Division of Revenue Amendment Bill: Negotiating Mandate

Meeting report

The Chairperson said the Committee was meeting about a matter that had been postponed - the consideration and adoption of the negotiating mandate report on the Division of Revenue Amendment Bill.

She said feedback received from the legal advisers was that the Committee did not need to consider public wage and conditional grant allocations because they did not fall under the Division of Revenue Act (DORA). She asked Adv Andre le Roux, Legal Advisor, to elaborate.

Adv le Roux said the issue of errors in conditional grant allocations should not have been referred to the Committee, but to the National Parliament. The Committee was, quite rightly, taken aback when it was asked to approve the corrections.

He said the Minister of Finance approved the Budget allocation for public sector wage increases as unforeseeable expenditure in terms of the Appropriation Act. The Act said that the provinces’ equitable share of the budget should be increased when this was done. He had received an email that this had been done and gazetted on 3 November. Because the allocation had been given effect the gazette, it was not an issue for the Committee to consider.  

The Chairperson invited Mr R Mackenzie (DA) to take the Committed through a written submission he had made on the Bill.

Mr Mackenzie said he did not support the Bill. Provinces were facing rising costs not covered by the provincial equitable share. For example, nursing staff at the Mitchells Plain Hospital struggled to cope with increasing patient numbers, but there were no funds to hire more staff. This was taking a toll on the mental health of staff. 

He was not satisfied with the answers received from National Treasury delegates at a meeting on 17 November about the process of allocating funds. He believed there was a lack of innovation in addressing new challenges. Instead, a standard template was used.

Ms N Nkondlo (ANC) stated that the ANC supported the Division of Revenue Bill. She said that the implications of the budget were not new and reflected the severe consequences of the Covid 19 pandemic and climate change. Financial constraints were experienced worldwide. During the pandemic and the floods experienced in the Western Cape, the Provincial Treasury and municipalities worked under difficult constraints to ensure that fiscal guidelines were maintained. 

Mr G Brinkhuis (Al Jama-ah) stated that Al Jamaah supported the Bill and was thankful for the portion of the funds received.

The Chairperson said she was unsure if she shared Mr Brinkhuis’s views on receiving no increase in the equitable share. However, his position was noted.

Ms C Murray (DA) said she shared Mr Mackenzie’s views. She stated that the DA did not support the Bill. 

The Chairperson said she agreed with Ms Murray and Mr Mackenzie and did not support the Bill. She did not appreciate that no extra funds were allocated in the equitable share. It meant that there would be no extra money for service delivery. The only funds received were a conditional grant for disaster management which could not be utilised for anything else. It was also allocated to the wrong municipalities, which might have cost implications.

The Chairperson stated that all the permanent Members had indicated their views. She asked for a mover for the Committee’s report.

Ms Murray moved that the report be adopted.

Mr Mackenzie seconded the motion. 

The Committee adopted the report stating that the Committee conferred a mandate on the Western Cape delegation to the National Council of Provinces (NCOP) to not support the Division of Revenue Amendment Bill. 

The report noted that the minority parties, the ANC and Al Jamaah, supported the Bill.   

The Chairperson stated that the Division of Revenue Amendment Bill Mandate would be tabled at the NCOP meeting that afternoon.

The meeting was adjourned