The Committee joined with the Portfolio Committee on Finance (National Assembly) for its deliberations on and formal consideration of the Finance Committee's report on the 2009/2010 budget, in order to ensure a quorum for both committees.
The Report of the Joint Budget Committee for the Second Quarter Expenditure of the 2008/09 Financial Year, dated 17 February 2009 was adopted with corrections.
The Chairperson of the Joint Budget Committee proposed an important modification to the report in replacing ‘The departments should consider exploiting information technology solutions to streamline their supply chain management’ with ‘Payments to service providers should be made on time.’ She believed that small enterprises (SMMEs) were collapsing because of delays in payments.
There was objection to the abrupt withdrawal, as distinct from withholding of funds from Alexkor recommended in paragraph 7.7. It was suggested that the National Treasury request the Department of Public Enterprises to intervene urgently. There were a number of legal matters involved. It was unacceptable of Alexkor not to supply business plans. At the same time, to allow jobs to be lost was unacceptable in the present economic climate.
The Joint Budget Committee Legacy Report for the Third Parliament 2004-2009 [Draft II] was adopted.
The Committee joined with the Portfolio Committee on Finance (National Assembly) for its deliberations on and formal consideration of the committee's report on the 2009/2010 budget in order to ensure a quorum for both committees.
[The Portfolio Committee on Finance's proceedings were recorded separately: please refer to 090218pcfinance (ilze).rtf]
After completion of the Portfolio Committee on Finance's agenda, in which some Members of the Joint Budget Committee participated, the Finance Committee Chairperson handed over to the Chairperson of the Joint Budget Committee.
Report of Joint Budget Committee for the Second Quarter Expenditure of the 2008/09 Financial Year
The Chairperson proposed removing ‘of the’ in the antepenultimate line of, paragraph 3, point 1 on page 1. The Committee agreed.
Ms J Fubbs (ANC) suggested that it would be useful to remind Members that the underlined text represented proposed additions to the Report.
The Chairperson said that all other sections had been considered previously, and the Committee was now considering sections where it was thought that the Committee staff should make changes.
On page 15, in point 6, ‘Summary of Findings’, paragraph 6.2, the Chairperson proposed substituting ‘high’ for ‘significant’. In the last line of the same paragraph, she proposed substituting ‘some’ for ‘the’.
On page 16, in the first line of paragraph 6.7, Ms Fubbs proposed a typographical correction by making ‘reasons’ singular by deleting the ‘s’ at the end of the word.
The Chairperson said that she did not remember that the Committee had discussed municipal infrastructure grants, as referred to in paragraph 6.7. The Department of Minerals and Energy had given different information about the number of schools that had to be electrified from that provided by the Department of Education. In fact, the Department of Minerals and Energy did not respond at that time.
The Chairperson asked if Members agreed to the removal of that paragraph, and replacing it with another.
The Chairperson recalled that the Committee had discussed the dysfunctional state of the public service, education and training Sector Education and Training Authority (SETA). This was one of the findings. There was no Chief Executive Officer (CEO); there was no Chief Financial Officer (CFO); some members of the board were no longer serving; the Department had even decided to take over its financial management.
The Committee had asked on what ‘the SETA was spending money and to what end’, and recommended that ‘its’ existence must be reviewed. In particular, the Chairperson had interacted with the Minister of Public Service and Administration, and the Minister had acknowledged that the SETA was dysfunctional, while the Department was trying to assist.
The Committee had agreed to review the functioning of the SETAs. The Minister of Finance had called for the incoming administration to review some of these structures and their relevance or otherwise. The Chairperson asked the Committee staff to note that this point should be included in the recommendations. The Chairperson proposed replacing paragraph 6.7 and asked if Members agreed.
Members indicated their assent.
The Chairperson opened discussion on point 7, pages 16-17, containing recommendations.
Ms Fubbs commented, but inaudibly.
The Chairperson proposed adding to paragraph 7.6, the words, ‘e.g., construction in …. by the Department of Labour’. That example was necessary because a feasibility study had not been carried out.
The Chairperson said that she was not comfortable with paragraph 7.3. She said that ‘and clinics’ should be added after ‘electrification of schools’. She asked the Committee researcher about the meaning of the sentence: ‘The Department of Public Works should submit the requested information at the earliest opportunity.’
The Committee researcher replied that the Committee had sent a letter to which there had been no response from the Department of Public Works.
The Chairperson said that it was too late for the Department of Public Works to submit the requested information.
