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23 November 2020 - NW1900

Profile picture: Wessels, Mr W

Wessels, Mr W to ask the Minister of Finance

(1)What is the prescribed period within which a member of the Government Employees Pension Fund (GEPF) should receive the first retirement payment after completing and submitting all relevant documentation; (2) what (a) number of members of theGEPF have been affected by delays in first payments after retirement in the each of the financial years from 2010-11 to 2019-20 and (b) were the reasons for each of the specified delays; (3) what was the total amount of interest paid due to the late payments since the 2010-11 financial year; (4) whether the GEPF has put in place any measures to ensure that delays in the payment of pensions are mitigated; if not, why not; if so, what are the relevant details; (5) whether he will make a statement on the matter?

Reply:

1. A benefit is payable to a member, pensioner or beneficiary entitled to such benefit within a period of 60 days from the benefit becoming payable to the member, pensioner or beneficiary.

2. (a)The under mentioned table details the retirements paid within 60 days and those retirements paid outside of 60 days

Financial Year

Total Retirement Cases Paid

Claims paid within 60 days

% age paid within 60 days

Claims not paid within 60 days

%age Not paid within 60 days

2011

23,913

23171

97%

742

3%

2012

29,391

26830

91%

2,561

9%

2013

27,699

22849

82%

4,850

18%

2014

29,546

22043

75%

7,503

25%

2015

28,802

24797

86%

4,005

14%

2016

31,845

27693

87%

4,152

13%

2017

32,196

26848

83%

5,348

17%

2018

35,571

29966

84%

5,605

16%

2019

35,931

32236

90%

3,695

10%

2020

34,134

29944

88%

4,190

12%

(b) The reason for delayed benefit payments varies and arises due to many factors.  The delays amongst others include:

  • Claim documentation has not yet reached the GPAA. Claimants should ensure that their HR departments send all required documentation to the GPAA once finalised
  • Incomplete or incorrect documentation which requires the documents to be referred back to employee departments for rectification
  • Incorrect payment information such as incorrect bank accounts which results in bank verification process failing thereby payment cannot be made
  • GPAA awaiting tax directives from SARS before payment is made.
  • Issues with members’ tax affairs requiring members to attend to these with SARS. Member’s tax affairs need to be in order to ensure that the required tax liability is paid over to SARS before benefits can be paid to members.
  • Required divorce documentation outstanding to pay benefits
  • Other reasons pertaining to specific claims.
  • The impact of the lockdown regulations has impacted operational activity of the GPAA since March 2020.

3. The table below depicts the interests paid in respect of all benefits paid by the GEPF and not specifically in respect of retirements only. The interest paid would be in respect of retirement, resignation, death, ill-health retirement, and transfer benefits.

Financial Year

Benefits Paid for the year

R’000

Interest Paid for the

R’000

2010 – 2011

31 098 727

653 748

2011 – 2012

35 581 583

881 093

2012 – 2013

39 769 902

756 179

2013 – 2014

52 570 775

1 158 520

2014 – 2015

78 341 762

1 421 880

2015 – 2016

85 196 350

1 845 820

2016 – 2017

86 290 613

1 883 182

2017 – 2018

91 071 319

1 954 491

2018 – 2019

94 876 686

1 469 311

2019 – 2020 (Unaudited)

108 742 851

1 752 019

4. The Government Pensions Administration Agency (GPAA) which administers payments for the Government Employees Pension Fund (GEPF) like many other organisations, was negatively impacted by the Covid-19 pandemic. In support of the national agenda in combating COVID-19 the entity was also initially closed for a short period of time during the first lockdown until it was subsequently classified as an essential service. The GPAA has implemented various measures to increase production since the declaration of the National State of Disaster.

These measure include:

• The acquisition of additional technology and mobile devices to enable and increase remote working arrangements;

  • A combination of remote working and staff coming into the office is being followed in order to ensure improved capacity;
  • Implementation of automation of processes, where possible, to allow for faster capability in processing of pension claims;
  • A dedicated focus on processing pension retirement claims to accelerate claims of retirees.
  • Continuous improvement of processes are being attended to allow for remote and faster capability of processing of claims

It is important to emphasise that these initiatives notwithstanding, service to members, pensioners and beneficiaries is impacted by COVID-19 and delays may still be experienced as staff contract COVID -19.

5. It is not necessary for the Minister to make a statement on the matter as there has been acknowledgement by the GEPF and GPAA of late payments.

23 November 2020 - NW1690

Profile picture: Opperman, Ms G

Opperman, Ms G to ask the Minister of Finance

(1)Whether he has found that the cost of employing consultants to assist municipalities in managing their finances often outweighs the benefits they bring, given that only 15 out of 183 municipalities who used consultants in the 2018-19 municipal financial year managed to achieve clean audit results; if not, what is the position in this regard; if so, what are the relevant details; (2) whether he has found that the use of consultants results in the transfer of skills to municipal employees; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

1. The HonourableMember to note that information provided in the General Report 2018/19 by the Office of the Auditor-General and other reports, on the use of consultants generally, is equally of concern. Municipal appointment practices are also a direct contributing factor. The use of consultants and support provided must however be contextualised within the FM reforms for municipalities and the varies capacity levels in municipalities.In an attempt to address these concerns, the National Treasury issued MFMA Circulars and Guides assisting municipalities with best practices in financial management, covering a range of financial disciplines, the establishment of Budget and Treasury Offices, supporting the rollout of minimum competencies, supporting the appointment of appropriately qualified staff with the requisite skills to perform financial management responsibilities. These have been coupled with awareness and training initiatives. The efforts to improve financial management practices in municipalities and the resultant improved audit outcomes, may require a number of financial cycles to show desired changes, but is receiving attention by both the National and Provincial Treasuries. It must however be recognised that in some instances, the use of consultants with specialists’ skills and knowledge will be required. Therefore, it may not always be cost effective for municipalities to appoint these scarce skills on a permanent basis.

2. The design of national and provincial support programmes has at its core specific focus on the transfer of skills and capacity, on-the-job training, to municipal officials, covering institutional and technical areas.For example, a total of 1 434 capacity building sessions were completed, with 9 716 officials capacitated during the 2018/19 financial year, from the national support programme to selected municipalities. The principles of skills transfer are also embedded in the Cost Containment Regulations for Municipalities issued in 2019, where measures must be implemented by municipalities when appointing consultants to perform specific responsibilities. The absorption capacity of municipalities also must be factored. The details relating to the use of consultants and transfer of skills, for those contracts entered into by municipalities would be best obtainable from the municipality directly, given the different specialised areas and contractual arrangements.

23 November 2020 - NW1600

Profile picture: Opperman, Ms G

Opperman, Ms G to ask the Minister of Finance

(1)Whether he has found that the cost of employing consultants to assist municipalities in managing their finances often outweighs the benefits they bring, given that only 15 out of 183 municipalities who used consultants in the 2018-19 municipal financial year managed to achieve clean audit results; if not, what is the position in this regard; if so, what are the relevant details; (2) whether he has found that the use of consultants results in the transfer of skills to municipal employees; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

1. The HonourableMember to note that information provided in the General Report 2018/19 by the Office of the Auditor-General and other reports, on the use of consultants generally, is equally of concern. Municipal appointment practices are also a direct contributing factor. The use of consultants and support provided must however be contextualised within the FM reforms for municipalities and the varies capacity levels in municipalities.In an attempt to address these concerns, the National Treasury issued MFMA Circulars and Guides assisting municipalities with best practices in financial management, covering a range of financial disciplines, the establishment of Budget and Treasury Offices, supporting the rollout of minimum competencies, supporting the appointment of appropriately qualified staff with the requisite skills to perform financial management responsibilities. These have been coupled with awareness and training initiatives. The efforts to improve financial management practices in municipalities and the resultant improved audit outcomes, may require a number of financial cycles to show desired changes, but is receiving attention by both the National and Provincial Treasuries. It must however be recognised that in some instances, the use of consultants with specialists’ skills and knowledge will be required. Therefore, it may not always be cost effective for municipalities to appoint these scarce skills on a permanent basis.

2. The design of national and provincial support programmes has at its core specific focus on the transfer of skills and capacity, on-the-job training, to municipal officials, covering institutional and technical areas.For example, a total of 1 434 capacity building sessions were completed, with 9 716 officials capacitated during the 2018/19 financial year, from the national support programme to selected municipalities. The principles of skills transfer are also embedded in the Cost Containment Regulations for Municipalities issued in 2019, where measures must be implemented by municipalities when appointing consultants to perform specific responsibilities. The absorption capacity of municipalities also must be factored. The details relating to the use of consultants and transfer of skills, for those contracts entered into by municipalities would be best obtainable from the municipality directly, given the different specialised areas and contractual arrangements.

23 November 2020 - NW1955

Profile picture: Mashabela, Ms N

Mashabela, Ms N to ask the Minister of Finance

Whether he reappointed the acting board of the Public Investment Corporation led by a certain person (name furnished); if not, what is the position in this regard; if so, how did a certain newspaper (name furnished) gain access to information that was not publicly communicated by any official National Treasury platform?

Reply:

The COVID-19 pandemic and the national lockdown had a negative effect on the appointment process of the new Public Investment Corporation (PIC) Board which was to be effective from 1 August 2020. In accordance with the Memorandum of Incorporation of the PIC, the terms of office of the Interim Board was extended until the appointment process is finalised or 15 months after the expiry of their initial term of office, whichever is earlier.

The Ministry isnot aware of the information accessed by the certain newspaper (name furnished) and how the newspaper gained access to the information.

23 November 2020 - NW1899

Profile picture: Wessels, Mr W

Wessels, Mr W to ask the Minister of Finance

(1)Whether the Government Employees Pension Fund is experiencing any cash-flow problems; if so, what are the relevant details; (2) whether he will make a statement on the matter?

Reply:

The GEPF is not experiencing any cash-flow problems.

19 November 2020 - NW2577

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

What total number of (a) international lenders does Government still have in their State-Owned Entity (SOE) debt portfolio and (b) facilities of international lenders who have exited the SOE debt were called prematurely?

Reply:

a) There are 9 international development finance institutions that lend to the SOEs as listed below. The typical financing instrument they use are foreign currency and domestic currency bilateral loans. MIGA is listed below as one of the institutions, however, their participation is usually in the form of providing credit enhancing guarantees on behalf of the SOE and to the benefit of other lenders that would otherwise not lend to a South African SOE owing to the credit rating.

China Development Bank

African Development Bank

International Bank for Reconstruction and Development

New Development Bank (BRICS Bank)

European Investment Bank

AgenceFrançaise de Développement (AFD)

World Bank

KreditanstaltfürWiederaufbau (KfW)

Multilateral Investment Guarantee Agency (MIGA)

In the case of SOEs that issue bonds in foreign jurisdictions, information of registered holders is not recorded in such a manner as to be able to establish how many different individuals or institutions (hedge funds for example) are the ultimate beneficial holders of those bonds.

b) There are no facilities that have been called prematurely in the sense of accelerating debt is due. Rather, some guaranteed debt has been called to service interest and capital payments that became due, but these facilities did not accelerate. The call on guarantees to international lenders for the current fiscal year were in respect of the Land Bank and amounts to R74 million.

19 November 2020 - NW2647

Profile picture: George, Dr DT

George, Dr DT to ask the Minister of Finance

(1)With reference to his statement in his Budget Speech on 26 February 2020 that provisional allocations will only be confirmed once certain requirements have been met, and considering the fact that SA Airways (SAA) has now been allocated its initial provisional allocation of R6,5 billion in the 2020 Medium Term Budget Policy Statement (MTBPS), what (a) were the requirements that had to be met for SAA to qualify for the provisional allocation of R6,5 billion, (b) were the reasons for the specific requirements that were chosen and (c) date/s was/were each requirement met; (2) whether he has found that the allocation in February of R16,4 billion, along with the MTBPS bailout of R10,5 billion, coupled with the confirmation of the R6,5 billion allocation, puts the total monies allocated to SAA in the 2020 calendar year at R33,4 billion; if not, (a) what total amount has he found the total allocation for the 2020 calendar year to be and (b) how did he calculate it; (3) what framework did he use to determine whether it was worth spending yet more money on SAA compared to rather being able to cover the costs of building more than 66 000 RDP houses?

Reply:

1. Provisional allocation

The R6.5 billion formed part of the R16.4 billion announced by during the February 2020 budget speech for payment of guaranteed debt and interest. This amount was split as follows:

(i) R10.3 billion in 2020/21

(ii) R4.3 billion in 2021/22; and

(iii) R1.8 billion in 2022/23.

Of the R10.3 billion in 2020/21, only R3.8 billion was included in the Appropriation Act (7 of 2020) leaving R6.5 billion unappropriated. SAA had R3.6 billion government guaranteed debt maturing on 31 July 2020 and the amount already included in the Appropriation Act was utilised to settle this debt.Additional government guaranteed debt of R6.7 billion matured on 31 August 2020 for which section 6 of the Appropriation Act (7 of 2020) was invoked in order for the debt to be settled.

2. Total allocation to SAA for 2020/21

Of the R16.4 billion allocated to SAA at the time of the February budget speech, R10.3 billion was allocated in the current financial year to pay for maturing government guaranteed debt. The balance of R6.1 billion will be allocated to SAA over the next two fiscal years as and when the airline’s government guaranteed debt matures.

An additional R10.5 billion was allocated to SAA in 2020/21 to provide for the implementation of the airline’s business rescue.

