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05 August 2022 - NW2421

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Ceza, Mr K to ask the Minister of Finance

(a) What total number of municipal employees have been reported to her department to have companies that conducted business with the State across the Republic in the past three financial years and (b)(i) what is the nature of the disciplinary action that has been taken against such employees?

Reply:

The National Treasury does not have information on the number of municipal employees doing business with the State, as such cases are not reported to the National Treasury. However, the National Treasury has data from Central Supplier Database which has been compared to payments data (Basic Accounting System) from the National and Provincial Departments. The following number of individuals (municipal employees) are linked to businesses that have been paid through BAS by National or Provincial Departments:

Financial Year

Number of Officials

2019/20

1086

2021/21

890

2021/22

657

It must be noted that the data above is based purely on identity number matches and has not been interrogated further to ascertain whether there is any wrongdoing.

27 July 2022 - NW2316

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Ceza, Mr K to ask the Minister of Finance

What remedial action has been taken to ensure that the four districts in the North West, which were listed as being in financial distress, fulfil their obligations of delivering on the allocated grants in their local municipalities?

Reply:

The North West province has four districts namely, Ngaka Modiri Molema, Bojanala Platinum, Dr Kenneth Kaunda and Dr Ruth Segomotsi Mompati Molema District municipalities. These districts receive grant allocations in terms of the annual Division of Revenue Act (DoRA) in accordance with the powers and functions allocated to them in terms of section 84 of the Municipal Structures Act and Regulations (Act No. 117 of 1998). Therefore, various districts and local municipalities in North West would have different powers and functions allocated to them in terms of the Structures Act. These powers are in the main the powers to provide the water, sanitation, roads, refuse, and electricity services.

In the North West province, Bojanala Platinum and Dr Kenneth Kaunda districts municipalities have no powers and functions to provide services for water, sanitation, refuse, roads and electricity, while Dr Ruth Segomotsi Mompati and Ngaka Modiri Molema districts municipalities are delivering these services on behalf of their local municipalities.

It is therefore important to distinguish and note that the local municipalities in the Bojanala Platinum and Dr Kenneth Kaunda districts are the ones responsible for delivering these services, while the other two districts in the North West province, Dr Ruth Segomotsi Mompati and Ngaka Modiri Molema districts municipalities are responsible for both receiving and spending the DoRA allocations on behalf of their local municipalities.

Through the principle of delegated and non-delegated responsibility, the Provincial Treasury is directly responsible to support these municipalities to ensure that tabled budgets are assessed and adopted in time and to ensure that municipalities consider the recommendations provided to them for various Council’s considerations. Only Rustenburg and Mahikeng local municipalities are non-delegated and remains a direct responsibility of National Treasury whilst the rest of the local and district municipalities are under a direct support of the Provincial Treasury.

The Provincial Treasury has been providing support to the municipalities in distress through placing various support skills and capacity support in those municipalities. A number of deployees through the National Treasury’s Municipal Finance Improvement Programme (MFIP) continues to support in the affected municipalities. Further, National Treasury continues to identify struggling municipalities through the process of Invoice Verification Process (IVP) wherein, payments and transfers of grants can only be made to the municipalities only after the work done and invoiced has been verified by both National Treasury (PT) and DCoG (MISA). On an annual basis, National Treasury and DCoG agree on a list of municipalities that are placed under these micro-management support.

In exceptional circumstances or persistent and material breach of the measures on prudent financial management, National Treasury may consider exploring the feasibility of utilising other organs of state to deliver these services on behalf of the municipalities that are in distress. These measures are, the utilisation of the district municipality to be a delivery vehicle against a municipality in distress to avoid conditional grants misuse or vice versa, wherein, the local municipality is considered to assist its district.

06 July 2022 - NW2436

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Wessels, Mr W to ask the Minister of Finance

Since the 1994-95 financial year up to the latest date for which information is available, what total (a) amounts were spent by the Government at national, provincial and local level on (i) general social grants, (ii) Social Relieve of Distress grants, (iii) school fee subsidies, (iv) tertiary support via the National Student Financial Aid Scheme, (v) subsidised and free electricity for those qualifying in terms of means test, (vi) subsidised and free water for those qualifying in terms of means test, (vii) other subsidised and free municipal services for those that qualify in terms of means test and (viii) subsidised and free housing and (b) number of individuals were reached and/or benefitted in each case?

Reply:

In the excel workbook attached, is the information requested. Kindly note that prior to 2015, classification of the social wage was at a high-level classification of Housing, Education, Health and Social Development. It is therefore not possible to provide the lower-level detail for the years prior.

In the workbook attached, the responses to Questions a, h and I are in the first tab, titled A, H and I. The responses to the rest of the questions are in the tabs titled B, C, D; and E, F, G (combined).

06 July 2022 - NW2330

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Clarke, Ms M to ask the Minister of Finance

What is the current total amount of tax being levied annually for the sugar tax?

Reply:

In the revenue year 2021/22, the Health Promotion Levy (colloquially referred to as the sugar tax) contributed a total of R 2,259,832,000.00* in the revenue collections that were reported by the South African Revenue Service. The R 2,259,832,000.00* collected reflects R2, 182,323,000.00* in domestic levy and R77, 510,000.00* in an import levy. Overall the FY2021/22 collections represent a growth of 6.92% on the FY2020/21 collections of R2, 113,606,000.00 (R2, 046,177,000.00 domestic levy and R67, 429,000.00 in import levy).

* All figures for FY2021/22 are preliminary pending auditing processes.

06 July 2022 - NW2250

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Groenewald, Mr IM to ask the Minister of Finance

Whether, in light of the fact that in terms of section 24(1) of the Municipal Finance Management Act, Act 56 of 2003, municipal councils must consider approval of the annual budget at least 30 days before the start of the budget year, any municipalities failed to comply with the specified provision; if not, what is the position in this regard; if so, (a) which municipalities failed to comply and (b) what are the reasons for the non-compliance in each specified case;

Reply:

(a)(b) According to our records, 17 Municipalities have failed to table their 2022/23 MTREF budgets on time. They are listed below together with the explanation provided to the National Treasury.

a) Municipality

b) Reasons

Nelson Mandela Bay NMA

Council did not sit/non-compliance letter

Mangaung MAN

Council did not meet quorum

Kopanong FS162

Council did not sit/non-compliance letter

Dihlabeng FS192

Council did not sit/non-compliance letter

Nama Khoi NC062

Community Consultation was not concluded by 31 May

Khai-Ma NC067

Community Consultation was not concluded by 31 May

Namakwa DC6

Community Consultation was not concluded by 31 May

Ubuntu NC071

Financial System related challenges

Renosterberg NC075

Not having staff in the office due to non-payment

Thembelihle NC076

Community Consultation was not concluded by 31 May

Siyathemba NC077

Community Consultation was not concluded by 31 May

Siyancuma NC078

Financial System related challenges

Dawid Kruiper NC087

Financial System related challenges

Sol Plaatje NC091

Community Consultation was not concluded by 31 May due to late submission of the IDP

Phokwane NC094

Community Consultation was not concluded by 31 May

Bitou WC047

Bitou Municipality did not approve the budget process plan in August 2021. It was only approved in December 2021 and the strategic session was only held in March 2022 hence the request for extension to better align the budget with the IDP.

Laingsburg WC051

The Municipality failed to comply with the provisions of section 14(1) of the Municipal Budget and Reporting Regulations which states that an annual budget and supporting documentation tabled in a municipal council in terms of section 16(2) of the MFMA must be in a format in which it will eventually be approved by the Council. The reason for non-compliance with the submission of the budget in the prescribed format is because the financial system settings were not such that the budget schedules could be generated from the system.

The Honorable member will recall that the National Treasury as a routine, consolidate this information for all 257 Municipal, verify the information and formally table a consolidated report to this effect in Parliament annually. All the previous reports are hosted on the National Treasury’s website on the following link:

http://mfma.treasury.gov.za/Media_Releases/mbi/2020/2020MTREF/Pages/tablingdates2020.aspx

Once the formal process has been concluded for this cycle, the updated report will once again be tabled in Parliament.

Lastly, municipalities have until 30 June 2022 to formally adopt their 2022/23 MTREF budgets hence it may be premature for me to make a statement in this regard at this stage.

06 July 2022 - NW2437

Profile picture: Wessels, Mr W

Wessels, Mr W to ask the Minister of Finance

Since the 1994-95 financial year up to the latest date for which information is available, what percentage of the total Governmental expenditure at national, provincial and local level was channeled to the (a) general social grants, (b) Social Relieve of Distress grants, (c) school fee subsidies, (d) tertiary support via the National Student Financial Aid Scheme, (e) subsidised and free electricity for those qualifying in terms of means test, (f) subsidised and free water for those qualifying in terms of means test, (g) other subsidised and free municipal services for those that qualify in terms of means test, (h) subsidised and free housing and (i) subsidised and free medical services?

Reply:

In the excel workbook attached as Annexure A, is the information requested. Kindly note that prior to 2015, classification of the social wage was at a high level classification of Housing, Education, Health and Social Development. It is therefore not possible to provide the lower level detail for the years prior.

In the workbook attached, the responses to Questions a, h and I are in the first tab, titled A, H and I. The responses to the rest of the questions are in the tabs titled B, C, D; and E, F, G (combined).

05 July 2022 - NW2244

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Luthuli, Mr BN to ask the Minister of Finance

With regard to making New Development Bank (NDB) policies accessible in the context of the Information Disclosure Policy that requires the provision of translations into local languages, and noting that the NDB Project information has remained inaccessible and not located on the website, what measures and/or plans has his department taken to facilitate information disclosure in general, especially to affected communities?

Reply:

Information on projects funded by the New Development Bank are listed on the Bank’s website. The Honourable Member and members of the public are encouraged to visit the New Development Bank website to obtain information on the work of the Bank https://www.ndb.int/projects/list-of-all-projects/.

The originator of any project that is funded by the Bank has to ensure that consultation occurs with the relevant stakeholders.

The National Treasury, in general, strongly supports the disclosure policies of information to institutions and entities in which it is a shareholder and has done so with the NDB.

05 July 2022 - NW2245

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Luthuli, Mr BN to ask the Minister of Finance

(1)Whether, with the understanding from the New Development Bank (NDB) and the headquarters in Shanghai that South African NDB five-year country partnership plan will be adopted within six months of the finalisation of the NDB five-year strategic plan, there will be a multi-stakeholder engagement with the public and/or civil society on the Republic’s partnership plan; if not, why not; if so, (2) whether he will furnish Inkosi B N Luthuli with the first five-year South Africa country partnership Plan 2016-21, which has not been made available; if not, what is the position in this regard; if so, was public multi-stakeholder engagement made?

Reply:

The work of the NDB is guided by its General Strategy. The first General Strategy was for the period 2017 to 2021. The Bank has recently approved its second General Strategy for the period 2022 to 2026. The National Treasury commented and contributed to the finalization of the Bank’s second General Strategy.

The Bank has not yet finalized its policy on member country partnership plans. This policy will set out the relationship between the Bank and its member countries.

The Honourable Member can access the Bank’s General Strategy on the Bank’s website (https://www.ndb.int/about-us/strategy/strategy/).

