Questions & Replies: Finance
2011-04-04
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QUESTION NUMBER 3850 [NW4641E]
DATE OF PUBLICATION: 25 NOVEMBER 2011
Mr I O Davidson (DA) to ask the Minister of Finance:
(1) Whether he will reply to (a) all outstanding parliamentary questions and (b) the points contained in each question before parliamentary questions lapse in accordance with Rule 316 of the National Assembly; if not, in each specified case, (i) why not and (ii) which questions, by its allocated number, will not be replied to; if so, what are the relevant details in each case;
(2) whether it is the policy of his Ministry that he submit to the mechanism of parliamentary questions as a measure of constitutional accountability to the National Assembly; if not, why not; if so, what are the relevant details? NW4641E
REPLY:
(1) Yes, my intention is to reply to (a) all outstanding parliamentary questions and (b) the points contained in each question before parliamentary questions lapse in accordance with Rule 316 of the National Assembly.
(2) It is indeed the policy of my Ministry to submit to the mechanism of parliamentary questions as a measure of constitutional accountability to the National Assembly.
QUESTION NUMBER: 3818 [NW4609E]
DATE OF PUBLICATION: 25 NOVEMBER 2011
Mr T D Harris (DA) to ask the Minister of Finance:
Whether any other persons have driven (a) his and (b) his Deputy Minister's official blue light fitted vehicles; if not, what is the position in this regard; if so, in each case, in respect of the (i) 2009-10 and (ii) 2010-11 financial years, (aa) what is each specified person's (aaa) name and (bbb) designation, (bb) which vehicle and (cc) why? NW4609E
REPLY:
No. The Minister and Deputy Minister adhere to the guidelines as set out in the Ministerial handbook.
QUESTION NUMBER 3772 [NW4563E]
DATE OF PUBLICATION: 25 NOVEMBER 2011
Mr. J R B Lorimer (DA) to ask the Minister of Finance:
Whether, with reference to the section entitled Economic Impact modelling in the Green
Paper on National Health Insurance (NHI) that refers to a draft report by the National
Treasury, this report will be made available to the public; if not, why not; if so, (a) when
and (b) where?
NW4563E
REPLY:
The Green Paper on National Health Insurance refers to a draft report which tests
various unofficial funding options. The National Treasury will publish the report once the
various funding options have been finalised and the report has been updated.
QUESTION NUMBER 3708 [NW4489E]
DATE OF PUBLICATION: 25 NOVEMBER 2011
Mr A M Mpontshane (IFP) to ask the Minister of Finance:
(1) Whether any officials in the National Treasury (a) have been investigated, (b) are currently under investigation and (c) have been charged for alleged (i) corrupt or (ii) fraudulent activity; if so, what are the relevant details;
(2) whether any disciplinary action has been taken against employees of the National Treasury for (a) fraud and/or (b) corruption; if so, (i) how many instances of disciplinary actions have (aa) been finalised and (bb) not been finalised and (ii) in each case, (aa) what sanctions have been meted out and (bb) how long has it taken to finalise such disciplinary actions;
(3) whether he has found that the National Treasury has adequate investigative capacity inclusive of manpower and infrastructure in respect of disciplinary proceedings; if not, why not; if so, what are the relevant details? NW4489E
REPLY:
(1) (a) Yes.
(b) Yes.
| 1 (a) | 1 (c) i + ii | 1 (c) i + ii |
| Investigated | 4 employees |
|
| 1 (b) | ||
| Currently under investigation | 2 employees | Both current investigations relate to corruption in the procurement process. |
(2) (a+b)
Yes, disciplinary action has been taken against an employee for fraud and corruption.
(i) (aa) None
(bb) One
(ii) (aa) The disciplinary process is currently being finalised. Relevant sanctions will be meted out based on the finalised outcomes.
(bb) The disciplinary process has taken 7 months to finalise due to valid postponements by the accused and the need to re-appoint the presiding officer following the original presiding officer passing away.
Yes, the National Treasury has forensic investigative capacity. The current capacity is limited to the Department's Internal Audit and Enterprise Risk and Security Management units, however where necessary, investigations are either forwarded to the Department's Specialised Audit Services Unit or in exceptional circumstance, outsourced to external service providers.