Therefore, the total amount that has been allocated to SAA in the 2020/21 fiscal year amounts to R20.8 billion.

3. Framework used to determine funding allocation to SAA

SAA was placed into voluntary business rescue on 6 December 2019, following which the business rescue practitioners concluded a creditor approved business rescue plan which required additional funding for implementation.

Cabinet advised by Inter-ministerial Committee (IMC) on SAA, took a decision not to place SAA under liquidation but rather to support the business rescue plan. The allocation of the R10.5 billion for the implementation of SAA’s business rescue plan is proposed by Cabinet for parliament’s consideration and approval.

19 November 2020 - NW2633

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

(1)What (a) total number of government guarantees have been granted to the SA Airways for the purposes of assisting the public entity to secure loans from credit providers since the Minister of Public Enterprises took charge of the airways on 31 March 2007 (details furnished), (b) was the monetary value of each government guarantee, (c) was the date of each government guarantee that was granted and (d) was the justification for each government guarantee that was granted; (2) which of the specified guarantees have had to be paid out to creditors, either partially or in full, by Government due to SAA not being able to repay the loans on its own?

Reply:

Government guarantees granted to SAA

SAA GUARANTEES

Date issued

Amount (R' Million)

Going Concern Guarantee

March 2007

1 300

Going Concern Guarantee

September 2009

1 600

Going Concern Guarantee

July 2012

5 006

Going Concern Guarantee

December 2014

6 488

Going Concern Guarantee

September 2016

4 720

Total Guarantees issued

 

19 114

SAA has been granted several guarantees since being unbundled out of the Transnet Group in 2007. All the guaranteed issued to SAA were for the granted to allow the airline to meet the going concern requirements for signing off the airline’s financial statements. Total guarantees granted from 2007 to date amount to R19.1 billion.

Due to the poor financial performance and deteriorating solvency position of the airline, SAA could not raise debt funding on the strength of its balance sheet. Local and international lenders thus required any funding provided to SAA to be backed by a sovereign guarantee. Each of the guarantees provided to SAA was based on business plans which forecasted that the airline would attain financial sustainability and be able to settle its debts from internally generated funds.

Government guaranteedobligations settled through recapitalisations from government

Since June 2017, R26.4 billion of the recapitalisations that government provided to SAA have been made to settle the airline’s government guaranteed obligations. This includes R10.3 billion of the R16.4 billion announced in the February 2020 budget that will be provided to SAA over the 2020 Medium Term Expenditure Framework (MTEF) for the settlement of government guaranteed obligations but excludes the R10.5 billion for business rescue implementation announced in the 2020 Medium Term Budget Policy Statement (MTBPS).

Historically, once SAA’s guaranteed obligations have been settled, the airline had used its freed-up guarantee facility to raise additional government guaranteed debt. Conditions have been put in place to reduce this risk to the fiscus.

19 November 2020 - NW2632

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

What (a) number of cash recapitalisation cases have been granted to the SA Airways by the National Treasury since the airline was placed under the Minister of Public Enterprises on 31 March 2007 (details furnished), (b) was the monetary value of recapitalisation that was granted in each case, (c) was the date of each cash recapitalisation that was effected and (d) was the justification for each cash recapitalisation that was granted?

Reply:

HISTORIC SAA RECAPITALISATIONS

Purpose

Date

Repayment of debt (R')

Working Capital Requirements

Total

SAA Labour Restructuring Plan and provision of working capital

2007

 

744 000 000

744 000 000

 

2009

 

1 560 000 000

1 560 000 000

Repayment of Government guaranteed debt

Jun-17

2 208 000 000

 

2 208 000 000

Repayment of Government guaranteed debt

Sep-17

1 800 000 000

1 200 000 000

3 000 000 000

Repayment of government guaranteed debt; settlement of outstanding creditors and provision of working capital

Dec-17

3 600 000 000

1 192 000 000

4 792 000 000

Repayment of domestic lenders

Feb-19

5 000 000 000

 

5 000 000 000

Working capital requirements

Aug-19

 

2 000 000 000

2 000 000 000

Repayment of domestic lenders

Sep-19

3 500 000 000

 

3 500 000 000

Repayment of government guaranteed Post Commencement Funding

Aug-20

10 300 000 000

 

10 300 000 000

Total

 

26 408 000 000

6 696 000 000

33 104 000 000

SAA has been recapitalised by R33.1 billion since being unbundled out of the Transnet Group in 2007. Of the total amount historically provided for recapitalization, R26.4 billion has been provided for the repayment of government guaranteed debt whilst R6.7 billion has been for the provision of working capital.

10 November 2020 - NW2578

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

On what basis did he decide to relent on the question of wasting more taxpayer money on SA Airways instead of refusing to provide yet another bailout to the airline?

Reply:

SAA’s Board of Directors placed the airline into voluntary business rescue on 6 December 2019 as a result of ongoing liquidity constraints and the airline’s inability to meet its financial obligations as and when they became due.

Upon being placed into business rescue, the Business Rescue Practitioners subsequently assumed responsibility for the management of the airline and finalised a business rescue plan to restructure SAA. Additional funding is required for the successful implementation of the plan as without funding the airline will be placed under liquidation.

Subsequently, Cabinet resolved to support the restructuring of SAA in order to avert the liquidation of the airline and the additional R10.5 billion allocated to SAA will therefore be utilised for the implementation of the business rescue plan.

22 October 2020 - NW2201

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

(1)What amount has been refunded to the State by a certain political organisation (name furnished) in respect of the irregular use of an SA Air Force jet to transport a delegation of the specified political organisation to Zimbabwe for talks with a political party in that country; (2) whether the specified amount is the (a) full and (b) final amount with which the specified political organisation will refund the State; if not, what action is the National Treasury taking to recover the full cost of the irregular flight; if so, what are the relevant details?

Reply:

Any revenue due to the state flows to the National Revenue Fund (NRF) through departments concerned before it is surrendered to the NRF. As it stands, the Department of Defence is still working on the matter and will inform the National Treasury accordingly once the matter is finalised.

22 October 2020 - NW2208

Profile picture: Schreiber, Dr LA

Schreiber, Dr LA to ask the Minister of Finance

Whether any portion of the $4,3 billion loan granted to the Republic by the International Monetary Fund (IMF) will be used to pay the salaries of public servants; if not, what mechanisms have been put in place to ensure that no portion of the IMF loan will fund the salaries of the public servants; if so, what are the relevant details?

Reply:

The loan of $4.3 billion loan granted to the Republic by the International Monetary Fund (IMF) will not be earmarked specifically for the payment of salaries. The loan is a special facility created for member countries experiencing emergencies. It is called a Rapid Financing Instrument (RFI), and does notbear conditionalities, nor does it require the implementation of an IMF structural programme. Countries, however, receiving IMF emergency financing have committed totransparently utilising and reporting spending.Thus, the loan receipts (or disbursements) will form part of the National Revenue Fund to be used to support existing government programmes, which could include salary payments.

Access to the RFI was specifically expanded to help countries deal with the balance of payments (BOP) problems arising from the COVID-19 pandemic. The loan provides a low-interest opportunity for South Africa to provide counter-cyclical support to the economy and fund COVID-19 related emergency support. In other words, it mitigated the need for massive spending cuts in response to the dramatic revenue shortfalls of government, and avoided an explosion in the financing needs brought on by high-cost borrowings.

The reporting on the loan’s use will form part of the general responsibility of government of publishing all information related to COVID-19-related support programmes, including procurement.

14 October 2020 - NW1885

Profile picture: Ndlozi, Dr MQ

Ndlozi, Dr MQ to ask the Minister of Finance

(a) What total amount has (i) the NationalTreasury and (ii) all entities reporting to him spent on (aa) Covid-19 related activities and (bb) personal protective equipment from 1 March 2020 to 29 July 2020, (b) what goods and/or services were procured, (c) what procurement processes were followed, (d) what are the details of each company that was awarded a contract, (e) on what date was each contract awarded and (f) what was the monetary value of each contract?

Reply:

NATIONAL TREASURY

(i) The department procured the following goods and services connected to the Covid-19 pandemic:

(d)

Name of company

(aa)

Covid-19 related activities

(bb)

Personal Protective Equipment

(c)

Method of procurement

(b)

Service and/or product that each company rendered

Lechoba Medical Technologies

R182 263.50

-

Three quotations

Hand sanitizers

Masana Hygiene Services

R156 302.26

-

Three quotations

Hand sanitizers liquid dispensers

 

R121 446.00

-

Three quotations

Building decontamination

 

R3 801.00

-

Three quotations

 
 

R10 500.00

-

Three quotations

 

Nesoscope Holdings (Pty) Ltd

R68 410.50

-

Emergency deviation on existing contract

Surface sanitizers

MPM Enviro Enterprise

-

R342 125.00

Three quotations

N95 masks and latex gloves

Class Three Medical Solution

R12 128.82

-

Three quotations

Thermometers

Tsuamo Civils (Pty) Ltd.

R9 000.00

-

Three quotations

Building decontamination

 

R1 900.00

-

1 quotation amount below R2000.00 SCM threshold

 
 

R75 950.00

-

Emergency deviation memo approved

 
 

R80 850.00

-

Three quotations

 

Khulanathi Black Ginger

-

R135 125.00

Three quotations

Cloth masks reusable

Benixo Utility Services

R98 640.00

-

Three quotations

Building decontamination

Armani Office Solutions

R5 900.65

-

Three quotations

Face shields

Techcon Systems Pty Ltd

(f)

R332 062.50

-

Three quotations

(e)

Contract signed on
7 July 2020

Rental, supply, installation, replenishing and maintenance of foot operated hand sanitizer dispensers.

TOTAL

(a) R1 636 405.23

   

ACCOUNTING STANDARDS BOARD

(a)(aa) R2 592.29

(bb) R2 681.00

(b)

Lockdown expenditure to enable staff to work from home

 

What?

From whom?

Process

Month

Amount

1 Printer cartridge

Reimbursement of staff member

Internet purchase by staff member from Takealot

30 June 2020

R229.00

DATA top up

MTN

Existing contract

May, June, July

R2 104.00

Zoom license

Zoom

Internet purchase

15 July 2020

R259.29

PPE

       

3 COVID 19 posters

UVO Communications

3 written quotes

28 May 2020

R414.00

3 Ply facemasks

Takealot

3 written quotes

30 June 2020

R370.00

1 infrared thermometer

Alphabetsoup

3 written quotes

8 May 2020

R1 897.00

CO-OPERATIVE BANKS DEVELOPMENT AGENCY

The CBDA did not send on Covid-19 related activities since CBDA is housed in the National

Treasury (NT) building and follow NT protocols.

DEVELOPMENT BANK OF SOUTH AFRICA

a) ii) (aa) R 57,530,574-20

(bb) R 27,578,337-70

 

b) Drilling and equipping of borehole pumps

Isolation Pods

Screening Units

PCR Testing machinery and consumables

Microbial Fogging

Deep Cleaning

PPE

 

c) Drilling and equipping of borehole pumps – open advertised tender

Isolation Pods – single source emergency COVID19 procurement

Screening Units – open advertised tender

PCR Testing machinery and consumables – sole source

Microbial Fogging – 1 quote emergency COVID19 procurement

Deep Cleaning – Request for Quote to 3 service providers

PPE – where value was less than R10,000, 1 quote. Where value exceeded R10000, competitive Request for Quotation to 32 companies.

The following section constitutes responses to sections (d), (e) and (f) in tabular format:

Description of goods and services

(d)

(e)

(f)

 

Company name

Company Registration

Date contract was awarded

Contract

Amount

Drilling and equipping of borehole pumps

MVULA TECH

2001/046344/23

25 June 2020

R 807,058.50

 

MICROZONE PROJECTS

2014/114267/07

 

R 2,962,860.00

 

KOLWANA

2010/102453/23

 

R 2,684,675.00

 

NDZALO

2016/294581/07

 

R 1,674,342.50

 

BLUE STAR

2011/036213/23

 

R 2,218,177.50

 

MAGISTRA

2015/170215/07

 

R 2,205,700.00

 

ZHEMVELO

2016/412151/07

 

R 769,860.00

 

ZITHUNZUZO

2006/103795/23

 

R 377,775.00

 

ZITHUNZUZO

2006/103795/23

 

R 368,000.00

 

MTHOMBELI

2008/190157/23

 

R 855,660.38

 

MSK CONSTRUCTIONS

2014/174945/07

 

R 442,218.13

Isolation pods

Everblock SA

 

24 June 2020

R 14,124,600.00

Description of goods and services

(d)

(e)

(f)

 

Company name

Company Registration

Date contract was awarded

Contract

Amount

Screening units

Abacus Space Solutions - Division of Waco Africa

 

02 July 2020

R 827,087.48

 

Container Conversions

   

R 1,054,099.20

 

Kwikspace Modular Buildings

   

R 2,345,550.81

PCR Testing machinery and consumables

LTC Tech SA Pty Ltd

 

15 May 2020

R 22,341,159.74

Microbial Fogging

Kagollo

2012/024874/07

26 March 2020 and 28 April 2020

R 480,000.00 and

R 480,000.00

Deep Cleaning

Lapeng la gae

2009/032219/23

18 March 2020 and

05 May 2020

R 241,500.00 and

R 270,250.00

Description of goods and services

(d)

(e)

(f)

 

Company name

Company Registration

Date contract was awarded

Contract

Amount

PPE

Supra-Health Care (Pty) Ltd

2007/027848/07

21 May 2020

R 1,815,401.50

 

