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JOINT BUDGET COMMITTEE
20 November 2003
THIRD COMMITTEE REPORT: ADOPTION
Documents handed out
Third Report of the Joint Budget Committee dated 18 November 2003
The Committee considered the statements of National and Provincial Governments Revenue expenditure and national borrowing for the second quarter ending 30 September 2003 issued by the National Treasury and adopted its Report on this matter. The Report notes that even though the Committee has each department's cash flow projection, this do not explain everything. A department could be on track in its spending for the quarter as per its cash flow projection but might has spent less than two percent of its capital budget, which is not explained in its cash flow projections.
The Committee met to consider and adopt its Report which is the outcome of the recently-concluded public hearings. The Report notes that even though the Committee has department cash flow projections, they do not explain everything. For instance, the Department of Trade and Industry has been on track in its spending for the quarter as per its cash flow projection. However, the Department has spent only 1.59 percent of its capital budget, which is not explained in its cash flow projections. The Department of Communications has indicated that it does not have cash flow plans and that there is no planning on spending but there is planning on the budget. The Department had indicated that funds are used to fund programmes as the need arises and that they are then allocated. The Department promised to furnish the Committee with a written explanation on its expenditure.
Mr Ralane observed that members had not read the entire report to be able to make meaningful contributions. It would be better to compare the report with the submissions made by the departments in order to determine whether the war against imprudent expenditure patterns is being won. It is also important to check and certify to what extent the Committee's recommendations have been implemented. He singled out Telkom as one of the notorious entities when it comes to overspending. There is however a marked improvement by some of the formerly blacklisted departments/entities.
Mr Moss (ANC) agreed with Ralane that it was important to engage with the perennial defaulters such as Telkom in order to seek an explanation as to why they do not measure up.
Ms Van der Merwe (ANC) asked if the Committee would summon the affected departments to respond to the charges of budgetary impropriety.
The Chair replied that they would and noted that some like Telkom fall short of giving a convincing explanation and that it would be useful to engage them on the concerns that have been raised in the Report.
Ms Tsheole (ANC) asked for clarity on the timeframes within which the affected departments would be required to respond to the Committee's queries. She noted that it is possible that the upset in the balance sheet was caused by a temporary hitch, which would resolve with time.
The Chair said the question raised by Tsheole begs the issue of co-operation with the relevant Portfolio Committees, which is very critical. Constant and consistent interaction with these Committees would resolve some of these matters even without involving the affected departments.
The Chair referred members to page 5 of the Report where the lowest spenders such as the Department of Home Affairs are clearly marked out. The Department is currently dealing with infrastructural backlogs and there this state of affairs shows that there is a problem with spending patterns.
Mr Ralane suggested that correspondence to these departments/entities should be copied to the relevant Portfolio Committees to enable them to engage the departments that fall under their oversight mandate.
Mr Hanekom (ANC) asked the Committee to tread carefully and not to assume that there is a problem with expenditure. It may well be that a particular payment is expected and the resultant delay cannot be attributed to the Department.
The Chair agreed with Hanekom's views and explained that this is the very reason why the Committee had called for reports.
Dr Koornhof (ANC) referred to page 9 of the Report where it is shown that three provinces had underspent on capital expenditure. He asked what action the Committee would take in this instance.
Mr Ralane said that one recommendation in the First Report is that where there is under-spending the Committee would pay the affected province a visit. This intervention did not however materialise as envisaged. It would be appropriate to write to the provincial legislature given that at times these things are not taken seriously unless they are properly highlighted.
Mr Hanekom said that the Committee lacks the constitutional mandate to hold the provinces accountable for the decisions they take at the provincial level.
Dr Rabie (DA) agreed that the only way to engage with the provincial government is through written memos indicating specific cases of lapse in expenditure.
The Chair agreed that it was always good to turn on the flashlights to awaken those in deep slumber in order for them to spring into action.
Mr. Moss said most provinces do appreciate the magnitude of the problems that bedevil their departments. The real dilemma was that of capacity to take these challenges head-on. At times provincial committees are not even aware of the problem hence the importance of sharing reports.
Dr Koornhof suggested that the conclusion should indicate what steps the Committee is taking to address the perennial problem of under-spending.
The Chair noted that the suggestion was valid and would be incorporated accordingly.
The Chair suggested that the Report should be put to vote. The Committee was hit by a lack of quorum thereby prompting the Chair to halt the process temporarily. He sent for some more members before a vote could be taken.
Dr Rabie said although the report is not controversial he was not at liberty to take a unilateral decision at this stage. He was obligated to take the report to his caucus and be given a mandate to take the vote.
The Chair asked him to consult his party while other members were being sought to make up a quorum. He noted that in any case Dr Rabie has the right to exercise his freedom to abstain from voting.
Mr Moss reminded members that the Committee was shaping the budget process and that there was no need to stick to formalities that would unnecessarily bog down this important process.
The quorum was soon assembled. The Report to vote and it was unanimously adopted.
The Chair then tabled the Report of the meeting between the Committee, the South Africa Human Rights Commission (SAHRC) and the National Treasury. He asked members to study the report and give their views on it.
Mr Hanekom suggested that members should be given ample time to read through the report then come back for deliberation the following day when a vote for its adoption would be taken.
The Chair agreed with this suggestion and adjourned the meeting to the following day.
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