Ms Fubbs said that the Committee had agreed at the time that information required should have been supplied; since there would still be a third quarterly report. The clinics and the schools would still be required to operate.
Ms Fubbs said that she was referring to Public Works with respect to two issues. It was linked here to paragraph 7.6, which was perhaps the wrong place. It was certainly something that the Committee had requested, but perhaps it might be better included in another place, because it was referring to the construction that was in progress, for which funds had not been utilised at that time. The Committee had obtained nothing from the Department of Public Works. Although one could take out that last sentence, it was a matter that should have been followed up.
The Chairperson said that she thought that it was wrongly placed.
Ms R Mashigo (ANC) said that she noted that there were 6 008 posts, whereas only 660 vacancies were filled. The vacancy rate at all levels should be analysed.
The Chairperson said that the Committee had discussed at length with the Department of Public Works the issue of vacancies, whereby the Department had a target but had been unable to meet their target.
Ms Fubbs proposed deleting the relevant item, since the Committee was not sure of the facts and it was important to ensure that the Report was passed, rather than delay it in order to spend time establishing the facts. There was no time available now to verify the facts.
The Committee agreed to delete the item.
The Chairperson said that she was not comfortable with paragraph 7.4. She proposed replacing ‘The departments should consider exploiting information technology solutions to streamline their supply chain management’ with ‘Payments to service providers should be made on time.’ She believed that small enterprises (SMMEs) were collapsing because of delays in payments.
The Chairperson proposed modifying paragraph 7.5 to read ‘relevant departments’ instead of ‘relevant department’.
Ms Fubbs proposed modifying paragraph 7.6 by deleting the inappropriately used indefinite article ‘a’ in order that the paragraph should begin ‘All departments should embark on proper feasibility studies before the execution of projects.’
Mr N Singh (IFP) objected to the abrupt withdrawal of funds from Alexkor recommended in paragraph 7.7.
Ms Fubbs added that Alexkor was servicing very poor communities. There was definitely a problem in that the Treasury insisted on the business plan. She thought that there must be some way whereby the Treasury could sanction them without jeopardising jobs. However, it was necessary to be ‘fairly tough’ in this situation because such business plans had not been forthcoming on time. Last year the Committee had had a similar experience in that as late as the fourth quarter, there had been a problem. The Committee had called for the Treasury to apply harsh measures to Alexkor to encourage the business plan to be provided by February and that Parliament should be provided with a report of the measures that they had implemented. The Committee had asked for these harsh measures to be implemented to ‘put a stop to such nonsense’, because Alexkor did service a very poor community.
The Chairperson pointed out that already they had not received the allocation, and suggested that further harsh measures would be excessive. She said that the Department of Public Enterprises must also take responsibility. It was unfortunate that the Committee had not been able to meet with the Portfolio Committee on Public Enterprises in its interaction with Alexkor.
Mr Singh suggested that the National Treasury might request the Department of Public Enterprises to intervene urgently with regard to the failure to submit business plans and report to the Committee on an urgent basis. He was unhappy about the withdrawal of funds.
The Chairperson pointed out that the Committee had agreed long ago to withholding funds, as distinct from withdrawing funds, but she suggested that perhaps the Department of Public Enterprises must assist them by intervening but not withdrawing funds.
A Member asked the Chairperson the reason for non-compliance. He asked if it was a capacity problem, or one of arrogance. He asked about the long-term implications. Ms Fubbs had said that the Committee had faced the same problem in the previous year. In his view it was a very serious problem.
Ms Fubbs said that perhaps Members of the Portfolio Committee on Finance might recall the issue of Alexkor. There were a number of legal matters involved. When the special adjustments came through, some funds had been released to enable Alexkor to operate. Progress with Alexkor was very slow at present; it was ‘crawling’. It was unacceptable not to supply business plans. She supported the idea of assistance from the Department of Public Enterprises, since it had capacity, but to allow jobs to be lost was unacceptable, since it the present economic climate, job losses had very serious consequences.
The Chairperson said that Members would remember that the previous week she had asked the Minister about South African Airways. They had requested funds, but without a plan for using those funds. When one asked them about capacity, they did not indicate a problem. Yet they continued to ask for funds.
The Chairperson moved to close the discussion ‘at that level’ and asked for a proposal for the adoption of the Report.
Ms Mashigo proposed adoption.
The proposal was seconded, and the Committee duly adopted the Report.
Joint Budget Committee. Legacy Report for the Third Parliament 2004-2009 [Draft II]
The Committee adopted the Report without any further discussion.
The meeting was adjourned.
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