17 June 2022 - NW2065

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Siwisa, Ms AM to ask the Minister of Finance

Whether, noting the recent judgment of the Special Tribunal, which found that the O R Tambo District Municipality failed to comply with the emergency procurement processes to extend a contract and the process was seen as unlawful, any steps will be taken against the municipal officials who were found to have been involved in the specified processes; if not, what is the position in this regard; if so, (a) what steps will be taken and (b) by what date?

Reply:

The Tribunal outcomes were issued to the Accounting Officer of OR Tambo District Municipality. No steps will be taken against the municipal officials by the National Treasury as the National Treasury does not have jurisdiction in the disciplining of any organ of state employees or officials. OR Tambo District Municipality will be required to take action against any transgressions of its employees.

The National Treasury are able to monitor to ensure that necessary actions are taken against the implicated officials.

17 June 2022 - NW2062

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Ceza, Mr K to ask the Minister of Finance

In light of the Auditor-General’s report in the 2020-21 financial year which indicated that municipalities relied on costly consultants in the short-term to compensate for the lack of financial management and reporting skills, which provisions have been put in place by her department in ensuring a strengthened control environment in order to avoid unauthorised, irregular, fruitless and wasteful expenditure?

Reply:

The Honourable Member should note that the Municipal Finance Management Act (MFMA), vests financial governance, accountability and responsibility for a municipality with the municipal council and its administration. This includes appointment of relevant and appropriate skills, ensuring proper internal controls are implemented and to prevent the incurrence of unauthorised, irregular, fruitless and wasteful expenditure (UIFW).

Specifically, section 62 of the MFMA provides that the accounting officer of a municipality is responsible for managing the financial administration of the municipality, and must for this purpose ensure internal controls, take all reasonable steps to ensure that unauthorised, irregular or fruitless and wasteful expenditure and other losses are prevented, amongst others.

The National Treasury has issued cost containment regulations that elaborate on the process to be followed and measures to be implemented by municipalities on the use of consultants with the objective of reducing reliance thereon. The Regulations requires a thorough needs assessment to be undertaken to demonstrate the need for appointing a consultant. In cases where consultants are appointed, a municipality must ensure the transfer of skills by consultants to municipal officials are included in all contracts.

A number of MFMA Circulars have been issued and officials trained in implementing their financial management responsibilities, including regulating a set of minimum requirements. These address all financial management disciplines, including revenue management, asset management, expenditure management and liability management.

Additionally, the National and Provincial Treasuries, have collaborated to render support to municipalities in various ways, both technical, financial and at knowledge sharing platforms. The issuance of the UIFW reduction strategy documents, preventative controls and assistance in preparation of support plans for implementation by municipalities are geared to address these financial challenges. Furthermore, all municipalities are required to assess their Budget and Treasury Office capability, capacity and competencies in financial management and to implement corrective measures to address gaps and audit findings. These have been communicated in MFMA Circulars available on the National Treasury website. Training has been provided and will continue in the use of these tools, interpretation of accounting standards, preparation of annual financial statements and disclosures to municipal officials.

03 June 2022 - NW1788

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Brink, Mr C to ask the Minister of Finance

Whether the National Treasury has taken steps to place the names of companies implicated in the findings of the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector including Organs of State on the register of entities prohibited from doing business with the State; if not, why not; if so, what are the names of the companies?

Reply:

Kindly note that National Treasury Instruction Note 3 of 2021/2022 paragraph 6 states that, should an organ of state opt to restrict the contractor and or any other persons from obtaining a business with the public sector, the relevant institution must:

  • Inform the contractor or person(s) of the intention to impose a restriction, provide the reasons for such decision and the envisaged period of restriction.
  • Allow the contractor and or person (s) to provide reasons why the envisaged restriction should not be imposed.
  • Consider any reasons submitted by the contractor and or person in terms of two bullets;
  • Inform the National Treasury such imposition of the name of the restricted person(s), the reasons for restriction, the period of restriction and the date of commencement of restriction ( date, month and year).
  • National Treasury will then consider the submission by an Accounting Officer/Authority then list the affected contractor and or person (s) to provide reasons.

Summarily: Government institutions that utilized services of such a contractor and or person (s) must follow the National Treasury Instruction Note 3 of 2021/2022 paragraph 6 and finally send the submission to the National Treasury; without that submission National Treasury would not be able to finalize any restriction of suppliers.

03 June 2022 - NW1300

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George, Dr DT to ask the Minister of Finance

(1) What is the (a) current backlog of pension payouts for retired public servants, (b) current turnaround time for pension payouts for retired public servants and (c) total number of retired public servants whose pensions were paid out within 30 days in the (i) 2019-20 and (ii) 2020-21 financial years; (2) whether the (a) Government Pension Administration Agency and (b) Government Employees Pension Fund introduced and/or implemented measures to decrease the turnaround time for pension payouts for retired public servants; if not, what are the reasons that such measures have not been introduced and implemented; if so, what has she found has been the impact of the measures introduced and implemented in this regard?

Reply:

(1) (a)

Backlog cases are defined as cases older than 60 days

Retirements of Public Servants

Current Backlog as of 31 March 2022

1 345

(1) (b)

Pension Payouts for Retired Public Servants

no

%

Retirees Paid within 60 Days

29 855

88,78

TOTAL Retirees Paid

33 627

100,00

(1) (c) (i) (ii)

Year

Paid within 30 Days

Total Paid

 

no

%

100%

Retirement Claims 2019/20

21 905

64,27%

34 081

Retirement Claims 2020/21

13 255

47,41%

27 956

Retirement Claims 2021/22

20 485

60,92%

33 627

(2) (a)

The GPAA has implemented the following initiates to improve the pay out of pension benefits:

  • Improved staff capacity to deal with claim volumes given the constraints the department had faced under the Covid-19 regulations;
  • System enhancements were done, where all retirement exit claims now pass through an automated process first allowing for reduced human intervention;
  • Validations conducted in advance to further reduce unnecessary delays in the processing of claims. These validations include amongst others bank verifications of particulars and identification verifications with Department of Home Affairs;
  • Reintroduction of member and employer department engagements under the required Covid-19 protocols. These engagements include Retiring Member Campaigns specifically focused on public servants who will soon retire, Human Resources forums with Employer Departments and Webinars;
  • The establishment of a consultative forum between the Department of Public Service and Administration (DPSA), GPAA and GEPF to deal with matters relating to the submission of exit claims by employer departments.

(2) (b)

In addition to the above, the GEPF has implemented the following initiatives:

  • Hosted retirement member workshops on a regular basis. During these workshops the discussions and interactions focus on the requirements and responsibilities of members and departments when retirement is applied for. These workshops were conducted virtually in most cases but have now returned to physical format following the easing of lockdown restrictions.
  • Set up mobile offices to execute its outreach initiatives and ease the burden of engagement for members who are located in remote or rural areas; and
  • Developed educational videos which explain how members should complete the required exit forms and detail all the documentation required when a member exits.

The initiatives have resulted in varied success. In 93% of the cases, the GEPF is able to pay the retirement claims within 60 days from receipt of correct information. The initiatives have led to a reduced number of cases where documentation is sent back for correction. The initiatives have also resulted in more cases where employers provide the correct and complete documentation within 30 days. It is important to note that though there have been administrative delays in payments for some retirement benefits, this does not represent the majority of the cases. The majority of retirements are being paid within the 60 day period as per the GEP Law.

03 June 2022 - NW1810

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Komane, Ms RN to ask the Minister of Finance

Whether, given that from a comparative perspective there seems to be a regression on the progress of programmes and projects since the 2022 Appropriations, the National Treasury has attempted to track any synergy between the appropriation of funds and performance; if not, why not; if so, what are the relevant details?

Reply:

The monitoring of performance by the National Treasury was conducted within the Framework for Strategic Plans and Annual Performance Plans. This framework was issued by the National Treasury in 2010 in order to guide institutions’ short and medium term planning. The Framework provided a standardised approach to strategic and annual performance planning; and promoted accountability for performance and service delivery, and alignment between the planning, budgeting and reporting processes.

To improve government-wide planning and to align planning with other government processes, the National Planning Commission (NPC) and the Department of Performance Monitoring and Evaluation (DPME) was established in 2009 in order to facilitate country-level long-term development planning through the NDP, outlines key policy trade-offs and sets out the sequence of decisions required to achieve the objectives, mobilise stakeholders and harness resources towards the implementation of the NDP, monitoring and evaluation for improved service delivery. In order to operationalize these functions, the planning and quarterly performance reporting function was transferred from National Treasury to the Department of Planning, Monitoring and Evaluation (DPME). DPME can report on progress against programmes and projects using the Electronic Quarterly Performance Reporting System. However, National Treasury is responsible for tracking expenditure /spending performance on appropriated funds. National Treasury has access to the Quarterly Performance Reporting data on a quarterly basis.

03 June 2022 - NW1963

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George, Dr DT to ask the Minister of Finance

Whether the National Treasury has ever conducted an economic impact study to determine the impact of load-shedding on the economy since it began in 2008, as it has been shown to have a direct impact on economic growth,; if not, why not; if so, what are the relevant details?

Reply:

  • While the National Treasury has not specifically done a full cost analysis evaluating the impact that load shedding has had on GDP since 2008, various analyses have been undertaken over the past few years to assess the impact of the electricity constraint on economic activity.
  • To understand the impact of electricity shortages on factor productivity, investment and potential growth, the National Treasury uses analytical tools such as its macro-structural model (which is also used for the macroeconomic forecast) as well as a computable general equilibrium (CGE) model.
  • This macro-econometric analysis generally builds on detailed energy modelling conducted by institutions such as the CSIR and is always supplemented by secondary research, data from Eskom’s Medium-Term System Adequacy Outlook as well as consultations with key stakeholders in the energy sector.
  • Some of this analytical work has focused specifically on the economic impact of load shedding, which has been published in several editions of the Budget Review as macro-fiscal scenarios that inform the budgeting process. This includes:
      • The 2019 Budget Review quantified the impact of a decline in Eskom’s average energy availability factor to between 65 and 70 per cent for 18 months. As a consequence, GDP growth was anticipated to weaken to 0.2 per cent in 2019 relative to the baseline forecast of 1.5 per cent (which is equivalent to a loss in GDP of R40 billion in real terms).
      • The 2015 Budget Review estimated growth to decline by 1 per cent in 2015 should there continue to be a deterioration in electricity availability.
  • Beyond assessing the impact of load shedding on the economy, several studies on the evolution of electricity supply and economic growth have been conducted as part of the National Treasury’s Southern Africa - Towards Inclusive Economic Development (SA-TIED) programme. These studies are available on the SA-TIED website (https://sa-tied.wider.unu.edu/climate).
  • National Treasury takes into account the energy constraint when generating its macroeconomic forecasts, and frequently reviews its outlook for load shedding based on the most recent information at its disposal.

03 June 2022 - NW1919

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Groenewald, Mr IM to ask the Minister of Finance

(1)What total number of municipalities in each province, (a) in each of the past five financial years and (b) from 1 April 2022 to date could (i) not pay and/or (ii) only partly pay salaries for (aa) one month, (bb) two to six months, or parts thereof and (cc) more than six months; (2) whether he will make a statement on the matter?

Reply:

(1)(a)(b)(i)(ii)(aa)(bb)(cc) The attached annexure provides the detail of the number of municipalities over the past five years that did not pay or partially paid salaries per province per year. It further distinguishes which municipalities within the two categories did not pay for one month or two to six months or more than six months.

