Questions and Replies

Reply:

This information was provided by the South African Revenue Service (SARS) on the 08th November 2016. The Ministry of Finance cannot verify its accuracy because of lack of accountability and cooperation from the SARS top management.

1. There are no specialised units like the SARS High Risk Investigation Unit:

           (a) The HRIU was formally dissolved in 2014.

           (b) SARS has since implemented a New Operating Model and the current position in dealing with non-compliance in high risk areas (including areas such as the illicit economy) is guided by the focus areas in the publicised 2012/13 – 2016/17 SARS Compliance Programme.

(i – iv) As stated there are no specialised units, thus the questions are not applicable.

Why not – why does SARS have no units similar to HRIU.

SARS has a multifaceted approach to tackle the illicit economy, tax related organised crime and tax evasion. This approach intergrates its resources to deal with such matters.

SARS also builds and maintains strong working relationships with South African law enforcement agencies. The SARS enforcement unit primarily deals with tax, customs and excise related investigations and is supported by other units within SARS such as case selection which identifies the cases; internal investigations which investigates cases perpetrated by / with the assistance of SARS employees and Customs and Excise Investigations, etc.

SARS is also representaed in various clusters such as the Justice, Crime Prevention and Security Cluster, Governance and Administration Cluster, International Cooperation, Trade and Security Cluster, etc. Through these and various other fora, SARS works with government departments to execute its mandate.

Reply:

Funds from the fiscus are allocated to provinces through the provincial equitable share and provincial conditional grants. The provincial equitable share and a number of provincial conditional grants use formulas to determine the allocations to individual provinces.

The provincial equitable share is however the main source of revenue for meeting provincial expenditure responsibilities. To ensure that allocations are fair, the equitable share is allocated through a formula using objective data on the context and demand for services in each of the nine provinces. A full description of the calculation of the provincial equitable share formula for each financial year is contained in the Explanatory Memorandum to the Division of Revenue Bill, which is tabled in Parliament on Budget Day. The details of the provincial equitable share formula used to determine the allocations to individual provinces for the 2016 Medium Term Expenditure Framework (MTEF), as contained in the Division of Revenue Act, Act 3 of 2016, can be found in the Explanatory Memorandum of the 2016 Division of Revenue Bill, pages 74 – 81, which was released on 2016 Budget Day (24 February 2016) (attached hereto see link).

http://pmg-assets.s3-website-eu-west-1.amazonaws.com/RNW2530Annexure-161130.pdf

Reply:

This response has been submitted by the South African Revenue Service and cannot be verified by the Ministry of Finance.

Due to the secrecy provisions contained in Section 69 of the Tax Administration Act No. 28 of 2011, SARS is prohibited from disclosing any taxpayer information (Including whether or not a taxpayer is subject to an audit/ investigation) to any person other than a SARS official. SARS is, therefore, unfortunately not in a position to respond to the above request.

Reply:

1. a) The law in terms of Municipal Finance Management Act Section 48 allows municipalities to pledge and the Division of Revenue Act with its amendments provides for the mechanism through which municipalities may provide security for loans.

 (i) Over the past three years, National Treasury approved an amount R2.5 billion in pledges for the municipalities to accelerate their infrastructure delivery. The National Treasury does not issue or approve loans, but approves pledging by way of issuing letters of approval to the municipalities. Municipalities may use the letter of approval to secure a loan with the accredited institutions.

 (ii) The terms and conditions for pledging conditional grants are outlined in circular No 51 paragraph 4.5, issued in terms of the Municipal Finance Management Act.

 (iii) According to the Division of Revenue Act; municipalities are allowed to pledge a percentage (75%) of the amounts that are due to them in the outer two years of the medium term period; however implementation happens during the current year. If one considers the year of implementation, the period becomes three years. Over the two year period, the National Treasury makes the money available to the municipality according to the gazetted tranche payments and the municipality is expected to pay the lender within the same period of time.

 (iv) Pledges that have been received and approved relates to the electrification of households, mainly in the rural areas and construction of high light masts in higher density informal settlements using the Integrated National Energy Programme grant (R498 million approved). The other group of approvals involves a mix of projects ranging from roads & storm water, sanitation, and water projects (R2 billion approved).

b) Yes, each approved loan is in alignment with the relevant conditional grant objectives and purposes.

2) The National Treasury did not approve all pledging requests

   (a) Over the past three years, 8 pledging applications were not approved.

   (b) The reasons for non-approval was mainly the following:

• Pledging applications do not meet the requirements as stipulated in circular 51.
• Gaps in the submission owing to the fact that most pledges are submitted too early in the infrastructure planning process - before key project information could be generated by the planning process itself and demonstration project readiness for implementation.

Reply:

The following information was submitted by the Government Employees Pension Fund:

1. Section 6 of the GEP Law and Rules makes provision for the establishment of the Board of Trustees and confers certain powers on the Board. Section 6 (7) specifically prescribes that the Board, acting in consultation with the Minister, shall determine the investment policy of the Fund. Further to this, Section 4.2.2 also provides the Board with the powers to invest, loan, advance on interest and place on deposit moneys not needed immediately for the current expenditure of the Fund or to deal therewith in any other way against such securities and in such a way as the Board may determine and to convert into money, adjust such securities, re-invest the proceeds thereof or to deal therewith in any other way as determined by the Board.
2. Up to 5% of the Fund’s investments may be allocated to developmental investments. The target rate of return on developmental investments is the Benchmark SA 10-year rate plus an applicable outperformance requirement. The unpredicatability of investment markets may result in investments that do not perform optimally; however this is not a desired outcome.
3. Please refer to question 1.
4. The PIC has been authorised by the GEPF to make developmental investments, in line with the GEPF’s Developmental Investment policy. The target rate of return on developmental investments is the Benchmark SA 10-year rate plus an applicable outperformance requirement. The GEPF does not believe that developmental investing necesarily leads to lower financial returns, and seeks to earn acceptable returns from these investments.
5. It has happened in the past that the PIC breached the Strategic Asset Allocation due to movements in the markets. However, those breaches were reported to the GEPF’s Investment Committee and either condoned or rectified it.

Reply:

The Registrar of Banks at the South African Reserve Bank is responsible for bank supervision, and has provided the following response to my office:

1. In February 2016, the deputy governor responsible for bank supervision appeared before the Standing Committee on Finance where these questions were addressed. In terms of section 69A(13) of the Banks Act, the Myburgh Report was private and confidential unless the Registrar, after consultation with the Minister of Finance, either generally or in respect of any part of such report, directed otherwise. In his consideration of the matter, the Registrar was in law required to follow due process, which entailed affording persons referred to in the report insight into the report and the right to make representations, for consideration by the Registrar prior to taking a decision about its confidentiality. Accordingly, the process and procedures set out hereunder were followed, and the relevant representations duly considered by the Registrar before his decision (involving the Minister) was taken to terminate the confidentiality of the Myburgh Report. A copy of the Myburgh report was subsequently forwarded to the National Prosecuting Authority for its consideration.

(a) In order to ensure a procedurally fair process, prior to the Registrar taking the decision contemplated in section 69A(13) of the Banks Act, it was decided –

   i. to communicate with those persons referred to in the Myburgh Report in order to provide them with the opportunity to review the report and to call for comments or representations by them with regard to why the Registrar should not direct, after consultation with the Minister, that the Myburgh Report should no longer be private and confidential;

   ii. that comments and/or representations received would be considered by the Registrar; this consideration was only with respect to removing the confidentiality of the report and not with respect to any change of the report itself; and

   iii. that the Registrar would then decide, after consultation with the Minister, whether the Myburgh Report generally or in respect of any part thereof, should no longer be private and confidential.

