Money Bills Amendment Procedure Bill [B75-2008]: NCOP Amendments; Committee Report on Budget hearings

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Finance Standing Committee

17 February 2009
Chairperson: Mr K Moloto (ANC)
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Meeting Summary

The Portfolio Committee considered the NCOP proposed amendments to the Money Bills Amendment Procedure and Related Matters Bill. They agreed only to an amendment to the Long Title, the addition of  new Clause 16 (that stipulated that provinces had to adhere to norms and standards for the amendment of money bills before provincial legislatures) and the new Schedule itself on Norms and Standards for Provinces. The Portfolio Committee rejected the proposed amendments to clause 4, 8, 9, 12 and 15.

On the NCOP proposed amendments to timeframes in clauses 8 and 12, the Committee had consulted extensively on the times allocated to each phase of the process and did not think it sensible to change this. The Committee noted that the Gantt chart addendum to the Portfolio Committee Report on the Bill detailed the timelines graphically. A similar schedule had not been provided by the NCOP Select Committee to show how the changes would affect the larger schedule. The Committee agreed that the National Assembly should retain the original time schedule, adding that it could be amended upon implementation if needed.

The Committee rejected the NCOP amendments to clauses 4 and 9. This amendment would mean abdication of the NA's responsibility in the consideration of the Division of Revenue Bill. The position of the NA was that they wanted to formalise the NA process in law.

 

 

The Committee rejected the NCOP amendments to Clause 15 about the establishment of the Parliamentary Budget Office (PBO) and the role of the Director of the Parliamentary Budget Office. The Committee recalled strong arguments in favour of the PBO’s independence, that their main function would be assistance to the parliamentary committees and that they must not fall under the line function of the Secretary to Parliament. They pointed out that having the PBO report to the Secretary to Parliament might compromise their objectivity and independence. The NA reply to the issue of how to deal with a dispute between the Secretary of Parliament and the Director of the PBO, was to state that any conflict could be referred to the presiding officers for resolution. If problems arose, they could review it as they had done with other legislation.

The Committee adopted its Budget Hearings Committee Report with recommendations.

Meeting report

The Chairperson reported that this was to be the last meeting of the Portfolio Committee on Finance. The National Assembly was scheduled to rise on 19 February 2009.

Adv Frank Jenkins, Parliamentary Legal Advisor, stated that although the NCOP was scheduled to pass the Financial Management on Parliament Bill on 17 February 2009, it had been deferred to 18 February 2009. This created uncertainty as to whether there would be enough time for the National Assembly to consider the National Council of Provinces amendments – bearing in mind that Parliament was scheduled to rise the following day.   

Mr K Marais (DA) stated that if the NCOP had passed the Bill with amendments and the NA then did not agree to the amendments, they could not pass the Bill. This Committee had to apply their minds. The question now was whether it was something they had to do or if it would be left to the agenda of the new Parliament.

The Chairperson stated that it would be unfortunate if they failed to pass the Financial Management on Parliament Bill. He asked for brief recap of the NCOP amendments on the Financial Management on Parliament Bill.


Adv Jenkins reported that amendments had been made to the name and functions of the former ‘joint committee’. It was proposed to call it an “oversight mechanism” and its functions had been separated from that of the executive authority. It appeared that the joint committee would be both finalising the budget and doing oversight over it. The NCOP had split those functions. They had taken the consideration of draft budgets out of the ambit of the joint committee and it was now left to the executive authority to prepare the budgets.

A smaller amendment dealt with the functions of the Accounting Officer being visited by criminal sanctions. This included provisions sending management to training and having a performance management system. The feeling of the NCOP Select Committee was that those were ordinary functions of management and should not be enforced by criminal sanctions.


Money Bills Amendment Procedure and Related Matters Bill: NCOP amendments
Mr Marais referred to the amendments proposed to the Money Bills Amendment Procedure and Related Matters Bill. This specifically concerned adjustments to the timelines.


Adv Jenkins responded that two major amendments were made and there had also been adjustments to the timelines. The long title had been amended and a new clause had been inserted, and a new Schedule to provide norms and standards for amending money bills before provincial legislatures. This was comparable to the Financial Management on Parliament Bill, which also referred to norms and standards. Consequential to that was the new clause 16. The proposed amendment to Clause 4 (Establishment of committees and the functions of those committees) was the omission of “Division of Revenue Bill” from Clause 4(4)(b). The Select Committee was of the opinion that the Division of Revenue Bill already had a procedure and did not want to provide an additional procedure in Clause 4. They proposed removing the reference to the Division of Revenue Bill in that clause. The Division of Revenue Bill was therefore found elsewhere in the Bill.

