a report because the Committee had requested a legal opinion based on the report and submission made by the DA. The Committee could therefore not engage on the merits and demerits of the proposal, but the opinion should rather be taken as advice on whether to continue on the matter or not.

The Chairperson thanked everyone for the congenial manner in which everyone had conducted themselves as a Committee since the first day. Their commitment to working together was a good start. They had to accept that there would be always different views on certain matters, although he was sure there were no differences over trying to work towards creating a better nation. He also thanked the support staff on working with the Members and ensuring that whatever the Committee needed was provided.

He encouraged the Committee to look at ways of motivating members of the public to participate in the budget process to create a “people’s budget”, as Parliament was for the people, and it was they who had elected the Members into office.

The meeting was adjourned.