BEADICA 423 CC

2011/085389/23

03 July 2020

R 3,010,781.25

 

PSR Solutions (Pty) Ltd

2014/183355/07

18 June 2020 and

03 July 2020

R 2,547,000.00

and R770,525.00

 

DPA Diesel and Electrical Services (PTY) LTD T/A DPA Chem

1961/000129/07

18 June 2020 and

03 July 2020

R 4,990,198.00

and R 2,325,250.00

 

GTL Consulting (Pty) Ltd

2016/202388/07

18 June 2020

R 11,765,000.00

 

Tumis Projects

2014/073200/07/23

29 July 2020

R 85,750.00

 

Melokuhle

2012/197977/07

18 May 2020 and 21 May 2020

R 75,637.82

 

Mmusi

2009/101050/23

15 June 2020 and

05 August 2020

R 9,400.00

And

R4,700.00

 

Steiner

1969/005893/07

from 30 March 2020 to 13 July 2020

R 37,557.68

Description of goods and services

(d)

(e)

(f)

 

Company name

Company Registration

Date contract was awarded

Contract

Amount

PPE

KPRG

1996/051772/23

18 March 2020 and

24 March 2020

R 32,056.25

 

Protechnik Laboratories

1968/008611/30

18 May 2020

R 9,394.70

 

Life Occupation

2012/07783/07

30 March 2020

R 1,185.30

 

Servest

1997/006391/07

04 June 2020

R 4,844.20

 

Hamisi

2015/077626/07

30 April 2020

R 93,656.00

FINANCIAL INTELLIGENCE CENTRE

FINANCIAL SERVICES CONDUCT AUTHORITY

FSCA spent for Covid-19 related activities and personal protective equipment is as follows:

a) The total amount of R341 884.20 was spent from 1 March 2020 to 29 July 2020.

b) goods and/ services that were procured are:

  1. Cloth masks;
  2. Hand sanitizers;
  3. All-purpose wipes / cloths;
  4. Digital body thermometer infrared non-contact;
  5. Disposable gloves; and
  6. Sanitizing/Disinfecting of FSCA and FST Buildings;

c) All items were procured from existing cleaning, hygiene and pest control services contract with Masana Hygiene Services except for cloth masks which were procured from The Express Penguin Consultancy (Pty)Ltd identified from the list of SMEs provided by National Treasury.

d) Details of suppliers:

(i) Masana Hygiene Service (Pty) Ltd, Registration number - 2014/110265/07, Business Address - Block 1 Falcon Crest Office Park, 142 South Street, Dooringkloof, Centurion; Contact numbers - 012 663 1626; 071 571 7311. Owned by TSHILILO CYNTHIA MKHOMBO and MIKATEKO RICHARD MKHOMBO;

(ii) The Express Penguin Consultancy (Pty) Ltd, Registration number 2015/194676/07, Business Address - 33 Dane Road, Castenhof, Midrand, contact numbers – 084 974 0016, Owned by Pamela Lozizwe Ngwenya

e) No new contract was awarded between 01 March 2020 to 29 July 2020.

f) Not applicable, see (a) and (e) above.

GOVERNMENT EMPLOYEES PENSION FUND

(aa) The GEPF spend a total of R74 462.45 on Covid-19 related activities.

(bb) The GEPF spend a total of R35 552.23 on personal protective equipment

(b) The GEPF purchase the following personal protective equipment:

  • Masks
  • Cloves
  • Face shields
  • Bottle spray trigger
  • Sanitizer
  • Protective overalls
  • Infra red thermometer
  • Multi surface wet wipes

The GEPF disinfected its office space on two occasions after positive Covid-19 cases were reported.

(c) Emergency procurement processes were followed to disinfect the GEPF’s offices and the existing contract with a cleaning service was utilized. All personal protective equipment was purchased from suppliers.

(d) MasanaHigiene Services disinfected the GEPF’s offices.

(e) The GEPF’s offices was disinfected on 6 May and 8 June 2020.

(f) The total value was R38 910.23

GOVERNMENT TECHNICAL ADVISORY CENTRE

a) Total spent on:

aa) Covid19 activities is R446, 562.27

bb) PPE from 1 March 2020 to 29 July 2020 isR27,500.00

b) Goods procured include:

  1. 500 branded face masks for GTAC employees.
  2. Clear Perspex screens to serve as desk dividers.
  3. Additional data sim cards were procured to enable staff to work from home.

c) All procurement took the form of Requests for Quotations. Data sim cards were requested on the existing Vodacom RT15 contract.

d) See table below.

e) See table below.

f) See table below.

SUMMARY TABLE FOR COVID-19 RELATED ACTIVITIES FOR GTAC

Description

Method of Procurement

Request No

Date Procured

Service Provider

Companies Registration Nr

Quantity

Total Invoice

GTAC branded 2-ply netted face masks

RFQ

RFQ/2020-21/185

2020/05/28

Mothizamo Trading

2016/445473/07

500

R27,500.00

COVID19 clear perspex screens for all GTAC desks: Phase 1 (Programme 1 and 3)

RFQ

RFQ/2020-21/191

2020/07/06

Maverick Business Solutions

Agreement with NT Reg: 2012/111721/07

305.7m

R165,385.81

COVID19 clear perspex screens for all GTAC desks: Phase 2 (Programme 2)

RFQ

RFQ/2020-21/195

2020/08/21

Pheladi Maisa Trading

2009/214327/23

84.4m

R53,500.00

Mobile Voice and Data - Working From Home

Existing Vodacom RT15-2016 Contract

N/A

April - August 2020

Vodacom

N/A

7 Voice Lines

39 Data Sims

Data claims from staff without Vodacom connectivity up to maximum of R487.50 per month

R200, 176.46

GOVERNMENT PENSIONS ADMINISTRATIONS AGENCY

The Government Pensions Administrations Agency has kept a spreadsheet to monitor the Covid-19 expenditure incurred.

Please find attached the most recently updated spreadsheet to answer (aa), (bb), (b), (c), (d), (e) and (f).

INDEPENDENT REGULATORY BOARD FOR AUDITORS

1 - COVID-19 related activities between 1 March and 29 July 2020

     

GOODS AND SERVICES PROCURED

PROCUREMENT PROCESSES FOLLOWED

COMPANIES APPOINTED

COMPANY REGISTRATION NUMBER

DATE OF APPOINTMENT

VALUE OF EACH CONTRACT

(b)

(c)

(d)

(d)

(d)

(f)

SANITISERS AND WET WIPES

3 QUOTATIONS

SERVEST

1997/006391/07

11/03/2020

3 795.00

SURFACE DISINFECTANT, THERMOMETERS

3 QUOTATIONS

WE CLEAN IT ALL SHOP

2017/509402/07

29/04/2020

5 500.00

           

HAND SANITIZER REFILL SACHETS

3 QUOTATIONS

WE CLEAN IT ALL SHOP

2017/509402/07

11/06/2020

10 800.00

       
  1. (aa)

20 095.00

2 - Spent on procurement of PPEs

         

GOODS AND SERVICES PROCURED

PROCUREMENT PROCESSES FOLLOWED

COMPANIES APPOINTED

COMPANY REGISTRATION NUMBER

DATE OF APPOINTMENT

VALUE OF EACH CONTRACT

(b)

(c)

(d)

(d)

(d)

(f)

180 x FACE MASKS FOR STAFF MEMBERS ( Note 1)

 3 QUOTATIONS

RITA HATTINGH (employee of the IRBA)

IRBA STAFF MEMBER - NO COMPANY ESTABLISHED

09/06/2020

3 150.00

HAND SANITISERS

3 QUOTATIONS

SERVEST

1997/006391/07

29/04/2020

6 513.60

RECEPTION DESK SCREEN

3 QUOTATIONS

SIGNARAMA

2011/099901/23

03/06/2020

4 143.43

GLOVES

3 QUOTATIONS

WE CLEAN IT ALL SHOP

2017/509402/07

29/04/2020

1 850.00

SANITATION STATIONS

3 QUOTATIONS

WE CLEAN  IT ALL SHOP

2017/509402/07

11/06/2020

12 150.00

       
  1. (bb)

27 807.03

Note 1:

The face masks were obtained by obtaining 3 quotes and the IRBA employee was the cheapest. A first batch of 90 masks were ordered and when the OHS regulations were published an additional batch of 90 were purchased. Total transaction value of R3 150.

PENSION FUNDS ADJUDICATOR

LAND BANK

(aa) Covid-19 related activities:

(bb) personal protective equipment from 1 March 2020 to 29 July 2020, (b) what goods and/or services were procured, (c) what procurement processes were followed, (d) what are the details of each company that was awarded a contract, (e) on what date was each contract awarded and (f) what was the monetary value of each contract?

OFFICE OF THE OMBUD FOR FINANCIAL SERVICES PROVIDERS

The total value of procurement for the period 1 March 2020 to 29 July 2020 was as follows:

SUMMARY OF PROCUREMENT SPEND ON COVID19 BY THE FAISOMBUD 1 MARCH 2020 TO 29 JULY 2020

1.

Covid19 related expenditure

99 089.98

2.

Personal protective equipment

142 120.27

TOTAL

241 210.25

The detailed breakdown is as follows:

COVID19 RELATED ACTIVITIES

DATE

COMMODITY

METHOD OF PROCUREMENT

SUPPLIER

SUPPLIER REGISTRATION

NUMBER

VALUEOFCONTRACT

(RAND)

29-04-2020

Disinfection, sanitation, fumigation anddeepcleaningoftheofficefora period of 6months

Deviation (One supplier responded to ourrequest)1

Masana Hygiene Services (Pty) Ltd

2014/110265/07

90 098.13

21-07-2020

Emergency disinfection of the office (New Covid19 Case)

Emergency

Masana Hygiene Services (Pty) Ltd

2014/110265/07

8 991.85

TOTAL

99 089.98

PERSONAL PROTECTIVE EQUIPMENT (PPE)

ITEM

DATE

COMMODITY

METHOD OF PROCUREMENT

SUPPLIER

SUPPLIER REGISTRATION

NUMBER

VALUEOF CONTRACT

(RAND)

1.

01-05-2020

Cloth masks and digital thermometers

Deviation: Emergency

Masana Hygiene Services (Pty)Ltd

2014/110265/07

R23 768,02

2.

07-05-2020

Surgical masks

Deviation (One supplier responded to ourrequest)2

Dante SA (Pty) Ltd

2014/000057/07

R38 812.50

3.

07-05-2020

Aprons and face shields

Deviation: Emergency

Masana Hygiene Services (Pty)Ltd

2014/110265/07

R4 421,75

4.

11-05-2020

Surgical gloves, stand-alone units and hand sanitizers

Deviation (One supplier responded to ourrequest)3

Dante SA (Pty) Ltd

2014/000057/07

R57 149,25

5.

12-07-2020

Surgical masks

Normal

Vuma Furniture Projects (Pty) Ltd trading as Vuma Office

Supplies

2006/019558/07

R17 968.75

TOTAL

142 120.27

PUBLIC INVESTMENT CORPORATION

  1. The COVID-19 related procurement of the PIC was done in line with the National Treasury Instruction 08 of 2019/20.
  2. These purchases consisted of PPE and other COVID-19 related items.
  3. PPE purchases relate to masks and latex gloves for staff, visitors and service providers working on site.
  4. Other COVID-19 purchases are composed of temperature scanning equipment, sanitisers including foot pedal dispensers, regular microbial fogging of the building and deep cleaning premises.
  5. The table below summarises the COVID-19 related expenditure of the PIC. We have also attached Annexure A which shows the expenditure in detail.

Description

Amount (R)

COVID-19 Normal Procurement

153, 515.00

PPE- Deviations as per Instruction 3.5.1

67, 783.00

Other COVID-19 Deviations as per Instruction 3.5.1

114, 925.00

Total

336, 223.00

SOUTH AFRICAN REVENUE SERVICES

(a)(i) NT to respond

(ii) A total of R 32, 796, 893 was spent by SARS on Covid-19 related activities and PPE’s from 1 March 2020 to 29 July 2020.

(aa) Total spend on Covid 19 related activities amounts to R 15, 901, 463.

(bb) Total spend on PPE related expenses amounts to R 16, 895, 430.

(b) Services and goods procured is tabled below. Further detail is provided as Annexure A.

Bio boxes & bags

Surgical mask

Dust coats

Dust mask

IT costs

Delivery costs

Tape and Stickers

Cloth masks

Wipes

Spray bottles

Tissues

Covid tests

Glass dividers

Thermometer Scanners

Disinfectants

Sanitisers

Face Shields

Detergents

Gloves

Thermometer

Masks

Decontamination foggers

The IT related cost was to enable staff to work from home. Delivery cost was for centralised purchases to be distributed to regional offices.

(c) The Procurement processes followed includes:

RFQ Process (3 Quotes),

National Treasury Prescribed Emergency Deviation,

Petty Cash,

(d)(e)(f) The detailed information of the Companies used, Dates awarded as well as the monetary value is attached as annexure A.