The Chairperson queried the exact location of the procedure for the Division of Revenue Bill in the rules.

Adv Jenkins responded that it was contained in the rules in general terms. The Division of Revenue Bill is introduced in the National Assembly (NA). It is then referred to the Select Committee on Finance in the National Council of Provinces (NCOP). The Select Committee felt that there should not be a provision for a different procedure. He recalled that the view of the Portfolio Committee was that they wanted to establish the procedure in the legislation. This was the apparent difference of opinion between the two Houses.

Amendments to clause 8 concerned the adjustments to the timelines. The Select Committee felt that 16 days was too short for public participation on the Fiscal Framework and had extended it to 30 days in Clause 8(3). A consequential amendment would be necessary to Clause 8(7) as the House must consider the report of the committee within the same 30 day period. Similarly, the two days afforded the Minister of Finance was extended to seven days in Clause 8(6)(b).


Leading on from the proposed omission of “Division of Revenue Bill “ in clause 4, the Select Committee proposed to omit clause 9 and that consequential amendments be made to the numbering.

The amendments in clause 12 concerned changes to the timeframes when considering the national adjustments budget. Clause 12(9) - 2 days to 7 days; Clause 12(13) - 4 days to 7 days; Clause 12(17) - 4 days to 7 days.


On clause 15 dealing with the Parliamentary Budget Office (PBO), the Select Committee had proposed substantial amendments and did not want the PBO to be independent of the parliamentary administration. This meant that the Director of the PBO would report to the Secretary of Parliament. The functions would remain the same. This was contained in the proposed amendment to Clause 15(1) and the omission of Clause 15(3) to 15(16). The PBO would then fit into the parliamentary administration and not be an outside agency.

As previously mentioned, there was a proposed new clause (clause 16) and a new Schedule to provide norms and standards for the amendment of money bills by the provincial legislatures.
The Schedule reflected the principles found in the Bill. This included the purpose of the amendment of money bills to give effect to resolutions on oversight, the fact that any amendment must still comply with the adopted Fiscal Framework and Division of Revenue Bill, fiscal responsibility (point b), the principles governing the amendment of revenue bills (point c), as were the general issues of facilitating public involvement and the role of the Executive (point d) and the content of the report on the amendment to a money bill (point e). The specific way of amending a money bill i.e. a conditional appropriation was contained in point (f). Appropriation for a specific and exclusive purpose was covered by point (g). Point (h) provided for the 4 month period and point (i) covered powers to propose technical amendments. There were also consequential amendments to the Memorandum on the Bill.   

Mr N Singh (IFP) pointed out that quite a number of amendments had been proposed. He was not denying the right of the NCOP to propose amendments. The Portfolio Committee had applied their minds to their own amendments and had consulted extensively. He asked if the Committee had the time to deal with the NCOP amendments. He indicated that this should perhaps be referred to the new Finance Portfolio Committee in the Fourth Parliament.

Mr Marais remarked that these were quite substantial changes. He remembered the debate the Portfolio Committee had on the times allocated to stages of the process. They had considered that everything had to fit into a certain period. Thirty days in one phase meant that they would have to compromise the time allocated to the other phases. This did not sound sensible.

The point on the independence of the PBO was of concern, as was taking away the reference to the Division of Revenue Bill in Clause 4. He felt that the Committee should be afforded time to apply their minds to this. In view of the substantial amendments, he was of the opinion that these should have been back with the Portfolio Committee by January 2009 – to be considered properly. He asked if the concept of norms and standards came from the provinces.

Ms J Fubbs (ANC) responded that norms and standards might have been something the NA overlooked due to its national focus. There was a lot of precedent for norms and standards, so this was not a stretch. The key question was whether this was going to subordinate the governance of the provinces. Would the norms and standards encroach on the governance of provinces? She suggested that the NCOP members present might be able to shed light on that. In the adjustment of the timelines, there were two areas where there did not seem to be any reasons provided. Clause 8(6)(b) referred to “at least” - this meant that more days could be added. They could make it 7 days in practical terms. This was different to the 16 days in Clause 8(3) where the time allowed was not flexible. She requested clarity on the reasons for the changes.

