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Meeting Summary

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Meeting report

3 November 1998


Document handed out:

Report of the Financial and Fiscal Commission (see appendix)

The committee discussed ways to improve its procedure.

When the meeting started the Speaker was not present so the committee elected Mr Deutsch (acting Chief Whip, ANC) to act as chair. Mr Deutsch noted that some members had to attend other committees at 9.00am and asked the committee to proceed through the items on the agenda as quickly as possible. Mr Gibson (DP) asked how many members were necessary for a quorum and, when advised that the there were 31 committee members and half was needed for a quorum, he said it was very disappointing that only 9 members were present in such an important committee.

Mr Deutsch asked Mr De Lange (ANC) about the progress of the Rules Sub-committee and Mr De Lange reported that he anticipated that the sub committee would furnish the committee with a report in February.

The Speaker, and chairperson of the committee, Ms Ginwala (ANC) arrived and, at the request of Mr Deutsch, took over as chairperson of the meeting. She stated that a document with proposals regarding reports of commissions had been circulated to committee members but apparently it has not been considered by committee members so she was reluctant to proceed with discussions on it. She added that she was reluctant to refer the proposal to the Rules Sub-committee firstly because the sub-committee was already labouring under a heavy workload and, secondly, because policy formulation is the committee's task, not the sub-committees, and the committee should not abdicate its responsibility. Ms Ginwala emphasised the importance of the committee making progress in this matter because there are many commissions asking Parliament to provide guidelines for them to refer to when tabling reports.

Ms Ginwala referred to the apparent burden of the members' workloads which was preventing them from devoting sufficient time to the matters before the committee, and suggested that rather than the committee members considering the latest proposal, it could be circulated to the party Whips who could give it to interested party members for comment. Mr Gibson said that his party members are already very busy but agreed with the Speaker's suggestion, as did the remaining committee members.

Ms Ginwala then reported to the committee on a project that she has been working on. She has noticed that while early European maps of the African coastline do not depict the Cape (implying that the Europeans thought the Indian ocean was a lake), early Asian maps do depict the Cape. She thinks that an exhibition of early maps showing different perspectives of South Africa would make a good project for the Millenium, tying in with the idea of the Renaissance, and asked the committee's opinion. The Committee endorsed the idea.

Financial & Fiscal Commission: report
[for information]

DATE: 17 AUGUST 1998

At a meeting of the Rules Committee of the National Assembly on 28 July 1998, it was decided that Parliament would prepare a comprehensive discussion document on Parliament’s obligations in regard to reports received from the Financial and Fiscal Commission [FFC]. A brief report of the establishment and functions of the FFC was discussed by the above Committee on 28 July 1998.

Types of Reports Emanating from the FFC
In order to determine the types of reports that emanate from the FFC which have to be tabled in Parliament, one would have to examine the provisions of the Constitution and other relevant statutes. Section 222 of the Constitution broadly states that the Commission must report regularly both to Parliament and to the provincial legislatures. Other provisions in the Constitution provide as follows:

(a) Section 214 [equitable shares and allocation of revenue] provides that an Act of Parliament which provides for the equitable division of revenue raised nationally among the national, provincial and local spheres of government; the determination of each province’s equitable share of the provincial share of that revenue; and any other allocations to provinces, local government or municipalities from the national government’s share of that revenue, and any conditions on which those allocations may be made, may be passed by Parliament [Division of Revenue Act] only after the FFC has been consulted, and any recommendations it may make are considered.

There is no obligation on the FFC to make recommendations in this regard or in the other instances mentioned below. Recommendations may be made at the initiative of the FFC or at the request of Parliament or the Minister of Finance. A Bill initiated in terms of this provision should indicate whether the FFC has been consulted and if the FFC’s recommendations, if any, have been considered.

A report containing its recommendations is tabled in Parliament in terms of the provisions of section 9 of the Intergovernmental Fiscal Relations Act of 1997. By its nature this type of report appears on an annual basis.

(b) Section 218 [government guarantees] provides that an Act of Parliament which allows the national government, provincial government or a municipality to guarantee a loan if it complies with any conditions set out in the Act, may only be passed after considering recommendations, if any, of the FFC. A report in this regard may be tabled in Parliament when such legislation is envisaged, or when such existing legislation is to be amended.

(c) In terms of section 228 [provincial taxes] an Act of Parliament which authorises a provincial legislature to raise taxes, levies, duties, flat-rate surcharges on the tax base of any tax, levy or duty that is imposed by national legislation, may be passed only after recommendations, if any, of the FFC have been considered by Parliament. A report by the FFC regarding this issue may be tabled in Parliament only when such legislation is envisaged, or when such existing legislation is to be amended.

(d) Section 229 [municipal fiscal powers and functions] provides that national legislation which allows local government to impose rates on property and surcharges on fees provided for or on behalf of the municipality and other taxes, levies and duties appropriate to local government, may be passed only after considering recommendations, if any, of the FFC. A report in this regard may be tabled in Parliament when such legislation is envisaged, or when such existing legislation is to be amended.

(e) Section 230 [provincial and municipal loans] provides that an Act of Parliament which allows a province or a municipality to raise loans for current or capital expenditure may only be passed after Parliament considers recommendations, if any, of the FFC. Reports by the FFC in this regard may be tabled in Parliament only when such legislation is envisaged, or when such existing legislation is to be amended.

Current position regarding Reports of the FFC tabled in Parliament
To date the FFC has only tabled one report in Parliament, namely, a report containing recommendations and comments on the allocation of financial resources to national, provincial and local governments for the 1998/9 fiscal year, in terms of the provisions of section 9 of the Intergovernmental Fiscal Relations Act of 1997. As stated earlier, this type of report is of a recurring nature in that it is tabled annually. The above report was addressed to the Speaker and was tabled by the Presiding Officers in both Houses on 5 February 1998. Thereafter it was administratively referred to the Portfolio Committee on Finance and the Select Committee on Finance. It would be preferable that a procedure be established for the passage of such reports through Parliament.

All other reports are submitted by the FFC as and when required in terms of the above statutory provisions.

Standing Rules of the National Assembly
Neither the current Rules nor the new draft Rules make provision for reports of the FFC. It can be mentioned that the same applies to the Rules of the National Council of Provinces. There is also no provision in any legislation that governs the procedure for submission of reports of the FFC.

Issues Arising from the Above Position
Reports of the FFC cover important areas of finance in the national, provincial and local government spheres. As such it may be prudent to regulate the process for submission of such reports, and other matters connected therewith. Hereunder are aspects which need to be discussed and addressed.

1. Should the Rules of Parliament be adapted to establish a procedure for dealing with an FFC report, on tabling?

2. Should there be provisions in terms of which Parliament may alert the FFC regarding problem areas within the FFC’s ambit of authority?

3. Should Parliament request the FFC’s input on the above bills? Furthermore, should Parliament request recommendations on all other bills which have financial implications?

4. Should the FFC’s reports on bills envisaged in the Constitution be referred only to the Finance Committee or also to other Committees where its recommendations could have an impact on the area of responsibility of that Committee, or should it merely appear on the Announcements, Tablings and Committee Reports [ATC] for the information of other Committees?

5. Should other reports of the FFC only be tabled for information and any action which Parliament may want to take by resolution or be placed on the order paper for debate?

6. Should the House debate the reports of the FFC?

7. How should the Finance Committee deal with the report? Should it report to the House on the FFC’s report?



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