2024 Fiscal Framework & Revenue Proposals: Committee Report

Meeting report

Opening remarks
Co-Chairperson Maswanganyi welcomed everyone to the meeting. The Select Committee on Finance and Standing Committee on Finance will be considering the Report on the 2024 Fiscal Framework and Revenue Proposals.
The meeting dealt with apologies.

Co-Chairperson Maswanganyi thanked the teams from both Committees for compiling this report. They had to be given credit. Compiling such a report of this nature was not easy, so the members had to commend the good work of the support teams.

Committee Report on the 2024 Budget (Fiscal Framework and Revenue Proposals)
Co-Chairperson Maswanganyi took the Committee through the Observations and Recommendations Section of the report.

The report was flighted.

He assumed the Committees read the report so they would not go through it item by item. As they went through the report, members could say whether they agreed or not and motivate if it is the latter.

Members agreed and had no comments concerning paragraphs 6.1 to 6.8.

On paragraph 6.9, Ms P Abraham (ANC) said the binding fiscal anchor should not be the trajectory of fiscal policy in relation to public expenditure as it limited fiscal policy parameters and narrowed the National Treasury’s fiscal policy orientation. She suggested having that re-arrangement in the paragraph.

Paragraph 6.10 was agreed to without comment.

Referring to paragraph 6.11, which recommends that both the National Treasury and SARS undertake a study on a phased migration of South Africa to a cashless economy, which would also reduce tax evasion, illicit flows, and money laundering, she suggested recommending some form of solution going forward. This would be a re-arrangement of the observation.

Co-Chairperson Carrim said the cashless society and principle of phased migration was fine. However, in developing society, is it possible for the most remote person in a rural area to have a card of some sort? He was not sure. This was something that needed to be discussed. The word used by Ms Abraham was correct, he suggested using incremental, and wording that accounted for those who were in remote rural areas. He did not know enough about this area, but if the National Treasury was in the meeting then it could comment. He did not know if it could happen here like it happened in the developed world.

On paragraph 6.12, Ms Abraham said the only addition would be the addition of those who were above 35 when talking about the youth. The Social Relief of Distress (SRD) did not provide only for the youth, but also for what the education field termed “the missing middle.” When making the recommendation about the SRD, the section should not end with the youth.

Co-Chairperson Maswanganyi asked her where she was. He thought the Committees were on paragraph 6.12 unless his sections were numbered differently. What was on the screen was about the inputs of the South African Institute of Chartered Accountants (SAICA), Heineken, and the South African Institute for Taxation (SAIT). Which item was the Member on?

Ms Abraham apologised and said it could be the numbering issue. For her, 6.12 spoke about the SRD and the commitment of the government to continue with SRD in reducing unemployment levels amongst the youth.

Co-Chairperson Maswanganyi suggested she follow what was on the screen.

Ms Abraham said Co-Chairperson Maswanganyi was going through the report too quickly. As they were reading through the paragraphs, the Chairperson was moving on.

Co-Chairperson Maswanganyi said it should be assumed that the report was read by the members last night. Hence, he tried to move through quickly. The members had a very tight schedule. Soon they would have to attend the memorial service of two late honourable members and then attend the sitting later.

Mr M Manyi (EFF) agreed with Co-Chairperson Maswanganyi and said the members kept quiet because they had read the document and agreed with everything thus far.

Paragraphs 6.12 to 6.18 were agreed to without comment.

On 6.19, Co-Chairperson Maswanganyi asked Ms Abraham if this was the paragraph she referred to. He did not receive a response.

Paragraphs 6.19 to 6.21 were agreed to without comment.

On 6.22, Mr Manyi said he was not sure how accurate the last sentence was in saying the Committee supported the National Health Insurance (NHI). Perhaps if it said the majority of the Committee supported the NHI, it could even be specific in stating which parties did not support it. The EFF did not support the NHI and thought it was a scam. That summary statement was a misrepresentation and had to be worded much more truthfully.

When going to all the observations read here, one would see that almost every line had a concern and disappointment. He would have thought that a summary statement would be included. This would state the Committees’ concerns as reflected line by line in the observations. The absence of a summary statement of the Committees’ sentiments took away from the picture of what was happening. The summary statement would ensure the House knew the Committees were worried when submitting the report.

Co-Chairperson Maswanganyi noted this.

Mr W Wessels (FF+) thanked Co-Chairperson Maswanganyi and agreed with Mr Manyi about 6.22. he supported the rewording of the last sentence because he did not think it reflected the sentiments of the whole Committee. Not every member supported the NHI. He also agreed there should be a summary statement that there was huge concern on all these aspects.