The Chairperson stated that timeframes was a critical area. Since they had worked according to a specific schedule, it would be a challenge to tamper with them. He suggested that the NA retain the original time schedule, adding that they could be amended upon implementation if needed. He referred to the Gantt chart addendum to the Portfolio Committee Report on the Bill, which detailed the timelines graphically. A similar chart had not been provided by the NCOP to show how their proposed changes would be accommodated in the larger schedule. Without such a chart, it was difficult to agree to any proposed changes.

The members agreed.

Mr E Sogoni (NCOP ANC) noted that the concerns raised were genuine. There would be implications if there were no decision on the Bill before the elections. The NCOP was of the opinion that these were substantive amendments. Once the original timeframes were in legislation, it could create chaos if one was unable to stick to them. The NCOP felt that the changes provided room to manœuvre. He understood the concern of the Portfolio Committee as they had only just received the NCOP amendments. He suggested that a sub-committee be convened to look at the issues and report on it to the National Assembly.

The Chairperson reiterated the point of the time constraints on the Portfolio Committee as the National Assembly would rise the following day. He recommended that they adopt the original timeframes. The budget had to be passed within 90 days and the 30 days proposed for public participation would then be working outside that timeframe.

Mr Singh (IFP) agreed with the Chairperson’s recommendation. He added that the Bill would be a work in progress. If there was a good reason, the timeframes could be amended. The Committee should have a Bill that the President could assent to by the time the National Assembly rises.

The Chairperson noted the argument offered by the NCOP: that the reference to the Division of Revenue Bill was redundant. He recalled that the position of the National Assembly was that they wanted to formalise the process in law.

Mr B Mnguni (ANC) responded that the omission of the reference would mean abdicating the responsibility of the NA to the NCOP when considering the Division of Revenue Bill.

The Chairperson officially proposed that they retain the reference to the Division of Revenue Bill in Clause 4(4)(b) so that the process could be formalised.

Mr Marais recalled the Portfolio Committee debate on the importance of the role of the two committees and that that clause gave guidance to the committees. He supported the retention of the reference to the Division of Revenue Bill.  

Ms Fubbs stated that she understood the point of the NCOP that the Division of Revenue Bill was not a money bill and was contained in the rules. However, the critical point was the problems surrounding service delivery obligations of the departments. Here one would have a direct line from the amendments you wish to make to an allocation. One would need to seriously and legally account for these amendments as to whether it would have a negative impact on the Division of Revenue Bill. She was of the opinion that the retention of the reference to the Division of Revenue Bill would protect and enhance effective service delivery.

Mr T Ralane, Chairperson: Select Committee on Finance, responded that when one dealt with the Division of Revenue Bill, there was a whole range of issues to be considered. He was surprised by the comments on formalising the process in law as it was formal procedure in Parliament and in the provinces. He was concerned about the consequences of tampering with the current procedure. This was why the NCOP proposed that the procedure be left as is until they had considered whether such a formalisation in the legislation would disadvantage provinces.

Ms L Mabe (ANC) referred to the numerous previous occasions that the Minister of Finance had cautioned the NA against ignoring their responsibility to look carefully at the Division of Revenue Bill. She thought that the Money Bills Amendment Procedure and Related Matters Bill would reinforce the need for the NA to take up that responsibility and that this would filter through to all spheres of government and legislatures. If they did not include it, they could compromise government and the legislatures.

Ms Fubbs referred to the mention of the Division of Revenue Bill in Clause 10(3) and (4). When she looked at that, it seemed to support the concepts that the NCOP pursued, in terms of the provinces. The reference was considered a check and a balance to ensure that once the Division of Revenue was devised, there should be no subsequent tinkering. The processes had legal protection by providing for the amendment of an appropriation without allowing for the resources to be cut. She thought this a very important issue for the allocations to provinces and local government.

The Chairperson responded that the point was well made. The NA’s intention was not to interfere with the NCOP process when they engage with provinces.

The Chairperson stated that the other big issue to be considered was that of the Parliamentary Budget Office.