(b) To this end, Werksmans Attorneys ("Werksmans") were instructed by the South African Reserve Bank ("SARB") and the Registrar to write to each person referred to in the Myburgh Report and invite them to –

   (i) review the Myburgh Report; and

   (ii) make written representations, should they so elect, regarding the status of the Myburgh Report and more particularly why the Registrar should not direct, after consultation with the Minister, that the Myburgh Report should no longer be private and confidential.

2. Werksmans wrote to the 37 individuals and entities (including the insurers who provided the directors and officers insurance cover in respect of African Bank Limited (“ABL”)) who were specifically referred to in the Myburgh Report, during the second and third weeks of September 2015. Most of the individuals and entities were addressed through their legal representatives who had represented them before the Commissioner during the latter part of 2014 and early 2015. They were afforded the opportunity, against the signing of appropriate confidentiality undertakings, to review the Myburgh Report, and to make written representations up and until 20 November 2015.

Of the 37 individuals or entities invited to review the Myburgh Report and make written representations, 35 of them took up the invitation and reviewed the Myburgh Report during the aforementioned period. Of those who reviewed the Myburgh Report, 32 of them were represented by legal representatives. In total more than 60 individuals, including legal representatives and representatives of companies and organisations, reviewed the Myburgh Report, during the review period. Of the 35 individuals or entities who reviewed the Myburgh Report, 22 of them submitted written representations (or at least submitted a letter of no objection) by 20 November 2015.

Of the written representations received, a significant majority objected to any decision taken which could result in the Myburgh Report or any part thereof no longer being private and confidential.

3. As indicated above, (a) Werksmans Attorneys of Sandton were used to conduct the process on behalf of the Registrar. (b) (i) The total costs amounted to some R11,8 million, which included the fees of Commissioner Myburgh and his two assistants.

Reply:

The following information was submitted by the Government Employees Pension Fund (GEPF) Board:

(1) The Board of Trustees has already decided to amend the implementation of the clean-break principle on divorce. It will be discontinued when the Government Employees Pension Law is amended and all the relevant approvals are granted.

(2) Yes, research was done and the GEPF board was comfortable that there would be no unintended consequences.

(3) This matter is currently sub judice.

Reply:

The following information was submitted by the South African Reserve Bank:

1. The South African Reserve Bank is the entity responsible for the prudential regulation of all banks in South Africa. This regulation includes ensuring that only those that meet the ‘fit and proper’ requirement act in key management and board positions. As such the South African Reserve Bank has provided the following response to this parliamentary question:

The Banks Act, Act No 94 of 1990 (the Banks Act), read with the Regulations relating to Banks (Regulations), requires that all directors and executive officers of a bank should be fit and proper and affords the Registrar of Banks (Registrar) the power to make an assessment in this regard. The application of a certain person was received by the Registrar who duly considered the prescribed information submitted with the application and notified the relevant bank in writing that that there was no objection to the proposed appointment.

2. The Registrar’s decision in terms of section 60 of the Banks Act was conveyed in a letter dated 6 August 2002 for the appointment of the specified person as Chief Operating Officer and Executive Director of African Bank Limited. A subsequent application was received for the appointment of the specified person as Executive Director of African Bank Investments Limited (the holding company) and approved in a letter dated 22 April 2003. The specified person was later appointed as Chief Risk Officer of African Bank Limited.

3. No disciplinary action was taken by the South African Reserve Bank (SARB) against any of its staff members in this matter as there was no evidence or allegations of any misconduct on the part of any staff member in this regard.

4. The causes of the failure of the previous African Bank Limited are documented in the Myburgh report which the SARB is unable to add to.

Reply:

1. The Request for Proposals (RFP) available on National Treasury’s website outlines the Terms of Reference (TOR) for the appointment of advisors to assist government in developing the optimal group corporate structure for the realignment of the state-owned airline assets. In terms of the TOR, the scope of activities to be performed by the advisors is as follows:

The consultants will be responsible for:

• • Reviewing the corporate plans (strategic plans) of SAA and SAX;
  • Assessment of the existing corporate structure proposals that have been made by the state-owned airlines and external advisors including an analysis of the advantages and disadvantages and an assessment of the extent to which they would enable the achievement of Government’s objectives;
  • Reviewing other supporting documentation, e.g. financial statements and annual report, legal agreements, risk management plan, governance documentation and legislative requirements;
  • Benchmarking international practice for the corporate structure of airlines;
  • Developing and comprehensively assessing a range of options for realigning the state owned airlines covering each of the key elements of the corporate structure, including:
    • Establishment of a holding company structure;
    • Corporatisation of Voyager and Cargo;
    • Integration of SAA, SAX and Mango into an integrated airline group with and without Airlink;
    • Increase or decrease in the shareholding in Airlink and valuation of the current 2.95% shareholding;
    • Integration of the technical divisions of SAA, SAX and Denel;
    • Identification of non-core assets for disposal;
    • Creation of a shared services division;
    • Establishment of a separate aircraft leasing company;
    • Separately corporatising the international, regional or domestic routes;
    • Investment by strategic equity partners (SEPs) at group or subsidiary level (including identification and assessment of potential SEPs).

This should include an analysis for each option of the advantages and disadvantages and an assessment of the extent to which it will enable the achievement of Government’s objectives.

• • Developing a comprehensive, holistic, overall recommendation for the optimal group corporate structure for the realignment the state-owned assets that will best achieve Government’s objectives. The recommendation must detail how each of these objectives are addressed; and
  • Identification of the required policy interventions by Government to realign the state-owned airline assets;
  • Developing a comprehensive plan for implementing the recommended option. The plan must clearly indicate any financial implications and potential risks with mitigation strategies.

2. The appointment of the advisors is still being finalised. Issues relating to the cost of the services in relation to the budget had to first be resolved.

Reply:

The following information was submitted by South African Airways Board:

No member of the South African Airways Board including its Chairperson is entitled to a security detail; however the company provides general security at all its premises. No special security arrangements have been made and no minders have been appointed by SAA to protect the Chairperson. Consequently no expenditure has been incurred by the Company in this regard.

The National Treasury cannot verify this information.

Reply:

1. Yes, the Head of Department (HOD) of the National Treasury (NT) has signed a performance agreement since his appointment.

    (a-d) Not applicable.

    (i) The last performance assessment for the HOD of NT was conducted for the 2014/15 fiscal year; and

    (ii) The results for the 2014/15 fiscal year was a B+ performance level in terms of NT’s performance management process.

2. The HOD signed performance agreements and has never received a performance bonus.

    (a -b) Not applicable.

3. No, the HOD of NT has not received a performance bonus since his appointment.

    (a -b) Not applicable.

Reply:

The National Treasury has been informed in terms of section 43 of the Public Finance Management Act (PFMA) that a virement of R95.97 million has been effected by the Department of Defence towards the leasing of Presidential VIP air transport.

Reply:

The following information was submitted by the Public Investment Corporation (PIC):

The VBS Mutual Bank has never defaulted on its payment of dividends to the PIC. The decision to pay dividends rests with the board of a company after taking into account factors such as capital required for growth, capital for precautionary purposes and capital adequacy requirements as well as compliance with the provisions of the Companies Act, Act 71 of 2008.

Reply:

The following information was submitted by the South African Airways (SAA) Board:

1. The Chairperson of the SAA Board is not entitled to a security detail and none has been provided by the company. No additional vehicles are provided for the Chairperson’s travelling.

2. No vehicles have been allocated to the Chair by the company.

The National Treasury cannot verify the above information.

 

Reply:

The following information was submitted by the Public Investment Corporation (PIC):

(a)(i) The PIC has no direct exposure to any business linked to the Gupta family.

(a)(ii) The Industrial Development Corporation queries should be directed to the Minister of Economic Development.

(b) Not applicable.

.