SASRIA

Spend on COVID-19 related activities between 1 March and 29 July 2020

       

Business requirements

Goods and services procured

Procurement processes followed

Companies appointed

Date of Appointment

Value of contract

1

Hygiene Services - Due to COVID19 pandemic, management took decision to install hand sanitizer dispensers and related chemicals (sanitizers) at entrance and exit points of the buildings for staff hygiene

Hand sanitizer Stands and related sanitizers (alcohol based)

Extension of the existing contract for office hygiene services

Perla Hygiene Solutions (Pty) Ltd (2006/009521/07)

18-Mar-20

R17 955,00

2

Security Services - Due to lockdown, there was a need to extend security service to day services since the offices would not have been manned by Sasria staff

One Grade D security officer

Emergency procurement

CKN Security Services CC (2006/192256/23)

25-Mar-20

R138 150,00

3

Hygiene, Health & Safety Services - In preparation of the offices for staff returning to work after lockdown, certain hygiene measures had to be put in place in the office to ensure safety of staff and visitors in line with the set regulations

• Conduct COVID Site Specific Risk Assessment;
• Develop and Implement COVID Workplace Policy;
• Submit COVID Policy to Department of Employment and Labour;
• Provide HPCSA Registered Medic;
• 1 x COVID – 19 Isolation Booth;
• COVID – 19 Training (Online Training Portal);
• COVID – 19 Screening/Monitoring/Recordkeeping System (Online);
• 2 x No-Touch Thermometers;
• 2 x Automated Disinfectant Tunnel/Sanitazation booth; and
• 200 x Disinfectant Solution/Sanitiser

Emergency procurement

Altra Medical Productions CC (1997/056694/23)

15-May-20

R271 950,00

 

Spend on PPE between 1 March and 29 July 2020

Business Requirement

PPEs procured

Procurement processes followed

Companies awarded contract including company registration number

Date of procurement

Value of contract

1

PPE - staff welcome back-pack (in anticipation for staff to return to the office)

2 x Washable Face Masks, Small Hand Sanitizer, Face Shield and 10 x New Filters

Emergency procurement

Altra Medical Productions CC (1997/056694/23)

15-May-20

R41 250,00

Note: This PPE purchase is included in the 3rd transaction listed above.

TAX OMBUD

  1. (aa). The Office of the Tax Ombud has spent R 224 888.20 on COVID-19 related activities between 1 March and 29 July 2020.
  2. (bb). The Office has spent R 25 764.09 on the procurement of PPEs between 1 March and 29 July 2020. There were other PPEs centrally procured by SARS and shared with OTO, the costs and procurement details is accounted for by SARS.
  3. Table 1 below details (b) goods and/or services procured, (c) procurement processes followed, (d) the details of each company that was awarded a contract, (e) the date was each contract awarded and (f) the monetary value of each contract.

TABLE 1: DETAIL EXPENDITURE ON COVID-19 AND PPE

No

Goods and Services (b)

Process followed (c )

Company awarded (d)

Date of procurement (e)

Value (R)

(f)

1

Surface cleaner, soap dispenser, hand wash, wipes

Petty cash

Clicks

Mar-20

       652.20

2

Surface cleaner, soap dispenser, hand wash, wipes

Petty cash

Dischem

Mar-20

 229.90

3

Disinfectants

Petty cash

Checkers

Mar-20

     474.80

4

Sanitisers

Petty cash

Picknpay

Mar-20

     111.90

5

Sanitisers

Petty cash

Pep Stores

Mar-20

    109.90

5

Sanitisers/Disinfectants

Petty cash

Makro

Mar-20

1 002.30

7

Disposable Gloves

Petty cash

Makro

Mar-20

      726.90

8

Disinfectants, Wipes

Petty cash

Dischem

Mar-20

   160.30

9

Sanitisers

Petty cash

Crazy Plastics

Mar-20

      269.80

10

Bottles for sanitiser

Petty cash

Picknpay

May-20

         79.99

11

Thermometer batteries

Petty cash

Picknpay

May-20

 1 953.20

12

Sanitizing Spray, wet wipes, batteries

Petty cash

Game

Jun-20

      790.80

13

Face shields

Petty cash

Clicks

Jun-20

  652.20

14

Branded Cloth Masks

Request For Quotation (RFQ)

Tammy Tailor Nails

Jul-20

9 275.50

15

Face shields (50) & Wet wipes buckets (2)

SARS Contract

JD Strategic Investments

Jul-20

6 726.60

16

Laptops (8)

Request For Quotation (RFQ)

Ubuntu Technologies

Jul-2020

211 744.40

17

Data Costs  (March to June 2020)

Vodacom Contract with SARS

Vodacom Contract with SARS

Jul-2020

13 143.80

18

Plexiglass shield (4)

Request For Quotation (RFQ)

Domelanco

Jul-20

3 200.00

14 October 2020 - NW2083

Profile picture: Tafeni, Ms N

Tafeni, Ms N to ask the Minister of Finance

Whether, for any of the contracts that were awarded to the Public Affairs Research Institute and payments made up to October 2018, there was any declaration of conflict of interest at that time by any persons in the National Treasury and/or the Government Technical Advisory Centre; if not, what is the position in this regard; if so, (a) who made a declaration and (b) what was the nature of the conflict of interest?

Reply:

National Treasury has not awarded any contracts to the Public Affairs Research Institute (PARI) up to October 2018.

Government Technical Advisory Centre (GTAC) awarded three contracts awarded to PARI.

These were for;

  1. the provision of action learning support to the Eastern Cape Department of Education turnaround project;
  2. the provision of technical advisory services to the Eastern Cape Department of Education with the schools’ rationalisation project for knowledge management specialist advisory services, and;
  3. an expenditure and performance review of the National Language Services.

The procurement and selection processes for all three of these bids were fully complied with. They included a properly constituted panel, which followed all required governance processes, including the signing of a Declaration of Conflict of Interest form. Each of the individuals in each of the three evaluation committees indicated in their Declaration of Conflict of Interest form that they had no conflict of interest to declare.

There was one additional project undertaken by PARI during the period under discussion. The work completed was a set of longitudinal city case studies for the Cities Support Programme. The mechanism utilized to complete this work was a Memorandum of Understanding between PARI and GTAC which was in place. This process did not require separate procuring of the required skill and the work was therefore delivered within the terms of this MoU.

14 October 2020 - NW2000

Profile picture: Schreiber, Dr LA

Schreiber, Dr LA to ask the Minister of Finance

(1)Whether public funding of any nature has ever been paid to (a) certain persons (names furnished) and/or certain entities or initiatives (names and details furnished); if not, what is the position in this regard; if so, what are the relevant details; (2) whether there was an application of any nature to obtain state funding and/or tenders by the specified persons, entities and/or initiatives; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

1(a) National Treasury only has access to payments information from national and provincial departments using the BAS payment system. In order to search for information against individuals, the National Treasury would need the identification numbers as a search by names may result in inaccurate results.

1(b) A search was done on the BAS payment system for the period 1 April 2017 to date and no payments were found that were made to the entities or initiatives mentioned.

2 The National Treasury is not aware of any application of any nature to obtain state funding and/or tenders by the specified persons, entities and/or initiatives.

29 September 2020 - NW2138

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

What is the full text of the investment mandate agreement between the Government Employees Pension Fund and the Public Investment Corporation?

Reply:

The investment mandate agreementappoints the PIC as an investment manager with the authority to act as its agent in the managing and administering the Investment portfolio within the constraints specified in the Agreement. The document is marked as confidential and cannot be made available.

29 September 2020 - NW869

Profile picture: Bagraim, Mr M

Bagraim, Mr M to ask the Minister of Finance

(1)Whether the National Treasury will offer any form of Covid-19 financial and/or other relief to small businesses; if not, why not; if so, what are the relevant details; (2) whether the Covid-19 financial and/or other relief will only be allocated to qualifying small businesses according to the Broad-Based Black Economic Empowerment Act, Act 53 of 2003, as amended; if not, what is the position in this regard; if so, (a) on what statutory grounds and/or provisions does he or the National Treasury rely to allocate Covid-19 financial or other relief only to small businesses according to the specified Act and (b) what form of Covid-19 financial or other relief, if any, will be made available to other small businesses?

Reply:

1. Yes, the President announced financial relief matters by Government to small businesses and individuals on 24 March 2020,two or three days before the first lockdown, and a second round of measures on 21 April 2020. A loan guarantee scheme was launched on 4 May 2020 and amended on 27 July 2020.National Treasury is part of Government, and does not act separately from it, but administers two of these measures whilst other departments administer others. I will deal with these two measures, and not those that are administered by other departments on behalf of Government. Bear in mind that with the totally unexpected COVID-lockdown that the country had to suddenly impose at midnight 26 March 2020, we had to find mechanisms that could reach thousands of businesses quickly, hence the intervention via the tax system and banks.

The first set of measures dealt with a number of tax measures to provide financial relief to small businesses, which were announced by the Minister of Finance on 24 March and 21 April 2020. These include tax deferrals for pay-as-you-earn payments and for provisional income tax payments for businesses with a turnover of less than R100 million, a four-month exemption from the skills development levy and an expansion in the employment tax incentive for four months, which will apply to all employees with a monthly income of up to R6 500. These provisions are included in the Draft Disaster Management Tax Relief Bill and the Draft Disaster Management Tax Relief Administration Bill, which have been passed by the National Assembly. The draft bills can be found at http://www.treasury.gov.za/documents/National%20Budget/2020S/.

The second measure is the COVID-19 loan guarantee scheme for eligible small businesseswhich came into effect on 12 May 2020, details of which were jointly announced by National Treasury, South African Reserve Bank and the Banking Association of South Africa. The loan guarantee scheme is an initiative for banks to provide loansfrom their own funds to their customersto eligible individuals and businesses, and where the banks take the first set of losses up to 8,5%, with the rest of the losses guaranteed by government.Since updating the initial criteria at the end of July, funds borrowed from banks through this scheme can be used for operational expenses or to restart their businesses as soon as lockdown restrictions applicable to the business is lifted. Loans are capped at R100m per loan and may be offered as syndicated loans by the banks were the loan amount exceeds R50m. Government and commercial banks are sharing the risks of these loans. Initially, the National Treasury has provided a guarantee of R100 billion to this scheme, with the option to increase the guarantee to R200 billion if necessary. It should be emphasized that this is a loan guarantee scheme and not a grant, and that funds for the loans are from participating banks and not Government. It is also the intention of the National Treasury that such lending should not be made recklessly, and that the loans that will be paid back to the respectivebanks. National Treasury does notintend for the entire R200 billion to be called in full, since it will have a negative impact on the fiscus nor for this or any other scheme to ever cover the full extent of losses incurred by businesses due to the COVID-19 pandemic.

More details on the scheme can be found in a Frequently Asked Questions guide posted at http://www.treasury.gov.za/, https://www.resbank.co.za/Pages/default.aspx and https://www.banking.org.za/

2. All businesses that meet the conditions for the loan scheme or the tax relief measures are eligible. The Broad-Based Black Economic Empowerment Act, Act 53 of 2003, as amended, is not applicable for purposes of the eligible criteria.

29 September 2020 - NW2139

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

With reference to the Mpati Commission’s finding that a review of the Government Employees Pension Fund investment mandate agreement with the Public Investment Corporation should be conducted, with an interim report produced by no later than the end of June 2020 (details furnished), (a) what progress has been made in this regard and (b) by what date will the interim report be published?

Reply:

(a) & (b)The GEPF had already prior to theMpati Commission Report being released began the process of an all-encompassing review the Investment Mandate. The GEPF aims to finalise the revised investment mandate agreement before the end of the 2020/21 financial year.

29 September 2020 - NW2137

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

(a) Which non-core assets have been sold since February 2019, as was committed to in the main budget of 20 February 2019 and (b) what are the relevant details of each sale?

Reply:

Government has not sold any non-core assets to date, however, work in this regard remains ongoing.

15 September 2020 - NW1898

Profile picture: Wessels, Mr W

Wessels, Mr W to ask the Minister of Finance

Whether any of the recommendations by the Mpati Commission of Inquiry into allegations of impropriety at the Public Investment Corporation have been implemented; if not, why not; if so, which of the recommendations have been implemented; (2) whether there is a time frame regarding the implementation of all the recommendations contained in the commission's report; if not, why not; if so, what are the relevant details; (3) whether he will make a statement on the matter?

Reply:

1. Currently the Public Investment Corporation and the National Treasury are in the process of developing an implementation plan on the report’s recommendations. Once the implementation plan is finalised, I will be in a position to provide clarity on the implementation of the recommendations.

2. The time frames regarding the implementation of the recommendations of the Mpati Commission of Inquiry will be finalised and outlined in the implementation plan taking into accountconsultations between the National Treasury and the Public Investment Corporation after which the implementation plan and the timelines will be shared with the relevant stakeholders.

3. An update will be provided to all relevant stakeholders at the appropriate time once all the processes have been concluded in this regard.

15 September 2020 - NW1886

Profile picture: Ndlozi, Dr MQ

Ndlozi, Dr MQ to ask the Minister of Finance

What are the reasons that the National Treasury has not presented the Report of the Judicial Commission of Inquiry into Allegations of Impropriety at the Public Investment Corporation to Parliament despite repeated commitments to brief Parliament?

Reply:

The National Treasury and Public Investment Corporation are still in the process of studying the Mpati Commission Report and developing an implementation plan in terms of the recommendations. In addition, due to the global pandemic, there has been a delay with the necessary consultations that need to take place prior to presenting the matter to the Parliamentary Committee.

15 September 2020 - NW773

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De Freitas, Mr MS to ask the Minister of Finance

(1)Whether he took into consideration the (a) short-, (b) medium- and (c) long-term implications for the tourism sector when he made his announcement on 24 April 2020; if not, why not; if so, what (i) are the implications in each specified case, (ii) fund will he remove from the Tourism budget and (iii) criteria did he apply to slash the budget; (2) what steps will the National Treasury take to ensure that the tourism sector is not decimated by the time the sector can return to operate?

