Division of Revenue Bill: Negotiating Mandates

NCOP Appropriations

26 April 2023
Chairperson: Ms D Mahlangu (ANC, Mpumalanga)
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Meeting Summary


The Select Committee on Appropriations met on a virtual platform to consider and adopt the provinces' negotiating mandates on the Division of Revenue Bill [B2 – 2023].

During discussion on the Bill, provinces raised a number of issues. For instance, some complained about the lack of ambulances and vandalism at schools, the greater need for disaster management funding, the need to support smaller and medium-sized municipalities, as well as capacitating them, and the inclusion of some provinces into the agricultural support grant, etc.

A Member requested National Treasury include comparison data in its future reporting to enable Members to have a better understanding of changes to year-on-year budget allocations.

The inclusion of chairpersons of the legislature to the Treasury’s budget forum was also discussed, as Members were of the view that the legislative branch of government should be represented on such occasions.

The Western Cape complained about the decreased funding in several of its educational grants for maths, science, technology and infrastructure, despite the population increase in the province in recent years.

The Committee discussed the appropriateness of the wording “minority view”, and if it should be included in a report of such a nature.

Concern over the review of the provincial equitable share formula persisted, and was highlighted by various provinces. Geographically large provinces like the Northern Cape preferred budget allocations to be based on their geographical area, whereas provinces with large populations, such as the Western Cape and Gauteng, preferred budget allocations to be made according to their rapidly growing populations. 

Meeting report

The Chairperson outlined the agenda of the meeting, which was to deal with the Division of Revenue Bill. She was glad that the whole process had gone well. This meeting would be an opportunity for Members from the provinces to present their respective provinces’ negotiating mandates.

The Committee received apologies from Mr Y Carrim (ANC, KZN), who was out of the country, and the Free State Provincial Legislature's representative, as it was conducting public hearings.

Mr W Aucamp (DA, Northern Cape) asked to present the mandates of his province first due to other commitments.

Ms Z Ncitha (ANC, Eastern Cape) had also indicated to the Committee that she would be joining the platform slightly later.

Division of Revenue Bill: Provinces' negotiating mandates

Northern Cape

Mr Aucamp indicated that the Northern Cape Legislature had voted in favour of the Bill.

Public participation had taken place. Some of the issues arising from that process were:

  • Consequence management to be strictly adhered to;
  • Complaints about the shortage of ambulances and vandalism at schools;
  • Grave concern about funding when disasters occurred, etc.

The province had not received any written submissions.

The provincial legislature, as usual, had expressed its concern that the equitable share formula had not been changed yet. The vastness and the size of the province should be taken into consideration.

The province also wanted the available fund for disasters to be immediately available.

KwaZulu-Natal (KZN)

Ms L Bebee (ANC, KZN) said that the KZN Provincial Legislature supported the Bill.

Eastern Cape

Mr M Ndabeni (ANC, Eastern Cape Legislature) said the Eastern Cape Provincial Legislature voted in favour of the Bill.

The key comments made by the province were:

  • Removal of the housing and emergency grant from local government;
  • Timing of the appropriation of the adjustment budget;
  • Historical backlog;
  • The involvement of the South African Local Government Association (SALGA) in the Bill;
  • Transport Network Grant should be used to support smaller towns and municipalities as well;
  • Agri-hubs.


Mr D Ryder (DA, Gauteng) said that the Gauteng Provincial Legislature voted in favour of the Bill.

He indicated that the attendance at the meeting on the Bill in the Gauteng Legislature had not been good, and diluted the democracy and representation. There was also a lack of response from the community, which he described as disappointing.

The provincial legislature recommended that:

  • Since local government was at the forefront of service delivery, National Treasury should only convert a conditional grant to an indirect grant as a last resort, and should capacitate municipalities to spend their funds prudently;
  • The equitable share formula should be based on the latest data;
  • The National Treasury should explain the funding for the 2023 District Development Model;
  • Municipalities must be capacitated to harness their own budgets, to circumvent instances of unfunded budgets as a consequence of the subdued environment.


Ms M Mamaregane (ANC, Limpopo) said that the Limpopo Provincial Legislature voted in favour of the Bill.

The province’s recommendations could be found in the attached documents. They included the recommendations for the government to develop a well-funded capacity building programme to assist municipalities, the review of the outer years budget, and the mechanisms to transfer funds to municipalities for the money which the provincial government owed.

Western Cape

Mr E Njadu (ANC, Western Cape) said the Western Cape Provincial Parliament objected to the Bill.

The key issues which had been raised were:

  • The Bill did not ensure that the Western Cape received its fair share;
  • The provincial equitable share (PES) formula had not been reviewed, leaving key areas such as gender-based violence (GBV) unfunded;
  • Increases in the conditional grant allocation to the province were below inflation;
  • There was a substantial reduction in the education grant for maths, science, technology, education infrastructure, etc;
  • The province had received amounts well below the Gauteng and KZN human settlement grants;
  • It had received less funding for the Expanded Public Works Programme (EPWP), etc.