Reply:

(a) According to National Treasury’s database of Section 71 reports submitted by the municipality as at 30 June 2016, investments with VBS Mutual Bank were made by the following municipalities:

    (i) West Rand District Municipality

    (ii) Capricorn District Municipality

(b) Municipalities do not make loans to financial institutions and /or banks as a standard practice as they are not allowed to lend money to financial institutions. There is also no municipality that has a primary bank account with VBS Mutual Bank.

(c) There are no other municipalities that have invested with VBS Mutual Bank according to the National Treasury’s database.

(d) According to National Treasury’s database of Section 71 reports submitted by the municipality as at 30 June 2016, investments with VBS Mutual Bank were made by the following municipalities:

Name of Municipality	Start Date	End Date	Amount	Balance
West  Rand Municipality	24/02/2015	23/08/2015	R21 million	R0
West  Rand Municipality	22/03/2016	23/09/2016	R10 million	R10 million
West  Rand Municipality	30/03/2016	23/04/2016	R15 million	R0
West  Rand Municipality	08/04/2016	07/06/2016	R15 million	R0
Capricorn District  Municipality	01/04/2016	30/06/2016	R120 million	R0

Reply:

The following response was submitted by the South African Revenue Service (SARS):

1. “Yes, SARS can confirm that it did receive a report concerning alleged suspicious and unusual payments relating to Mr Jonas Makwakwa.

          (a) The organ of state which produced the said report is the Financial Intelligence Centre (“FIC”).

         (b) The report was received on 18 May 2016.

 2. The report was not referred for further investigation at that stage. SARS had adopted a two-pronged approach towards handling this matter. The first part entailed affording Mr Jonas Mashudu Makwakwa and Ms Kelly-Ann Elskie an opportunity to respond in writing to the allegations against them. This was part of the internal investigative process that SARS undertook. The second part involved engaging the (“FIC”) for purposes of seeking technical guidance, co-operation and assistance in relation to this matter, as per Section 4 of the FICA.

   (a) SARS has appointed the law firm; Hogan Lovells to investigate this matter, and to conduct disciplinary proceedings against the two employees on behalf of SARS. The matter was referred to Hogan Lovells on 15 September 2016.

   (b) SARS is aware, based on correspondence received from Directorate of Priority Crime Investigation (“DPCI”) dated 15 September 2016, that the matter has been reported to the (“DPCI”).

3. Mr Makwakwa has been suspended.

    (a) Mr Makwakwa was suspended on 15 September 2016. Ms Elskie is currently on maternity leave. SARS is currently in the process of seeking a legal opinion on whether an employer has lawful authority to suspend and/or institute disciplinary proceedings against an employee who is on maternity leave.

      (b) Mr Makwakwa was suspended pending the investigation into the allegations contained in the report referred to above.”

4. Yes, I would like to make a statement on this matter.

I only became aware of the issue through the article in the Sunday Times on the 11th September 2016. I immediately contacted Mr Moyane telephonically to report to me the veracity of the report and met with him on the morning of the 12th September 2016 to be briefed on the issue. This was approximately four months after Mr Moyane was first alerted to the matter through a letter dated 17th May 2016 from the Financial Intelligence Centre (“FIC”). This matter is exceptionally serious as the allegations were against one of the most senior managers in the organisation and the official was appointed by Mr Moyane. The report from the FIC stated that there was a total of 75 transactions done between 01st March 2010 and the 31st January 2016 which amounted to R785 130.00 (R726 400.00 of this money was deposited during 2014 and 2015). Furthermore, Mr Makwakwa’s partner deposited a total amount of R450 200.00 directly into her personal bank accounts. It is perturbing that considering that the origins of these funds were not confirmed that Mr Moyane allowed Mr Makwakwa to remain in his position dealing with individual and corporate taxpayers. It is my opinion that Mr Moyane failed to inform me of the matter possibly in an attempt to resolve the issue without the matter becoming public. Since the report in the newspapers, Mr Moyane has publically criticised the FIC rather than take the responsibility an accounting officer is expected to assume in dealing with such vital matters. I would like to confirm that to date I have not been informed whether Ms Elskie has been suspended.

These and other maters raise serious concerns about the stewardship of a vital fiscal institution.

Reply:

The following in the information provided by the Financial Intelligence Centre (FIC):

(1) In terms of Section 40(1) and 41 of the Financial Intelligence Centre Act the FIC is not permitted to make public any report.

(2) Without reference to a specific report, the normal process followed by the FIC is to submit any report to

(i) Investigating authorities inside and outside of the Republic;

(ii) SARS;

(iii) Intelligence services;

(iv) Entities outside of the republic performing a similar function to those of the FIC;

(v) Accountable institutions or reporting institutions;

(vi) Supervisory bodies.

(3): A referral of a report from the FIC contains descriptions of transactions or activities relating to the financial conduct of reported person(s) and how those transactions or activities are linked with the person(s) mentioned in the referral. This information is gleaned from reports which persons make to the FIC pursuant to their legal obligations under the FIC Act (sections 28, 28A and 29 of the FIC Act). In addition to these factual descriptions, a referral from the FIC also contains the FIC’s analysis of the events mentioned in the referral and their potential links to unlawful activity, as well as the FIC’s advice on the potential unlawful activity which the recipient of the referral may wish to pursue in an investigation.

It is incumbent on the recipient of the information and advice of the FIC to determine whether he/she can formulate allegations of unlawful activity which warrant the launch of an investigation into the conduct of the person(s) mentioned in the referral and to then collect the evidence that can corroborate those allegations by means of the recipient’s own original investigative powers.

The FIC’s guidance and support for an investigation consists therefore of the information and advice contained in the referral which it makes to a recipient and the supply of further information in response to requests for information that are made in terms of the FIC Act (section 40(1)(a)(i) of the FIC Act).

The FIC does not undertake investigations nor does it have any investigative powers. Moreover, the FIC does not have any legal mandate to undertake investigations of its own or to direct how investigations should be undertaken by another organ of state. As consequence the FIC does not have the practical expertise to provide general guidance as to how another organ of state should conduct an investigation in terms of the mandate and powers of that organ of state.

The relevant head of the organ of the state has the obligation to act on the report or the information provided.

Reply:

1. Yes, I as Minister of Finance met with the CEO of Oakbay Investments (Pty) Ltd, (hereafter referred to as ‘Oakbay’), Mr Nazeem Howa on 24 May 2016. The meeting was at the request of Mr Howa in letters to me dated 8 and 17 April 2016. I am not aware of any other dedicated meetings between any person from the National Treasury and Oakbay. I will therefore only deal with the meeting with Mr Howa held on 24 May 2016.

I will not deal with the matter raised in the public statement made on 16 March 2016 by the Deputy Minister of Finance, Mr Mcebisi Jonas, detailing how he was approached by a shareholder of Oakbay who offered him the position of Minister of Finance to replace the then – Minister Nene.

  (a) Mr Howa was accompanied by a member of Oakbay’s finance department (name not known) who presumably reports to him. The Director-General (Mr Lungisa Fuzile) and three other officials, including the Treasury Legal Counsel, formed part of the Treasury delegation.

  (b) The meeting was at the request of the CEO of Oakbay, Mr Nazeem Howa, who wrote to me on 8 and 17 April 2016 to request a meeting with him.

  (c) The purpose of the meeting was to discuss Oakbay’s request that the Minister of Finance intervene in its dispute with a number of banks so as to avoid possible job losses that may arise as a result of the closure bank accounts held by Oakbay and its associated companies.

  (d) (i) As stated above, the meeting took place on 24 May 2016.

       (ii) The meeting took place at the National Treasury head office at 40 Church Square, Pretoria.

2. The only purpose of the meeting was to hear the view of Oakbay on the closure of its accounts. The only decision out of this meeting was for Oakbay to provide the Treasury with any relevant information to support its allegations and to continue to engage in good faith.