Reply:

1. On 24 April 2020, the Minister of Finance outlined a R500 billion economic support package in fiscal and monetary policy interventions to be implemented in the immediate, short-run with long-run sustainability. In terms of this, the Minister outlined that the fiscal response is characterised through five key components and provided the sequential order of interventions which involve (i) the scaling up of efforts to deal with the immediate effects of the pandemic, characterised through an extraordinary health budget (ii) substantial increase of social relief measures for the distressed (iii) rollout of an extensive set of tax relief and support for workers (iv) phased re-opening of the economy (v) supportive monetary and financial market measures -

(i)

(a) the immediateaftermath of the CoVID-19 pandemic had huge implications for the tourism sector, with many countries going into lockdown and imposing travel restrictions, this meant domestic and international tourism had been suspended in response to the pandemic, the contraction in activity triggered an unprecedented crisis in the tourism sector;

(b) as part of the short-term relief measures to support the tourism sector, the Department of Tourism, with the approval of the National Treasury, introduced the Tourism Relief Fund to provide once-off capped grant assistance to eligible small micro and medium sized enterprises in the tourism value chain to ensure their sustainability during and post the implementation of government measures to curb the spread of CoVID-19 in South Africa. Categories eligible to apply for the Tourism Relief Fund include, accommodation establishments, hospitality and related services, travel and related services. The Fund has been launched in collaboration with the Department of Tourism, South African Tourism (SAT) and the Tourism Business Council of South Africa (TBCSA) through a 50:50 co-financing arrangement. To this end, the Department of Tourism has contributed R100million, while SAT/TBCSA contributed the remaining R100 million used to capitalise the Fund. The R200 million funding facility is administered by SAT, using a qualification criteria and selection process set by the Department of Tourism. Beneficiaries of the fund are geographically spread across the nine provinces; and

(c) to support the recovery of the tourism sector, the Tourism Relief Fund may be extended as part of upscaled measures expected to be detailed in a tourism sector recovery plan currently being developed by the Department of Tourism.

(ii) The South African Tourism carries out tourism marketing activities both domestic and international, with many countries going into lockdown and implementing stringent measures to curtail the spread of the CoVID-19 virus globally, the marketing activities of the entity have been significantly scaled down in the immediate, short term. Currently, domestic and international travel as well as interprovincial movement remains prohibited except for people that are travelling for the purposes of work or under specific provisions stipulated in the legislation.According to the Tourism Business Council of South Africa, the domestic tourism industry is only expected to pick up activity in September 2020 due to the gradual easing of regulation on domestic and international travel. Even with that, tourism is only expected to regain about 50 per cent of the pre-CoVID-19 activity levels. This in large will also depend on the trajectory of the pandemic. For the moment, the entity will not be able to spend a significant portion of their allocated budget for 2020/21. To this end, during the recent tabling of the 2020 Special Adjustment Budget, allocations to the South African Tourism had been adjusted downward from R1.304billion toR438.306million for 2020/21 fiscal year. In addition, R134 million has been suspended from among others, the tourism incentive programme, destination development and tourism sector support services, bring the total reduction to R1 billion for 2020/21 fiscal year.

(iii) In funding some of the stimulus package, government committed to redirect R130 billion within the current budget. As such, departments were required to identify programmes/activities that could be temporarily suspended without negatively affecting the longevity of those programmes. In this respect, government was able to free up R109 billion from the 2020/21 Budget by removing underspent funds, delaying some departmental projects to 2021/22, and by suspending allocations to programmes with a history of poor performance.

2. Guided by the Tourism Sector Recovery Plan currently being developed by the Department of Tourism, the National Treasury will need to consider the fiscal implications of the plan for the 2020 Medium Term Budget Policy Statement and their possible inclusion in the tabling of additional budget adjustments at the time.

15 September 2020 - NW1688

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Opperman, Ms G to ask the Minister of Finance

Which municipalities, including metros, have had salary increases that were above the inflation rate in each of the past three municipal financial years?

Reply:

Over the past three financial years two salary and wage collective agreements wereconcluded at the South African Local Government Bargaining Council (SALGBC). These collective agreements were effective for the periods, 1 July 2017 to 30 June 2021 (2017/18 to 2020/21 financial years). The terms of the agreements are applicable to all grades of municipalities and affect all employees who fall within the scope of the SALGBC. However, Municipal Managers and those employees appointed as managers directly accountable to Municipal Managers in terms of Sections 54A, Section 56 and Section 57 of the Municipal Systems Act 32 of 2000, as amended, are excluded from all the terms of these collective agreements.

The below table link indicates the salary increases as per the salary and wage collective agreements applicable to the past three financial years.

https://pmg.org.za/files/RNW1688Table.pdf

 

15 September 2020 - NW1768

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George, Dr DT to ask the Minister of Finance

With regard to the assets of deregistered pension funds, what (a) total amount of unclaimed benefit funds is held, (b) steps are being taken to trace and pay beneficiaries and (c) total number of beneficiaries have been traced and paid since January 2017?

Reply:

The Financial Sector Conduct Authority (FSCA) has informed the National Treasury that deregistered retirement funds should generally not have any unclaimed benefits.Prior to the liquidation of a fund or exemption from liquidation, these benefits are transferred to unclaimed benefit funds. If there are no unclaimed benefit funds that are willing to accept these benefits, the unclaimed benefits are paid to the Guardians Fund.

The FSCA has also pointed out thatsome retirement funds with assets were erroneously deregistered by their administrators, as part of a consolidation exercise. These funds have been or are in the process of being reinstated, as is the case when such errors are identified, and to ensure no loss to any members who have not been paid out. If the question is directed at ascertaining the amounts of unclaimed benefits in respect of these funds, unfortunately, the FSCA does not have these statistics. Further, the administrators are currently undertaking investigations on which funds have assets and wereerroneously deregistered. The administratorswould, therefore, likely not be in a position to knowthe value of these unclaimed benefits at this stagegiven that theirprocesses arestillunderway.

15 September 2020 - NW645

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Lees, Mr RA to ask the Minister of Finance

(1)Whether, with reference to the reply of the Minister of Public Works and Infrastructure to written question 304 on 19 March 2020, the authority given to the Property Management Trading Entity to open a bank account expires; if not, why not; if so, on what date; (2) whether the authority granted to the Property Management Trading Entity to open a bank account authorises the specified entity to operate an overdraft in the current account it has with the SA Reserve Bank; if not, why not; (3) whether the overdraft and/or negative balance of the Property Management Trading Entity with the SA Reserve Bank is backed up with any security such as a government guarantee; if not, what is the position in this regard; if so what are the details of sure security and/or collateral?

Reply:

1. No. It is a Paymaster - General account which is held at the South African Reserve Bank in terms of Treasury Regulation 15.2.1. The Paymaster - General account is the bank account operated by the particular government department or entity. This bank account will reflect all amounts received and paid by the particular government department or entity.

2. The net position of all the Paymaster-General accounts are funded to zero on a daily basis.

3. No. See (2) above.

14 September 2020 - NW2082

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Paulsen, Mr N M to ask the Minister of Finance

(1)With reference to the contract which the SA Revenue Service (Sars) awarded to the Public Affairs Research Institute (PARI) in February 2011 to conduct a Sars corruption study to the value of R799 755, what process of procurement was followed to appoint the PARI; (2) whether the specified tender was advertised; if not, why not; if so, (a) on what date was it advertised, (b) on what platforms and (c) which other organisations responded to the tender?

Reply:

1. Public Affairs Research Institute (PARI) was appointed via a bid process (SARS reference number RFQ 39-2010).

2. (a) RFQ 39-2010 was advertised on 09 December 2010 and officially closed on 10 January 2011 at 11h00.

(b) SARS issued a bid invitation letter on 08 December 2010 as part of a limited bid. A compulsory briefing session was requested with five (5) bidders attending and on the closing two (2) bids were received.RFQ 39-2010 was then approved by the Bid Adjudication Committee at that time.

c) Two (2) bids were officially received on the closing date 10 January 2011 at 11h00.

Bidder 1 – Ethics Institute of South Africa. Bidder 2 – Public Affairs Research Institute (PARI)

14 September 2020 - NW2081

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Maotwe, Ms OMC to ask the Minister of Finance

What (a) total number of (i) contractors and/or (ii) consultants were appointed by the Government Technical Advisory Centre between 1 January 2014 and 31 December 2019 who are not South African citizens, (b) are the names of each specified contractor and/or consultant, (c) was the (i) date of appointment for each contractor and/or consultant and (ii) monetary value of each contract and (d) processes were followed to appoint each contractor and/or consultant?

Reply:

The Government Technical Advisory Centre (GTAC) has awarded a total of 456 contracts over the period 1 January 2014 to 31 December 2019.

a) During this period, seven (7) contracts were awarded to contractors/consultants that were verified as non-South African while five (5) contractors/consultants could not be verified as eith South African or non-South African.

b) Please refer to table below.

c) Please refer to the table below.

d) Please refer to the table below.

 

Contractors/consultants contracts for the period 1 January 2014 to 31 December 2019

NO.

SERVICE PROVIDER

START DATE

END DATE

NO. OF CONTRACTS

TOTAL VALUE OF CONTRACTS

PROCESS FOLLOWED

1. 

James Aiello

01-Jan-16

31-Dec-18

1

R 5 106 000,00

Bid

2. 

Mwansa Saidi

01-Jan-16

31-Dec-20

1

R 10 225 800,00

Bid

3. 

Donas Nyatsambo

03-Nov-14

31-Mar-17

1

R 2 883 574,00

Bid

4. 

Simon Creswell

05-Jan-15

04-Jan-18

2

R 4 913 547,00

Deviation

5. 

Tinashe Chatambira

03-Dec-15

30-Nov-18

1

R 1 001 000,00

Bid

6. 

William Kenneth James(Jim) Hewit

18-Mar-15

31-Mar-17

1

R 2 318 736,00

Bid

7.

Daniel Makoni

05-Jan-15

04-Jan-18

2

R 4 913 547,00

Deviation

TOTAL EXPENDITURE ON FOREIGN CONTRACTS:

R 31 362 204,00

 
8. 

Pieter Mert van der Berg

18-Mar-15

31-Mar-17

1

R 2 318 736,00

Bid

9. 

CH DE J Financial Management Chukudu De Jaar

01-Aug-15

31-Mar-17

1

R 2 210 586,00

Deviation

10.

Dr Nicholas Crisp

11-Aug-15

10-Aug-17

1

R 3 417 840,00

Bid

11.

Cornelis Johannes Kymdell

01-Sep-15

31-Mar-17

1

R 1 899 248,00

Bid

12

Gavin Hardford

19-Oct-15

28-Feb-16

1

R 352 000,00

Bid

TOTAL VALUE FOR UNVERIFIED SERVICE PROVIDERS:

R10 198 410,00

 

TOTAL SA VALUE

R690 473 518,90

 

TOTAL VALUE OF ALL CONTRACTS

R 732 159 132,90

 

04 September 2020 - NW1883

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Shivambu, Mr F to ask the Minister of Finance

(a) What amount has been paid as a settlement by any (i) person, (ii) corporation and/or (iii) fund to each pension and/or retirement fund (details furnished), (b) which payments were approved by a certain person (name and details furnished) and (c) how was the decision to allocate the payments into the funds made?

Reply:

Kindly note that the Office of the Pension Funds Adjudicator (OPFA) only deals with complaints referred to it in terms of section 30A of the Pension Funds Act, 24 of 1956. Therefore, the questions posed above would not arise in the execution of the OPFA’s mandate.

01 September 2020 - NW1914

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Brink, Mr C to ask the Minister of Finance

(1)Whether he has been informed of the plans of the Development Bank of Southern Africa (DBSA) to assist the Government with drafting One Plan and other initiatives under the District Development Model (DDM); if not, what is the position in this regard; if so, (2) whether the DBSA and/or the National Treasury received diagnostic reports in respect of the lessons learnt by the Government in piloting the DDM in the OR Tambo and Waterberg District Municipalities; if not, on what basis has the DBSA issued a tender (details furnished) on 30 June 2020 to source professional service providers to help in the development and finalisation of the DDM One Plan for the specified two districts; if so, (3) whether he will furnish Mr C Brink with a copy of the reports; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

1. The District Development Model (DDM) is an initiative by the Department of Cooperative Governance (DCoG) to facilitate better coordination across all spheres of government and SOEswith regard tothe investments that is required to facilitate development in 52 spaces in the country. The objective of the DDM is to effectively respond to the needs of communities by implementing programmes that contribute to the outcomes in the National Development Plan (NDP). Government should be able work in partnership with the private sector and communities in making the outcomes of the National Development Plan a reality, now more so than ever before given the fiscal constraints we face and impact of Covid-19 on our communities.

Our understanding is that DCoG has concluded and MOU with the Development Bank of Southern Africa (DBSA) MOU to assist the department with professional servicesforproject management unit (PMU) to implement the DDM.

2. DCOG has made available the DDM concept note, document on lessons learnt in the pilots and profiles of the 52 District it produced available in the following link http://www.cogta.gov.za/ddm/ 

There is no requirement that DCOG should submit reports to Treasury prior to its decisions to procure professionals through the DBSA for its implementation of DDM, given that National Treasury does not get involved in the procurement processes of professional servicesof other institutions. In other words, we can’t provide comments on what basis the DBSA issued a tender on 30 June 2020, DCOG should be in a position to provide required details.

