Adjustments Appropriation Bill: public hearings

NCOP Appropriations

10 December 2021
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Meeting Summary


The Select Committee on Appropriations in the National Council of Provinces (NCOP) convened in a virtual meeting for two oral submissions on the Medium Term Budget Policy Statement (MTBPS) by the Congress of South African Trade Unions (COSATU) and #PeoplesBudget.

COSATU disagreed with the austerity approach of government. The fiscal policy challenges were impacting businesses which had been closing in large numbers. The fiscus was losing billions to corruption. The union wanted to assist government in not allowing the state to collapse. COSATU proposed wage caps for senior managers in all state entities.

#PeoplesBudget said the adjustment budget was underwhelming and was not characterised by a sense of urgency felt by South Africans. This is not a pro-poor budget as stated by the Minister of Finance. The poor would be left to fend for themselves.

The public participation process was deemed inadequate by #PeoplesBudget which made a collaborative submission on behalf of 28 civil society organisations. A proposal was made for the creation of a database of stakeholders who regularly comment on budget matters instead of relying on advertising in print newspapers. It stated that

The Select Committee acknowledged public participation could be improved and it was open to enhancing the process to benefit the broader society. It also stated that the annual budget framework was complex and had time constraints which limited the Committee. Balancing the budget involved trade-offs.

Underspending was of concern to the Committee as well as the stakeholders. National Treasury explained that underspending could be attributed to the new approach being followed in the current pandemic. The shifts in budget allocation were the result of savings due to less travel and fewer physical meetings and monitoring which were increasingly done virtually in all government departments.

The engagement with #PeoplesBudget became acrimonious due to MPs' lack of use of the relevant pronouns for people identifying as non-binary members of society.

Meeting report

COSATU submission
Mr Matthew Parks, COSATU Deputy Parliamentary Coordinator, said he had Covid-19 the previous week and encouraged everyone to take the vaccine as he could attest to it being a miracle worker.

COSATU disagreed with the austerity approach of government. The fiscal policy challenges were impacting businesses which had been closing in large numbers. The fiscus was losing billions to corruption. The union wanted to assist government in not allowing the state to collapse. COSATU proposed wage caps for senior managers in all state entities.

The government had run a very tepid vaccine campaign in the media. The R150 million allocated to Digital Vibes should be recovered and utilised to resource a mass media campaign to educate citizens on the importance of being vaccinated.

The R350 social grant should be extended. The long queues at the Post Office was an indication of the desperate need for social assistance. The ultimate solution was to provide jobs for the unemployed.

Railway transport in Cape Town had come to a halt which indicated a crisis in leadership in the City of Cape Town. There was a need for the Department of Transport to table a plan to rebuild the railway infrastructure.

#PeoplesBudget submission
Researcher Sacha Knox stated the #PeoplesBudget submission was endorsed by a diverse group of 28 organisations (see document for content). The coalition of organisations endorsed the content of the submission, they viewed the public participation process as a tick-box exercise which was not constituting a proper public participation process. The submission was available online for use in advocacy. The Section 27 analysis in the submission indicated a massive decline in health spending. The representative asked to be addressed as they/their/them and that the pronoun ‘she’ not be used.

Ms Esther Ramani, co-presenter and Rhodes University researcher, highlighted the non-performance in the delivery of home language school books and said even before Covid-19, there had been a long history of books not being delivered on time. In the developed areas of the Eastern Cape, people had access to water every other day while in rural and township areas, people could go without water for seven days due to huge infrastructure backlogs. Tenders were being awarded to people who were not equal to the task.

The submission included that femicide needed urgent attention and the coalition of organisations found the lack of performance indicators to track performance in Agriculture, Land Reform and Rural Development, concerning. The adjustment budget was underwhelming and was not characterised by a sense of urgency felt by South Africans. This is not a pro-poor budget as stated by the Minister of Finance. The poor would still be left to fend for themselves.

In response to the Chairperson asking to help the Committee follow the submission as a lot of time was spent discussing health, it was pointed out that health was an important issue. The Chairperson did not disagree but said the Committee was unable to keep track in the document.

The Chairperson thanked COSATU and #PeoplesBudget for the very important and relevant issues raised that the Committee should take forward. Some issues the Committee had already raised. But first the Committee had a responsibility to acknowledge and clarify the public participation concern. She requested the Committee Secretary explain the procedure followed in the public participation process.