I did take the opportunity to point out the legal framework operating for banks, and made the following points to Mr Howa:

   (a) The banking sector is highly regulated, and any failure of our banks to comply with international regulatory standards could have devastating effects on the banking system, financial stability and the economy as a whole. Banks are subject to tough and intrusive international standards such as Basel III, 2003 United Nations Convention Against Corruption and anti-money laundering obligations. I attach the aide-memoire that I provided to Oakbay after our meeting, to explain the regulatory framework that applies to banks in South Africa (Annexure A).

   (b) The Annexure explains that besides anti-money laundering and prudential objectives to make the financial sector more secure and resilient (following the 2008 Global Financial Crisis), banks are also expected to comply with market conduct standards, including treating customers fairly, financial inclusion and access objectives. The Memoire also references past cabinet decisions including Twin Peak reforms (Financial Sector Regulation Bill) approved by Cabinet and currently before Parliament for its consideration.

   (c) There are legislative and regulatory impediments to any registered bank discussing client-related matters with the Minister of Finance or any third party. The Minister of Finance does not have the power to intervene in a bank-client relationship (and I pointed out that I am advised by legal opinion in this respect). The bank-client relationship imposes a duty on the bank to honour the confidentiality of the client.

   (d) Oakbay (unlike banks) is free to provide to the Minister any reasons or information it has received from any bank when closing their accounts. Mr Howa stated that no bank had provided any reasons to Oakbay for the closure of their accounts. I requested copies of the letters from the banks to Oakbay from Mr Howa to verify whether reasons were provided or not, and to allow myself to take appropriate steps based on full and complete available information.

   (e) I pointed out that the best, and only, course of action for any corporate client would be for the company to approach a competent court to seek the reasons for the closure of their accounts, and to establish its rights and to deal with any alleged transgressions of the law or of the Code of Banking Practice, which cover the process that banks have agreed to when closing accounts.

   (f) I noted my concern for any loss of jobs at any time in our economy, be it at Oakbay, Exxaro or any other company;

   (g) Oakbay agreed that attacks from individuals related to the company on the National Treasury were not helpful or in the national interest and should be avoided.

  (h)) Mr Howa also agreed to provide all the relevant information to my office, including the letters he received from banks when informing Oakbay of the closure of their accounts.

3. My view that the only option available to Oakbay is to approach a competent court has subsequently been strengthened by what Mr Howa himself indicated on 19 June 2016 during an interview on Carte Blanche, where he confirms that one bank has in fact provided the following reason to Oakbay for the closure of its account:

“….. South Africa’s Companies Act, Regulation 43, Prevention of Organised Crime Act, Prevention and Combating of Corrupt Activities Act and the Financial Intelligence Centre Act, as well as the USA’s Foreign Corrupt Practices Act and UK’s Bribery Act, prevent us from having dealings with any person or entity who a reasonably diligent (and vigilant) person would suspect that such dealings could directly or indirectly make us a party to or accessory to contraventions of that law. ”

Mr Howa further indicated that the bank stated “We have (conducted) enhance[d] due diligence of Oakbay entities and as required by the FICA and have concluded that continuing with any bank-customer relationship with them would increase our risk of exposure to contravention of the mentioned law to an unacceptable level.”

The reasons quoted by Mr Howa above are very serious, and it is in the interest of Oakbay that it goes to court if it has nothing to hide to correct any misperceptions that any bank may have about it, and to ensure it is being treated fairly. It should be borne in mind that the 2003 UN Convention Against Corruption requires banks in member countries like South Africa to take preventive action against corruption and money laundering, with the onus on all individuals and companies to explain any transactions that their banks may regard as suspicious.

Despite our agreement with Mr Howa to provide all relevant information and to continue to engage in good faith, Mr Howa has to date not provided me with the letter that he has quoted from.

So despite an exchange of further correspondence with Oakbay, it remains my view that I am unable to assist Oakbay in any way. I am advised that to do so would be legally impermissible. The best course of action would be for the company to approach a competent court so that it can establish the rights which it contends it has, rather than via a political or public media campaign. This will also allow banks to provide any reasons without transgressing their confidentiality obligations.

Reply:

I am advised by the PIC that replies to these questions may contain confidential information pertaining to third parties and that the PIC may be in breach of its confidentiality obligations if such information is made public. The PIC has obtained legal advise on their disclosure obligations and the conclusion was that the PIC is not obliged to disclose confidential information with regards to its clients and assets under management to any third parties. However, the PIC Management and Board have carefully considered the legal opinion and it was resolved that the PIC will take into account the legal opinion but that it will also take an approach to disclose certain details regarding its unlisted investment portfolio without breaching its confidentiality obligations to clients. There are certain processes that need to be followed before these details can be disclosed. These processes are currently being undertaken. I will therefore table replies to these questions once the PIC has obtained the necessary approvals, in order to ensure that you receive relevant information without the PIC being in breach of any legislation, agreements or its mandate.

Reply:

I am advised by the PIC that replies to these questions may contain confidential information pertaining to third parties and that the PIC may be in breach of its confidentiality obligations if such information is made public. The PIC has obtained legal advise on their disclosure obligations and the conclusion was that the PIC is not obliged to disclose confidential information with regards to its clients and assets under management to any third parties. However, the PIC Management and Board have carefully considered the legal opinion and it was resolved that the PIC will take into account the legal opinion but that it will also take an approach to disclose certain details regarding its unlisted investment portfolio without breaching its confidentiality obligations to clients. There are certain processes that need to be followed before these details can be disclosed. These processes are currently being undertaken. I will therefore table replies to these questions once the PIC has obtained the necessary approvals, in order to ensure that you receive relevant information without the PIC being in breach of any legislation, agreements or its mandate.

Reply:

The South African Revenue Service has submitted the following information. Please note that the Minister is unable to verify the content.

(a)(i) – (iv) Yes, according to available records SARS reached 13 severance agreements with employees since 2006 to date. The total value of the settlements combined is R19 334 333.91.

The breakdown of these payments per year are as follows:

Fin Year	Nr of Transactions	Sum of R-Value Pay out
2007/08	1	R 3, 150 ,894.81
2008/09	2	R 1, 674, 920.54
2009/10	1	R 435, 134.48
2010/11	3	R 3, 047, 735.00
2013/14	1	R 375, 048.00
2014/15	2	R 1, 681, 798.20
2015/16	3	R 8, 968, 802.88
Grand Total	13	R 19, 334, 333.91

Due to confidentiality provisions of these agreements, as well as protection of personal information governed by the Protection of Personal Information (POPI) Act, SARS is prohibited from disclosing employee specific information regarding the agreements with regards to the names of the individuals concerned, the positions held, the date of separation, reasons for the settlement and the individual amounts involved.

(b) Yes, the amounts were disclosed in the annual financial statements under employee cost in the statement of financial performance.

Reply:

South African Airways (SAA) has provided the following response:

The sponsorship department which is tasked with managing sponsorships at SAA has not received nor approved any request for sponsorship of tickets for three Members of Parliament to the 2016 Summer Olympics in Rio de Janeiro, Federative Republic of Brazil.

The Minister requests that the Honourable Member provide more precise information on this matter, should this be available.

Reply:

I was informed by the South African Revenue Service (SARS):

1. (a)(b)(i)(ii)(aa)(bb) That the SARS Advisory Board (SAB) had an occasion to consider, inter alia, the following issues:

• SARS Strategic IT Assessment (Consultants on this issue were Gartner Ltd);
• SARS Operating Model (Consultants on this issue were Bain Consulting); and
• The related issue of Communications & Engagement Stream Overview;
• The alleged SARS Intelligence Unit;
• KPMG Report (forensic investigation into the affairs of SARS);
• The investigative powers of SARS;
• Disciplinary proceedings instituted by SARS and subsequent settlements reached;
• Border Management Agency Bill;
• Internal SARS Security;
• Minutes of the Joint meeting with the Davis Tax Committee.