(2) No, the Minister will not make/issue a statement in this regard, the onus rests with the Municipal Council to ensure all financial obligations are honoured timeously. The design of the Local Government Fiscal System does not allow any Organ of State to “bail-out” a municipality should they find themselves in this position. This by implication means that a municipality is required by law to adopt a funded budget as per section 18 of the Municipal Finance Management Act, 2003 (ACT NO. 56 of 2003), MFMA. A funded budget will consist of any financial obligation due by the municipality which includes salary obligations.

03 June 2022 - NW1811

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Komane, Ms RN to ask the Minister of Finance

Whether, given the current developments of lockdown in China and the supply chain disruptions caused by what is happening between Russia and Ukraine, the National Treasury will be required to revise its key assumptions and projections such as budget surplus by 2023; if not, what is the position in this regard; if so, what are the further, relevant details?

Reply:

The National Treasury is monitoring the impact of the global and domestic economic developments on the fiscal framework. This is part of the macro-fiscal planning process that takes place every quarter which involves updating the macroeconomic and revenue forecast. The impact of the Russia-Ukraine war will be included in the updated macroeconomic forecast and framework that will be published in the 2022 MTBPS.

25 May 2022 - NW1792

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Steenhuisen, Mr JH to ask the Minister of Finance

With regard to the address by the President of the Republic, Mr M C Ramaphosa, to the nation on 18 April 2022 after the devastating floods in KwaZuluNatal, wherein the President commented that the Minister of Finance, Mr E Godongwana, had said that R1 billion is immediately available and Parliament will be approached for the appropriation of additional resources, (a) how has the R1 billion been spent and (b) what are the details of the additional resources that will be made available for relief and recovery?

Reply:

a) The R1 billion mentioned by the President refers to funds that are provided for in the 2022 Division of Revenue Bill (and are not new monies), namely disaster relief funds (for immediate response) through the Provincial Disaster Response Grant and the Municipal Disaster Response Grant. These grants are allocated R144 million and R371 million respectively in 2022/23. A further R501 million is available for this financial year in the form of provincial and municipal Emergency Housing Grants. These funds, amounting to just over R1 billion, are available shortly after Treasury receives an application from the National Disaster Management Centre (NDMC) and / or the national Department of Human Settlements (DHS), which are responsible for administering these grants. NDMC and DHS submit their applications to National Treasury once they have verified the submissions received from the province(s) and municipality(ies) concerned. To date, National Treasury has not received any applications from the NDMC or DHS.

b) In addition to immediate relief grants, state organs can reprioritise their budgets and existing conditional grants for emergency relief, reconstruction and recovery. For example, the Human Settlements Development Grant to provinces already allows for the construction of houses. Additional resources are also available through the contingency reserve, which will become available after the Appropriations Bill is passed. Another option is to use the Reconstruction and Development Programme (RDP) fund, which mainly consists of donor disbursements through various financing agreements, plus interest accrued on capital of related development projects. Therefore, since the full cost of emergency relief, reconstruction, and recovery is yet to be determined, it is difficult to determine whether the sources discussed above are adequate.

20 May 2022 - NW1685

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Shivambu, Mr F to ask the Minister of Finance

(a) Which financial institutions borrowed government (i) long-term loans and (ii) short-term loans and (b) what are the relevant details of the (i)(aa) market participants and (bb) their clients, (ii) interest rate, (iii) term of the loan and the (iv) total amount borrowed?

Reply:

Treasury Bills (T-bills) are held by every commercial bank in the country that holds a banking license since they form part of the High-Quality Liquid Assets (HQLA) which are required by the Prudential Authority. These assets allow banks to meet their short-term liquidity requirements and can be used as collateral for central bank operations, as well as benchmarking for pricing financial assets. The same banks may hold both T-bills and bonds on behalf of clients in their stockbroking or wealth management units. For the latter reason, it would be impossible for the National Treasury (NT) to determine what rate investors bought the bonds at and who the clients are.

Long term loans are bought by the 9 primary dealers in the primary market on behalf of insurers, asset managers, hedge funds and others on a weekly basis. These bonds are then traded in the secondary market where they are bought and sold by different entities. The 9 primary dealers are:

  1. ABSA
  2. HSBC
  3. NEDBANK
  4. CITIBANK
  5. STANDARD BANK
  6. INVESTEC BANK
  7. DEUTSCHE BANK
  8. RMB
  9. JP MORGAN

To qualify as a primary dealer, applying banks are required to comply with capital adequacy requirements as well as additional NT requirements. These banks would buy these bonds at different rates on a weekly basis and distribute these bonds in the secondary markets both on exchange and over the counter which also impacts the rates at which the bonds trade. The interest rates and amounts at which the bonds are auctioned in the primary market are available on the NT website on a weekly basis. The amount that each bank buys in the auction are not public information since this information is sensitive for the ongoing auction process. There are no terms associated with each bond purchase except the obligation to pay the interest rate and principal when it is due on NT’s part.

The ultimate holders of the bonds can categorized as follows:

1. Monetary Institutions

a) Banks

b) SARB

2. Insurers

a) Long Term Insurers

b) Short Term Insurers

3. Pension Funds

a) PIC

b) Private self-administered pension funds

c) Official Pension Funds

4. Other Financial Institutions

a) Unit Trusts

b) Participation Mortgage bond schemes

c) Financial Public enterprises

The details of the ultimate holders are not recorded by NT. It is in the secondary market where these bonds bought and sold by various institutions. The JSE, STRATE and the institutions themselves would be best placed to provide details in terms of the quantity of bonds they hold. Market data systems like Bloomberg and Reuters would also provide details for the reported market.

It is worth remembering is that these institutions would themselves be holding these bonds on behalf of individual investors or policy holders who cannot be legally disclosed as per FICA and POPIA act. The holdings change regularly owing to the needs of each category of holder. It is therefore impractical for NT to quantify how much each institutional holder owns at a point in time or what interest rate they are receiving.

Retail bonds are held by individual investors whose names cannot be disclosed. Retail bond interest rates are available on the retail bonds website along with the terms and conditions of each retail bond.

The National Treasury publishes monthly detailed information on outstanding bonds, redemption dates, redemption amounts, and coupon rates, which can be found on the National Treasury's investor website.

Table 7.5 of the 2022 Budget Review reflects the international financing institution borrowings. The table provides information on the institution, disbursement date, interest rate, terms (years), grace period (years), and amount (billion). From the table, the borrowing has only been long-term in nature, with no short-term loans being entered into.

13 May 2022 - NW1349

Profile picture: Shivambu, Mr F

Shivambu, Mr F to ask the Minister of Finance

What (a) is the full list of financial institutions that have issued (i) long-term loans, such as bonds and (ii) short-term loans, such as Treasury bills to the Government and (b) are the (i) names of (aa) the market participants and (bb) their clients, (ii) interest rates, (iii) term(s) of each loan and (iv) total amounts borrowed in each case?

Reply:

Treasury Bills (t-bills) are held by every commercial bank in the country that holds a banking license since they form part of the High-Quality Liquid Assets (HQLA) which are required by the Prudential Authority. These assets allow banks to meet their short-term liquidity requirements and can be used as collateral for central bank operations, as well as benchmarking for pricing financial assets. The same banks may hold both t-bills and bonds on behalf of clients in their stockbroking or wealth management units in both discretionary, non-discretionary and segregated income portfolios. For the latter reason, it would be near impossible for the National Treasury (NT) to determine what rate investors bought the bonds at and who the clients are.

Long term loans are bought by the nine primary dealers in the primary market on behalf of insurers, asset managers and hedge funds on a weekly basis. Furthermore, these bonds are then traded in the secondary market where they are bought and sold by different entities. The nine primary dealers are:

  1. ABSA
  2. HSBC
  3. NEDBANK
  4. CITIBANK
  5. STANDARD BANK
  6. INVESTEC BANK
  7. DEUTSCHE BANK
  8. RMB
  9. JP MORGAN

To qualify as a primary dealer, applying banks are required to comply with capital adequacy requirements per the banks act as well as additional NT requirements. These banks would buy these bonds at different rates on a weekly basis and distribute these bonds for a turn in the secondary markets both on exchange and over the counter which also impacts the rates at which the bonds trade. The interest rates and amounts at which the bonds are auctioned in the primary market are available on the NT website on a weekly basis however, the amount that each bank buys in the auction is not public information since this information is sensitive for the ongoing auction process. There are no terms associated with each bond purchase except the obligation to pay the interest rate and principal when it is due on NT’s part.

The ultimate holders of the bonds can categorized as follows:

1. Monetary Institutions

        (a) Banks

        (b) SARB

2. Insurers

(a) Long Term Insurers

(b) Short Term Insurers

3. Pension Funds

(a) PIC

(b) Private self-administered pension funds

(c) Official Pension Funds

4. Other Financial Institutions

(a) Unit Trusts

(b) Participation Mortgage bond schemes

(c) Financial Public enterprises

The details of the ultimate holders are not recorded by the NT since the NT’s purview is the primary market. It is in the secondary market where these bonds bought and sold by various institutions. The JSE, Strate and the institutions themselves would be best placed to provide details in terms of the quantity of bonds they hold since they transact both on and off-exchange. Market data systems like Bloomberg, Reuters would also provide details for the reported market.

It is worth remembering is that these institutions would themselves be holding these bonds on behalf of individual investors or policy holders who cannot be legally disclosed as per FICA and POPIA act. The holdings change regularly owing to the needs of each category of holder. For example, insurers would buy long term debt to meet long term obligations however they may need to liquidate short- and medium-term bond holdings if claims rose suddenly. Pensions funds would rebalance their portfolios regularly based on the investment mandate of their portfolios and whether or not they are managing an external portfolio. For this reason and many others, it is impractical for NT to quantify how much each institutional holder owns at a point in time or what interest rate they are receiving since they would hold bonds along the yield curve.

Institutions also frequently engage in interest rate swaps to manage their risk which would transfer those rates to other entities. Retail bonds are held by individual investors whose names cannot be disclosed. Retail bond interest rates are available on the retail bonds website along with the terms and conditions of each retail bond.


The National Treasury publishes monthly detailed information on outstanding bonds, redemption dates, redemption amounts, and coupon rates can be found on the National Treasury's investor website. The same details can be found in the SARB’s quartely bulletin.

http://investor.treasury.gov.za/pages/default.aspx

Table 7.5 of the 2022 Budget Review reflects the international financing institution borrowings. The table provides information on the institution, disbursement date, interest rate, terms (years), grace period (years), and amount (billion). From the table, the borrowing has only been long-term in nature, with no short-term loans being entered into.

12 May 2022 - NW1455

Profile picture: Krumbock, Mr GR

Krumbock, Mr GR to ask the Minister of Finance

(1)What (a) total number of (i) entities and (ii) individuals owe the SA Revenue Service (Sars) (aa) between (aaa) R10 million to R20 million and (bbb) R20 million to R50 million and (bb) more than R50 million and (b) is the period that the amounts have been outstanding for; (2) whether it is unacceptable that Sars allows any entity to rake up a bill of over R100 million; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

In setting out to answer the posed questions, it is important to explain some principles as they guide how SARS approach their work with regards to collection of tax revenues that are due.