The Committee Secretary replied that between 18 and 26 November 2021, advertisements were placed in print media in different newspapers publishing in the official language per region. On 16 November 2021, he received an email from Sacha Knox of #PeoplesBudget enquiring about the process. In response, he emailed a copy of the advertisement with the closing date and public hearing date. He was under the impression that the matter had been resolved. The day before this meeting, when public participation was again raised, he reminded the presenter about the earlier communication between them. He did not anticipate finding himself in this position. He hoped that this important exercise as mandated by Section 72 of the Constitution would not be clouded by this. He believed the matter of public participation had been adequately canvassed.

Ms Ramani requested an opportunity to speak.

The Chairperson asked Ms Ramani to allow Committee members to raise questions first and then the presenters can respond.

Sacha Knox spoke to acknowledge their mistake in getting the dates wrong but felt the public participation process was massively inefficient and insufficient.

The Chairperson advised them to deal with the matter during the opportunity given to stakeholders to respond and to allow Members to raise questions at this point.

Mr D Ryder (DA, Gauteng) thanked both organisations for the input, questions and issues highlighted in both submissions. It was worth appreciating the work done, especially the huge value and practicality of the COSATU submission. There were a couple of policy positions that he disagreed with, for example, its analysis was sending the wrong signal about the R200 million for critical infrastructure in the Department of Trade, Industry and Competition (DTIC). COSATU highlighted manufacturing impacting the ability to re-industrialise the country. Mr Ryder said government was not putting its money where its mouth was on this matter. He agreed with the proposal to relook at salary packages for senior management. He agreed that Metrorail in Cape Town had been obliterated. Metrorail would do better if incorporated into the City of Cape Town Metro, which had been pushing for Metrorail to fall under the local government. The majority of the people that wanted to use train services could not afford the fees of the MyCiti Bus service. Metrorail under the local government sphere would make a massive difference. The conclusion by COSATU was spot-on; the time for dithering had past, the urgency had not been picked up by government and was not translated in the budget.

Mr Ryder had massive policy differences with the #PeoplesBudget submission. The claim about consisting of the most diverse range of organisations was a bit off the mark. Mr Ryder said he had been a member of COSATU in his previous life and in terms of diversity, one could not do better than COSATU. The comments made in the #PeoplesBudget submission needed to be filtered. He agreed the public participation process was not up to scratch but the pandemic and recent elections had been constraints to this. The public participation process could be drastically improved and not merely be used as a tick-box exercise. He proposed the creation of a database of regular commentators by the Committee Secretary and to encourage stakeholders to come forward and make their voices heard. Stakeholders should be contacted directly as not many people were still reading print newspapers.

In terms of the Basic Education analysis, he enjoyed the comment about salaries always being well spent. Comparing the 10% of achieved targets with the 100% salaries paid, the matter needed to be seriously investigated. He understood the rollover in the StatsSA department but requested National Treasury to provide more detail on the underspending and thus rollovers in the Agriculture, South African Police Service and Basic Education departments. He questioned the effectiveness of how the money was being spent and suggested it was spent on the wrong things.

Mr Y Carrim (ANC, Kwazulu-Natal) said the ANC and its partners agreed to support the LGBTQI+ community in South Africa. Today's exercise was not about recognising diversity but about how the budget allocation, in terms of LGBTQI+ initiatives, would be done. In the First Parliament Term, deliberations were held on gender budgeting but this was a broader issue that needed further engagement with National Treasury.

Mr Carrim drew attention to the matter of the public participation process being the last stage of the budget process. It was a complicated process and in some sense it was too sophisticated and onerous. The Committee had consistently raised the waning of public participation and this process needed to be revitalised. The public was sceptical of the process and Members needed to recognise the failures. The budget timeline framework within which the Committee could operate, was very limited. He added that budget rollovers were unforeseen and unavoidable.

Mr Carrim acknowledged the Committee Secretary and his team for the excellent work. It was his opinion that whatever had happened in advertising the call for public comment was done in error and had not been deliberate. He suggested the matter should be dealt with off-line. The main objective of the NCOP was funding the public participation process in the provinces, it was not operating at a national level. The concerns raised by #PeopleBudget should receive attention in the National Assembly. The NCOP had a secondary role.

On the proposed non-binary pronouns, Mr Carrim explained all future bills would refer to the relevant pronouns for non-binary identity consistent with the Constitution.