3. Besides the information DCOG published in its website, given thatit is the custodian of theDDM, it will only be appropriate that they be approached to provide the Honourable members with the diagnostic reports in respect of the lessons learnt by the Government in piloting the DDM in the eThekwini Metro, OR Tambo and Waterberg District Municipalities.

01 September 2020 - NW1787

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Masipa, Mr NP to ask the Minister of Finance

What are the (a) relevant details of the factors that were considered when the Government approved a bailout of R3 billion to the Land Bank and (b) conditions attached to the specified bailout; 2) whether he has found that the specified bailout will solve the challenges faced by the Land Bank going forward; if not, what is the plan going forward to solve this problem; 3) on what date will the bank resume its lending activities?

Reply:

1(a) The following factors were considered when the Government approved a bailout of R3 billion to the Land Bank

(i) The credit downgrading of the Land Bank:Between January 2020 and April 2020, Moody’s downgraded both the Land Bank’s global long-term issuer rating and the national scale credit rating on various occasions. The downgrades led to funders not rolling over maturing debt or extending new funding facilities. Despite having access to R4.3 billion in Government Guarantees, the Bank was still unable to secure additional funding.

(ii) Downgrading leading to liquidity challenges and defaulting on financial obligations: The Bank as a result of the downgrade experienced significant liquidity shortfalls, which resulted in a default on its outstanding debt starting 1 April 2020.

(iii) The poor financial position of the Land Bank for the period 2016 to February 2020. Analysis showed significant deterioration in the Bank’s financial position since the 2015/16. This pointed to the need to restructure the Bank for its future financial sustainability

(b) The following conditions attached to the specified bailout

“Part of the R3 billion funds is to be utilised to pay portion of the overdue interest and capital and the remainder for the operation activities of the Bank (i.e. disbursements to farmers, etc.).

2.The R3bn will assist the bank with short term liquidity. The immediate goal is to stabilise the financial sustainability of the Land Bank and make sure the bank improves and continues with its business of lending to farmers in terms of its mandate, as per the Land Bank Act of 2002. In the medium to long-term the bank needs to cure its event of default, correct its asset and liability mismatch and attain financial sustainability. The shareholder recognises that the medium to long-term goals will required additional government support.

3.The Land Bank has continued its lending activities although at reduces scale.

26 August 2020 - NW1506

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Brink, Mr C to ask the Minister of Finance

(1)With reference to the information that has to be reported to him in terms of Chapter 13 of the Local Government: Municipal Finance Management Act, Act 56 of 2003, (a) for which of the municipalities in the Free State did the Municipal Financial Recovery Service prepare mandatory financial recovery plans (MFRS) since 1 July 2016 and (b) on what date (i) was each financial recovery plan adopted and (ii) did he last receive a progress report from the Member of the Executive Council (MEC) of finance and/or the MEC for local government in the Free State in respect of the municipality terms of section 147(1)(b)(ii); (2) Whether he has found that each specified municipality is currently implementing its financial recovery plan as required and/or expected by him and/or the MFRS; if not, what is the nature and extent of each municipality’s breach of its financial recovery plan; (3) Whether each municipality has successfully completed any financial recovery plan prepared for it as contemplated by section 148(2); if not, why not; if so, what are the relevant details. (4) Whether he and/or the MFRS have had any discussions with the Minister of Cooperative Governance and Traditional Affairs regarding each municipality; if not, why not; if so, what were the outcomes of such discussions?

Reply:

1. To date, only one mandatory financial recovery plan has been prepared for a municipality in the Free State Province. This plan was prepared for the Mangaung Metropolitan Municipality in terms of mandatory intervention invoked in December 2019 in terms of S139 (5)(a) and (c) of the Constitution. The draft financial recovery plan has been approved by the Minister of Finance on the 6th of July 2020 and is in the process of consultation and approval as per the requirements of the Municipal Finance Management Act, 2003.

All other interventions initiated in the Free State Province have been initiated as discretionary interventions by the Provincial Executive. Details pertaining to these interventions are outlined in the table below:

Municipality

Date of FRP Adoption / Indicated on front page of FRP

Last FRP Report Date from Municipality

Masilonyane Local Municipality

December 2017

June 2020

Mafube Local Municipality

October 2017

No report

Nketoana Local Municipality

November 2016

June 2020

Phumelela Local Municipality

July 2017

June 2020

Maluti A Phofong

August 2018

Intervention has been withdrawn by Province

2. No, municipalities are not implementing financial recovery plans as required.

The nature and extent of breaches are generally consistent amongst municipalities. The most common issues identified by the Municipal Finance Recovery Service Team include:

  • Poor quality and consistency of reporting;
  • Non-compliance with reporting timeframes requiring consistent follow-ups before reports are submitted;
  • Regression in reporting content and implementation of activities;
  • Repetition of comments on the FRP status progress update;
  • No progress reporting at all on some strategies;
  • Key activities are not finalized even though the due dates have long passed;
  • Slow implementation of activities;
  • Poor accountability for the financial recovery plan by municipal officials;
  • National Treasury inputs on the implementation and progress reports are generally ignored.

3. No municipality is currently under an approved mandatory financial recovery plan and therefore this is not applicable.

4. No, discussions were not held with the Minister for Cooperative Governance regarding each of the municipalities under intervention in the Free State Province. In terms of the Constitution, the Department of Cooperative Governance oversees discretionary interventions in terms of S139 (1) of the Constitution. The MFRS unit does oversee the process in terms of monitoring the financial recovery plans in place in the Province and in this way maintains oversight of the financial aspects relating to the intervention process in the Free State Province.However, in the case of the Mangaung Metro, the intervention was jointly launched by the Deputy Ministers for Cooperative Governance and Finance. A War Room jointly chaired by the National Treasury, the Provincial Department of Cooperative Governance and the Provincial Treasury oversees the process on behalf of the Provincial Executive who monitors progress on a quarterly basis and reports to the two Deputy Ministers.

24 August 2020 - NW853

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George, Dr DT to ask the Minister of Finance

What (a) number of companies and businesses in each province have made use of and/or benefited from the tax deferral measures announced on 23 April 2020 and (b) was the Rand value of the tax deferrals in each province?

Reply:

a) 8 957 taxpayers requested PAYE Tax Deferments thus far and 4 taxpayers requested deferrals of excise duties.

b) The rand value for the PAYE Tax Deferments is R334m.

Deferral for the payment of excise duties on alcoholic beverages and tobacco products

Excise duties on alcoholic beverages and tobacco products are payable by manufacturers and the liability for excise duty is assessed and collected on a Duty at Source (DAS) basis - i.e. as close as possible to the point of domestic manufacture when goods achieve their excisable character or the point of importation of similar excisable products.

The liability to account for excise duties and the payment thereof therefore rest with the manufacturer with payment periods following the end of the accounting month ranging from 30 to 130 days depending on the product and the period between the time of manufacture and final sale.

The outbreak of the COVID-19 pandemic resulted in the President declaring a national state of disaster and instituting a nation-wide lockdown with effect from Thursday, 26 March 2020. As a result, the sale of alcoholic beverages and tobacco products was first restricted and has since been prohibited.

In order tominimise cash flow difficulties for the manufacturers of alcoholic beverages and tobacco products, the revised Disaster Management Tax Relief Bill, 2020 proposes that the manufacturers in these industries continue to submit their excise duty accounts on time but that the payments due to SARS be deferred for a period of 90 days without incurring interest or penalties.

Manufacturers will qualify for such deferment provided they have no outstanding excise accounts or payments unless an arrangement has been made for such payments. The proposed deferral, as set out in the proposed amendments to Rule 19A.11 to the Customs and Excise Act No. 91 of 1964, will apply to payments due in the months of May and June and will be for a period of 90 days.

The table below provides the detail of tax deferral measures approved to date in this regard.

Table A: Tax deferral measures relating to the payment of excise duties on alcoholic beverages and tobacco products

Province

Taxpayers Approved

Amounts deferred

Gauteng

1

R546 000 000

KwaZulu Natal

1

R933 000 000

Western Cape

2

R1 073 659 864

24 August 2020 - NW1426

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Schreiber, Dr LA to ask the Minister of Finance

(1)What is the total cumulative amount of money spent on bailouts for state-owned entities since 27 April 1994; (2) whether he will provide a breakdown of the amount spent annually on bailouts for state-owned entities during each financial year since 27 April 1994; if not, why not; if so, what are the relevant details; (3) whether he will provide a breakdown of the total cumulative amount spent on bailouts for Eskom, SA Airways, Denel, the Passenger Rail Agency of South Africa, PetroSA, the SA Broadcasting Corporation, SA Post Office and Transnet since 27 April 1994; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

1. The total cumulative amount of money spent on state-owned entities (SOE)recapitalisations and bailouts from 2000/01 to 2019/20 is R187.4 billion. The information was derived from the ENE databases for the years where the classification was clearly indicated and is thus, at this stage, not available from 27 April 1994.Furthermore, National Treasury followed Standard Chart of Accounts (SCOA)[1] economic classifications in compiling the data and focused on the classification for “payment of financial assets”, this excludes indemnities, guarantees and other contingent support provided to SOEs during this time that may be interpreted as a bailout.

2. The breakdown of amounts spent annually on bailouts andrecapitalisations from 2000/01on SOEsis provided in annexure A. At this stage the information is not available dating back to 27 April 1994.

3. The breakdown of the total cumulative amount spent on bailouts and recapitalisations to Eskom, South African Airways, Denel, South African Broadcasting Corporation, South African Post office and South African Postbank from 2000/01 to 2019/20 is included in Annexure A.At this stage the information is not available dating back to 27 April 1994.

 

 


[1]Standard Chart of Accounts (SCOA) is used by departments and provinces to classify their transactions

 

24 August 2020 - NW1346

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Hill-Lewis, Mr GG to ask the Minister of Finance

(1)What total amount of the announced Covid-19 R 200 billion government-secured loan scheme has thus far been deployed by banks; (2) whether he has found the pace of the lending to be satisfactory; if not, (3) whether any design modifications are being considered to encourage banks to deploy the scheme; if not, what is the position in this regard; if so, what modifications are being considered?

Reply:

1. The latest information provided to the National Treasury by the Banking Association of South Africa (BASA) is that, as at 25 July 2020, participating South African banks have provided a cumulative R44.85 billionin total financial relief and loan guaranteesto South African businesses and individuals who are financially distressed due to the Covid-19 pandemic and national lockdown. This includes R12,79 billion in loans extended under the Covid-19 Loan Guarantee Scheme. The balance is non-guaranteed financial relief that banks have voluntarily offered to their customers, including R19,18 billionto individuals and R12,88 billion to commercial and small and medium enterprises.

2. The initial update of the Covid-19 Loan Guarantee Scheme appeared to be slow, however it should be seen within the context of the initial relief granted by the banks (debt restructuring, repayment holidays and similar relief) before the credit guarantee scheme took effect.

3. Yes, the modifications have been considered and effected on 27 July 2020. This includes a longer payment holiday (increased to a maximum of 1 year after taking out the loan and repayment over five years) and offering business “restart” loans.The previous turnover cap has been removed and replaced with a maximum amount of R100m per loan. Previously the customer had to be in good standing with their bank on 29 February 2020 and this has been moved to 31 December 2019, which allows for more businesses to access the loan. Sole proprietors are now explicitly included. No security or suretyship was required and this was further clarified to still not be a requirement. Banks may reconsider applications declined under the first phase.The press statement that was issued by National Treasury, the Banking Association of South Africa and the South African Reserve Bank on 26 July 2020 provides more details, and can be accessed on the treasury website at:http://www.treasury.gov.za/comm_media/press/2020/20200726%20Media%20statement%20-%20Updated%20Loan%20Guarantee%20Scheme.pdf

24 August 2020 - NW1337

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Brink, Mr C to ask the Minister of Finance

(1) In light of the reply of the Minister of Justice and Correctional Services to question 478 on 9 June 2020 regarding the number of prosecutions instituted and convictions secured under section 173 of the Municipal Finance Management Act (MFMA), No 56 of 2003, (a) what support does the National Treasury currently give the SA Police Service (SAPS) and the National Prosecuting Authority to and prosecute offences under the MFMA and (b) will he, on his own or in co-operation with the Minister of Cooperative Governance and Traditional Affairs, consider appointing a dedicated team of officials to assist SAPS and the National Prosecuting Authority to obtain evidence in support of prosecutions under the MFMA?

Reply:

a) The National Treasury provides support and training to both NPA and SAPS with regard to interpretation of MFMA, PFMA and related Treasury regulations through the Office of the Accountant-General (OAG). The support and training provided assistthese law enforcement agencies to develop relevant investigation plans and approaches to their cases. The OAG also provides technical expertise on the legislation and related prescripts.

b) The National Treasury already has the Specialised Audit Services unit which works in collaboration with and gives support to the law enforcement agencies on MFMA cases.

24 August 2020 - NW1336

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Brink, Mr C to ask the Minister of Finance

In respect of draft contracts published for comment by municipalities in terms of section 33 of the Municipal Finance Management Act, No 56 of 2003, in the 2018-19 municipal financial year, (a) on which draft contracts identified by the relevant municipality and/or the parties to the contract did the National Treasury give adverse comments and/or ask clarity-seeking questions, (b) what was the essential reason for the adverse comments and/or the clarity-seeking question in each case and (c) which of the specified draft contracts were subsequently concluded by the relevant municipal councils unamended and/or without answers to clarity-seeking questions by the National Treasury?