QUESTION NUMBER 3639 [NW4420E]
DATE OF PUBLICATION: 18 NOVEMBER 2011
Mr N J J van R Koornhof (COPE) to ask the Minister of Finance:
Whether the National Treasury is in the process of revising the salaries paid to all Chief
Executive Officers of entities operating under the auspices of the National Treasury, including
the SA Reserve Bank, by adjusting it downwards to assist with savings and the wage bill of the
State; if not, why not; if so, what are the relevant details?
NW4420E
REPLY:
All entities have been advised to exercise the appropriate prudence. The SA Reserve Bank has
a committee of its Board which sets the salaries and benefits.
QUESTION NUMBER 3578 [NW4351E]
DATE OF PUBLICATION: 18 NOVEMBER 2011
Mr S J F Marais (DA) to ask the Minister of Finance:
(1) Whether, with reference to the Walmart/Massmart merger, foreign direct investment (FDI) is welcomed by the Government; if not, why not; if so,
(2) whether the Government intends to dispel the alleged perception that South Africa will not block FDI; if not, why not; if so, what steps does the Government intend to take to ensure that there is no interference in the said transaction?
REPLY:
South Africa has seen significant FDI inflows in the recent past in the manufacturing sector, mining and of course in the wholesale/retail sector (Wal-Mart / Massmart merger). These constitute a vote of confidence by foreign investors in the Government's stance on FDI. The sharp decline in FDI observed in 2009 during the global financial and economic crisis was consistent with global trends and the global slowdown in cross-border corporate investment activity and is therefore not indicative of a reversal in FDI flows to South Africa. Government will continue to strive to attract FDI and will continue to encourage new inflows of foreign capital, while safeguarding public interest related to cross-border acquisitions.
In February 2011, the National Treasury published a discussion document titled "A review framework for cross-border investment in South Africa". After receiving public comments on the discussion paper, Cabinet has approved the need for consistency in investment policy across government and certainty for investors entering into such transactions. Cabinet has therefore approved that the Minister of Finance lead the work to set up such a framework for cross-border acquisitions of existing South African businesses.
In addition to the above, government will continue to:
- Support Trade and Investment South Africa's efforts to assist investors with the problems they encounter;
- Have open discussions with investors;
- Undertake investor road shows to market South Africa as a FDI destination of choice.
QUESTION NUMBER 3547 [NW4252E]
DATE OF PUBLICATION:
Ms A M Dreyer (DA) to ask the Minister of Finance:
With reference to the findings of the Auditor-General on progress in audit
outcomes of all national departments and entities reporting to them in the (a)
2008-09, (b) 2009-10 and (c) 2010-11 financial years, (i) why has the number of
departments which have received unqualified reports with no findings, decreased
over this period, (ii) what steps have been taken against departments and/or
entities whose financial management have deteriorated and who have received
disclaimers for the first time in the three-year period and (iii) what are the relevant
details regarding the increase in irregular expenditure for departments and
entities from R13 billion in the 2009-10 financial year to R21,1 billion in the 2010-
11 financial year?
NW4252E
REPLY:
i) An analysis of the Auditor-General's General Report on Audit Outcomes
reveals that the negative audit outcomes are largely the result of findings
related to Leadership, Financial and Performance Management and
Governance. With regard to Leadership, it was found that chief financial
officers in many departments do not have the appropriate skills to perform
adequately whilst many of their support personnel were not adequately
trained in respect of financial management and accounting skills. There
was therefore a significant reliance on consultants for the preparation of
annual financial statements in such departments.
On matters related to Financial and Performance Management, there is
evidence of poor record keeping, inadequate processing and
reconciliation controls whilst problems around Governance include
ineffective internal audit units and audit committees.
ii) A regression in audit outcomes to the extent that a department obtains a
disclaimer is always cause for concern. In such instances, the National
Treasury prioritizes assistance to such departments through interventions
agreed in a strategic support plan entered into between the accounting
officer and the Accountant-General. Such a plan contains specific
interventions that the department commits to undertake and the National
Treasury commits similarly to initiatives that will be undertaken to assist
the department rectify the concerns raised by the Auditor-General.
iii) An analysis of audit reports also reveals that the significant increase in
irregular expenditure is the result of departments not adhering to the
supply chain management prescripts and departments not amending
departmental procedures with the contents of National Treasury
practice/instruction notes resulting in implementing personnel not being
aware of any changes. There are also instances where management
knowingly over-rides prescripts.