Mr Carrim said the budget was about trade-offs although civil society acted as though government was against the poor. He was stunned to hear that Mr Ryder had been a COSATU member.

Mr Carrim said that organisations should be cautious about making claims on representing diversity. South Africa was very advanced in abortion rights, not having the death penalty and legalised gay rights. South Africa is a developing country but it was doing ok on LGBTQI+ issues, although it had been a battle with some comrades and people from rural areas. The fact that this is Africa and not Sweden must be appreciated and balanced considering the culture of rural people. Civil society and the Committee need to work together. It would help if people from the Zulu or Venda cultures were represented in these organisations to speak for themselves. Civil society should be a bit more understanding. Firstly, the budget was severely stressed and the budget system was complex and secondly, it was a Constitutional Court decision to go ahead with elections.

Mr M Moletsane (EFF, Free State) asked for comment from COSATU on the unspent budgets of municipalities.

Mr E Njadu (ANC, Western Cape) expanded on unspent budgets. Under spending, over spending and rollovers had all impacted on job creation. This matter had been raised several times and could no longer be a case of business as usual. He was interested to hear the COSATU perspective on this matter. He asked for the current position of COSATU on the wage bill. He wanted to hear National Treasury's perspective on the matters raised by #PeoplesBudget. The public participation process was important but the Covid-19 pandemic restrictions had affected this. The Committee had to consider the timeframes of the budgeting process.

The Chairperson acknowledged Sacha Knox’s raised hand but first wanted to give her input. She was impressed by the COSATU submission as could easily relate to what had been presented. Not only had concerns been identified, but recommendations were also made. Most of these had also been raised by the Committee and some of them would be included in the report that would be sent to the House.

The Chairperson asked that National Treasury be given an opportunity to respond to what had been presented. The Committee would have to resolve some of the concerns raised but some required the involvement of Sector Committees. The role of the Committee was limited to approving the money. However, budget allocation matters needed to be referred to the Sector Committees to deal with the important issues as mandated. The presenters could consult with the relevant committee secretary to coordinate such meetings.

The Chairperson asked COSATU to comment on but Mr Parks noted Sacha Knox’s request to respond first and he agreed to the request.

Sacha Knox said they needed to step out of the meeting shortly, hence the request to speak first. There had not been much innovation in the NCOP on the public participation process. The response from the Committee was found to be fairly dismissive. The budget process was in crisis. The level of information and statistics available online had been dismally low and people did not know how to access the information. In scrutinising the information, massive problems were identified. The non-participation from other stakeholders, pointed to a lack of real participation.

In response to the diversity claim, the coalition did not claim to be as representative as COSATU, which was well-resourced. As a member of the Workers and Socialist Party, it was clear that a lot of members were hesitant to become involved in the public participation process as it was viewed as a check-box-exercise. The public submissions did not make a difference in the allocation of the public purse. It was outrageous to say South Africa was doing ok by referring to programmes that were regarded as achievements while there were no indicators in the Adjusted Estimates of National Expenditure (AENE) geared towards the LGBTQI+ population. Home Affairs statistics would reflect how the LGBTQI+ community had been abandoned. Gay rights issue was not a side issue, homophobia was not an African problem; the comments were found to be neo-colonial.

In response, Mr Carrim said the accusations had no bearing on what he said. He felt Knox was not engaging with what was said but was more focussed on what was in her head.

Sasha Knox objected to being referred to as ‘she’. It was outrageous that Mr Carrim talked about acknowledging LGBTQI+ issues but continued to use the pronouns rejected by the LGBTQI+ community. As only two oral submissions were made on such an important issue, this was indicative of a flawed public participation process. Changes were needed to create a meaningful public participation process. National Treasury was often the scapegoat or the ‘whipping boy’ where budget allocations were concerned. There would always be winners and losers in trade-offs but #PeoplesBudget was highlighting unacceptable trade-offs in the budget. The investments proposed in #PeoplesBudget submission would impact on the triple problems of unemployment, inequality and poverty. It was outrageous and unacceptable that the wage bill was not targeting a reduction in the salaries of top earners.

The Chairperson called on Mr Parks to take the platform.

Mr Parks said he did not want to appear to be defending Parliament but acknowledged the good effort made by the Committee staff. Although he saw the advertisement, he was also contacted by the Committee for COSATU’s input. In his experience, Parliament had gone out of its way to be inclusive and to accommodate the proposals from the unions within the limitations of the budget.