Reply:

a) Section 33 of the MFMA requires a municipality to amongst others, solicitthe views and recommendations of the National Treasury and the relevant provincial treasury. Treasuries generally reviewmatters of compliance with the MFMA, processes followed, contents of draft contracts, supply chain management, alignment of resources and future obligations, as well as processes of consultation with the public and transparency principles. Draft contracts are reviewed to advise municipalities that contract management are aligned to the provisions in terms of section 116 of the MFMA. No adverse comments were raised on any of the draft contracts received during the 2018/19 financial year.

b) There were no adverse comments on the draft contracts. Comments were more for the municipal officials and council’s consideration prior to approval.

c) We do not maintain records of contracts entered intoafter the conclusion of the comment process.No further processes were followed, since the MFMA requires such contracts to be made public on municipal websites to maintain the accountability and transparency principles.

24 August 2020 - NW1184

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Hill-Lewis, Mr GG to ask the Minister of Finance

What amount of funding did the National Treasury allocate to each province to support their responses to Covid-19?

Reply:

An initial payment to support provinces in responding to the COVID-19 pandemic was made at the end of the 2019/20 financial year (before the full magnitude of the pandemic and its impacts was known). Details of further allocations and reprioritisations for the COVID-19 response in the 2020/21 financial year will be published when the Minister of Finance tables a supplementary adjustment budget on 24 June 2020.

On 25 March 2020, National Treasury approved the release of the amounts shown in Table 1 to provinces from the 2019/20 allocation for the Provincial Disaster Relief Grant. These funds were transferred to provinces by the National Disaster Management Centre to fund the initial costs of purchasing additional personal protective equipment and other medical equipment needed by provincial health departments to respond to the pandemic.

Table 1: Provincial Disaster Relief Grant allocations, 2019/20

R'000

2019/20 allocations

Eastern Cape

44 551

Free State

12 429

Gauteng

115 996

KwaZulu-Natal

138 918

Limpopo

42 449

Mpumalanga

33 993

Northern Cape

6 224

North West

18 540

Western Cape

53 292

Total

466 392

24 August 2020 - NW1155

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Wessels, Mr W to ask the Minister of Finance

(1)Whether the National Treasury purchased any goods and/or services below the amount of R500 000 connected to the Covid-19 pandemic; if not, what is the position in this regard; if so, what (a) is the name of each company from which the specified goods and/or services were purchased, (b) is the amount of each transaction and (c) was the service and/or product that each company rendered; (2) whether there was any deviation from the standard supply chain management procedures in the specified transactions; if so, (a) why and (b) what are the relevant details in each case; (3) what were the reasons that the goods and/or services were purchased from the specified companies; (4) whether he will make a statement on the matter?

Reply:

1. The department procured the following goods and services connected to the Covid-19 pandemic.

(a)

Name of company

(b)

Amount

Method of procurement

(c)

Service and/or product that each company rendered

Lechoba Medical Technologies

R182 263.50

Three quotations

Hand sanitizers

Masana Hygiene Services

R156 302.26

Three quotations

Hand sanitizers liquid dispensers

 

R121 446.00

Three quotations

Building decontamination

 

R3 801.00

Three quotations

Building decontamination

 

R10 500.00

Three quotations

Building decontamination

Nesoscope Holdings (Pty) Ltd

R54 275.88

  1. Emergency deviation on existing contract

Surface sanitizers

MPM Enviro Enterprise

R293 250.00

Three quotations

N95 masks and latex gloves

Class Three Medical Solution

R12 128.82

Three quotations

Thermometers

Tsuamo Civils (Pty) Ltd.

R9 000.00

Three quotations

Building decontamination

 

R1 900.00

1 quotation amount below R2000.00 SCM threshold

Building decontamination

 

R75 950.00

  1. Emergency deviation memo approved

Building decontamination

 

R80 850.00

Three quotations

Building decontamination

Khulanathi Black Ginger

R135 125.00

Three quotations

Cloth masks reusable

Benixo Utility Services

R98 640.00

Three quotations

Building decontamination

Techcon Systems Pty Ltd

R332 062.50

Three quotations

Rental, supply, installation, replenishing and maintenance of foot operated hand sanitizer dispensers.

TOTAL

R1 567 494.96

   

2. Two emergency deviations were approved.

(a) Immediate sanitization of all surfaces, kitchens, utensils, door handles on regular basis to prevent infections. This was done by the incumbent service provider.

(b)The department experienced positive Covid-19 cases. The building had to be evacuated and there was an urgent need to decontaminate buildings immediately.

(3) The Department’s COVID-19 Committee established the need for the goods and services to manage and contain the spread of infections.Request for quotations were issued to various companies and lowest quotations were accepted in each instance.

(4) N/A

24 August 2020 - NW606

Profile picture: Groenewald, Mr IM

Groenewald, Mr IM to ask the Minister of Finance

(1)Whether the National Treasury monitors the maintenance of asset registers of municipalities; if not what is the position in this regard; if so, what number of municipalities in each province have (a) asset registers that are (i) up to date and (ii) not up to date and (b) no asset registers; (2) whether he will make a statement on the matter?

Reply:

1. The National Treasury monitors the submission of municipal asset registers together with the annual financial statements, each financial year.

a)  The Honourable Member to note that whilst municipalities are required to record movements of assets on an ongoing basis as part of their recording and accounting process, for acquisition, upgrading or disposal. Theseare generally checked annually, when the Annual Financial Statements are prepared. Since the introduction of Generally Recognised Accounting Practices (GRAP), we have consistently encouraged municipalities to undertake this reconciliation on an in-year basis.

b) All 257 municipalities have asset registers as they are all reporting in terms of the GRAP standards.

2. Each municipality, through the Accounting Officer, is responsible for the management, safeguarding and maintenance of assets, as contained in section 63 of the Municipal Finance Management Act (MFMA), Act 56 of 2003. To assist municipalities in complying with this provision, the National Treasury has issued frameworks, guidelines, circulars, tools and conducted training on asset management, accounting and reporting thereof. The National Treasury has also rendered additional support to municipalities on asset management. The strength of a municipality’s asset management practices (including the completeness of its asset register) is measured by the quality of the information reported in its annual financial statements, which is also audited by the Auditor-General.

24 August 2020 - NW397

Profile picture: Van Minnen, Ms BM

Van Minnen, Ms BM to ask the Minister of Finance

What remedial processes have been put in place to deal with the consecutive disclaimers in the (a) Bojanala Platinum District Municipality, (b) Ngaka Modiri Molema District Municipality, (c) Madibeng Local Municipality and (d) Mamusa Local Municipality in the North West?

Reply:

The Honourable Member to note that the National Treasury, in consultation with the Provincial Treasury, had provided support to three of the four municipalities, as required by the Municipal Finance Management Act. Support is provided to those municipalities that commit to implementing the reforms required to address the audit findings. The time required to address all of the institutional, governance, and administrative weaknesses go beyond one financial cycle.

Moreover, the full commitment of both the municipal council and its administration is required to address the negative audit findingsas the primarily responsibility and accountability resides with the municipality.

Therefore, the support included a reviewing and revision of support plans for the financial management grant programme, rendering of technical support through audit specialists, assistance in the development and reviews of audit action plans,capacity building of internal audit units, audit committees and municipal officials to address audit findings. Additional support was provided to review the draft annual financial statements, supporting audit files, correction of previous technical errors, assistance in responding to audit findings, and appropriate responses. The following details relate to the support provided to the municipalities mentioned above.

a) Bojanala Platinum District Municipality

The following support was provided:

  • Reviewed the post audit action plan and annual financial statements (AFS) preparation plan and schedule. 
  • Meetings with Management to discuss AFS preparation plan and adviceon audit preparation.
  • Reviewed interim financial statements.
  • Escalated initiatives for training to address irregular expenditure. 
  • Reviewed prior period error note on draft financial statements and submitted recommendations.
  • Advised training and capacitation of internal audit unit. 

b) Ngaka Modiri Molema District Municipality

Thefollowing support was provided:

  • Reviewed the post audit action plan and provided feedback to the municipality.
  • Advised the CFO and internal auditor on AFS readiness.
  • Reviewed and provided feedback on AFS preparation. 
  • Followed up on progress made in addressing common audit findings pertaining to roads and water services that had an impact on local municipalities in the district.
  • Supported the municipality at audit steering committee meeting with the Auditor-General  

c) Madibeng Local Municipality

The following support was provided:

  • Reviewed the post audit action plan and provided feedback to the municipality.
  • Attended audit steering committee meeting to render advice. 
  • Advised the municipality on tracking and maintaining records, and copies of documentation required for audit purposes.  

d) Mamusa Local Municipality

The National Treasury could not provide support to this municipality due to institutional instability which was referred to the province for further intervention.

In conclusion, the Honourable Member could request the Legislature to perform additional oversight, especially to all those municipalities that received a disclaimer or an adverse audit opinion, to ascertain progress made and consequence measures taken.

24 August 2020 - NW376

Mohlala, Mr M to ask the Minister of Finance

What amount has he found would the Government save if (a) Ministers, (b) Deputy Ministers, (c) Members of the Executive Council and (d) senior managers in (i) national and (ii) provincial government flew economy class when executing their official duties?

Reply:

The information provided on this response is based on data provided by SAA and BA (two of the airlines that provides Business Class Cabins in the country).

The following assumptions apply:

  1. The values are total Rand value and total number of single trips (legs) for calendar year 2019.
  2. The values include all government institutions that uses the government deal codes as per the National Treasury’s centrally negotiated discount rates (including Parliament).
  3. The data provided was not provided per individual (compliance to POPI Act), hence only total amounts are used.
  4. The values exclude other domestic and international airlines. The data is not readily available.
  5. SAA Economy class Average Price per Ticketwas calculated based on the average price of full Y-class tickets on all the routes. (R6181.00)
  6. The values are exclusive of airport taxes and inclusive of VAT

Observations

If all Business Class tickets for 2019 were to be converted to Full Y Economy class tickets, on the two mentioned airlines only, Government could have saved R12 672 956.

 

COST ANALYSIS FOR FLYING BUSINESS CLASS COMPARED TO ECONOMY CLASS

 

British Airways

South African Airways

 

Total cost (2019)

Total # Legs

Average price per ticket per leg

Total cost (2019)

Total # Legs

Average price per ticket per leg

Business Class

R23 676 021

8967

R2 640

R83 320 961

12873

R6 473

Economy Class (Full Y)

R53 511 915

32509

R1 646

*

*

R6 181

Difference between Business Class and Economy class ticket

 

 

R994

 

 

R292

Estimated saving per Airline

 

 

R8 915 759

 

 

R3 757 196

Total Estimated Saving

R12 672 956

 

Notes:

 

 

 

 

 

 

* Not provided

 

 

 

 

 

Conclusion

The pronouncement made by Minister of Finance to cut Business Class travel will yield the desired outcome.

24 August 2020 - NW303

Profile picture: Lees, Mr RA

Lees, Mr RA to ask the Minister of Finance

(1)With reference to the report by the Office of the Auditor-General on 25 February 2020 to the Standing Committee on Public Accountsregarding a R1,1 billion loan from the Public Investment Corporation (PIC) to the Madibeng Local Municipality in the North West, what (a) are the details of the due diligence measures that the PIC took when considering the application to grant the loan, (b) was the purpose of the loan, (c) is the interest rate that will be paid on the loan and (d) are the loan repayment (i) dates and (ii) amounts, (2) whether the municipality will be able to meet all interest and capital repayments; (3) what are the details of all conditions attached to the loan; (4) what are the reasons given by the Madibeng Local Municipality for not repaying the loan and interest; (5) what are the details of the (a) court orders obtained by the PIC to force the specified municipality to pay the interest and capital amounts due to the PIC and (b) action taken by the National Treasury to ensure that the interest payments and capital repayment obligations are adhered to by the specified municipality?

Reply:

(1)(a) There are no details available of the due diligence measures that were taken at the time of the transaction. The transaction was concluded on 11 January 1994 by the then Public Investment Commissioners.

(1)(b) The purpose of the loan was to assist Madibeng Local Municipality (Madibeng) with the repayment of a number of short-term loans.

(1)(c) The current matter relates to the remaining three Coupon Certificates (others were settled), and their respective numbers are BR20, BR25 and BR26. The interest rate on BR20 was 13.29%; BR25 was 12.47% and BR26 was 12.47%. The PIC waived the respective interest rates and charged a flat interest rate of 10% in respect of each certificate.

(1)(d) The loan repayment dates and amounts are as follows:

  • BR20 – 30 November 2003 – R37 million
  • BR25 – 30 June 2003 – R83 million
  • BR26 – 30 November 2003 – R87 million

(2) Madibeng will be in a better position to reply to this question, however, they have and continue to make provision for this debt in their financial staments and have not pleaded that they will not be able to repay the PIC. The PIC also made an offer to the Municipality to effect the payment over a period of time, which they declined.

(3) Yield to maturity; final yield on redemption dates; repayment to be effected at par on the redemption date on each certificate.

(4) The reasons are all of a technical nature. Madibeng admitted that they have received the loan amounts and that they owe the money to the PIC. However, they first raised a technical point that they were not authorised to raise the loan and issue the certificates. When they lost on this point, they appealed to the Supreme Court of Appeal (SCA) where they lost the appeal as well. The matter was remitted to the Court of First Instance for hearing on the merits and the quantum. Madibeng raised another technical point that the debt has prescribed. They lost again and have once more appealed to the SCA . PIC is currently awaiting for a hearing date from the SCA.