QUESTION NUMBER: 3541 [NW4246E]
DATE OF PUBLICATION: 11 NOVEMBER 2011
Dr D T George (DA) to ask the Minister of Finance:
(1) Whether the Government intends supporting the establishment of the proposed
Solidarity Tobacco Contribution (STC) fund; if not, why not; if so, what are the
relevant details;
(2) whether the Government intends contributing to the fund; if not, why not; if so, what
are the relevant details of the contribution?
NW4246E
REPLY:
(1) The Solidarity Tobacco Contribution (STC) Fund is a proposal arising from a proposal
made by Mr Bill Gates on innovative finance measures and submitted to the G2O
Ministers at their meeting of 3 to 4 November 2011. The G20 meeting welcomed the
Bill Gates proposals in recognition of the "importance of the involvement of all actors,
both public and private, and the mobilisation of domestic, external and innovative
sources of finance". The G20 agreed that, over time, "new sources of funding need to
be found to address development needs". While the G20 acknowledged the
initiatives in some countries to explore or implement some of these options, no
agreement has been reached on how to proceed with the proposals. As a member
country, South Africa will assess the proposals put forward by Mr Gates, which in
addition to the STC also proposes a Financial Transaction Tax (FTT), diaspora
bonds, taxation of bunker fuels, etc.
(2) Not applicable.
QUESTION NUMBER 3534[NW4238E]
DATE OF PUBLICATION: 11 NOVEMBER 2011
Mr M Swart (DA) to ask the Minister of Finance:
What steps is the National Treasury taking to assist the 278 municipalities which are owed R62.3 billion in outstanding debts? NW4238E
REPLY:
The reported R62.3 billion in outstanding debts has been analysed by National Treasury.
It has been concluded that:
a) Some debts are recoverable and National Treasury is helping municipalities to recover this debt. National Treasury puts pressure on entities / organs of the state that owe municipalities money by emphasizing to them the legal / regulatory requirements which oblige them to pay bills on time;
b) Municipalities must begin to take steps to write-off debts which have been identified as unrecoverable;
c) Municipalities categorise debt into government, business and residential debt.
National Treasury is assisting municipalities to collect government debt while municipalities are going ahead with the necessary steps to recover debt from other users; and
d) National Treasury is working closely with municipalities to ensure that they improve their billing processes to avoid recurrence of debt accumulation.
QUESTION FOR WRITTEN REPLY
QUESTION NUMBER 3533 [NW4237E]
DATE OF PUBLICATION: 11 NOVEMBER 2011
Mr M Swart (DA) to ask the Minister of Finance:
Whether he intends introducing a zero-based budgeting process in order to prevent the
inflation of current budgets through the calculation of percentages; if not, why not; if so,
what are the relevant details?
NW4237E
REPLY:
A zero-based budgeting process for the whole of government is not proposed in the
present circumstances. International experience indicates that the overload of
information and complexity of zero-based budgeting make it impractical. However, indepth
analysis of departmental budget baselines is conducted annually where nonrecurrent
allocations are removed from baselines prior to consideration of increases or
decreases. The aim is not only to focus on costing of programmes, but to encourage
departments to constantly review their budget baselines and make the necessary tradeoffs
between different ways of delivering on programmes within limited resources.
Departments are expected to conduct zero-based budgeting for new
programmes/projects or initiatives, and in periodic reviews of existing programmes.
QUESTION NUMBER: 3516 [NW4216E]
DATE OF PUBLICATION: 11 NOVEMBER 2011
Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:
How his department intend to ensure accountability after the fact, when financial
regulators are afforded the right to override normal legislation to deal with emergency
situations that may arise in the economy or financial services sector as proposed by
the twin peaks model of financial regulation?
NW4216E
REPLY:
The legislation establishing new financial sector regulatory framework is still being
developed and will be brought to Parliament after the necessary technical research is
completed over the next two years. Even when such legislation is enacted, all the
powers of regulators will form part of the legislation, as well as the accountability
mechanisms that will apply. No regulators can act outside the law, so there is no
override of any legislation that may apply. Where certain more general legislation does
not apply to the financial sector, this will also be legislated for. This would usually arise
from higher standards pertain to the financial sector. Current legislation already
provides for extraordinary powers to some of the regulators (such as the banking
regulator in the event when a bank experiences solvency problems). To the extent that
there are any gaps in the powers of regulators that need to be dealt with urgently, I
intend to introduce transitional legislation early next year to fill such gaps. This will be
achieved by amending current legislation.