Firstly, SARS collects all revenue that is due to the fiscus without fear or favour. SARS does so regardless of the taxpayer profile due to the fact that its debt collection processes are indifferent to the taxpayer since they are primarily informed by the law. This neutral approach is crucial for the integrity of the tax system. SARS therefore cannot compromise this principle of apply the law without fear or favour under any circumstance. All forms of outstanding taxes constitute non-compliance, taxpayers are provided instruments in law to remedy their non-compliance. The approach of treating a taxpayer’s non-compliance irrespective of who the taxpayer is, applies regardless of the amounts involved.

SARS manages the collection of all outstanding revenues in line with the provisions of the tax administration laws. Firstly, SARS will seek to collect all revenues that are due by engaging the defaulting taxpayers, these taxpayers may approach SARS to enter into a deferred payment arrangement where the full debt cannot be settled at once. The deferral of payment (i.e. instalment payments) arrangements are in line with Section 167 and 168 of the TAA, this is a governed process where a governance structure makes such decisions pursuant to considering a number of taxpayer factors. Secondly, taxpayers may approach SARS to request for the compromise on the portion of the tax revenues that are due in line with the provisions of Section 200 of the TAA, once again this is a governed decision by a duly appointed structure. Thirdly, taxpayers may approach SARS to request for the suspension of the payment of tax revenues that are due but disputed, in line with Section 164 of the TAA. Fourthly, in circumstances where the tax debt remain outstanding after engagement efforts, SARS may appoint other parties (involuntary third party appointments – TPAs) in line with Section 179 of the tax administration act (TAA) to collect such outstanding revenues, these include employers, banks, other entities that hold monies that are due to the owing taxpayer. This process is clearly articulated in law in terms of steps that SARS must follow before triggering this instrument.

In instances where debt collection methods as per the above fail, SARS may, where economical feasible and justified, attach assets of taxpayers in an effort to collect revenues from the sale of such assets through securing a civil judgement (section 172 of the TAA) and writ of execution.

SARS will use a combination of the above instruments and others to ensure that due tax revenues are collected, against the above backdrop I then turn to provide the specific responses to the questions posed:

(1)(a)(aa)(aaa) Entities and Individuals that owe SARS in the range of R10 million and R20 million are:

  1. 1,234 entities with a total amount in outstanding debt of R17,041,074,608.00 and
  2. 242 individuals with a total amount in outstanding debt of R3,417,727,564.00. (The reported amounts include the capital debt, interest, penalties and additional tax)

(bbb) Entities and Individuals that owe SARS in the range of R20 million and R50 million are:

  1. 784 entities with a total amount in outstanding debt of R24,257,828,448.00 and
  2. 126 individuals with a total amount in outstanding debt of R3,693,222,592.00. (The reported amounts include the capital debt, interest, penalties and additional tax)

(bb) Entities and Individuals that owe SARS outstanding debt above R50 million are:

  1. 498 entities with a total amount in outstanding debt of R129,059,637,995.00 and
  2. 72 individuals with a total amount in outstanding debt of R14,828,653,526.00. (The reported amounts include the capital debt, interest, penalties and additional tax)

(b) The ageing of the amounts owed (by individuals as well as entities/companies in line with the above ranges in as per the below table, segregated in time intervals of three months.

2) SARS is pursuing strategies to ensure that taxpayers are clear and certain about their obligations, additionally, SARS is working to ensure that it is simple and easy for taxpayers to meet tax obligations. Where taxpayers still fail to meet their obligations SARS will always seek to ensure that it enforces its laws responsibly without fear or favour as mentioned earlier.

The above said, in the course of tax administration, tax debt arises from a number of different scenarios which includes the submission of returns without payment, audit assessments, etc. Depending on the origination of the debt, such debt can accumulate due to interest, penalties and additional taxes. Furthermore, debt could be as a result of a single assessment resulting in large amounts of debt being added into the debt book. SARS follows a prescribed debt collection process on all taxes overdue. However not all instances of enforcement (e.g. deferral of payment arrangements, third party appointments, etc.) readily lead to all debt being collected timeously, such that some debt remains in the books whilst collection steps are ongoing. SARS legal collection steps will include issuing a final demand and appointment of third parties, civil judgments, personal liability, writ of execution, etc. which may give way to the attachment of assets as explained earlier. SARS also considers criminal proceedings against taxpayers on the basis of the tax debt owed. Each debt case would however be treated on its own merits however SARS always seek to ensure that all due debt is collected on-time as far as practically possible and that the enforcement actions are applied consistently, taking into account the facts of each case.

It is important to note that SARS has initiated an overall review of the current end-to-end debt management process with the first phase to be completed in April 2022. The improvements in terms of how SARS account for and manages the collection of debt will be progressive over the next 12 to 24 months in line with SARS’ strategic plan commitments.

05 May 2022 - NW1309

Profile picture: Schreiber, Dr LA

Schreiber, Dr LA to ask the Minister of Finance

Whether, in terms of paragraph 2.6 of the Guide for Members of the Executive that became effective on 20 November 2019, the National Treasury has made any adjustments to the spending limit of R700 000, inclusive of value-added tax, security upgrades and maintenance plan, imposed on the purchase of official vehicles; if not, why not; if so, what are the relevant details?

Reply:

The price threshold for official vehicles for members of the executive is reviewed regularly and considers different criteria. Among these are budget constraints, the changing market price of vehicles, the practical requirements of executive members to fulfill their portfolio responsibilities, as well as safety and reliability, including for travelling in difficult terrain. The Guide for Members of the Executive (“the Guide”) confers powers to the Minister of Finance to determine any annual adjustments to the threshold. The National Treasury maintains a transversal contract for the purchase of official vehicles for use by the executive which should be used by government departments. This contract allows for vehicles to be purchase directly from the manufacturer where the vehicle is new. This ensures superior value-for-money compared to purchasing vehicles from dealers.

Paragraph 2.6 of the Guide states the following: “The price for the purchase of official vehicles shall not exceed R700 000-00, inclusive of VAT, security upgrades and maintenance plans. The limitation on the cost of the vehicle must be adjusted annually by the Minister responsible for Finance, in consultation with the Ministers responsible for Police, Transport and State Security”.

In the period since the finalization of the Guide, National Treasury Instruction no. 6 of 2019/2020 was issued, stating in paragraph 3.1 that the threshold for the procurement of official vehicles for members of the executive is revised from R700 000 to R800 000.00 inclusive of VAT and security features. Paragraph 3.3 of the said Instruction further provides that it is the responsibility of each department to ensure confirmation of the price of security features is obtained from the South African Police Service prior to finalization of the vehicle purchase.

The above is the most recent instruction note issued in this regard, and ongoing reviews will continue to be undertaken.

05 May 2022 - NW1213

Profile picture: Groenewald, Mr IM

Groenewald, Mr IM to ask the Minister of Finance

(1) With regard to unfunded budgets at municipalities, which municipal budgets were (a)(i) unfunded in June 2021 and (ii) still unfunded after the intervention by the National Treasury at municipalities at the end of November 2021 and (b) unfunded after the local government adjustment budget process was completed; (2) whether there are any municipalities whose budgets became unfunded after the adjustment budget process ensured that the budgets were funded and/or approved in the 2021-22 budget approval process; if not, what is the position in this regard; if so, what are the relevant details; (3) whether he will make a statement on the matter?

Reply:

(1)(a)(i) There were 106 municipalities that adopted unfunded budgets. The attached Annexure A provides the list of municipalities per province that adopted unfunded budgets for the 2020/21 financial year.

(1)(ii) There was no intervention introduced during this period, however, National Treasury and Provincial Treasuries have institutionalised processes to guide municipalities. During the window of opportunity, 31 March and end of May of each year, Treasuries assess the budgets of municipalities, this is referred to as the Benchmark process. During this process, municipalities whose budgets are assessed to be unfunded are advised to correct this position before adoption. Unfortunately, some municipalities ignore this advice and continue to adopt unfunded budgets. Those that adopt unfunded budgets are requested to correct this position during the adjustments budget period by the end of February of the following year. Once the unfunded budget is adopted, this is the only legal opportunity to rectify the position.

In addition, the National Treasury targets the 2nd instalment (December of each year) of the Equitable Share allocation to ensure compliance with Section 18 of the Municipal Finance Management Act (MFMA) and address unfunded budgets.

If a municipality is not able to achieve a funded budget position within a year or two due to the extent of the problem, such as high Eskom debt, the National Treasury has created an opportunity for municipalities to adopt a credible funding plan that will ensure that the funding position is improved. The implementation of these plans is monitored through quarterly reports submitted by municipalities.

Furthermore, the National Treasury also circulates annually, a document that compares the original budget, adjusted budget and the outcomes as per the Annual Financial Statements, in essence this exercise highlights that municipalities are simply “living beyond their means” when it reflects a deficit position.

To date, the resolution emanating from the Budget Council and Budget Forum, which forms the political platform for discussing and addressing municipal matters, was not to accept the adoption of an unfunded budget by any municipality.

(1)(b) After the 2020/21 adjustments budget process, 105 municipalities were recorded to have unfunded position with 5 additional municipalities undetermined. The detail of the unfunded list is in the attached Annexure A.

2. The attached Annexure A shows that 112 municipalities adopted unfunded budgets for the 2021/22 financial year. Many municipalities that adopted an unfunded budget during the adjustments period (2020/21) of the previous year are found to have adopted an unfunded budget for the 2021/22 year (main budget). During the preparation of the new budgets, municipalities often increase their expenditure budget and not align it to realistic anticipated revenue to be collected by them. On the other hand, some municipalities base their budgets on a collection rate far beyond their capability. When the National or Provincial treasuries undertake their assessment of the budget based on previous years audit outcomes, the budget is assessed to be unfunded.

3. The Minister of Finance usually refers to the funding position of municipalities in the Budget Speech and it is published in the Budget Review and the Medium Term Budget Policy Statement. Due to the importance of adopting a funded budget, addressing unfunded budgets is a standing item on the agenda of Budget Council and Budget Forum, which is the political platform in the municipal context.

11 April 2022 - NW1161

Profile picture: Brink, Mr C

Brink, Mr C to ask the Minister of Finance

Whether the National Treasury currently supports metropolitan municipalities to access project-based loan financing to replenish existing service infrastructure, especially the metropolitan municipalities that lack the creditworthiness to raise long-term financing on the bond market; if not, why not; if so, what are the relevant details of the (a) support and (b) examples of where it has been utilised effectively?

Reply:

In terms of section 160(d) of the Constitution, it is the mandate of the municipal council whether or not to approve borrowing. The National Treasury’s responsibility when a municipality decides to incur borrowing is set out in Section 46 of the Municipal Finance Management Act. In terms of that section, the National Treasury must submit written comments or representations in respect of the proposed borrowing. The National Treasury looks at a number of issues, including affordability, when providing written comments to municipalities. The National Treasury does not support instances where the borrowing is unaffordable for the municipality. Therefore, the municipality must have financial stability, and the planned borrowing must have been budgeted for before considering any borrowing.

