INPUT ON THE PUBLIC HEARING ON MTEF AND FFC RECOMMENDATIONS
First and foremost, the portfolio committee wishes to thank the Deputy Chairperson of the Finance & Fiscal Commission for releasing his team to the Northern Province on a very short notice request.
The Committee benefited from the informative brief given by commissioner Jerry Sithole, Bongani Khumalo who is a research coordinator of the FFC and Vincent Makinta the data research Coordinator. We appreciate it and we have been empowered by their input.
We were also impressed by the fact that government departments showed an appreciation by attending and participating in the FFC briefing which were also enriched by the attendance of Statistics South Africa.
In his input, commissioner Sithole informed the committee that the FFC is mindful of the fact that it is the 3 layers of government and their corresponding legislatures that determine fundamental policy and norms and standards alter having assessed the current situation. The FFC's responsibility is to make recommendations in terms of section 14 (2) of the constitution of RSA as read with section 9 of the intergovernmental fiscal relation act of 1997.
The FFC's role is to make recommendations which will ensure an equitable sharing of national Revenue such that all spheres of government may meet any legal requiremment for equity in the provision of Constitutionally mandated by basic services and that the FFC is also expected to assess the financial implication of new policies and to develop mechanisms to support the effective and efficient funding of this policies.
- that the recommendations are aimed at advancing the FFC's initial recommendations submitted in the 1996.
- the commission believed that the costed norms approach will give substance to the recent developments in public Finance Management as contained in the Public Finance Management Act 2000, particularly with respect to facilitating the development of an outcome based and cost sensitive budgeting regime.
- that the FFC 's review is that it is good fiscal practice for policies and norms and standards to be formulated with due regard to their financial implications.
- We were told that the FFC acknowledge the absence of adequate data, and lack of clearly defined policy targets and norms and standards, in addition the nature and structure of government functions such as Safety and Security were difficult to cost with certainty.
- the application of COSTED NORMS in the FFC recommendations for
2001 highlighted the shortcomings of public sector data but nevertheless,
the approach will have the benefit of helping define the data requirements of
the system.
- the committee was informed that the FFC initiated a consultative process with government & legislatives stakeholders following the release february 2000 of its preliminary recommendation for 2001 and that there will be further opportunity to engage with the commission recommendations through parliamentary processes. I am happy that we are using that chance today. The NCOP, and perhaps I should emphasise that as we are engaged today, the NCOP is affording Provinces that necessary engagement with the FFC recommendations.
One may argue that this process can take place in Provinces individually & separately only, our committee in the Northern Province would like to argue that yes, that is good to get the Provincial’s uniques' specifics but that should always be followed by a collective engagement with the FFC in the NCOP, in order to keep intact the fact that although we have Provincial imperatives which may differ from Province to Province, we must as legislators bear in mind that South Africa is a Unitary State , it is and the difficulties faced by women in the Western Cape or Eastern Cape, must equally bother us in the Northern Province because in many instances it is indicated as Provinces to give inputs that there are many similarities which are caused by recent natural disasters like the floods in the Northern Cape and in Mpumalanga.
- The terrible roads in the Eastern Cape and the Northern Province and Kwazulu-Natal.
- The crime in the western Cape and Gauteng and Bushbuckridge region of the Northern Province.
-The illiteracy and poverty and unemployment factors in Kwazulu-Natal, Eastern Cape and the Northern Province.
- The rural areas of the Eastern Cape, Northern Province and Kwazulu-Natal.
- The illegal immigrants facing Mpumalanga which boarders Mozambigue and Swaziland and the Northern Province boarding Mozambique, Zimbabwe and Botswana and Lesotho.
- These affect the reliability of data. We recommend that the FFC look ito the possibility of demand and constantly revised figures in these Provinces.
Our sincere thanks goes to the FFC research coordinator Bongani Khumalo, and Vincent Makinta the data research coordinator who painstakingly explained the following:
- Differences: preliminary & financial recommendations
- The Costed Norms Approach
- Why use the Costed Norms Approach
- Vertical Division and Costed Norms Approach
- Issues in implementation
- Applying the Costed Norms Approach to the social component -Education Health and Welfare
- The institutional element
- The basic element
- Conditional grant for Capital backing
- Summary of the Equitable share formula
- Need to apply MTEF resource allocation using the FFC formula and???
- Implementation - that the Costed Norms Approach can be implemented
side by side with the current formula and fully implemented in 2002. and
that the parliamentary committee could request the result of the Costed
Norms Approach formula as applied - MTEF
Both the input of the FFC research coordinator Bongani Khumalo and that of commissioner Gerry Sithole have improved our understanding of the Costed Norms Approach and the functioning and responsibility of the FFC respectively.
Our committee and some of the government departments want to respond as follows:
A. Role of NCOP - We want to thank the chairperson of the Select Committee on Finance, the Honourable Dorothy Mahlangu, for always coordinating joint sittings with Provinces.
This has greatly helped the Provincial committees on finance to move as one, and this greatly compliment the good approach of the minister of finance for having created a Strong Team Finance, and made all MEC's to consider themselves as part of one Team Finance, this approach is to be commended and it is because of this type of working relationship of TEAM Finance that has brought great improvement in the Fiscal Management in all Provinces because the minister cde Trevor Manuel managed to make all finance MEC's to consider themselves as part of a WHOLE TEAM FINANCE.