QUESTION NO: 3503
Mrs. G M Borman (ANC) to ask the Minister of Human
Settlements:
The Minister received a parliamentary question from a member of
parliament Mrs. G M Borman (ANC) who enquires about costs,
funding arrangements and outcomes of the departmental Human
Settlements Vision 2030 Indaba, held on the 3 and 4 October
2011 in Port Elizabeth.
REPLY
1(i) The calculation of the total cost incurred by the Department
of Human Settlements for the Vision 2030 Indaba is still in
process of being finalized based on the reconciliation of
payments made.
(b) (i) The Department extended invitations to three hundred
(300) people.
7
(ii) Two hundred and forty (240) delegates attended.
(c) The Indaba succeeded in bringing together a wide range of
stakeholders involved in the following categories:
• Civil society
• Banking Sector
• Government
• Contractors
• Portfolio Committee on Human Settlements
• SALGA etc
• Youth formations
• Women formations
• Disability formations
• Political formations
(d) The Department circulated the Indaba invitation, In good
time prior to the event, to all its stakeholders.
(2) The cost of the Indaba was funded by the Department of
Human Settlements.
8
(3) The Human Settlements Indaba achieved the intended
outcomes centered the advancement of the Human
Settlements strategies regarding 2030 Vision.
QUESTION NUMBER 3490 [NW4164E]
DATE OF PUBLICATION: 11 NOVEMBER 2011
Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:
How many South African bonds were (a) offered and (b) bought by foreign investors in (i) September and (ii) October 2011?
NW4164E
REPLY:
The total amount of bonds issued by the national government in September and October 2011 amounts to R12.1 billion and R13.0 billion, respectively. Local investors purchased the entire amount of R12.1 billion on offer during September 2011. Foreigners were for the first time during the 2011/12 fiscal year net sellers of Government Bonds during September 2011. However, in October 2011, foreign investors purchased R8.3 billion worth of government bonds, bringing their total purchases since April 2011 to R52 billion.
QUESTION NUMBER 3480 [NW4154E] DATE OF PUBLICATION:
Mr G B D McIntosh (Cope) to ask the Minister of Finance:
(1) What (a) has been the trend and (b) total amount of foreign direct investment inflows (FDls) (i) in the (aa) 2008-09, (bb) 2009-10 and (cc) 2010-11 financial years and (ii) during the period 1 April 2011 up to the latest specified date for which information is available;
(2) whether he has found that the Walmart / Massmart transaction has affected the levels of FDI inflows; if not, what is the position in this regard; if so, what are the relevant details?
(1) Foreign direct investment (FDI) inflows into South Africa tend to be lumpy and vary significantly from year to year, as they tend to be dominated by acquisitions and are affected by global trends. Actual FDI data is published regularly in the South African Reserve Bank Quarterly Bulletin, and the Information below Is sourced from various editions of the Bulletin.
(1.i.aa) Net FDI inflows into South Africa reached an all-time high of R83.9 billion in 2007/08, boosted by the Industrial and Commercial bank of China's acquisition of a 20 per cent stake in Standard Bank for US$5.5bn. In 2008/09, during the global financial and economic crisis, South Africa experienced a sharp decline in net FDI inflows, which declined by 57 per cent to R36.1 billion. This was consistent with global trends and the global slowdown in cross-border corporate investment activity.
(1.i.bb) FDI inflows increased in 2009 / 2010, rising by 11 per cent to R40 billion, with a large proportion of inflows invested into the telecommunications sector.
(1.i.cc) Inflows declined sharply in 2010/ 11, falling by 67 per cent to R13.2 billion. According to the South African Reserve Bank, the significantly smaller FDI inflow in 2010/11 reflected .some degree of uncertainty regarding the global economic recovery, domestic economic fundamentals and the long-term outlook for the domestic economy" (SARB Quarterly Bulletin, March 201" pp 29).
(1.ii) In the first quarter of the 2011/12 (ie. 1 April 2011 to 30 June 2011) net FDI inflows totalled R12.3 billion. Inflows were directed to the domestic wholesale and retail trade, mining and manufacturing sectors. This includes the Walmart / Massmart merger, in which Walmart has acquired 51 per cent of Massmart for approximately R16.5 billion.'