(5)(a) The current Court Order, which Madibeng is appealing, is for payment of the sum of R162,639,962,00 plus interest at the reduced rate of 10% per annum. This is after taking into consideration the payments that Madibeng effected after summons was issued.

(5)(b) National Treasury will be in a better position to reply to this question.

24 August 2020 - NW115

Profile picture: Shaik Emam, Mr AM

Shaik Emam, Mr AM to ask the Minister of Finance

What measures does he intend to put in place regarding the mass looting that takes place in the Government’s supply chain processes which results in billions that are lost annually?

Reply:

1. The review of the existing procurement regulatory framework through the Public Procurement Bill is a measure that will be put in place to prevent the mass looting that takes place in the Government’s supply chain management processes. The Draft Public Procurement Bill makes the following provisions:

  • A directive to all Accounting Officers and Accounting Authorities on what measures to put in place within their respective institutions to prevent the abuse of the supply chain management system;
  • A chapter on procurement integrity which outlines code of conduct for officials, bidders and suppliers, including measures for handling any contravention of the code of conduct; and
  • That institutions must ensure that all planned procurement is aligned to the institution’s budget and plan.

2. The National Treasury, furthermore, proposed to the DPSA, the following Key Government Focus Areas (KGFA) and Key Focus Area Activities (KFAA) to be included in the Performance Agreements of Head of Departments:

Key government focus areas: Supply Chain Management System

KGFA

KFAA[1]

Suggested Weight

Target Date

Indicator/Target

Baseline Data

Develop and implement effective and efficient supply chain management system

Elimination of wasteful and fruitless expenditure

20%

Annual

70% elimination of wasteful and fruitless expenditure from baseline 2019 [2]

2018 Baseline

 

Reduction of irregular expenditure

20%

Annual

65% reduction of irregular expenditure from baseline 2019[3]

2018 Baseline

 

Reduction of qualified audits

20%

Annual

Unqualified audit opinion with 25% fewer findings than 2019/20[4]

2018 Baseline

 

Ensure that procurement planning is managed

15%

Annual

The finalisation of tender awards within an average of 100 days

Average number of days to award tenders

 

Ensure that SCM risk management is performed

5%

Annual

Risk response plans for the top 5 SCM risks developed

Risk response mitigation plans

 

Ensure that the department pays all compliant supplier invoices within 30 days of receipt of invoice

20%

Annual

100% of compliant supplier invoices paid within 30 days of receipt of invoice

Average supplier payment days

  1. All KFAAs are compulsory

  2. This indicator should be incremental so that by 2024/2025 the target is 100% elimination

  3. This indicator should be incremental so that by 2024/2025 the target is 75% elimination

  4. This indicator should be incremental so that by 2024/2025 the target is Clean Audit

24 August 2020 - NW72

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

What is the position of the Board of Trustees of the Government Employees Pension Fund on the proposals by the Congress of South African Trade Unions, which are alleged to be supported by the Minister of Public Enterprises, to commandeer R254 billion in funds from the Government Employees Pension Fund for the purposes of writing down Eskom’s debt?

Reply:

The GEPF has not received the proposal by the Congress of South African Trade Unionsfor consideration to write down Eskom debt.

24 August 2020 - NW1210

Profile picture: Joseph, Mr D

Joseph, Mr D to ask the Minister of Finance

(1)What are the details of the mismanagement case that was mentioned during the presentation made by the Land Bank to the Standing Committee on Appropriations on 20 May 2020; (2) whether the mismanagement case was brought to the attention of the (a) board, (b) chief executive officer, (c) chief financial officer and (d) Standing Committee on Public Accounts (SCOPA); if not, why not in each case; if so, what are the relevant details in each case; (3) (a) in which financial year did the mismanagement incident take place and (b) what was the financial impact in respect of monetary value, equipment and/or land; (4) were any of the Land Bank officials involved in any manner; if so, what are the relevant details; (5) by what date will Parliament, the Portfolio Committee on Finance and SCOPA receive the final report?

Reply:

We have no recollection of mention being made during the briefing by a representative of the Bank of any instance of mismanagement. What we are able to confirm is that the Chairman of the Board, Mr. Moloto, did say, in response to a suggestion that the Bank’s liquidity challenges may have been attributable to corruption, that the Land Bank prides itself on the governance processes in place and that in the face of any corporate governance lapses, the Board does not hesitate to take disciplinary action and dismiss individuals where necessary. He emphasised that the Land Bank prides itself in maintaining the highest ethical standards.

We would much appreciate it if you could furnish us with specifics as to what may have been said by representatives of the Land Bank which led to this enquiry so that we can accurately respond to the question.

24 August 2020 - NW1310

Profile picture: Groenewald, Mr IM

Groenewald, Mr IM to ask the Minister of Finance

(1)Whether, with reference to the negative economic impact of the Covid-19 pandemic on communities at large, the National Treasury is considering measures to assist municipal ratepayers and/or recommending any prescripts for municipalities to this effect; (2) whether he will make a statement on the matter?

Reply:

1. National Treasury does not recommend that municipalities provide relief from property rates beyond what is already provided for in existing municipal policies (such as exemptions for indigent households). Municipalities face lower revenues due to a combination of lower demand for services such as electricity and water, and significantly higher non-payment rates for municipal bills. At the same time, they are faced with additional costs in responding to the pandemic. This would not be an appropriate time for municipalities to reduce their property rates.

2. The Supplementary Budget Review tabled on 24 June 2020 discussed the decline in municipal revenue collection and noted that, “The extent to which municipal bills are paid in the months ahead will depend on the duration of restrictions on economic activity, the pace of recovery and the application of revenue collection measures.” No further statements on municipal revenue collections as they relate to the COVID-19 pandemic are planned at this stage.

24 August 2020 - NW1290

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Brink, Mr C to ask the Minister of Finance

(1)In light of the judgment of the Eastern Cape High Court in the case of Blue Nightingale Trading 397 (Pty) Ltd t/a Siyenza Group v Amathole District Municipality (ECD 1681/15) on the proper interpretation of section 110 of the Municipal Finance Management Act (MFMA), Act 56 of 2003, read together with Regulation 32 of the MFMA: Supply Chain Management Regulations, what measures has he taken, alone or in collaboration with other Ministers, to ensure that municipalities and organs of State doing business with municipalities, comply with the specified provisions when purporting to procure goods and services under a contract secured by another organ of State; (2) whether he has been informed of any contracts concluded under these provisions afterthe Blue Nightingale judgment, that did not or do not rely on the MFMA section 110 as well as Regulation 32 of the MFMA; if so, what are the relevant details in each case?

Reply:

1. It is important to highlight that there was no relief sought against the Minister of Finance or that a finding was made against the Minister of Finance or the Regulations as administered by the Minister of Finance. After the Blue Nightingale judgement, two similar judgements were made against KwaDukuza and Mamusa Municipalities. National Treasury assessed the application of Regulation 32 by various municipalities and deemed it necessary to issue a Circular to elaborate on the principles captured in regulation 32. The Circular is available on the National Treasury website as Circular No.96 under MFMA Circulars. The Circular considered the principles in the Blue Nightingale and KwaDukuza judgements.

2. In terms of Circular No. 96, the accounting officer of the participating municipality or municipal entity must utilise the process of reporting as contained in SCM regulation 6, to also include any procurement through SCM regulation 32. The treasuries may request further information in terms of section 74 of the MFMA. The participating accounting officer must also publish the details of the participation contract award on the municipality or municipal entity’s official website in line with section 75 of the MFMA. Therefore, this information is in the public domain, however, there is no specific obligation placed on the municipality or municipal entity to report to the National Treasury or the Minister of Finance with regards to these provisions.

24 August 2020 - NW1772

Profile picture: Opperman, Ms G

Opperman, Ms G to ask the Minister of Finance

(1)Whether he has found that municipalities who are currently and/or were previously under section 139 administration are now better off than they were previously with regard to the purpose of the specified intervention; if not, what is the position in this regard; if so, did the intervention by the National Treasury solve the problem; (2) whether he will furnish Mrs G Opperman with a detailed progress report regarding municipalities that were under the administration of the National Treasury?

Reply:

1. Interventions in terms of S139 of the Constitution are invoked by the Provincial Executive and not directly by any National Government department, unless, there is a failure by the Provincial Executive to act, then the National Executive may intervene in terms of Section 139(7) of the Constitution. This subsection however, is not applicable to all interventions in terms of S139 of the Constitution.

Research into the efficacy of S139 interventions undertaken by the Public Affairs Research Institute on behalf of the National Treasury in 2018, showed that S139(1) interventions often fail to achieve their intended outcomes for a number of reasons. Amongst others, these reasons include, that interventions are often invoked using the wrong subsection of S139. In this regard, where there is clear evidence of a financial crisis and for which a mandatory intervention in terms of S139(5) is required, the Province elects to invoke a S139(1) intervention which is discretionary in nature and intended to remedy a failure to fulfil an executive obligation. The constant practice of “mismatching” interventions and problems results in failed outcomes.

Interventions, are also invoked too late, well after municipal failure is a fait accompli and are terminated too early before the intervention has dealt with all dimensions of the problem. The use of an administrator has also been found to have little effect on improving outcomes. Administrators should firstly only be appointed upon dissolution of Council; most administrators lack requisite qualifications thus incapable of solving municipal problems singlehandedly. Even where administrators may be competent and suitably qualified, a further impediment to successful outcomes are the threats that are often made by corrupt and unethical official and local politicians on the administrator’s lives.

Other reasons for failure include municipal officials who are often unwilling to cooperate with the intervention teams, the terms of reference for the administrator are often not specified upfront making it difficult to determine whether or not the objectives of the interventions were attained, the interventions generally lacked substantive-ness and in many cases the root cause of the problem is never dealt with adequately. A number of municipalities met the criteria for S139(5) – financial crisis intervention - but these interventions are seldom invoked by Provincial Executives.

In summary, the history of interventions to date point to a number of failures – people, process, political, timing related and therefore interventions have not been successful in addressing municipal dysfunction. However, the experience of the Oudtshoorn Municipality in the Western Cape is an exception in this regard and is due to a concerted effort on the part of senior managers in the municipality to repair the institution.

No intervention in terms of S139(7) of the Constitution has been invoked yet and therefore National Treasury has not had the mandate to intervene directly in a municipality.

2. As indicated in the above response, S139 interventions are invoked by the Provincial Executive and records of interventions of these interventions should be maintained nationally by the Department of Cooperative Governance. National Treasury does not have detailed records of these interventions but can furnish copies of financial recovery plans prepared for those municipalities where the Municipal Finance Recovery Service unit has rendered assistance in this regard. We will provide copies upon request of all active financial recovery plans that the MFRS unit is currently monitoring on a monthly basis.

24 August 2020 - NW1537

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

Whether, with reference to the announcement by the Member of the Executive Council for Health in KwaZulu-Natal on 2 June 2020 that the province had received an additional R1,5 billion allocation from the Government for the quarantine and isolation site that the province established at the Clairwood Hospital in Durban, any other province has received any similar additional allocations from the Government; if not, why not; if so, what are the relevant details in each case?

Reply:

  • In terms of Treasury Regulations section 6.6.3, the relevant Provincial Treasury must table an adjustments budget within 30 days of the tabling of the National Adjustments Budget. Therefore, Provinces have until the 24thJuly 2020 to table their adjustments budget, and the requested information will only be available then. This information should be obtained directly from Provinces as the responsibility to determine specific provincial allocations for quarantine and isolation sites vest with each province in terms of their own budget determination processes.

24 August 2020 - NW1508

Profile picture: Brink, Mr C

Brink, Mr C to ask the Minister of Finance

(1)Whether he has been informed about the letter that was allegedly written by an official of the National Treasury to the SA Local Government Association (Salga) requesting Salga to apply on behalf of municipalities for exemption from annual salary increases for municipal officials in light of the adverse financial impact of the Covid-19 pandemic (details furnished); if not, what is the position in this regard; if so, (2) whether the National Treasury sent the specified letter and/or a substantially similar request to Salga; if not, what is the position in this regard; if so, (a) what are the relevant details and (b) will he furnish Mr C Brink with a copy of Salga’s reply; (3) whether he alone and/or in conjunction with other Ministers have taken any further action to persuade municipalities to apply for such an exemption; if not, what is the position in this regard; if so, what are the further relevant details?

Reply:

1. The Director-General of the National Treasury wrote to SALGA on 10 May 2020 and noted that “In terms of the South African Local Government Bargaining Council circular number 02/2020, dated 6 March 2020, the salary and wage increase in terms of sections 6.6 and 6.8 of the Collective Agreement will be 6.25 per cent from 1 July 2020. Clearly, this is no longer affordable considering the current economic environment. The local government collective agreement further provides, in Clause 11, for applications for exemptions from any provision of the collective agreement should the agreement be unaffordable or in cases of unexpected economic hardship.” The Director-General then said that, “It is National Treasury’s view that SALGA should urgently lodge an application for exemption on behalf of all municipalities who are party to the agreement to allow for consideration before the municipal financial year commences. The specific provisions from which the municipalities should be exempted should be agreed with affected municipalities.”

(2)(a) The letter was sent to SALGA on 10 May 2020. SALGA took up the issue in the South African Local Government Bargaining Council (SALGBC) and National Treasury was subsequently invited to provide a briefing to the SALGBCon 17 June 2020. National Treasury provided the briefing as requested.

3. SALGA is the employer representative in the SALGBC and are taking the issue forward through that structure. National Treasury respects the process in the SALGBCand has no role in the process unless we are requested to provide further information or support.