The NCOP as a place where all Provinces meet to discuss Provincial specifics and National collective approach to decision making is best placed to coordinate Provincial issues, being mindful of the fact that the South africa is a Unitary State not a Federation of Provinces while Special and Permanent delegates deliberate on provincial specifics.
In the final analysis, nationally collected revenue should bring A BETTER LIFE.. for all irrespective of where each one find oneself.
Therefore the NCOP remains the one chamber to unite decision makers, to get all the Provinces to have an indepth understanding of challenges faced by other sister Provinces and therefore understand that while we highlight our special circumstances in our relative Provinces, we have a common challenges in other Provinces as challenges for the whole country, the one unitary South Africa, with scares resorces coming from one National Treasury. This is the challenge facing the NCOP.
B. Broad Policy Issues - Concerns about Data
- We appreciate the fact that the FFC acknowledge absence of adequate
data which is in our view still a very big challenge facing rural provinces.
- Recommendations that came out on the day of the FFC hearing is that the FFC should demand more reliable data from government as we do have a parastatal that is tasked with the responsibility of data, namely STATS Africa.
- That the FFC should note that Provirces like Mpumalanga, bordering Mozambigue and Swaziland and the Northern Province bordering Mozambigue, Zimbabwe and Botswana are affected in the provision of Education and Primary Health and Social Welfare by illegal immigrants, and that the FFC should deal with this challenges as a SPECIAL CIRCUMSTANCES
- The state of the roads and bridges any time
FFC should work closely with Provincial data and encourage STAT SA to work in close collaboration with Provincial departments.
Repair of Provincial roads is a Provincial competence, it should be noted that from the Provincial budget alone, it is not possible to repair all provincial potholes on time, the Department of Transport Nationally should do like the National Department of Housing and help the Province by allocating funds for the maintenance of Provincial roads which at any rate were used by Heavy Trucks during the floods when National roads were on a state of disrepair.
It should be noted that since 1994 there was very little funds for maintenance.
- this unfortunate circumstances will be very costly to the country as worse depreciation to property is taking place now, Public Works should be given Special grants to deal with these backlogs.
- We think that the costed norms approach is achievable as long as the FFC take into account all the abnormal circumstances which prevail in specific provinces. We agree that it is good fiscal practise for norms and standards to be formulated with due regard to their financial implication.
- The costed norms approach will give substance to the positive development in fiscal management as contained in the PFMA particularly with respect to assisting with the development of an outcome based and cost effective and efficient funding of policies.
- FFC must demand improved data, this will help rural Provinces to know other things like the Northern Province Unemployment figure might have improved but that can only be illustrated by correct statistics.
- Infrastucture: The Department of Public Works in the Province, has got accurate data
Department of Safety and Security's funds have been taken up by personnel and CPF's there are no funds to run the department.
It must be noted that in a Province where illiteracy levels are as high as they are, structures that government form will need to be empowered, hence the importance of the COSTED NORMS approach.
LEGISLATURE: The Northern Province, Kwazulu-Natal, Mpumalanga and the Eastern Cape are Provinces where the majority of Legislators come from historically dissadvantaged communities with Bantu Education as their only background. It is therefore important that the budgetary process should allocate more money for the empowerment of members if as a country we are serious about achieving legislation that abide by the COSTED NORMS approach and if we want to produce Legislators who can do an oversight role in the line with the stipulations of the PFMA as recommended in the FFC document.
HEARING ON THE MTEF FIGURE
1. Key policy issues which influence this process. We think the FFC formula has taken care of that.
2. The formula is okay as proposed by the FFC
National government should improve communication with provinces in general and the Northern Province in Particular.
Our department of Public Works is up to date with data, and its reporting is highly professional yet they are time and again blamed for lack of submission of reports.
I take the instance of flood relief funds. We appreciate the R 98 000 000 forwarded to the Province. If National government could inform this department as to exactly how much will be allocated for its work, data has been forwarded on time to the National office, and should more data be required, that department is ready to give it.
If the Province is aware of how much it will get, it will be able to plan otherwise the lack of planning can result in wasteful expenditure as floods have taught us a lesson that roads and bridges must be planned and built with natural disaster in mind.
It is the view of the Portfolio committee on finance, Economic Affairs and
Tourism that Tourism can bring a lot of the much needed jobs in our
Province.
The Northern Province is rich in cultural diversity, we have the Venda,
English, Afrikaans, Pedi, Balobedi ef Modjadji the rain Queen, Tsonga,
Bushbuckridge Shangaan Mchongolo, Sekhukhune and Mapulane koma
cultures.
The diversity of cooking methods, the beautiful and rich ecco system, the heritage sites of Maphungubje and Makapansgrot and the big 5. Our biggest problem is the difficulty of access roads. how do Tourist get to all the, beautiful sceneries. Our Public Works Department really need a special attention, fixing infrastructure will definitely promote Tourism in the Province and this will mostly take care of our high and unacceptable employment situation.
This also applies to the Department of Health - the child support grant
The minister has given a deadline of 2003 by which date, 600 000 children should have benefited.
The funds right now can only help +/- 300 000
As this announcement was made public, many mothers will be coming forward, that will frustrate the department. Please help the Northern Province.
5. Local Government
I reserve my comment until we discuss with the department and the Northern Province Local Government Association.