(2.) It is too soon to consider whether (or how) the Walmart/Massmart merger will impact the levels of future FDI inflows into South Africa. The National Treasury recognises the importance of certainty for mergers and acquisitions in sectors considered to be strategic and in February 2011 published a discussion document titled "A review framework for cross-border investment in South Africa".
After receiving public comments on the discussion paper, Cabinet has approved the need for consistency in investment policy across government and certainty for investors entering into such transactions. Cabinet has therefore approved that the Minister of Finance lead the work to set up such a framework for cross-border acquisitions of existing South African businesses.
‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑_
1.The quarterly total of R12.3 billion is below the value of the Wnlmm1iMassrnart merger because a United Kingdom based company sold its equity stake in a South African company operating in the finance , insurance, real estate, and business services sector.
QUESTION NUMBER 3421 [NW4107E]
DATE OF PUBLICATION: 4 NOVEMBER 2011
Mr I O Davidson (DA) to ask the Minister of Finance:
(1) (a) How many copies of each annual report that was produced by (i) the National Treasury and (ii) the entities reporting to him were commissioned for print in the 2010-11 financial year, (b) how many copies were actually printed and (c) what were the (i) total and (ii) individual costs involved of printing these reports;
(2) (a) who printed each specified report, (b) how was the specified printer decided upon and (c) on what date did the specified printer deliver the report to the specified entity;
(3) whether any of the specified reports that had been printed were found to be unsatisfactory; if not, what is the position in this regard; if so, in each case, (a) which reports, (b) for which entity, (c) by which printer, (d) what action was taken and (e) what were the costs involved? NW4107E
REPLY
Please find it here: www.pmg.org.za/questions/RNW3421-table2011.pdf
QUESTION NUMBER 3392 [NW4071E]
DATE OF PUBLICATION: 4 NOVEMBER 2011
Dr D T George (DA) to ask the Minister of Finance:
Whether the Financial Services Board retains statistics on the (a) number of death claims submitted for processing by insurance companies and (b) reasons why these claims are (aa) outstanding and (bb) outstanding pending receipt of pathology reports and (ii) what are the (aa) reasons for these claims being outstanding and (bb) further relevant details in each case?
REPLY
(a) In terms of the Long-term Insurance Act, 1998 {Act No. 52 of 1998) all registered long-term insurance companies are required to submit unaudited prescribed quarterly returns and audited prescribed annual statutory returns.
In respect of the unaudited quarterly returns the long-term insurers are required to provide the Financial Services Board ('FSB") with the total amount of claims paid and the total amount of outstanding claims for the reporting period. The quarterly returns do not contain details of paid and outstanding claims relating to death claims specifically.
In terms of the audited annual statutory returns the long-term insurers are required to provide the FSB with the total amount of claims paid and outstanding in respect of death for different types of business i.e investments, risk, annuities and universal life on both a gross and net of reinsurance basis for individual and group policies. Long term insurers are further required to provide information on the movement in the number of in-force policies on their books from one period to the next. Within that number they are required to indicate the number of policies that ended and are no longer in-force due to death benefits that were paid.
(b) The returns do not call for any further details on the outstanding death claims nor the reasons as to why these death claims have not been paid or settled.
(aa) See (a) and (b) above.
(bb) See (a) and (b) above.
(ii) (aa) See (a) and (b) above.
(bb) See (a) and (b) above.
QUESTION 3367 FOR WRITTEN REPLY
QUESTION NUMBER PQ 3367 [NW3752E] DATE OF PUBLICATION: 4 NOVEMBER 2011
Mr M H Hoosen (ID) to ask the Minister of Finance:
What amount in orders has been placed, with each specified travel agency that has been contracted by his office, (a) in the 2010/11 financial year and (b) during the period 1 April 2011 up to the latest specified date for which information is available?