Dr D George (DA) thanked Co-Chairperson Maswanganyi and supported his colleagues on that. The Democratic Alliance (DA) did not support the NHI. There was no money for it, it was not planned, and there was no financial planning for it. It would be sensible to reword this.

Mr G Masualle (ANC) thanked Co-Chairperson Maswanganyi. On paragraph 6.22, perhaps it was fair to consider what the opposing members proposed even as the Bill was being passed in the House. Perhaps there should be wording that reflected this. From the African National Congress (ANC) perspective, the House had passed this Bill so it was applicable in a way. Measures aimed at getting it expedited would be welcomed and appreciated. Those who felt differently could express so, but it did not change the fact that this process had gone through the House.

Mr Z Mkiva (ANC, Eastern Cape) seconded Mr Masualle. People should appreciate that every time legislation was passed in Parliament, this went through a process of costing. Nothing would be passed without a costing measure. To insinuate there was no money for the implementation of NHI was a blatant misrepresentation. Therefore, the Committee could not afford to speak from both sides of its mouth. The inaccurate statements made by members were unparliamentary. He supported Mr Masualle.

Co-Chairperson Maswanganyi said his understanding was that the Bill from the NHI was passed and is before the President for assent. Do we have to debate further about a Bill that has gone through? Removing the last item was not a train smash. What was important was that the National Treasury allocated R1.4 billion to it. He suggested leaving it there, where the National Treasury allocated funds and the President is taking the process with the minister. Whether members supported it or not, the Bill had been passed. He said members should note this and focus on what they were dealing with in the Fiscal Framework.

Dr George responded to Mr Mkiva’s remark about unparliamentary statements. He said it was not so. Of course, members did not want to engage in a debate, but this was to look at the report. There would be further conversation on this. The facts spoke for themselves. R1.4 billion was allocated in the Budget and nothing else. The NHI would cost about R800 billion. He did not think members had to go into detail right now, but it was certainly not unparliamentary to comment that there was no money for the NHI. This was a different matter, he just wanted to state his position.

Mr Manyi said he was covered with the summary statement and the removal of the sentence because it was inconsequential in the context of what was being done today. Removing this made it easier to take a unified position on the report. Otherwise, it would just muddle things unnecessarily. He told the two ANC members to appreciate that this was a report and would go on record. In the future, when people asked what was happening and what the members did when this failed, they would be able to refer to the records and say they did point out the discrepancies, but some members abused their majority power to steamroll it. The opposing members wanted to be able to say this. The ANC members should appreciate that the fact that something was budgeted for did not mean there was money for it. This was why sometimes before the end of the year, there were all kinds of revisions. This happened because the fiscus did not collect enough to cover everything that was projected. This was why there were all these budget cuts. That was how the budgeting process worked, he hoped members educated themselves on how these things worked. The main point was to say the summary and removal of the last sentence would assist the Committee.

Ms Abraham said the members did go through the report and while issues were being raised, they did have their own party opinions on various areas of the report. However, in the end, the different parties would have a view on what the report held. As per previous discussions on the various issues, they did not have to change anything. As members agreed and disagreed on the report, members still had an opportunity to make their opinions known at the end. The way this was captured was not necessarily problematic, considering members would still have an opportunity to raise their views at the end. She was worried the Committee was not able to discuss other areas of the report, because members of the opposition already held views as they did now. She did not believe this was the only area where members differed. She proposed stating the points as they were. For instance, the Committee did support NHI, but it did not mean that Members did not have issues to raise.

Mr D Ryder (DA; Gauteng) thanked the Chairperson and said Mr Mkiva’s comments were provocative and regressive. Especially because he was not participating in the meetings when the Minister of Finance presented to the Committees, who said there was not enough funding for NHI. This was borne out of the budget projection and the R1.4 billion over three years was a fraction of what would be needed if the government was serious about NHI. He did not find Mr Mkiva’s comments constructive and thought Ms Abraham was also trying to take the Committees back. He supported Co-Chairperson Maswanganyi's progressive recommendation.

Mr Manyi said he was covered by Mr Ryder and told Ms Abraham that the report was like minutes and had to be a true reflection of what happened. If the report said the Committee adopted the report unanimously as purported, then it would be a lie. This was why he said if one said the majority, then it was fine. There could be specific mention of the EFF’s rejection of the report and other opposing parties. Co-Chairperson Maswanganyi's proposal was progressive, that this was inconsequential and should be removed and everyone agreed. If it had to stay, then it could do so with the objections.