(More details of the province’s recommendations can be found in attached documents.)

Free State

As Mr M Moletsane (EFF, Free State), the Free State provincial permanent delegate, was not on the platform, so the Chairperson asked Mr Ryder to read the province’s mandates on his behalf.

The Free State Provincial Legislature had voted in favour of the Bill.

Four issues have been highlighted:

  • Municipal infrastructure grant funding;
  • Provincial emergency housing grant;
  • Disaster management allocation;
  • Welisizwe rural bridges programme.

North West

Mr F du Toit (FF+, North West) said that the North West Province had voted in favour of the Bill.

The province proposed four amendments:

1) Rural roads asset management grant;

2) Funds allocated to anti-retroviral therapy (ART) and tuberculosis (TB) to be increased;

3) The inclusion of the province for the comprehensive agricultural support grant;

4) A policy to intervene and mitigate in instances of foreseeable non-expenditures in both departments and municipalities.


The Chairperson said that the Mpumalanga Provincial Legislature had voted in support of the Bill.

Three engagements had been held prior to the voting within the provincial legislature. The provincial treasury had also been involved in the process.


The Chairperson said that various issues that had been raised by the provinces.

She commented on the Western Cape’s report, which had used the wording, “the minority view”. She said that the conventional practice was to state that certain parties did not support, or had abstained. She highlighted the importance of adhering to the correct wording, and asked for Members’ views on that.

Mr Du Toit agreed that the Committee should rather adhere to the conventional practice -- to state which political parties did not support, rather than saying "the minority view."

Mr Ryder explained that the standard practice would be that a minority view should be accompanied by a minority report.

He highlighted that the equitable share formula issue persisted despite Treasury’s year-on-year promises. When the budget committee convened, it was usually comprised of various executive members of various provinces, but he was uncertain whether chairpersons of various committees were included in the budget forum. He suggested that at least the chairpersons of provincial committees should be included in the budget forum.

He pointed out that the information being presented to the Committee by Treasury made it difficult for Members, because there was no year-on-year comparison to show if those numbers were going up or down. He asked the Treasury to include those comparative figures in its future presentation. This point was particularly in relation to the Western Cape’s report, which states that its various allocations had gone down, despite the influx of population to the province which people heard about daily.

The Chairperson summarised Mr Ryder’s point that the Committee should not use the wording “which political parties hold which position” in terms of the report, but rather should take the view of the majority view. She maintained her view that she was uncomfortable with that wording.

She noted Mr Ryder’s point on the budget forum. She said that, to her knowledge, Chairpersons of the National Assembly were invited to this forum, where Members of the Executive Councils (MECs) from provinces engaged on their respective budgets. However, as observers, they were invited only a day before the meeting took place, so most Members were unable to make it due to meeting clashes.

Mr Njadu responded to the Chairperson’s remark on “minority view”. As a government, opposition parties were part of the composition of the government. All Members, including the opposition, made inputs to assist committees, so he did not think it correct to refer to “the minority”. He thus could not support the word “minority,” because all members participated in the committee work.

The Chairperson summarised that he and she agreed on the issue of “minority view”.

Mr Ryder referred to the Chairperson’s input on the budget forum, and commented that the fact that chairpersons got an invitation only at the last minute showed that the forum was not working as it should. He requested Treasury give a response on the issue.

Ms Wendy Fanoe, Chief Director: Intergovernmental Policy and Planning, National Treasury, noted the concern. She said it was an administrative issue, as the meeting invitations should have been sent out long before the time. They would discuss the matter with officials so that they informed the chairpersons sooner.

Mr Bongani Daka, , Acting Director: Financial Management, said that Treasury had put in deadlines for requesting stopping and reallocations for both provinces and municipalities. He also responded to the provinces’ complaints that when Treasury stopped and reallocated funds to another province, it was like taking money away from people. However, he asked the provinces to note that, in most instances, those provinces had under-expenditures, so the funds would have been reverted back to Treasury at the end of the year in any case.

Mr Daka said that some provinces wanted to be included for the agri-hubs. He advised that those provinces needed to put in an application through the budget funding for infrastructure before they could be considered.

He said the funding for disasters was allocated based on the assessment made by the National Disaster Management Centre.

Treasury needed to calibrate the needs of various provinces carefully. Vast provinces such as the Northern Cape wanted more budget because of their geographical area, whereas the more populous provinces such as the Western Cape and Gauteng wanted more budget, based on population. Even the Eastern Cape wanted more budget, citing its rural areas and poverty. Treasury always indicated that a province’s proposals should always be based on credible data to inform its budget allocation. He said that the review of the equitable share formula was underway and was, for instance, differentiating between categories of learners within the education component.

The Chairperson requested written submissions to be forwarded to the Committee.

The negotiating mandates were duly adopted.

Adoption of minutes

Committee minutes dated 22 and 24 March were duly adopted. 

The Chairperson adjourned the meeting.


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