Mr Marais remarked that the Portfolio Committee had discussed this issue thoroughly. He recalled strong arguments in favour of the PBO’s independence – that their main function would be assistance to the committees and that they must not fall under the line function of the Secretary to Parliament. He pointed out that having the PBO report to the Secretary to Parliament might compromise the objectivity and independence of the PBO. He supported the position originally taken by the Portfolio Committee.

Mr Singh referred to the comparative study Portfolio Committee had made with the Congressional Budget Office in the USA – where the independence of the institution was key. He suggested they retain the Portfolio Committee’s original provisions.

Adv Jenkins responded on a point of clarity on the independence of the PBO. Referring to Clause 15(1), the NCOP had proposed the omission of “independent” there. In his opinion, that was tautologous as that independence was contained in the word “objective” in the same line. That reference to independence had nothing to do with the structure of the PBO – which was independent of the parliamentary service. He advised that the comparison with the USA was perhaps inappropriate. South Africa’s public service was politically independent, constitutionally. The USA was completely different – this can be seen in the way the whole administration was being replaced upon the election of a new president. Their administration is politically biased. Specifically on the Congressional Budget Office - the President of the USA made proposals on the budget and it was then the job of the Congressional Budget Office to draft the budget.
In South Africa, parliamentary services was constitutionally independent of politics, even though they accounted to the Secretary of Parliament.

The Chairperson responded that the role of the Secretary of Parliament was not in dispute. Regarding the PBO’s independence, he referred to the provision in Clause 15(5) saying that its omission would render the whole exercise obsolete. If one accepted the proposed amendment by the NCOP, this effectively stated that the Appropriations Committee and the Finance Committee had no say in the appointment of the Director. The second issue was that they wanted people to have confidence in the PBO and not for its advice to be based on the wishes and whims of any particular part
y. As proof of this, he referred to Clauses 15(8) and 15(9). The Portfolio Committee saw the amendment of money bills as a very serious matter. Amending the national budget was a major responsibility. Members needed to take a decision on whether or not they wanted to be involved in the appointment of the Director.

Mr Ralane responded that the NCOP strongly supported the involvement of the committees of the Parliament in the appointment of any person, but were concerned that the response to the underperformance of the appointee would be inadequate due to their involvement in the appointment. The PBO was an office of Parliament and therefore should not be outsourced. That said, they were also concerned about elevating the Director of the PBO to the status of the Secretary of Parliament. Currently the only appointment made by a resolution of both Houses was the Secretary of Parliament. There was a danger of inadvertently creating two centres of power. Independent advice was fine but the structure could not be independent of Parliament. This was an issue the Select Committee felt very strongly about.

The Chairperson responded that the PBO was not independent from Parliament. It was within Parliament. The Secretary of Parliament was only requested to transfer funds to the PBO on an annual basis – that did not mean independence. Referring to the issue of creating two centres of power: the Commissioner of the South African Revenue Services did not report to the Director-General of the National Treasury. Though the DG determined tax policy, the Commissioner reported to the Minister of Finance. As the responsibilities were different, there were not two centres of power. The Commissioner of SARS was responsible for the collection of tax and the DG of the National Treasury was responsible for determining tax policy. By the same token, the Secretary of Parliament was responsible for the administration of Parliament but the Director of the PBO was responsible for giving the parliamentary committees advice on amending money bills. The goal had been to recruit the best and remunerate them at an acceptable level. In his view, the two centres of power argument did not hold. It would hold on one condition – if the two were responsible for doing the same thing.

Mr Marais supported the view that the objectives of the PBO were not in conflict with the tasks of the Secretary of Parliament. Clause 15(13) to (16) were critical. The level of the Director emphasised the importance assigned to the budget office and reflected the knowledge and expertise they wanted vested in the PBO. He did not pick up any conflicts with the Secretary of Parliament and agreed to the original clause 15 being retained.

Ms Fubbs noted that there were quite a few anomalies. Comparisons with the USA were mentioned, yet there was no denying that South Africa had a unique Constitution and system of governance. This had not created a major problem yet. SA had two Houses of Parliament in which one had a Chairperson and a Speaker. There was no speaker for the combined Parliament. There was a Secretary of Parliament, in whom the authority of both Houses was vested. This was the one person that linked the two Houses. This linkage had been extremely practical thus far – on the administration level. This should be borne in mind, as it did not happen elsewhere.