Mr G Skosana (ANC) supported Co-Chairperson Maswanganyi’s summary to remove the last sentence. The contents of the paragraph were fine; it was just the last sentence being contested. The Committee should not be taken to whether it supported it or not because it was not dealing with the NHI. There were already committees dealing with the issue of NHI and the matter was already debated in the National Assembly (NA) and the NCOP. To debate whether members supported it was immaterial. The best thing was to remove the last sentence.

Mr Manyi agreed with him.

Co-Chairperson Maswanganyi said the NHI went through a lot of government processes of initiating a policy, bill, public hearings, the NA and NCOP adopting and passing the bill. Whether members supported it or not was not the issue, the fact of the matter was that Parliament passed the Bill. The National Treasury was updating the Committees about the progress on the NHI budgeting.

Mr Manyi checked if the Committee support staff had the summary statement. There was consensus that there had to be a summary statement that spoke about the Committee’s concerns. When looking at the observations line-by-line, there was the constant use of words like ‘concern’. Therefore, this warranted a summary statement summarising the Committees’ posture. There was no objection to summarising the Committees’ sentiments on the presentations.

Co-Chairperson Maswanganyi understood what he was saying, however, reports were not drafted in this manner. The Committees went through the report item by item. They did not have a summary of all statements at the end. The members were meant to vote on the report as it were. Members could either vote for or against the report and this would be recorded. This was the standard way of compiling a report on the Fiscal Framework.

Standing Committee on Finance Report Adoption

It was confirmed that the Committee quorated.

Co-Chairperson Maswanganyi asked if anyone could move for the adoption of the report.

Ms Z Nkomo (ANC) moved for the adoption of the report.

Mr Masualle seconded the adoption of the report.

Co-Chairperson Maswanganyi asked for any objections.

Dr George said the DA reserved its position on the report.

Mr Wessels said the Freedom Front Plus (FF+) objected to the report.

Mr Manyi said there were a lot of things that were said. He did not know what was finally said about the last sentence. If the last sentence was removed, then the Economic Freedom Fighters (EFF) had no problem with the report, if not, then the EFF had a problem with it.

Ms Nkosi said the last sentence was removed.

Mr Manyi said the EFF supported the report.

The report was adopted.

Read: ATC240305: Report of the Standing Committee on Finance on the 2024 Fiscal Framework and Revenue Proposals, Dated 05 March 2024

Select Committee on Finance Report Adoption
Co-Chairperson Carrim thanked Co-Chairperson Maswanganyi and his colleagues. He invited members to express their views. First, he asked for a mover and seconder for the adoption of the report.

Ms D Mahlangu (ANC, Mpumalanga) moved for the adoption of the report.

Ms L Moss (ANC, Western Cape) seconded the adoption of the report.

Co-Chairperson Carrim asked if the members agreed with the report.

Mr Ryder said the DA reserved its position on the report.

Mr M Moletsane (EFF, Free State) said the EFF reserved its position on the report.

Mr S Du Toit (FF+, North West) said the FF+ reserved its position on the report.

Co-Chairperson Carrim said the majority voted for the Bill and there were three reservations.

The report was adopted.

Read:
ATC240305: Report of the Select Committee on Finance on the 2024 Fiscal Framework and Revenue Proposals, Dated 05 March 2024
Closing remarks
Co-Chairperson Carrim reminded colleagues that he had COVID-19 and lost an entire month and the minutes were not done like they were normally done at the end of the term. There were several outstanding minutes from last term and the current term. He asked a Committee staff member to forward a letter to other Committee members that stated the National Treasury could not deliver a response this Friday. The Committee pursued the NA to sit again for one day at the end of April, and one day in early May 2024 to process the NCOP amendments. There was a gruelling election ahead for the parties, but members still had to do some work. Balancing out what members did in the Committee meetings and how much time they had for the elections would be shaped by the way they processed bills. He said the members should have a lot of work done in between Committee meetings. A study group would be convened in the next 10 days or sooner to discuss how the Committee processed the Public Procurement Bill. There were also public hearings. It was the members who decided. He asked a Committee staff member if he sent the members the National Treasury letter requesting the Committee to postpone Friday’s sitting.

A Committee staff member said he was waiting for an official letter, he only received a WhatsApp message.

Co-Chairperson Carrim asked if the Committee could get it immediately, it could not wait otherwise it would go ahead with the meeting. He said it was a terrible week for the National Treasury because it was dealing with provincial budgets, its officials were busy with those who were the same officials who had to deal with this matter, and extensive public submissions.

The meeting adjourned.