Also, as emphasised in the Original Borrowing Policy framework passed by Cabinet in 2000, financiers/lenders are encouraged to perform their own due diligence assessments to ascertain a municipality’s creditworthiness. Financiers/lenders whose capital is at risk have both the incentive and the means to limit or deny credit if they doubt the sustainability of a proposed borrowing.

a) Project finance is part of the many funding mechanisms that have been identified in the 2017 Updated Policy Framework for Municipal Borrowing as mechanisms that are permissible within our current legislative framework. Municipalities can utilise project-based financing to fast-track infrastructure development; however, such a financing choice should be solely based on the strength of the municipality’s finances or the credibility of the assumptions and arrangements that inform the project package. Besides borrowing, municipalities may consider other funding mechanisms such as public-private partnerships to enable them to finance projects. In these types of transactions, the private party assumes the financial responsibility, amongst others, for the implementation of projects.

It is important to note that the updated policy emphasises that only creditworthy municipalities should borrow based on the strength of their balance sheets whilst encouraging responsible borrowing and lending. Therefore, municipalities deemed non-creditworthy (lack fiscal discipline and sustainable financial management; have no resources or capacity to repay the debt) should not borrow. This is further cemented by the principle of non-guarantee of municipal debt by neither provincial nor national government, as reflected in the updated policy and in section 51 of the Municipal Financial Management Act (MFMA). Incurring a loan when a municipality is not in the financial position to repay the loan will add to a municipality’s financial problems.

Municipalities have not pursued project loan financing but rather use general loans to finance various projects. This is mainly due to the capability of these municipalities in preparing bankable projects that would attract financing and the financial support required for project preparation activities. To assist metropolitan municipalities with funding for project preparation, the Programme and Project Preparation Support Grant was established in 2021 to institutionalise an effective and efficient system of developing a pipeline of investment projects that would be financed by an array of financing instruments, including project-based loans. To this end, National Treasury will allocate R1.1 billion to metropolitan municipalities over the 2022 MTEF to support project preparation.

b) In addition, to assist some of the municipalities facing financial difficulties, National Treasury has institutionalised the Municipal Financial Recovery Services with the core objective of identifying and resolving financial challenges, with the City of Tshwane and Mangaung being part of the programme. Through the success of the Municipal Financial Recovery Service and other initiatives around revenue management, National Treasury hopes to achieve strengthened operating performance for some metropolitan municipalities, thus allowing them to access the market and pursue mechanisms such as project-based loan financing.

11 April 2022 - NW987

Profile picture: Schreiber, Dr LA

Schreiber, Dr LA to ask the Minister of Finance

What is the total Rand value of all (a) loans, (b) grants, (c) donations and (d) other support, of any nature whatsoever, received by the Republic from the Russian Federation since 1 January 2009?

Reply:

The Republic of South Africa has no exposure to the Russian Federation in terms of a loans, grants, donations and other forms of support.

11 April 2022 - NW988

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Schreiber, Dr LA to ask the Minister of Finance

What are the details of the (a) purpose, (b) date received and (c) repayment terms of each (i) loan, (ii) grant, (iii) donation and/or (iv) any other support received from the Russian Federation since 1 January 2009?

Reply:

The Republic of South Africa has no exposure to the Russian Federation in respect of a loans, grants, donations and other forms of support.

11 April 2022 - NW989

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Schreiber, Dr LA to ask the Minister of Finance

What are the relevant details of all commercial contracts that are currently in force between the Republic and the Russian Federation?

Reply:

The National Treasury are not custodians of the commercial contracts between South Africa and other countries. If and should there be any goods and services contracts entered by the SA government it will be with suppliers in Russia, and that level of detail is not available in National Treasury but in the departments doing business with such suppliers in Russia.

11 April 2022 - NW1118

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Joseph, Mr D to ask the Minister of Finance

(1)With reference to the view of a certain person (name and details furnished) that the Republic shows signs of a failing state, what (a) indicators are used by Government to measure the Republic’s environment against signs of a failed state and (b) are the details of the reform agenda for (i) senior public servants and (ii) politicians that the specified person referred to; (2) whether Government will adjust its projected economic growth percentage for the 2022-23 financial year due to the Russian invasion of Ukraine; if not, why not; if so, what are the relevant details?

Reply:

1(a) Mr. Mogajane, speaking at a post-Budget event said the following:

We have to remind our leaders – and I’m speaking as a South African – who are in government, in public service and politicians to get off your high horse and do what we have to do to ensure we create access and a conducive environment for people’s lives to change.

If that’s not going to be a motivating factor, we can start calling SA a failing state because the things that define a failing state are beginning to show, where we don’t care about the poor and improving their lives.”

Mr. Mogajane was expressing his personal view on the corrosive impact that corruption has had on the state’s capacity to deliver basic services and warning of the consequences if our leaders fail to take action.

A failed state is a widely understood to be one that has disintegrated to a point where a sovereign government no longer functions properly and therefore cannot execute its basic responsibilities and deliver a minimum standard of living.

Whilst there is no formal framework that the government uses to test whether it is a failing state or not, the state’s ability to perform its basic functions and deliver the requisite level of services to its citizens is monitored, evaluated and regularly commented on, as is the case in many democracies. Examples include the Auditor-General’s annual reports as well as the recent reports from the Zondo Commission.

(b) Unfortunately, no details of this were attached to the submission. Could the Honourable member please resubmit the question with the relevant information to enable us to respond.

2 The National Treasury reviews the economy's outlook and associated risks as quarterly GDP statistics are made available by the relevant authorities. The economic outlook is made publicly available twice a year in the Budget Review and MTBPS. Risks to the outlook are closely monitored and subsequent developments considered in future economic outlook updates. As noted in Chapter 2 of the 2022 Budget Review, emerging geopolitical risks contribute to elevated uncertainty over the medium term.

With respect to the Russia-Ukraine conflict, the potential adverse effects to the South African real economy are likely to be fairly contained and mostly indirect if the conflict is not protracted. Historically, South Africa has recorded positive real GDP growth during periods when both Russia and Ukraine faced economic recessions, with the exception of global recession periods.[1] This suggests that the correlation between South Africa’s growth and Russia’s and Ukraine’s is not as strong, particularly during periods where economic movements are dominated by country-specific factors.

With the situation still developing and so much uncertainty, it is relatively difficult at this stage to quantify the potential impact with precision and confidence. However, South Africa’s trade statistics point to a very weak trade intensity between South Africa and Russia and Ukraine on aggregate. Less than 1 per cent of South Africa’s exported goods are destined for Russia and Ukraine combined. A similar number is reflected on inbound goods that are from both these countries. However, within certain industries, the trade exposure is more significant – such as exports of citrus, apples and pears products – where Russia is an important destination market.[2]

Despite relatively limited direct trade exposure to Russia and Ukraine, risks to the real economy could manifest through the import and export price channels given the importance of both countries in key energy and agricultural commodity markets. The persistent higher levels in these prices as suggested by the futures contracts[3] introduces renewed upside risks to the global and domestic inflation and interest rate outlook.

There are risks to the current assessment regarding the impact the conflict may have on South Africa. The risks largely depend on how long the conflict persists for.

  1. For example, during the post-soviet market periods from 1994 to 1999 and during the Russia’s invasion of Crimea period, from 2014 to 2015.

  2. The diversion of volumes to other export markets or the domestic market could place downward pressure on prices and export earnings from the agriculture sector in 2022 following solid growth in the past two years. See: https://www.agbiz.co.za/content/open/14-march-2022-agri-market-viewpoint

  3. A futures contract is a standardised legal agreement to buy or sell something at a predetermined price at a specified time in the future.

11 April 2022 - NW1172

Profile picture: Shivambu, Mr F

Shivambu, Mr F to ask the Minister of Finance

What (a) total amount has the Government borrowed from (i) domestic and (ii) international financial institutions in the past five financial years and (b) are the details of (i) each loan amount and (ii) the terms of each specified loan?

Reply:

(a), Government’s gross borrowing requirement is financed through the issuance of domestic short and long-term loans, foreign currency long-term loans and the use of cash balances. Domestic short (Treasury bills) and long-term loans (bonds) are issued to market participants in the primary market (primary dealers and other financial institutions) through weekly auctions. The market participants buy these bonds on behalf of their clients which include pension funds, foreign investors, insurers, monetary institutions, other financial institutions, and individuals to name a few.

Gross loan debt has increased from R2.5 trillion in 2017/18 to R4.3 trillion in 2021/22. Government has therefore borrowed an additional R1.8 trillion from both domestic and international investors.

Table 1. Domestic and foreign loans for the period 2017/18 – 2021/22

Figure 1 shows the ownership distribution of domestic long-term loans. The share of domestic bonds held by foreign investors declined to a 10-year low of 28.2 per cent by December 2021. Although these investors remain the largest category of domestic bondholders, risk aversion is rising due to global and domestic events. Other financial institutions and pension funds increased their holdings from 17.6 per cent and 22.4 per cent in 2020 to 20.1 per cent and 23.5 per cent in 2021 respectively. South African banks have been holding significantly more government debt because of weak demand for private credit and relatively high interest rates on government debt.

Figure 1. Ownership distribution of domestic long-term loans

Foreign currency long-term loans are raised through the combination of marketable loans - raised in the international capital markets - these foreign bonds are mostly bought by foreign institutions and are traded on the secondary market on the Luxembourg exchange. Non-marketable loans - concessional financing - includes borrowing from multilateral development banks (MDBs) and International Financing Institutions (IFIs) such as the World Bank, new development bank, African development bank and the International Monetary fund

Some of the loans from multilateral development banks includes but not limited to the following, which can be found in Table 7.5 of the Budget Review 2022.

Table

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(b), Detailed information about outstanding bonds, redemption dates, redemption amounts, and coupon rates can be found on the National Treasury's investor website.

Retail investors who purchase directly from the National Treasury take up the remainder of the loans. They consist of both individuals and co-operatives registered with the Co-operatives Banks Development Agency (CBDA). The terms and conditions of retail bonds are available on the retail bonds website https://secure.rsaretailbonds.gov.za/Home.aspx. Additional information about issued loans can be found in the annual debt management report on http://investor.treasury.gov.za/Publications/Forms/AllItems.aspx.

11 April 2022 - NW1162

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Brink, Mr C to ask the Minister of Finance

(1)Whether a financial recovery plan is currently in place in the Mangaung Metropolitan Municipality; if not, what is the position in this regard; if so, how long has it been in place; (2) whether he has found that any progress has been achieved with the implementation of the plan in terms of the municipality’s revenue collection, expenditure management and reduction of liabilities; if not, what steps does he intend to take to prevent the municipality’s financial distress from worsening; if so, what are the relevant details?

Reply:

1. A Financial Recovery Plan (FRP) is currently in place at Mangaung Metropolitan Municipality. The municipality adopted a voluntary FRP in July 2018 but unfortunately there was no evidence that the implementation of the FRP translated into any meaningful improvements on any of the key focus areas. Subsequently, a new FRP was developed following the Section 139(5)(a) and (c) mandatory intervention invoked in December 2019 by the Free State Provincial Government. The mandatory FRP was implemented in 2020.

2. The municipality’s collection rate remained below the treasury norm of 95 per cent throughout the period of FRP implementation with an average of 86 per cent achieved for the 2020/21 audited financial year. Whilst the collection rate is still below the norm there has been a slight improvement from the 60-70 per cent collection rate reported previously. This indicates that the targets on the FRP to improve the collection rate is not fully yielding the desired results.

In the main, overtime expenditure is a challenge as the municipality is failing to properly plan, manage and control overtime payments and therefore the municipality is continuously overspending on this item. The municipality still has arrear debt with BloemWater amounting to R747 million and there is a revised settlement agreement in place that the municipality needs to align with the FRP targets. In addition, the provincial government owes the Municipality an amount of R1.9 billion for rates and taxes.