Up to now, the idea had been that the administration would at least consult the parliamentary committees in the appointment of critical posts. That had never actually happened in practice. She did understand the point of the NCOP on the potential danger of committees being involved in the appointment of the Director of the PBO. However, Parliament had seen the potential danger in handing this over to one individual. There were points for and against, but when the collective was involved, one was more likely to come up with a more robust decision. There was nothing to stop remuneration at the appropriate level. She did not think this was just about remuneration. Rather, it seemed to be the provision that a resolution of both Houses being required. If that were the case, it would be best to concentrate on that point.

Mr Ralane stated that they had to avoid creating a monster. The biggest issue here was how one would deal with a dispute between the Secretary of Parliament and the Director of the PBO. Parliament should work on the nitty gritty of such issues. In his view this Director should not be appointed by a resolution of the two Houses and should account to Parliament through the Secretary of Parliament.

Mr Sogoni said the NA should decide what they wanted to do. He suggested that a note be made of the disagreement for the new Parliament to revisit.

Adv Jenkins stated that the PBO would be part of Parliament. This could be seen specifically in Clause 15(4). It would, however, not be part of Parliament’s administration as was currently in place. In Clause 15(13)(a) and (b), the management decisions about the structure and service contracts would be taken outside of the parliament administration structure. The Secretary of Parliament involvement would be transfer the funds, as approved by Parliament.

If the Financial Management on Parliament Bill went through, with or without the NCOP amendments, it provided for the Secretary of Parliament to be responsible for the proper accounting systems surrounding any transferred funds. That was where the responsibility of the Accounting Officer would terminate. The rest would be the responsibility of the Director and the committees would also be responsible. This amounted to additional management functions for the committees and Houses.

At present the Parliamentary Service supported the committees in terms of the Division of Revenue Bill and money bills. The Bill did appear to change the research capacity. The committee researchers might be superfluous when the Money Bills Bill was implemented. The researchers from the PBO would take over that function. Parliament would have to look at whether the committee researchers might have to go to the PBO, or be used elsewhere. This was something that had to be sorted out.

Besides the comparative study made of the Congressional Budget Office in the USA, the drafters had also studied the Canadian Parliamentary Budget Office, which formed part of the Canadian Parliamentary Library, where all the research capacity of the Canadian Parliament was vested. This model of independent research within Parliament Services was something to be considered.

He was legally obliged to advise the committee of the consequences if they wanted to provide for the management and the functions of the PBO as in the current Bill. If it did not work, Parliament would have to deal with the labour laws. Assuming there was no space in Parliament to reassign the staff and deputy directors appointed, Parliament would have to go through a period of rationalisation according to the Labour Relations Act and the Basic Conditions of Employment Act. It would not be that simple to go the other way, if it did not work.

Ms Mabe indicated that the intention was not to create a monster in Parliament. They had not fulfilled their constitutional obligations fifteen years down the line. It was their right to come up with something that would be useful. Members of Parliament were now better placed to advise Parliament on how to approach such matters. They had agreed that the budget office should be independent, based on experience. At present Parliament did not do oversight over the budget as expected by the public. The PBO was intended to improve the level of oversight so that they could be advised by people who were independent in thought. The committees would recommend who should be appointed and hold them accountable. She fully supported the retention of Clause 15 as it was. They should take this matter seriously to avoid weakening the power of Parliament. The PBO was meant to assist the Members to do better oversight. The PBO was not meant to serve the administration of Parliament. She did not see the two-centres-of-power concern. If there was any conflict, this could be referred to the presiding officers to resolve.

The Chairperson clarified that the PBO was established mainly to assist the Appropriations Committee and Finance Committee established in the Bill. The existing research division remained separate from the PBO. They could co-operate as needed. He agreed that the Secretary of Parliament responsibilities terminated with the transfer of funds to the PBO. The Secretary of Parliament could also withdraw the funds if they were not properly spent. The dispute that was likely was therefore one that concerned this flow of funds.

Mr M Swart (DA) noted that the Secretary of Parliament was responsible for reporting in terms of the NCOP amendments could cause some information being withheld from the committees. This was another reason why the Director of the PBO should report to the committees directly.