(c) The Board received a number of verbal reports on relevant matters from the Commissioner of SARS at a number of its meetings.

2. I am informed by SARS that:

     (a) The SARS Advisory Board produced and submitted untitled reports to the previous Minister of Finance and the Commissioner of SARS regarding its activities to date, and included copies of the minutes of the meetings that had been held. The minutes of subsequent meetings were submitted to the previous Minister of Finance and the Commissioner. Various emails were sent directly to the previous Minister of Finance from time to time dealing with other aspects considered by the SAB.

    (b) 30 June 2015

I cannot vouch for any of the above.

Reply:

The Deputy Minister has informed me that the matter involving the certain family (name furnished) is under investigation by both the Hawks and the Public Protector and therefore we are not in a position to provide any further details until those investigations have been concluded.

Reply:

In the past few months, the growth challenge and transformation agenda have brought government, business and labour leaders together. Since the beginning of the year, as tasked by the President, government, business and labour have been working together intensively to help strengthen short term confidence and reinforce long term growth. The focus has been on three key areas:

1. Restoring confidence and boosting investment by local and international investors,
2. Taking action to reignite growth
3. Unblocking obstacles to faster employment growth in key sectors, and
4. Identifying fiscal and regulatory reforms and strengthening state-owned companies.

Investment, employment creation, a sustainable budget deficit, building plans completed, industrial productivity and competitiveness are the measures of the progress, and the indicators that require urgent attention and are being dealt with in the Inter Ministerial Committee (IMC) on Investment chaired by the President. The results of the partnership already include the adoption by government of a clear fiscal consolidation path to avoid the burden of debt that might cripple investment flows and government spending capacity.

Together with business and labour, the government, after the budget in February, embarked on a foreign investor road show to present a united message to the world that South Africa is embarking on necessary economic reforms and is open for business. Recently, the President has tabled a report of the Presidential Review Commission on State Owned Companies (SOCs) that outlines interventions aimed at addressing the issues in the SOCs. While the 2016 Budget has been tabled under the most difficult economic conditions, with low growth and weak revenue performance being the major impediments, the National Treasury’s fiscal policy is sticking to its nominal expenditure ceiling. The Deputy President C Ramaphosa is leading a process of instituting reforms aimed at strengthening governance, business models and financial performance of SOCs. Please refer to the 2016 Budget Review for more details.

Reply:

I have been informed by the Public Investment Corporation (PIC) that:

These questions are based on a highly confidential report following a request from the PIC to Gobodo to investigate a certain transaction for the purchasing of SacOil shares. The PIC can state that it did act on the recommendations contained therein to the satisfaction of the Board of the PIC.

Further to this, as the matter was referred to the Public Protector of South Africa, the PIC regards it to be sub-judice and therefore they cannot respond to the questions raised, except to state that it will fully cooperate with any investigation the Public Protector may conduct.

Reply:

The South African Revenue Service provided the following information:

 (a) In general, tax incentive information is only available at least two years after employers submit their annual tax returns for a tax year to the South African Revenue Service (SARS) and most of the returns have been audited. Therefore, the data on the Employment Tax Incentive (ETI) that is provided is preliminary and could be significantly revised. The data for the last tax year and the current tax year are as per the monthly returns that employers submit to SARS for PAYE, which are very preliminary and subject to revision. The imminent review of the ETI will be the first comprehensive assessment to be conducted and it is expected to be completed by September 2016.

   (i) The total cost (tax revenue forgone) of the ETI since implementation on 1 January 2014 to 31 March 2016 was R6 623 million.

      aa. These amounts were claimed as follows:

            aaa. R1 882 million during calendar year 2014

            bbb. R3 330 million during calendar year 2015, and

      bb. R1 411 million from 1 January 2016 to 31 March 2016. The higher amount during the first three months of 2016 includes a correction for some understatements during 2015.

  (ii) The estimated tax revenue forgone for the 2016 calendar year is around R4 100 million (which includes the figure for the period 1 January 2016 to 31 March 2016, mentioned in bb above).

  (b & c)

An in-depth analysis of the estimated number of employees involved and jobs created is currently underway in the imminent review. During this review the efficacy of the ETI will also be studied. The National Treasury will provide the Standing Committee of Finance with a report of this review once it is available.

Reply:

The following information has been submitted by the South African Revenue Service except the query related to National Treasury, I have no way of verifying its content:

1. Yes, the South African Revenue Service (SARS) employed external services including a consulting company to assist with the investigations.

   (a) Kanyane Committee; Sikhakhane Panel; and KPMG.

  (b)(i)

Kanyane Committee	R332, 177.90
Sikhakhane Panel	R2, 978, 363.88
KPMG	R23, 131, 265.30

(ii) The reports were produced in line with contractual agreements.

2.Yes.

   (a) Kanyane Report

“Report to the Acting Commissioner for SARS regarding the findings of the panel established into allegations of impropriety against Johann Van Loggerenberg”

Sikhakhane Report

“Investigation Report - Conduct of Mr Johan Hendrikus Van Loggerenberg (South African Revenue Service)”

KPMG report

“South African Revenue Service: Report on allegations of Irregularities and Misconduct”

  (b) (i)

Kanyane Report	No record of receipt of document
Sikhakhane Report	No record of receipt of document
KPMG Report	December 2015. Report that was submitted was dated the 03rd September 2015. The report was submitted without any attachments.

(ii)

Kanyane Report	12 August 2014
Sikhakhane Report	05 November 2014
KPMG Report	31 July 2015 3 September 2015 4 December 2015

(ii)

Kanyane Report	Not received
Sikhakhane Report	01 April 2015
KPMG Report	31 July 2015 – This copy was recalled as it contained certain errors. An amended report was submitted on 3 September 2015 and stamped as a “final report”.

Reply:

NATIONAL TREASURY

		NATIONAL TREASURY	RSA RETAIL BONDS
	(a)(i) 2015/16 Expenses	R 6 344 136.51	R24 096 546.49
	(b)(i) 2016/17 Budget	R 2 075 000.00	R25 000 000.00

ACCOUNTING STANDARDS BOARD

The Accounting Standards Board (ASB) has not spend any money on advertising during the 2015-16 financial year, nor have they budgeted for any advertising in the 2016-17 financial year.

CO-OPERATIVE DEVELOPMENT AGANCY

(a) (ii) R162,000

(b) (ii) R200,000

DEVELOPMENT BANK OF SOUTHERN AFRICA

The table below provides a summary of the actual spend for 2015/16 as well as the budget for 2016/17.

Description	2015/16 Actual	2016/17 Budget
Advertising including TV, radio and print Note: The amount includes advertising for operational procurement	1 720 464	1 500 000
Total	1 720 464	1 500 000

FINANCIAL INTELLIGENCE CETRE

(a)(ii) The Financial Intelligence Centre spent R112 033 on advertising in the 2015-16 financial year;

(b)(ii) and has a preliminary budget allocation for advertising of R352 542 in the 2016-17 financial year.

FINANCIAL SERVICES BOARD

1. (ii) Spent R 1 306 886.00 - 2015/16
2. (ii) Budgeted R 1 636 960.00 – 2016/17

GOVERNMENT EMPLOYEES PENSION FUND

1. (ii) The GEPF has spent an amount of R54 483.35 on advertising for the 2015-16 financial year.