The Mangaung Metro is one of 43 municipalities in the country that have been identified to be in financial and service delivery crisis necessitating a mandatory intervention. Since the Mangaung Metro is already subject to a mandatory S139(5) intervention by the Province, measures are being considered to escalate the intervention into a National S139(7) intervention. Preparations are already underway to commence with a Ministerial visit to the municipality in the 1st week of April 2022. This will also be followed with a special induction session for the municipal council in early April 2022.

14 March 2022 - NW521

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Sharif, Ms NK to ask the Minister of Finance

What is the (a) make, (b) model, (c) year of manufacture, (d) price and (e) purchase date of each vehicle purchased for use by (i) him and (ii) the Deputy Minister since 29 May 2019?

Reply:

 

(i) Minister

ii) Deputy Minister

(a) Make

Mercedes-Benz

None

(b) Model

C-Class (C180)

 

(c) Year of manufacture

2016

 

(d) Price

R653 943.27

 

(e) Purchase date of each vehicle purchased since 29 May 2019

28 June 2019

 

04 March 2022 - NW340

Profile picture: George, Dr DT

George, Dr DT to ask the Minister of Finance

Whether a backlog exists in the payment of (a) withdrawal claims, (b) retirement claims and (c) death claims from the Government Employees Pension Fund; if not, what is the average time for the processing of (a) withdrawal claims, (b) retirement claims and (c) death claims; if so, what is the (i) number of outstanding claims and (ii) average number of the days that claims have been outstanding in each case?

Reply:

 

Claim Type

*Backlog, i.e., Claims older than 60 days (Claims)

*Average time for processing (days)

(i)

Total number of claims on hand

(ii)

Average number of the days that claims have been outstanding in each case #

a) Withdrawal Claims

242

24

1 859

158

b) Retirement Claims

416

22

5 025

125

c) Death Claims

1 130

81

3 523

220

In relation to the question, kindly see below the Government Pensions Administration Agency response:

*Backlog cases are defined as cases older than 60 days.

*Age of claims vary depending on specific complexity of each case.

04 March 2022 - NW338

Profile picture: Brink, Mr C

Brink, Mr C to ask the Minister of Finance

Whether the National Treasury, on its own or in collaboration with other departments, conducted an assessment of the affordability of the implementation of the SA Local Government Bargaining Council Salary and Wage Collective Agreement for the municipal financial years 2021-24, which was concluded on 15 September 2021; if not, why has such an assessment not been conducted; if so, what are the relevant details of the assessment?

Reply:

No, the National Treasury did not undertake an assessment on the affordability of the SA Local Government Bargaining Council Salary and Wage Collective Agreement for the 2021-2024 financial years. National Treasury is not directly involved in the collective bargaining matters relating to local government wage agreements and the associated implementation costs. These are negotiated between the employer represented by the South African Government Association (SALGA) and Labour represented by various trade unions.

The National Treasury and Provincial Treasuries undertake assessments twice a year (before a budget is adopted and at mid-term of the financial year) on the ability of a municipality to fund its operating budget. These assessments include the affordability of salaries and wages as a component of municipal expenditure. In addition, the National Treasury also undertakes an annual assessment on the State of Municipal Finances and Financial Management to identify municipalities in financial distress.

Even before the start of the COVID-19 pandemic, there were already 166 municipalities in financial distress. On this basis, the National Treasury advised SALGA on the need for greater fiscal prudence given the decline in overall economic activity and the concomitant impact thereof on municipal revenues. The National Treasury expressed concerns in a letter to SALGA that there should be an exit clause which allows for exemptions from salary increases for those municipalities that cannot afford these such increases. SALGA provided an undertaking in this regard indicating that any municipality who cannot afford the salary and wage increase on the basis of their financial health reports will be allowed to use the exit clause in the agreement making it easier for the municipality to apply for an exemption.

04 March 2022 - NW303

Profile picture: Mey, Mr P

Mey, Mr P to ask the Minister of Finance

(1)With reference to the reply of the Minister of Public Enterprises to question 2557 on 11 January 2022, by what date is concurrence expected to be finalised in order to prevent legal action being taken against the relevant departments for disregarding the court order that was awarded on 22 June 2020 with regard to CAS 42355/2015 in the Gauteng North High Court for the members of the Passenger Rail Agency of South Africa (Prasa) Sub Fund which has not been implemented (details furnished); (2) whether he will make a statement on the matter; if not, why not; if so, what are the relevant details?

Reply:

1. The Minister of Finance is currently considering the request for concurrence from the Minister of Public Enterprises in respect of the proposed amendments of rules for the PRASA sub-fund of the Transport Pension Fund.

2. The Minister of Finance will not make a statement on the matter. The outcome will be communicated to the Minister of Public Enterprises.

25 February 2022 - NW84

Profile picture: Clarke, Ms M

Clarke, Ms M to ask the Minister of Finance

(1)What (a) steps has he put in place to deal with the escalating debt owed by Soweto to the City of Johannesburg as little progress has been made in this regard and (b) are the details of a complete plan detailing how the amount will be dealt with; (2) what is the total debt bill currently reported to the National Treasury for defaulting municipalities as the debt bill for the past financial year was R35,5 billion; (3) in light of the fact that 47 municipalities owed more than 100 million each, what is the (a) name and (b) outstanding amount for each municipality reported to him currently; (4) what (a) is the total outstanding debt of Soweto reported to him and (b) steps have been taken by the National Treasury to assist in recovering the debt?

Reply:

(1)(a) Although the Minister of Finance is the custodian of the Municipal Finance Management Act, 2003, (MFMA), it is the policy adopted by the respective municipality or Metro that dictates the process or procedure to be followed for debt recovery. In this case, the policy will be the Credit Control and Debt Management Policy. National Treasury have been persistently advocating through various correspondence and budget circulars that debt owed to creditors by municipalities must be paid within 30 days as stipulated by Section 65(e) of the MFMA.

The City has informed National Treasury that majority of the debt owed by Soweto is to Eskom. National Treasury has no legal mandate to address the debt owed by consumers to Eskom, however, the Government through the Political Task Team Chaired by the Deputy President is addressing municipal debt owed to Eskom. It is the City’s responsibility to intensify its credit control and debt collection strategies to ensure that the debt owed by consumers is collected. Similarly, it is the responsibility of Eskom to implement its Credit Control and Debt Management strategy to achieve a sustainable solution to the recovery of Soweto arrear debt.

The City reported that the following measures are being institutionalised to collect the outstanding debtors:

  • Councilor intervention in areas with limited access.
  • Applying of strict control measures on customers who acknowledges their debt, by ensuring thorough affordability checks are done against each customer to determine the down payment and reasonable terms of payment.
  • Intensify internal meter audits on accounts confirmed by entities as successfully disconnected.
  • Promote support from the councilors during the City’s Open Days (to assist on educating customers about City’s relief programs and instant query resolutions); and
  • Promote visibility of the Stakeholder Relations Officers to all the regions at all times (as the support for clear communication of the customers concerns in the entire value chain).

(1)(b) The City has informed National Treasury that it has embarked on a number of revenue enhancing initiatives to collect debt older than 90 days (this includes debt owed by Soweto residents). The City will be in a better position to provide the progress made so far in relation to revenue collection of debt older than 90 days. The City has intensified the credit control actions taken since December 2021 and January 2022 by issuing pre-termination notices and delivered it to most of the Soweto owing households. Disconnection of services have commenced after 14-days lapse of the notices delivered but with low return on investment, this is due to community disturbance to effect credit control measures. JMPD Officers have been called to provide security since the beginning of February by escorting the technicians to various areas wherein they are likely to experience backlash (trusting that their visibility will slowly show improved results).

2. According to the Section 71 of the MFMA reports for the second quarter ending December 2021, reports submitted to National Treasury by municipalities indicates that the total debt owed by municipalities to various creditors is R73.7 billion.

(3)(a)(b) Below is the list of municipalities with debt owed over R100 million as per the Local Government Data Base - Section 71 reports of the MFMA.

25 February 2022 - NW78

Profile picture: Lees, Mr RA

Lees, Mr RA to ask the Minister of Finance

What are the details of the age analysis of all value-added tax refunds claimed by (a) taxpayers and (b) vendors that had not been refunded to taxpayers and vendors as at 31 December 2021?

Reply:

The South African Revenue Service, in processing all refunds, will always seek to balance the protection of the fiscus from illegitimate refund claims and the optimal processing of all refunds that are legitimate. This balance is further enhanced when considering that more than R50bn in illegitimate refunds are prevented from flowing out of the fiscus every year through tight risk engine rules.

The following table depicts the ageing of the VAT credit book as at 31 December 2021. The month end reports run on the 3rd of the following month hence the report is dated 3 January 2022.

Age Bracket

Amount

0 – 1 Month

12 124 197 396

2 Months

8 096 487 168

3 Months

6 013 454 301

4 – 6 Months

10 972 108 740

7 – 9 Months

5 197 216 823

10 – 12 Months

3 993 203 326

13 – 24 Months

4 620 035 970

25 – 36 Months

1 181 352 081

37 – 48 Months

928 762 378

49 – 60 Months

717 706 100

60+ Months

2 358 401 594

Grand Total

56 202 925 877

It must be noted that 81% of the book is within 12 months whilst 45% is within 3 months.

SARS at any given time will have amounts outstanding on refunds for a number of reasons including the following:

  1. Audit cases amounting to R39.9 billion,
  2. Continues Non-Compliant CNC) amounting to R11.1 billion, *
  3. Suspected fraud amounting to R0.369 billion,
  4. Credits payable within 24 hours amounting to R2.6 billion
  5. Outstanding Returns amounting to R1.8 billion, and
  6. Invalid Banking details amounting to R0.5 billion.

* CNC includes cases where SARS is awaiting taxpayer response on long outstanding documents having granted in excess of 35 days for taxpayer to respond.

25 February 2022 - NW76

Profile picture: Lees, Mr RA

Lees, Mr RA to ask the Minister of Finance

What are the details of all value-added tax refunds claimed by (a) taxpayers and (b) vendors as at the last day of every month from 31 March 2019 to 31 December 2021 that had not been refunded to taxpayers and vendors as at the last day of every month from 31 March 2019 to 31 December 2021?

Reply:

The South African Revenue Service, in processing all refunds, will always seek to balance the protection of the fiscus from illegitimate refund claims and the optimal processing of all those refunds that are legitimate. This balance is further enhanced when considering that more than R50bn in illegitimate refunds are prevented from flowing out of the fiscus every year.

SARS has for the period ending 31 December 2021 paid R193bn in refunds of which 72% (R138bn) was paid within 21 days. It is worth noting that almost 80% of all refund claims are paid without audit or verification thus confirming our compliance theory that most taxpayers are honest and want to meet their tax obligations fully. The remaining 20% is the combination of those taxpayers who make genuine errors as well as those who unfortunately seek to defraud the fiscus. It must be noted that the law does not prescribe a minimum period for the completion of an audit or verification, therefore rendering the notion of overdue refunds a misnomer in law. However, SARS has committed to various turnaround times in its service charter in line with the desire to provide superior service to taxpayers.