Mr Parks replied to Mr Ryder that DTIC played a critical role in growing jobs and should be given more, not less money. A person in a job was less dependent on the state. The request for a dedicated SAPS Railway Unit for Metrorail had previously been raised by COSATU. He confirmed the need for urgent railway security and suggested the Defence Force be approached to provide the security. The rollovers on the Vaal River infrastructure programme, the MyCiti bus service and the Basic Education allocation were worrying. Money should not be denied if it can be better spent elsewhere. The budget was often found not to be user-friendly and was also silent on zero-based budgeting. COSATU welcomed the comments made by the Minister of Finance to engage the Public Investment Corporation (PIC) board.

Mr Parks acknowledged the important issues raised by Mr Carrim. He remembered abortion being a hot issue when the termination of pregnancy legislation came into effect in 1996. Home Affairs was currently reviewing the identity document (ID) policy. There had been progress on many fronts but it was not enough. Good laws on paper, if not implemented, do not effect change. Corruption affected all sectors. All unions, churches and civil society organisations needed to work together to deal with the ‘cancer’ of corruption. The budget, by its nature, was a trade-off. Nurses and teachers should not be penalised. The R350 social grant should be reinstated. COSATU raised R63 million or 40% of its contributions as savings for government initiatives, for example, to assist Eskom.

The Chairperson noticed that Sacha Knox was no longer on the platform. It was unfortunate that the presenter was not on the platform to listen to the feedback. The Committee needed to respond to what had been raised. Everything possible had been done to facilitate the public participation process but the Committee needed to reflect about the public not responding. The Committee was not rigid if there was room for improvement. However, they could not keep quiet if the Committee had done its part. Compromise was needed and emotions should be left aside. The Chairperson was also a gender activist but disagreed with the notion of attacking people for using common pronouns. The Committee was under attack and requested engagement on the matter and to see what the legislation was saying about this.

Ms Esther Ramani of #PeoplesBudget asked for an opportunity to speak and. She would inform Sacha Knox of the comments made by the Chairperson.

The Chairperson requested her to be brief in delivering her comments.

In response, Ms Ramani said the parliamentarians were allowed adequate time to speak but stakeholders were asked to be brief. She congratulated the staff for the work done but said the AENE was not a user-friendly document. Placing newspaper advertisements was not effective as not many people were still reading newspapers. The Committee had to acknowledge the distrust in Parliament by civil society and should understand the frustration of people. Everything achieved by civil society came as a result of fighting. Section 27 and Equal Education had to take government to court to reinstate school meals during the initial stages of the pandemic. She raised concern about the kind of society we have become considering 13 million people go hungry every day. She questioned the trade-offs in the budget. The Constitution was the best on paper but the budget procedures needed to be relooked. The country was not short of brilliant people and the government should not limit itself only to people known by parliamentarians.

Mr Carrim apologised to Sacha Knox for using the pronoun ‘she’ instead of ‘they’ or ‘them’. He said the presenter was not listening but lecturing, which was not in the spirit of the public participation process. He felt it was arrogant and wrong to think that being non-binary was being superior to those who were not non-binary.

He questioned Ms Ramani’s objection to the need for budget trade-offs as the pro-poor approach did not always meet the budgetary requirements. He thanked Mr Parks for the kind words about Parliament seeking engagement. Although there had been difficulties, COSATU was always available to engage on issues.

Mr Carrim could not recall in his 27 years of being a Member of Parliament, the kind of behaviour displayed by Sacha Knox. The Committee acknowledged people with multiple identities but it had to take society along on this journey and it could not be too far ahead in this approach. The Committee expected from civil society to show how best the money could be allocated and not merely to deliver criticism. If her background influenced the Euro-centric approach expressed by her, then it was reflective of her racial demographic. He said Members should not be intimidated by her but should engage with organisations associated with her. Her outrageous behaviour was something she should pay attention to.

At this point, Mr Njadu took over as Acting Chairperson as the Chairperson lost network connection. Mr Njadu said the last part of the meeting was reserved to hear from Treasury.

National Treasury response
Mr Spencer Janari, Education Budget and Policy Analyst: National Treasury, thanked Members and civil society organisations for the input thus far. He noted the comments on elements of the public participation and said government as a collective needed to do better on this.