Supplier's Name	Description of Services	Amount
JONTI TENDERS	Enterprise Risk Management Service	R24 175.30
ULTIMATE RECRUITMENT SOLUTIONS cc	Advertising for Vacant Post	R30 308.05
		54 483.35

GOVERNMENT PENSION ADMINISTRATIVE AGENCY

(a)(ii) The GPAA spent R 6 388 347.00 on advertising in the 2015-16 financial year and (b)(ii) an amount of R17 752 800.00 has been budgeted by the GPAA for advertising in the 2016-17 financial year

INDEPENDEND REGULATORY BOARD FOR AUDITORS

The IRBA declares that no money was spent on advertising in the 2015-16 financial period and no money was budgeted for advertising in the 2016-17 financial year.

PENSION FUNDS ADJUDICATOR

1. (ii) – OPFA spent R494 661 in 2015-16
2. (ii) – OPFA budgeted R208 000 for advertising in 2016-17

LAND BANK

1. (ii) Land Bank Budget for Marketing and Advertising during the Financial

Year 2015/2016

During the year under review the Land Bank budgeted R2 073 220.00 for Marketing. This budget covered the following budget items:

• General Advertising
• Print Advertising
• Event Sponsorships and Promotion related Advertising

Amount Spent: R711 559.57

Budget Variance: R1 361 660.43

1. (ii) Land Bank Budget for Marketing and Advertising for the current

Financial Year 2016/2017

For the current Financial Year, the Land Bank has budgeted R4 358 264.00. This amount will still cover the above-mentioned budget items.

NB: The under expenditure during the 2015/16 financial year was due to:

• The implementation of the Organisational Review resulted in the halting of all marketing and advertising related expenditure i.e. event sponsorships, purchasing of promotional material and all advertising was put on hold. There is now a team on board with marketing spend commitments made for the current financial year.

OMBUD FOR FINANCIAL SERVICES PROVIDERS

1. (ii) The FAIS Ombud spent R53 503.42 in the 2015-16
2. (ii) The FAIS Ombud has budgeted R66 874.00 for advertising for the 2016-17 financial year.

PUBLIC INVESTMENT CORPORATION

(a)(ii) In respect of the 2015-16 financial year – R338 918 was spent on advertising; and

(b)(ii) In respect of the 2016-17 financial year – R928 980 was budgeted for advertising.

SOUTH AFRICAN AIRWAYS

For SAA, the amount spent on advertising/media for 2015/16 is R 41 047 717.16 excluding production.

For 2016/17 with a 6% increase is R 43 510 580.19 excluding production.

SOUTH AFRICAN REVENUE SERVICES

(a)(ii) The South African Revenue Service spent R 56,665,196.36 on advertising in the 2015/16 Financial Year.

(b)(ii) The South African Revenue Service has budgeted R 62,513,316.00 for advertising in the 2016/17 Financial Year.

SASRIA

(a)(ii) During the 2015-2016 financial year an amount of R2 800 861.19 was spent on adversiting by Sasria SOC Limited.

(b)(ii) The advertising budget for the 2016-2017 financial year is R R 3 068 310.00

TAX OMBUD

The Office of the Tax Ombud has spent R 239 964.07 on advertising for the 2015/16 financial year. The advertising budget for the 2016/17 financial year has not been finalized yet.

Reply:

The SA Reserve Bank (SARB) has provided the following response: The SARB fulfils its responsibility for financial stability and continually monitors developments that may affect this mandate, and has taken steps to mitigate the effects of a possible sovereign ratings downgrade on the stability of the financial system. The SARB produces its Financial Stability Review (available on its website www.resbank.co.za) twice a year to report on how it is fulfilling this mandate.

The dual mandates of the SARB (price and financial stability) are pursued through the tools available in a manner consistent with its defined objectives, irrespective of the source. The framework for dealing with financial stability risks (including those posed by a possible sovereign ratings downgrade), includes:

1. Monitoring for financial stability risks
2. Contingency planning for various risk scenarios

iii) Stress testing

i) Monitoring framework for financial stability

The Financial Stability Department has in place a monitoring framework that focuses on the systemic vulnerabilities that may propagate adverse shocks to the South African economy and financial system. As noted in the SARB Financial Stability Review (May 2016), an important component of this monitoring framework is the risk assessment matrix (RAM) that identifies key domestic and external risks to financial stability, and their likely impact. The risks associated with a sovereign credit rating downgrade to sub-investment grade have been included in the versions of the RAM presented to the Financial Stability Committee since at least 2014.

ii) Contingency planning for various risk scenarios

The SARB is involved in continuous efforts to identify, quantify and mitigate possible adverse events that could pose a financial stability risk including a ratings downgrade. This contingency planning involves engaging with key public and private sector stakeholders.

The systemic risks associated with various scenarios are then discussed with all key stakeholders and contingency arrangements are put in place.

iii) Stress testing exercise conducted

The SARB conducted a common scenario stress test exercise to evaluate the soundness of the South African domestic banking sector (2016 stress testing exercise). Details of the scenarios and methodology are contained in the Financial Stability Review (May 2016).The scenarios made provision for vulnerabilities similar to what could be experienced following a downgrade.

In addition to these measures aimed at ensuring financial stability, action have been taken (by the Bank Supervision Department) to mitigate risks that may arise to individual financial institutions.

Reply:

The South African Reserve Bank (SARB) has provided the following response:

The SARB is responsible for production of banknotes and coins. The response below takes into account the need for appropriate security and confidentiality related to their production and distribution:

1)(a) South Africa is mostly self-sufficient as far as the production of banknotes and coins are concerned. The majority of the South African banknotes (close to 90%) are produced domestically with the small percentage produced externally.

(b) The current arrangements are with a European based service provider.

(c) The production costs per unit externally ranged below R1,00 in the 2015/16 financial year. The production costs per unit is determined by the denominational values and volumes that are ordered, which might differ from year to year and is influenced by factors such as the exchange rate. The costs do not vary significantly from domestic production.

(d) This is done as part of a risk mitigation and diversification framework. This prudent approach is consistent with best practice by central banks to provide for more than one production house.

 

2)(a) The choice of haulage reflects security and cost considerations. South Africa currently does not have long-haul heavy-lift aircraft available to transport the required volumes of banknotes in a single flight which would not require re-fuelling stop-overs. Furthermore, the limited number of two to three flights per year does not warrant the purchase of an aircraft. Air chartering for banknote transport is an international common practice by central banks.

(b) Total associated costs of air transportation:

2012/13 FY – R125 million;

2013/14 FY – R147 million;

2014/15 FY – R53 million.

The total associated costs include, amongst others, the international transport / handling costs and customs value-added taxes.

(c) The Bank contracts with a lead logistics provider. The identity of this provider is confidential and the Bank cannot for security reasons publically disclose the identity of the company.

(d) In accordance with the Bank’s policy, the Bank followed a closed tender process for the procurement of currency related products and services.

3)(a) These production orders are placed annually.

(b) Refer to 1(b).

(c) (i) In accordance with the Bank’s policy, the Bank followed a closed tender process for the procurement of currency related products and services.

(ii) For the past few years the total costs ranged between approximately R150 million and R180 million per annum.

 

Reply:

1. (a) (i) 11 May 2009 – 23 May 2014: approximately 191 days

         (ii) 14 December 2015 – 25 April 2016: approximately 16 days

(b) France; Nigeria; Angola; United Kingdom; Kingdom of Swaziland; United States of America; Turkey; Scotland; India; Switzerland; Tanzania; Cote d’Ivoire; Korea; Canada; Namibia; Hong Kong; Sierra Leone; China, Portugal; Spain; Egypt; Italy; Mexico; Ethiopia; Argentina; Sweden; Germany; Japan; Morocco; Malawi; Russia; Islamic Republic of Iran.