The following table reflects the number of VAT credit returns submitted since March 2019 with total value and a column indicating credit balance in relation to those submissions. Some of the credits submitted will be outstanding and are reflected in the rolling credit balance. As can be generally noted on the percentage unpaid refunds, the amounts yet to be paid for these periods are much less than the original submission.

It must be noted that the unpaid refunds column is inclusive of all statuses i.e. cases where supporting documents have been requested and vendors have not submitted to date. Such vendors are categorized as Continuous Noncompliant (CNC). To date, SARS has over R11.5bn CNC cases for VAT which largely cannot be processed until the taxpayer responds to the SARS query.

Table

Description automatically generated

As can be noted on the table, there is an increase in value of unpaid refunds from March 2021 onwards as reflected in the current balance per month which is in line with the increased number of return submissions and values coupled with an increased focus on the risk mitigation against refunds fraud (this focus in risk mitigation has resulted in R59 billion revenue protection across all tax refunds in current fiscal year). This is to ensure that SARS maintains the balance of protecting the fiscus from illegitimate refund claims whilst processing legitimate refunds. It must be noted as well that there are challenges experienced in matching the available capacity and the generated case load as the risk system responds to compliance risks that are inherent in the filed returns.

SARS at any given time will have amounts outstanding on refunds for a number of reasons including the following:

  1. Audit within 21 days amounting to R8.5 billion,
  2. Audit above 21 days amounting to R20.6 billion,
  3. Continues Non-Compliant CNC) amounting to R9.1 billion, *
  4. Suspected fraud amounting to R0.369 billion,
  5. Outstanding Returns amounting to R1.8 billion, and
  6. Invalid Banking details amounting to R0.5 billion.

* CNC includes cases where SARS is awaiting taxpayer response on long outstanding documents having granted in excess of 35 days for taxpayer to respond.

25 February 2022 - NW58

Profile picture: Sarupen, Mr AN

Sarupen, Mr AN to ask the Minister of Finance

(1)Whether any value-added Tax (VAT) refunds are overdue for payment; if not, what is the position in this regard; if so, what is the total outstanding amount per economic sector; (2) whether any steps will be taken to resolve any backlog in the payment of overdue VAT refunds; if not, why not; if so, what are the relevant details?

Reply:

(1) The South African Revenue Service, in processing all refunds, will always seek to balance the protection of the fiscus from illegitimate refund claims and the optimal processing of all refunds that are legitimate. This balance is further enhanced when considering that more than R50bn in illegitimate refunds are prevented from flowing out of the fiscus every year.

SARS has for the period ending 31 December 2021 paid R193bn in refunds and 72% (R138bn) was paid within 21 days, furthermore it is worth noting that almost 80% of all refunds claims are paid without audit or verification interventions thus confirming our compliance theory that most taxpayers are honest that want to meet their tax obligations fully. The remaining 20% is the combination of taxpayers who make genuine errors as well as those who unfortunately seek to defraud the fiscus. It must be noted that the law does not prescribe a minimum period for the completion of an audit or verification process, therefore rendering the notion of overdue refunds a misnomer in law however SARS has committed to turnaround times in its service charter in line with the SARS desire to provide superior service to taxpayers in order to bring about clarity and certainty on their affairs

 

Yes, SARS has some refunds that are outstanding. SARS at any given time will have amounts outstanding on refunds for a number of reasons, key amongst these reasons are 1) SARS is at various stages of the audit and verification process and 2) Taxpayer related issues including invalid banking details, instances of outstanding documentation where SARS has communicated in more than one instance with the taxpayer requesting such supporting documentation (these are continuous non-compliance cases) as well as instances of suspected fraud by the taxpayer. The sectorial view of the balance of refunds in audit in excess of 21 days is as follows:

Industry

Vendors

Sum of Balance

AGENCIES AND OTHER SERVICES

11718

-R 3,485,040,995.02

AGRICULTURE, FORESTRY AND FISHING

11228

-R 2,032,265,989.44

BRICKS, CERAMICS, GLASS, CEMENT AND SIMILAR PRODUCTS

338

-R 52,091,107.65

CATERING AND ACCOMMODATION

1827

-R 302,765,982.13

CHEMICALS AND CHEMICAL, RUBBER AND PLASTIC PRODUCTS

707

-R 362,900,673.78

CLOTHING AND FOOTWEAR

520

-R 67,148,930.30

COAL AND PETROLEUM PRODUCTS

555

-R 216,979,759.08

CONSTRUCTION

10316

-R 4,273,709,791.85

EDUCATIONAL SERVICES

471

-R 81,063,823.27

ELECTRICITY, GAS AND WATER

583

-R 261,615,811.24

FINANCING, INSURANCE, REAL ESTATE AND BUSINESS SERVICES

13678

-R 4,327,781,607.92

FOOD, DRINK AND TOBACCO

1630

-R 248,802,796.42

LEATHER, LEATHER GOODS + FUR(EXCLUDING FOOTWEAR + AND CLOTHING)

205

-R 20,001,623.97

MACHINERY AND RELATED ITEMS

1243

-R 304,557,104.71

MEDICAL, DENTAL AND OTHER HEALTH AND VETERINARY SERVICES

774

-R 218,844,178.05

METAL

437

-R 275,891,258.63

METAL PRODUCTS (EXCEPT MACHINERY AND EQUIPMENT)

529

-R 108,858,944.81

MINING AND QUARRYING

3990

-R 934,174,989.83

OTHER MANUFACTURING INDUSTRIES

719

-R 183,565,764.57

PAPER, PRINTING AND PUBLISHING

571

-R 98,998,679.73

PERSONAL AND HOUSEHOLD SERVICES

509

-R 177,524,560.34

PUBLIC ADMINISTRATION

236

-R 264,314,018.60

RECREATIONAL AND CULTURAL SERVICES

561

-R 75,341,201.10

RESEARCH AND SCIENTIFIC INSTITUTES

145

-R 24,340,885.13

RETAIL TRADE

4491

-R 707,260,203.27

SCIENTIFIC, OPTICAL AND SIMILAR EQUIPMENT

149

-R 60,521,555.14

SOCIAL + RELATED COMMUNITY SERVICES NOT ELSEWHERE SPECIFIED

785

-R 95,335,672.15

SPECIALISED REPAIR SERVICES

599

-R 94,216,037.19

TEXTILES

300

-R 62,412,722.77

TRANSPORT EQUIPMENT(EXCEPT VEHICLES, PARTS AND ACCESSORIES)

756

-R 338,988,730.81

TRANSPORT, STORAGE AND COMMUNICATION

3059

-R 757,966,821.77

VEHICLES, PARTS AND ACCESSORIES

1236

-R 240,996,838.88

WHOLESALE TRADE

3695

-R 1,740,906,434.94

WOOD, WOOD PRODUCTS AND FURNITURE

412

-R 46,556,690.16

Grand Total

78972

-R 22,543,742,184.65

The financing, insurance, real estate and business services accounts for the largest balance, followed by Agencies and other services, Wholesale Trade then Construction sector.

(2) SARS adopts a number of strategies to address the credit book backlog including but not limited to working overtime, repurposing of experienced staff to focus on audits and verifications, applying secondary risk tolerance and appetite based on taxpayer previous compliance track record and continued attempts to get taxpayers to comply with outstanding requirements in order to process refunds. SARS accepts that the balance of supply and demand is not always possible to maintain thereby leading to increase in inventory faster than the available capacity can handle. In this regard refinement of our risk approach is on-going.

25 February 2022 - NW57

Profile picture: Sarupen, Mr AN

Sarupen, Mr AN to ask the Minister of Finance

Whether the National Treasury keeps a record of the debts incurred by municipalities; if not, why not; if so, (a) which municipalities have incurred debts in the (i) 2019-20, (ii) 2020-21 and (iii) 2021-22 financial years, (b) what total amount in debt has been incurred by each specified municipality and (c) what is the current total outstanding debt amount owed by each municipality?

Reply:

Yes, National Treasury keeps a record of the debt owed to creditors.

(a)(i)(ii)(iii) The tables (attached as Annexure A) provides the detail of the debt owed by municipalities to creditors for the respective years per province as per the Local Government Data Base - Section 71 reports of the Municipal Finance Management Act, 2003, (MFMA). This information is for the 2020/21 and 2021/22 financial years and the Annual Financial Statements for the 2019/20 financial year.

(b)(c) The column, “Year 2021/22 – Month 06” in Annexure A provides the year to date amount owed by each municipality. The total for municipalities is R76.6 billion (unverified). Due to the amounts being accumulative, it will be the same for total amount in debt as well as current total outstanding.

25 February 2022 - NW56

Profile picture: Sarupen, Mr AN

Sarupen, Mr AN to ask the Minister of Finance

Whether, with regard to the proposed National Health Insurance (NHI), any financial modelling has been undertaken by the National Treasury (a) in the (i) 2019-20, (ii) 2020-21 and (iii) 2021-22 financial years and (b) during the period 1 January 2022 up to the latest specified date for which information is available to calculate the total cost of the (i) implementation and (ii) administration of the proposed NHI; if not, why not; if so, (aa) what are the relevant details and (bb) how has the economic impact of the COVID-19 pandemic affected financial modelling for financing the NHI?

Reply:

The most recent update of the NHI cost model was carried out in 2019/20, details of which can be found in section 8 of the explanatory memorandum to the NHI Bill and the 2019 Medium Term Budget Policy Statement. This modelled the medium-term cost of specific NHI interventions at approximately R33 billion per annum by the 5th year. The economic impact of the COVID-19 pandemic has thus not been factored into the cost model. The need for and timing of further updates to the model will be determined by practical progress with preparing for the implementation of NHI, spending on the existing NHI allocations, as well as progress with processing the NHI Bill in the two chambers and relevant committees of Parliament.

25 February 2022 - NW43

Profile picture: George, Dr DT

George, Dr DT to ask the Minister of Finance

Whether, with regard to pension reform, (a) investment fees and (b) administration fees on compulsory contributions to pension savings will be capped; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

No, they have not been capped for good reason, given the complexity and potential unintended consequences arising from such measures. As you may be aware, Government has been totally committed to bringing down charges in the retirement industry to maximise benefits for members of such funds, as can be seen from the government policy paper titled Charges in South African Retirement Funds published in 2013. The paper found that the layering of many fees and costs, which were also opaque for certain products, was driving the high charges, and therefore clearly unfair to members of retirement funds since they were reducing their savings significantly by up to 40% over a lifetime in one scenario presented in that paper.

It is also recognised that structural reform issues were also driving costs, with too many funds (nearly 4 500), many of which only had small memberships and were not economical – hence the focus on consolidation, widening coverage and strengthening preservation to drive costs down. The recent December 2021 papers give further effect to these reforms.  The proposed reforms are in line with best international practices than direct measures like caps, which have limitations and could have perverse outcomes. Different countries are taking different approaches to regulating the fee structure of retirement fund providers.

25 February 2022 - NW42

Profile picture: George, Dr DT

George, Dr DT to ask the Minister of Finance

With regard to the $750 million loan amount from the International Monetary Fund as announced by the National Treasury, what (a) conditions are attached to the loan, (b) are the repayment terms and (c) is the purpose of the loan?

Reply:

a) There are no conditions attached to the loan.

b) The loan has a 13-year repayment period including a 3-year grace period (period after the disbursement where no capital repayments are required). The interest rate of the loan consists of the 6 month Secured Overnight Financing Rate (SOFR) (currently at 0.05%) plus a 0.75% variable spread, for an all-in rate of 0.80%.

c) It is a budget supported loan to assist the government to deal with the impact of the COVID-19 pandemic.