Mr Ralane responded that there was nothing in law to indicate that the Secretary of Parliament had the final say. The bottom line here was that the Director would account to Parliament and the Secretary of Parliament would account to Parliament. It appeared that the Secretary was merely a channel for funds. He thought that this was wrong. The Secretary of Parliament was the accounting officer and the power to withhold funds was also not in the Bill.

The Chairperson responded that the Secretary of Parliament had this power in practice. If political parties did not produce audited financial statements for evaluation by the Secretary of Parliament, funds could be withdrawn. He did however understand the point that the Director reported this information to Parliament, not to the Secretary of Parliament, as contained in Clause 15(11). 

Ms Fubbs noted the report the NA had adopted the previous day on the oversight mechanism to underpin the separation of the legislature from the executive bodies. In that vein, it related to what the previous Speaker had tried to do. This was to ensure that the constitutional status of Parliament was restored. Parliament must have its status recognised effectively. If Parliament was not a rubber stamp, then they had to take this matter seriously. If one House of Parliament had evidence that funds had been misused, the funds should be amended.

Adv Jenkins responded that the Financial Management on Parliament Bill made it clear that when a transfer was made by the Secretary of Parliament, the Secretary had to ensure proper accounting systems regarding those transfers. The Secretary of Parliament could also cut off those funds if those systems were not valid. This had huge implications as the staff of the PBO would not be remunerated until the dispute was resolved. Those issues would also filter into the audit report. Who was going to audit the PBO’s books? Would it be the Auditor-General? They would have to create policies for the PBO.
 
The best comparison available was the transfer of constituency funds from Parliament to political parties. The Auditor-General did not audit that. There was an obligation on the Secretary to ensure the transfer but when it came to accounting, the Secretary could not do anything more than confirm the transfer of the funds. The responsibility for the accounting for those funds would fall squarely on the shoulders of the Director. If his reading of the Financial Management on Parliament Bill was correct, all the provisions around what the annual report should contain did not apply to political parties and, on an analogous basis, did not pertain to the PBO. They would have to create separate rules and regulations to ensure the accountability of the budget office.

Mr Sogoni responded that no one was opposed to the establishment of the budget office. The issue was the level at which the Director would be appointed. He would want the Secretary of Parliament to have the power to withdraw transferred funds if they were misused. He felt the current legislation stated that the Secretary would have nothing to do with the Director. The Director was to report to Parliament. The Select Committee had difficulties interpreting this, as it seemed that they were transferring the responsibility for oversight away from the committees. Perhaps they should be clearer about the principles they wanted to promote in the Bill for the consideration of the next Parliament.

Mr Singh pointed out that the Secretary of Parliament was a functionary of Parliament. This was not somebody with superpowers. The Director would be appointed by the recommendation of committees and could be removed from office upon recommendation of the committees. The Secretary of Parliament only funded the budget office in name. Parliament funded the PBO, not the Secretary of Parliament. He did not see anything wrong with the original clause. The Portfolio Committee should proceed with it. It would serve as a point of departure. If problems arose down the line, they could review it as they had done with other legislation.


Ms Mabe recalled that when the Money Bills Bill was introduced, she had made a plea for personalities to be removed from the process. They should deal with positions and responsibilities. She proposed reaching a decision about the NCOP amendments to the Bill.

The Chairperson proposed that they retain the Select Committee proposal on the norms and standards for provinces.

Mr Marais queried the extent to which provinces were involved in these norms and standards. In principle, he agreed with the Chairperson on the norms and standards.

Adv Jenkins replied that the provinces had been involved insofar as their provincial delegates were part of the Select Committee. This was a Section 75 bill and was therefore not formally referred to the provinces for mandates. The delegates might have informally briefed the provinces.


Voting on NCOP amendments
The Portfolio Committee considered the amendments proposed by the Select Committee on Finance.

The Bill was adopted with amendments to the Long Title, the new clause 16 and the new Schedule on norms and standards for provinces.

The Portfolio Committee rejected the proposed amendments to clause 4, 8, 9, 12 and 15.


Adoption of the Committee Report on the Budget Hearings 2009
Mr Marais commented that the report seemed to be a compilation of the submissions and did not contain the discussions on the submissions. He asked if this was not supposed to be part of the report.

The Chairperson noted that this was an important comment on the structure of their reports. There were instances where these reports did not highlight the critical issues raised in the discussions. They should develop a different format for future reports.