1(c) and (2)

The Minister contributes to and draws on a number of international fora meetings. These include all the G20 meetings, the IMF/WB Annual Meetings as well as the OECD Ministerial Council meeting, New Development Bank meetings, BRICS meetings, and many other for a where South Africa participates. For example, the issues emanating from the G20 discussions informs the policy approaches or choices that the National Treasury proposes in its day to day economic management of the South Africa.

Again, engagements in an international arena are important to enforcing global agreements, for example agreements on i) financial architecture; ii) money laundering and iii) finance regulations. These engagements further provide an insight into matters in the international environment. Issues that are raised at the G20 meetings assist in the shaping of South Africa’s economy in the global arena. During the 2008/09 global financial crisis, the Minister was able to draw insight on how South Africa was to respond to the crisis as a developing country. Specifically, the global cooperation among the G20 member countries has helped South Africa to avert the negative decline of the country’s economy through a set of possible policy options that were used to restore global stability and growth during the global financial and economic crisis.

Recently, the G20 Finance Ministers and Central Bank Governors Meeting, that was held in February 2016 and July 2016, discussed a number of issues concerning global economy, framework for strong, sustainable and balanced growth, investment and infrastructure, international financial architecture, financial sector reform, international tax, anti-terrorist financing, green finance and climate finance. It is within this context that the Minister attends international meetings to assist the country in exploring the scope for cooperation amongst the G20 while acknowledging the interconnectedness of policy options between the different economies.

Reply:

The South African Reserve Bank (SARB) is operationally independent and does not generally report to the Minister or the National Treasury. It has provided the following response in order to address this parliamentary question:

The SARB is not authorised to regulate and / or supervise the relationships between individual banks and customers. Notwithstanding this fact, given the SARB’s regulatory and supervisory responsibilities, the SARB’s investigations and inspections are conducted with strict regard to the confidentiality requirements of the legislation the Bank is subject to.(e.g. the South African Reserve Bank Act and the Banks Act) As such, the SARB does not discuss current or potential investigations in the public domain. However, it is common cause that the SARB, as part of its supervisory role, conducts routine inspections on all banks to ascertain their levels of regulatory compliance. This includes assessment of compliance with the Financial Intelligence Act; amongst others. The conclusions of such inspections are discussed with the banks concerned, and where there is a need for remedial action, plans to implement such actions are also discussed. It is the SARB’s view that the banking sector has a very high level of adherence to the regulatory / legislative framework applicable to them.

Reply:

(a)(b)(i) (ii) (aa) (bb) (cc) (dd) (ee)

Yes. The National Treasury conducts benchmark exercises as part of the budget process on an annual basis and has undertaken these exercises for each of the years specified. The benchmark exercises were introduced by the National Treasury in 2002 with a focus on analysing provincial budgets and expenditure to identify risk areas and bring these risks to the attention of provincial treasuries and to explore possible solutions with them.

(aaa) (bbb) (aaaa) (bbbb)

Amongst others, the benchmark exercises:

• Interrogate the assumptions behind draft programme allocations and alignment of budgets to national and provincial health policy priorities.

• Assess how the sector is implementing cost saving measures and assess departmental budgets in view of a constrained fiscal envelope.

• Assess areas of risk in provincial budgets and provide feedback on areas where changes might be required.

Because the benchmark exercises cover an extremely wide range of areas it is not possible to provide a simplified answer whether provincial budgets do or do not comply with national priorities. In general there is a reasonable degree of compliance but the benchmark exercises help to find risks and deviations and point these out to provinces to address. The non-negotiable budget items announced by the Minister of Health in 2012 have assisted the National Department of Health and the National Treasury in advocating for appropriate budget allocations for prioritised spending areas that are critical to service delivery.

As an example, the table below shows spending on medical supplies per capita uninsured person by province, which is a national priority. Limpopo’s budget was only R42 per uninsured person for 2016/17 compared to a national average of R152 per capita per year for medical supplies. Limpopo was then advised to address this risk in their budget.

See the link for the table: https://pmg.org.za/files/RNW1176_TABLE-160711.docx

It is important to emphasise that the benchmarking exercise mainly focuses on budgets and expenditure. As such, the National Department of Health and the Department of Performance and Monitoring evaluation will be better placed to respond to detailed performance benchmarking questions.

At times the National Treasury has conducted the health sector benchmark exercise in partnership with the National Department of Health and in several years whole day benchmarking meetings were held with all nine provincial Departments of Health and provincial Treasuries.

(aaaaa)

The National Treasury also publishes, approximately every second year, a comprehensive review of provincial budgets and expenditure, known as the Provincial Budgets and Expenditure Review. The last review was published in December 2014 and covered details of health sector spending for financial years from 2010/11 to 2016/17. These reviews contain numerous comparative indicators in the health chapter which is available on the National Treasury’s website at http://www.treasury.gov.za/publications/igfr/2015/default.aspx.

(bbbbb)

The review also reflects that substantial portion of the provincial expenditure is in line with the national health priorities.

Reply:

The details of the co-investment fund have as yet not been finalised. There is a commitment from government to play a role in the fund and to have representation on the board. The details about how much funding government will provide, if any; how the funding will be structured; and the date of the launch of the fund will be determined in the near future.

The fund will provide the details in due course.

Reply:

The performance and expenditure reviews commenced in August 2013, and is ongoing. Many of the reviews span more than one financial year.

The attached schedule outlines the purpose (aa) of each expenditure review, the title (bb), the date of completion (cc), as well as, the total cost of the performance and expenditure reviews process (aaa) and the costs of each individual expenditure review (bbb).

The work of the expenditure and performance reviews is managed by a unit within GTAC, where the time of 2-3 people is allocated to the project.

Reply:

(1) The South African Reserve Bank (SARB) regularly publishes on a monthly basis information on the official gold and foreign exchange reserves it holds. In line with international practices, the SARB holds a large percentage of South Africa’s gold reserves in vaults of official sector institutions at offshore bullion centres, including the Bank of England, while a smaller amount is held locally. It is operationally efficient to store gold at offshore bullion centres should the need arise to conduct gold transactions.

(2) (a) The latest “Information notice on the official gold and foreign exchange reserves of the SARB as at the 29 February 2016”, indicates that the value of the official gold reserves as at 29 February 2016 was US$4,96 billion, which is approximately 4 million fine ounces.

(b) The value in Rand terms, using US dollar/Rand exchange rate of ZAR15.17 (as at 9 March 2016) and the value of the official gold reserves as at 29 February, is approximately R75 billion.

(3) The SARB performs regular reconciliations on reports based on gold held at various local and international locations. Senior SARB officials conduct due diligence visits to inspect gold reserves held offshore on a regular basis. The last due diligence visit was conducted during 2015.The executive of the SARB is informed of the findings of the due diligence visit. As these report backs contain confidential information, they are not made publicly available.

(4) Storing gold at secure locations around the world usually attracts storage costs, however, these costs are miniscule in comparison to the value of the gold being stored. When transacting with gold trading counterparties, one would also incur transaction and transportation costs.

Reply:

According to the Public Investment Corporation (PIC):

1. The total decrease in Asset under Management (AuM) over the period 08 December 2015 to 12 December 2015 amounted to R99, 107,867,476.76.

Table 1 below provides detailed information as per Client.