Mr Janari responded to three points made in the #PeoplesBudget submission on Vote 16: Basic Education. Firstly, on the 0% performance against the target of 100% for delivery of home language workbooks. The target was 100% for 2021/22 while the performance was reported for the first six months up to September. The 100% performance for workbooks was expected in the October-December quarter for use in January 2022, which was on track. Secondly, on the concern about the R12,8 million shift from Goods and Services in the Curriculum Monitoring subprogramme. The shift was from Subsistence and Travel because of the change in the monitoring methodology used since 2020. There was less physical travelling and more virtual monitoring in the country. It was not compromising curriculum monitoring at all. He expected this kind of saving to occur across all government departments as the new way of virtual operating was becoming more entrenched. Thirdly, the R97 million shift on School Infrastructure was not from the infrastructure portion of the allocation. It was money allocated to Planning and Oversight and not a reduction in the School Building programme. Again, it was as a result of the new way of operating.

At this point, Sacha Knox re-joined the meeting and requested an opportunity to respond.

The Committee Secretary intervened and said this had never happened before and there was no way she could return and address the Committee. There was a specific procedure to be followed and respected for committee meetings. As committee secretary, he needed to ensure that meetings proceeded in a proper manner.

The Acting Chairperson thanked the Committee Secretary for his intervention and reiterated the meeting procedure: stakeholders were given an opportunity to present submissions followed by a response from Members….

Sacha Knox interjected but was asked not to proceed.

The Acting Chairperson continued to explain the meeting procedure, saying stakeholders were again given the opportunity to respond to Members. Then National Treasury was given an opportunity to comment on everything that had been said in the meeting. Stakeholders could not return as the last part of the meeting was reserved for National Treasury participation.

Sacha Knox then called ‘a point of order’.

The Acting Chairperson asked her to respect the meeting. National Treasury was on the platform and she would not be allowed to speak, neither was she in a position to call for ‘a point of order’. National Treasury was asked to continue.

In the Chatbox, Sacha Knox made a number of comments about the unfair public participation process during National Treasury’s response.

Ms Pebetse Maleka, Public Policy Specialist: National Treasury, said rollovers were analysed by Treasury. The efforts were not just due to funds unspent but the idea was to meet obligations already committed to. The analysis considered which commitments had been made, at what stage of delivery the department or institution was, and to settle the commitment already made. What National Treasury was trying to do on Vote 20 for Women, Youth and Persons with Disabilities, was to assess all the public participation to see if the concerns had been addressed within the responses of the Department. Most of the responses would not be visible in the element of the budget, so the best way to view it was to review the public participation or the Department Annual Report. On the grant reduction in the 2020/21 MTEF, the key issue that still needed to be decided on politically was how much was available for continuation of the R350 grant versus the ability to consider an inflation-related grant. There was a gap in providing for inflation for the current social grant. A balancing act was required on the part of the political leadership.

Ms Dumebi Ubogu, National Treasury Public Finance Director: Transport, clarified the 'underspending' under the Public Transport Network Budget. In 2018, a budget facility for infrastructure development programmes was introduced to accelerate infrastructure delivery. At the time, this reform was to be headed by the PIC, Treasury and Department of Economic Development. Two projects were evaluated and flagged as priority; one was the MyCiti roll out programme to benefit from the budget facility infrastructure programme. However, funding had been channelled in error through the Energy Grant. This resulted in the City of Cape Town reassessing the rollout of the infrastructure programme. At the time when the City of Cape Town approached National Treasury, the programme had been under review. What had been stated as underspending, was in fact a realignment of the infrastructure programme that could at a later stage be drawn for the MyCiti roll out programme.

Concluding remarks
The Acting Chairperson thanked National Treasury for the responses. The role of the Committee Secretary was to advise the Committee on procedure, which was appreciated. The procedure in a public hearing was to give invited stakeholders an opportunity to make a submission, followed by engagement by Members. Thereafter, stakeholders were given the opportunity to make additional inputs. Lastly, National Treasury was given the opportunity to give its perspective on the appropriations and give an overview of all points raised. This was to ensure that all inputs were given attention. Any further comments that had not been dealt with, must be done in writing.

The Acting Chairperson thanked everyone for the contributions and requested the Committee Secretary inform them of the agenda for the following week.

The Committee Secretary noted that on 14 December 2021 the Committee would adopt two reports: Adjustment Appropriations Bill and the Proposed Division of Revenue and Conditional Grant Allocation reports. One of the reports was ready but the second report was still in progress and would be distributed to Members by 13 December 2021.

The meeting was adjourned.

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