25 February 2022 - NW41

Profile picture: George, Dr DT

George, Dr DT to ask the Minister of Finance

With regard to the spouses pension benefit payable by the Government Employees Pension Fund for Zacharias Jacobus Botha (member number 96600594; ID number 660515 5015 084), (a) how long the payment is outstanding; (b) when payment will be made (c) what steps will be taken to ensure that future payments are made timeously?

Reply:

The details of the spouses’ pension benefit cannot be provided due to the fact that such information is deemed to be personal and cannot be made available to third parties.

Members are encouraged to utilize the available GEPF channels to obtain information regarding their pension benefits such as the call centre (telephone number 0800 117 669); walk in centre facilities across the country (details obtainable on the GEPF website (www.gepf.co.za)) or via email at enquiries@gepf.co.za to deal with enquiries.

 

25 February 2022 - NW12

Profile picture: Komane, Ms RN

Komane, Ms RN to ask the Minister of Finance

(1)(a) How long has each (i) Deputy Director-General and (ii) acting Deputy Director-General been an employee of the National Treasury and (b) by what date is each specified person expected to retire; (2) whether any such persons passed the regulated retirement age and are still working for the National Treasury; if not, what is the position in this regard; if so, what are (a) their names and (b) the reasons that they have not retired?

Reply:

1. Appointed and Acting Deputy Directors-General

(a) i Deputy Director-General (DDG)

SURNAME

INITIALS

DESIGNATION

NT APPOINTMENT DATE

APPOINTMENT DATE AS DDG

SISHI

NE

DDG: BUDGET OFFICE

01/10/2007

01/02/2022

PIETERSE

DE

DDG: ASSET AND LIABILITY MANAGEMENT

01/09/2013

01/12/2020

VUMENDLINI

V

DDG: INTERNATIONAL & REGIONAL ECONOMIC POLICY

15/04/2010

01/03/2018

MODISE

MP

DDG: PUBLIC FINANCE

29/09/2009

01/11/2017

NGQALENI

MT

DDG: INTERGOVERNMENTAL RELATIONS

01/10/1998

01/01/2014

MNGOMEZULU

JS

DDG: CORPORATE SERVICES

01/11/2002

01/11/2011

MOMONIAT

I

DDG: TAX AND FINANCIAL SECTOR POLICY

01/01/1996

01/01/2001

         

(ii)Acting Deputy Director-General (DDG)

SURNAME

INITIALS

DESIGNATION

DATE OF APPOINTMENT AS AN EMPLOYEE OF THE NT

DATE OF APPOINTMENT AS ACTING DDG

 

MODISE

BM

ACTING DDG: ECONOMIC POLICY

16/01/2012

26/10/2021

 

FANI

MI

ACTING CHIEF PROCUREMENT OFFICER

01/12/2018

25/08/2021

 

MAREE

K

ACTING ACCOUNTANT-GENERAL

01/04/2011

13/12/2019

 

(b) Expected retirement age

SURNAME

INITIALS

DESIGNATION

EXPECTED RETIREMENT DATE

MODISE

BM

ACTING DDG: ECONOMIC POLICY

18/06/2050

MODISE

MP

DEPUTY DIRECTOR GENERAL: PUBLIC FINANCE

03/05/2048

PIETERSE

DE

DDG: ASSET AND LIABILITY MANAGEMENT

13/03/2045

SISHI

NE

DDG: BUDGET OFFICE

19/01/2042

VUMENDLINI

V

DDG:INTERNATIONAL & REGIONAL ECONOMIC POLICY

05/06/2041

MAREE

K

ACTING ACCOUNTANT-GENERAL

19/01/2041

FANI

MI

ACTING CHIEF PROCUREMENT OFFICER

23/07/2034

MNGOMEZULU

JS

DDG: CORPORATE SERVICES

06/08/2031

NGQALENI

MT

DDG: INTERGOVERNMENTAL RELATIONS

11/06/2024

MOMONIAT

I

DDG: TAX AND FINANCIAL SECTOR POLICY

19/08/2022

2. Regulated retirement age

(a) No employee is above the regulated retirement age.

(b) All employees are still within their regulated retirement age.

25 February 2022 - NW184

Profile picture: Kopane, Ms SP

Kopane, Ms SP to ask the Minister of Finance

(a) What number of supplier invoices currently remain unpaid by (i) the National Treasury and (ii) each entity reporting to him for more than (aa) 30 days, (bb) 60 days, (cc) 90 days and (dd) 120 days, (b) what is the total amount outstanding in each case and (c) by what date is it envisaged that the outstanding amounts will be settled?

Reply:

NATIONAL TREASURY

(a)(i)(aa)

(a)(i)(bb)

(a)(i)(cc)

(a)(i)(dd)

(b)

(c)

5 Supplier invoices

Nil

Nil

Nil

R9 228,78

Before end of February 2022

       

R9 228,78

 
       

R9 228,78

 
       

R9 228,78

 
       

R758 540,00

 

INDEPENDENT REGULATORY BOARD FOR AUDITORS

As at 11 February 2022 the IRBA is not aware of any invoice older than 30 days due for payment.

OFFICE OF THE TAX OMBUD

a) What number of supplier invoices currently remain unpaid each entity reporting to him for more than

(aa) 30 days, - None

(bb) 60 days, - None

(cc) 90 days - None

(dd) 120 days – None

(b) what is the total amount outstanding in each case - None

(c) by what date is it envisaged that the outstanding amounts will be settled? - None

GTAC

a) What number of supplier invoices currently remain unpaid by entity reporting to NT entity (GTAC)

Question no

No of invoices

aa) 30 days

0

bb) 60 days

0

cc) 90 days

0

dd) 120 days

0

b) what is the total amount outstanding in each case? Zero amount

c) by what date is it envisaged that the outstanding amounts will be settled? No applicable

GOVERNMENT EMPLOYEES PENSION FUND (GEPF)

The details of unpaid supplier invoices are listed below:

Number of unpaid invoices

30 days

60 days

90 days

120 days

Date to be paid

16

R1 300 729

R 2 450

R1 026 375

N/A

24 Feb 2022

Total Payable Amount R 2 329 554

ACCOUNTING STANDARDS BOARD

We have no unpaid invoices exceeding 30 days or more.

OFFICE OF THE OMBUD FOR FINANCIAL SERVICES PROVIDERS (FAIS OMBUD)

The following table provides the information as requested relating to the amounts outstanding to suppliers based on their aging.

No

Description

Current

1 to 30 days

31 to 60 days

61 to 90 days

Over 90 days

Total outstanding

1

Total outstanding

-

-

644,39

5 000,00

6 974,21

12 618,60

2

Number of suppliers

0

0

1

1

2

4

Refer to legends below

   

*

**

***

 
               

 

Legends

*

The Office is awaiting the credit note of R644,39 from the supplier in order to remove the balance from the aging report. The adjustment of the insurance policy has given rise to the credit note.

**

The Office is awaiting the credit note of R5,000.00 from the supplier in order for the account balance to be corrected. The disposal of an asset resulted in the adjustment of the insurance policy which has given rise to the credit note.

***

An amount of R400,00 is owed to a supplier. However, given the inability to contact the supplier, it may seem that the supplier is no longer trading. Once confirmation of this is received, the financial records will be adjusted accordingly.

The remaining amount is still in dispute with the supplier and payment will be effected once the matter has been resolved between the office and the supplier. The dispute relates to the non-delivery of certain goods.

Of the R12,618.60 reflected in our records, a total amount of R5,644.39 relate to credit notes that need to be received and processed. Therefore, this amount is not actually owed to suppliers. The remaining amount of R6,974.21 relating to two suppliers will be paid over to the suppliers once the dispute is resolved with the one supplier and the existence of the other supplier is confirmed.

FINANCIAL SECTOR CONDUCT AUTHORITY (FSCA)

(aa) 30 days,

Answer: None

(bb) 60 days,

Answer: One

(cc) 90 days,

Answer: None

(dd) 120 days,

Answer: two

a) what is the total amount outstanding in each case

Answer: over 30 Days R25,000.00 and over 120 Days R16,165.00

Total outstanding; R41,165.00

b) by what date is it envisaged that the outstanding amounts will be settled?

Answer: Invoices under query with the service providers, envisaged to be resolved and paid within the next 30 days.

LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA

As at end 31 January 2022 Land Bank had 123 invoices owed to 85 vendors. All invoices were settled in February 2022.

As at 16 February 2022 the following remains outstanding and is envisaged to be paid by 28 February 2022.

aa) 30 days – 3 Invoices owed to 3 vendors amounting to R332 372.64

bb) 60 days – 1 invoice owed to 1 vendor amounting to R7 436.54

cc) 90 days – no invoices outstanding

dd) 120 days – 1 invoice outstanding owed to 1 vendor for the amount of R304 200.00

GOVERNMENT PENSIONS ADMINISTRATION AGENCY (GPAA)

The Government Pensions Administration Agency (GPAA) has a 99% rate on paying invoices on or before 30 days, see the below response:

1. 30 days, No outstanding supplier’s invoices on this period.

2. 60 days, No outstanding supplier’s invoices on this period.

3. 90 days, Two unpaid invoices valued at R206 634.00

One matter valued at R203 034.00 are subject to a dispute. The supplier did not complete the building renovations and payment is subject to the resolution of the dispute.

The other, an amount of R3 600.00 was retuned by the bank due to incorrect banking details. The service provider has been engaged to provide the correct banking details and should be resolved shortly.

DEVELOPMENT BANK OF SOUTHERN AFRICA (DBSA)

(a)& (b)

Table

Description automatically generated

c) the amounts outstanding will be settled within the next 30 days.

SASRIA SOC LTD

The table below depicts the number of supplier invoices currently remain unpaid by Sasria, the total amount outstanding and the envisaged settlement date:

CO-OPERATIVE BANKS DEVELOPMENT AGENCY (CBDA)

The CBDA does not have invoices that have not been paid for more than 30 days. A monitoring tool is implemented to track the invoices received as well as ensure that any query or dispute is resolved within 30 days of receipt.

PUBLIC INVESTMENT CORPORATION

There are no supplier invoices outstanding for more than 30 days.

The rest of the questions fall away.

SOUTH AFRICAN REVENUE SERVICE (SARS)

South African Revenue Service – Outstanding payments

 

(aa) more than 30 days

(bb) more 60 days

(cc & dd) more than 90 days)

(a) Number of invoices

44

32

62

(b) Total amount outstanding

R1,682,119.93

R 2,987,788.79

R 4,183,355.50

(c) By what date is it envisaged that the outstanding amounts will be settled

The population outstanding invoices relates to 16 creditors that is currently under investigation to determine reason for non-payment and will be resolved by 28 February 2022 through either payment or requesting credit notes from service providers/suppliers if not valid goods or services. Internal communications have been issued to remind all SARS employees of timeous payment of invoices in April 2021 as per Treasury Regulations and related instruction notes and a follow up internal communication in terms of attracting interest on late account and the related consequences in terms of the Fruitless and wasteful expenditure framework was issued on 11 February 2022 reminding employees of the importance to pay service providers/suppliers on time.

FINANCIAL INTELLIGENCE CENTRE (FIC)