Mr Singh agreed. He felt that there were omissions in the report such as the discussions on the Division of Revenue Act (DORA). He recommended that the new committee should have a workshop on DORA principles and mechanisms. He also felt that the report should note that the time given to submissions had been limited in 2009 due to unusual circumstances. The other issue that came up strongly was that of SAA.

The Chairperson asked members to note such issues under Recommendations and that these would be added to the recommendations section of the report. He proceeded with a page-by-page consideration of the report.

Mr Johnson noted that the reference to the International Monetary Fund and World Economic Outlook reports should be specific as these were 2009 reports. The footnotes also did not contain enough detail, as he could not reference the National Treasury sources.

Mr M Witbooi, Committee Researcher, responded that he had used three National Treasury sources in compiling the report and these were referred to as National Treasury 2009a, National Treasury 2009b and National Treasury 2009c – the exact document references were clarified in Part 9 of the report.

Mr Johnson pointed out that one of the presenters had mentioned that South Africa would join the Organisation for Economic Co-operation and Development (OECD). As they had no confirmation of that, it could not be written as a fact. He suggested that it be made clear that this was according to a presenter.

Ms Fubbs noticed that great reference was made to the panellists. The report did not indicate if the committee shared the views presented by the panellists.

The Chairperson responded that this was also an issue to be captured in a reviewed format for future committee reports. There was a need to reflect on what was discussed and capture the opinions of the members.

Mr Johnson noted that the last paragraph of page 5 referred to mid-2009. This was not a future projection. He asked if that should be changed to mid-2008.

Mr Witbooi noted the oversight for correction in the finalised report.

Dr George pointed out that Prof Osman Mollagee of Pricewaterhouse Coopers had mentioned the complexity of the tax system. This was quite an important point made and had not been captured.

The Chairperson suggested that this revision be made to the finalised report and that a review and the need for simplification of the Income Tax Act should also be noted.

Mr Marais referred to the last paragraph of page 19 - “South Africa’s growth forecasts remain in line with that of emerging economies but better than that of developed countries.” - He recommended that “comparable” be inserted in front of “emerging”. The discussion had revealed that not all emerging economies were comparable with the South African economy. China and India in particular were pointed out as emerging economies with higher per capita GDP and higher purchasing power than South Africa.

Ms Fubbs referred to the conclusion on page 19 – the first line stated that: “introduce prudent macroeconomic management”. The reality was that was that prudent macroeconomic management had been practiced for years - “introduced” should be omitted and replace with “maintain”.

Dr George referred to the third sentence of the conclusion and suggested that “becomes a negative” should be replaced by “falls into deficit”

Mr Johnson pointed out that they style of quoting presenters should be more consistent. A choice should be made between using the names of individuals or the organisations they represent.

The Chairperson requested Members provide recommendations.

Mr Singh recommended:
- The issues discussed in the question and answer sessions should be put into a preface to the report.
- The shortened time for the process should be noted in the report.
- The next committee should have a workshop with the Financial and Fiscal Commission (FFC) and National Treasury on the principles and mechanism of the Division of Revenue Act.
- South African Airways (SAA) should be called to the committee to account in more detail for their recent loan from the National Treasury.
- The FFC’s recommendations on the Division of Revenue Bill should be considered more carefully.
- The Department of Transport should be called to a joint briefing with the Portfolio Committee on Transport on their management of transport subsidisation.
- The Portfolio Committee should comment on the allocation (± R 1 billion) to the Umsobomvu Youth Fund in view of their consolidation into the National Youth Development Agency.

Mr Marais recommended:
- Agreed to the recommendation to call SAA to the Committee.
- The Committee should revisit the discussion on the wage subsidy. The Minister of Finance had admitted that this issue had fallen off the National Treasury’s radar this year.
- The Committee should review the lack of ability of the South Africa exports market to capitalise on the lower Rand value to earn foreign currency.
- Parliament should also review all expenditures – this came from the Budget speech.


Mr Johnson referred to the point on the Umsobomvu Youth Fund and the National Youth Development Agency and added that National Treasury should update Parliament on the usage and performance of the almost R1 billion allocated to the Umsobomvu Youth Fund.

The Chairperson responded that they would recommend that the next Parliament attend to the issues raised in the report.

The Committee adopted the report.

The meeting was adjourned.

 

 

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