 

Table 1: Assets under Management per Client:

GOVERNMENT EMPLOYEE PENSION FUND
Start date	End date	End Market Value (Rands)	Change in Rands	Change in Percentage
2015/12/08	2015/12/09	1 578 842 958 575,68
2015/12/09	2015/12/10	1 533 030 433 903,16	-45 812 524 672,52	-0,03
2015/12/10	2015/12/11	1 492 840 656 310,47	-40 189 777 592,69	-0,03
2015/12/11	2015/12/12	1 492 952 420 399,11	111 764 088,64	0,00
2015/12/12	2015/12/13	1 492 954 477 051,57	2 056 652,46	0,00

UNEMPLOYMENT INSURANCE FUND
Start date	End date	End Market Value (Rands)	Change in Rands	Change in Percentage
2015/12/08	2015/12/09	118 539 328 931,11
2015/12/09	2015/12/10	113 622 850 706,82	-4 916 478 224,29	-0,04
2015/12/10	2015/12/11	110 538 549 728,88	-3 084 300 977,94	-0,03
2015/12/11	2015/12/12	110 553 868 800,92	15 319 072,04	0,00
2015/12/12	2015/12/13	110 555 818 779,42	1 949 978,50	0,00

COMPENSATION COMMISSIONER FUND
Start date	End date	End Market Value (Rands)	Change in Rands	Change in Percentage
2015/12/08	2015/12/09	34 722 690 994,32
2015/12/09	2015/12/10	32 550 500 181,82	-2 172 190 812,50	-0,06
2015/12/10	2015/12/11	31 615 296 174,48	-935 204 007,34	-0,03
2015/12/11	2015/12/12	31 627 883 140,02	12 586 965,54	0,00
2015/12/12	2015/12/13	31 628 048 616,55	165 476,53	0,00

COMPENSATION COMMISSIONERS PENSION FUND
Start date	End date	End Market Value (Rands)	Change in Rands	Change in Percentage
2015/12/08	2015/12/09	16 943 272 754,78
2015/12/09	2015/12/10	16 271 781 984,86	-671 490 769,92	-0,04
2015/12/10	2015/12/11	15 809 698 426,57	-462 083 558,29	-0,03
2015/12/11	2015/12/12	15 811 843 053,26	2 144 626,69	0,00
2015/12/12	2015/12/13	15 812 007 764,12	164 710,86	0,00

ASSOCIATED INSTITUTIONS PENSION FUND
Start date	End date	End Market Value (Rands)	Change in Rands	Change in Percentage
2015/12/08	2015/12/09	14 106 965 858,19
2015/12/09	2015/12/10	13 361 805 139,24	-745 160 718,95	-0,05
2015/12/10	2015/12/11	13 055 814 127,87	-305 991 011,37	-0,02
2015/12/11	2015/12/12	13 059 366 371,64	3 552 243,77	0,00
2015/12/12	2015/12/13	13 059 853 104,81	486 733,17	0,00

PIC FUNDS UNDER MANAGEMENT
Start date	End date	End Market Value (Rands)	Change in Rands	Change in Percentage
2015/12/08	2015/12/09	1 791 426 488 177,86
2015/12/09	2015/12/10	1 737 191 207 615,39	-54 235 280 562,47	-0,03
2015/12/10	2015/12/11	1 692 157 213 606,73	-45 033 994 008,66	-0,03
2015/12/11	2015/12/12	1 692 309 150 164,43	151 936 557,70	0,00
2015/12/12	2015/12/13	1 692 318 620 701,10	9 470 536,67	0,00

2. The PIC’s Portfolios have since recovered from the December 2015 decline.

Reply:

(1) & (2) No

Reply:

I have been informed by South African Airways (SAA) that:

The employee was put on a precautionary suspension, based on serious allegations of misconduct levelled against her, which remain a subject of a current pending internal investigation. Full reasons for the suspension of the employee are clearly set out in the correspondence exchanged between SAA and the employee’s duly appointed legal representatives. There is no specific statute or legislative framework that regulates the suspension and/or provides grounds for the suspension of this employee. The requirements for a valid precautionary suspension are fully enunciated in common law and, such requirements had been fully complied with and met by SAA in dealing with this particular matter. The employee has a contractual employment relationship with SAA and is subject to the Disciplinary Code like all other employees. Most importantly, the Labour Relations Act, Act No. 66 of 1995 (LRA) governs and regulates the employment relationship between the employee and SAA, and thus, should the employee be aggrieved by the decision to place her on precautionary suspension, pending an internal investigation, she is at liberty to invoke the relevant provisions of the LRA for an appropriate relief. This remains an operational matter.

Reply:

The following information was provided by South African Airways (SAA).

The certain person (name furnished) (a) was not and (b) is not currently on any SAA no-fly list.

Reply:

The following information was provided by the Public Investment Corporation (PIC).

The PIC does not hold any financial interest in certain companies (name furnished).

Reply:

(1)(2)(3) The National Treasury is invited by the relevant parliamentary committee Chairperson according to their programme and only the parliamentary committee is able to decide on its programme and any possible changes. The Chairpersons and / or Committee Secretaries do consult with the relevant ministries and departments on the availability of the Minister, Deputy Minister and also the representational departmental officials before finalizing an invitation. Therefore, I suggest that this request should be directed to the identified Committee Chairperson for comment.

Reply:

I have not attended any meeting with the Gupta family or anyone else at their Saxonworld Estate. I have encountered one or more members of his family at public events on a few occasions, eg a cricket match. I have met one of the Gupta brothers at Mahlamba Ndlovu around 2009/10 during which a brief discussion on small business finance took place.

Reply:

1. (a) No. And no to all subsequent sections to the question.

(b) Yes. The DDG: Tax Policy and Financial Regulations was requested by the Minister to brief the study group on certain items that were before the parliamentary committees.

    (i) Yes

    (ii) Yes

    (aa) To discuss legislation before the parliamentary committees

     (bb) (aaa) LC August and T Plaatjie

            (bbb) Ministerial Parliamentary Liaison Officers

     (cc) Upon request, usually during Parliamentary sessions.

     (dd) Finance and Appropriation study groups

2. The Code of Conduct for Public Service (Chapter 2 of the Public Service Regulations, 2001, as amended) stipulates:

(a)        An employee may not does not abuse her or his position in the public service to promote or prejudice the interest of any political party or interest group (regulation C.2.7)

(b)        An employee must refrain from party political activities in the workplace (regulation C.3.7).

However, officials of a department may and should communicate with, and consult, relevant role players on policy and legislative proposals. Relevant role players include the study group of any political party for a Parliamentary committee. Furthermore, if a Minister is invited to a study group meeting in their capacity as the Minister, i.e. as a member of the executive, they may nominate an official to represent or attend on their behalf.

On the direction of the Minister, officials have also met Members of Parliament of various political parties to provide clarity on Legislative and policy matters.

Reply:

The National Treasury has not yet received any report or request for further investigation of the matter at the Ekurhuleni Metropolitan Municipality from the Office of the Public Protector.

(a) The need for further investigation to be conducted by the National Treasury will be informed by the findings in the report of the Office of Public Protector.

(b) There are no further relevant details available to the National Treasury at this time.

Reply:

1. The National Treasury was not approached by any political party for any form of funding (a) in the (i) 2013-14, (ii) 2014-15 and (iii) 2015-16 financial years and (b) since 1 April 2016.

2. The National Treasury has not provided any form of funding to any political party (a) in the (i) 2013-14, (ii) 2014-15 and (iii) 2015-16 financial years and (b) since 1 April 2016.

Reply:

The South African Revenue Service has submitted the following information. Please note that the Minister is unable to verify the content.

(1)(a)(b) The cost incurred for the mandated work was:

• KPMG – R23, 131, 265.30.

The KPMG investigated the allegations made in respect of an investigative unit within the SARS.

2. An already existing panel was utilised for this purpose that was previously appointed through an open tender process in terms of paragraph 4.9 of the National Treasury Supply Chain Management – A guide for accounting officers/ authorities – February 2004.

The Terms of Reference of the mentioned company was to perform a forensic investigation based on the recommendations of the Sikhakhane report to institute a more detailed investigation and to provide evidential support to the findings made.

Reply:

The assessment to determine the costs is underway. A full report which addresses the Honourable Members questions will be submitted to the Constitutional Court within the timelines set by the Court.