NW3752E
REPLY:
(a) 2010/11 financial year
Travel with Flair R32,720,835.50
Wings Travel Management R 5.079.202.45
TOTAL R37,800,037.95
(b) 1 April- October 2011 Wings Travel Management R23,297 ,652. 73
Rennies Travel Pty Ltd R 2.113.815.67
TOTAL R25,411 ,468.40
QUESTION NUMBER 3343 [NW4004E]
DATE OF PUBLICATION: 28 OCTOBER 2011
Mr. M G P Lekota (Cope) to ask the Minister of Finance:
(1) Whether the Government has any system in place to ensure that tenders that were approved are randomly or systematically evaluated by an authority set up for this purpose; if not, why not; if so,
(2) whether such an authority determines that the tender (a) complied with the provisions of the Public Finance Management Act (PFMA), Act 1 of 1999, (b) was advertised, (c) was submitted by a person or company that was fully tax compliant, (d) offered value and proven expertise and (e) had no conflict of interest; if not, why does the Government not close the loopholes; if so, what are the relevant details? NW4004E
REPLY:
(1) A Multi-Agency Working Group (MAWG) was established during 2009 to investigate supply chain management (SCM) related fraud and corruption. One of its first initiatives was to conduct a gap analysis in SCM processes and procedures. Flowing from the gap analysis, measures were initiated (and are ongoing) to improve the SCM legislative framework. The MAWG has the advantage of being in a better position to co-ordinate, extract and manage information in its efforts to monitor adherence to SCM prescripts. The MAWG is also better positioned to facilitate remedial actions when SCM transgressions or deficiencies are detected. Furthermore, a Special Audit Services was established within the National Treasury which works hand-in-hand with the MAWG and other organs of state to, among others, investigate alleged abuse of the tendering system. Arising from this experience, further steps will be taken to enhance institutional capacity to have a more vigorous oversight over major procurements.
(2) Yes. All the aspects raised in parts (a) to (e) of your question are regulated in terms of the existing SCM legislative framework. These aspects are therefore part of the overall monitoring of adherence to prescribed SCM processes by the MAWG. The National Treasury also introduced a Financial Management Capability Maturity Model to assess all government departments on the implementation of the Public Finance Management Act. SCM forms an integral part of this annual assessment.
QUESTION NUMBER 3315 [NW3971E]
DATE OF PUBLICATION: 28 OCTOBER 2011
Dr D T George (DA) to ask the Minister of Finance:
(1) Whether provision has been made for the award of short term bonuses with regard to the remuneration of the Public Investment Corporation; if not, why not; if so, what are the relevant details;
(2) whether any short term bonuses were awarded; if not, why not; if so, (a) what are the (a) bonus amount and (b) the reasons for the bonus payment?
REPLY:
(1) Yes, there is a short term incentive scheme at the PIC. It is a discretionary scheme based on the achievement of specific targets and objectives both in terms of the corporate balanced scorecard as well as the balanced scorecards of individual employees. The PIC's strategic plan is used to draft a corporate balanced scorecard with stringent performance targets. The corporate balanced scorecard gets approved by the board of the PIC. The Board in consultation with the human resources and remuneration committee scores the corporate balanced scorecard at the end of the financial year. The score of the corporate balanced scorecard determines the size of the bonus pool.
The corporate balanced scorecard is used by both the investments and operations teams and it is cascaded down to balanced scorecards for each employee of the PIC. An individual employee's score and the bonus payable to the employee are determined by a formula that takes into account the company score and the specific divisional score as well as the individual employee's score.
(2) Yes, for the 2010/11 financial year short term bonuses were awarded. The bonuses were awarded for exceeding performance targets as set out in the different balanced scorecards. Details of these payments are disclosed in the PIC 2010/11 integrated report.
QUESTION NUMBER 3314 [NW3970E]
DATE OF PUBLICATION: 28 OCTOBER 2011
Dr D T George (DA) to ask the Minister of Finance:
(1) Whether a review will be undertaken with regard to the composition of
independent non-executive directors of the Public Investment Corporation; if
not, why not; if so, what are the relevant details;
(2) whether the recommendations of the King III Report have been taken into
consideration; if not, why not; if so, what are the relevant details?
NW3970E
REPLY:
(1) Yes, a review is in progress with regards to the composition of independent
non-executive directors. A special task team, consisting of board members
and PIC employees, was established to look into this issue.
(2) Recommendations of the King III Report have been taken into account.
However, not all the principles of King III could be applied in the context of the
PIC and some of these factors will be considered by the special task team.
The task team will also take into consideration the Public Investment
Corporation Act of 2004, the Companies Act of 2008, the Public Finance
Management Act of 1999 and the Treasury Regulations as well as various
other codes which are relevant to state owned entities which were drafted by
the Department of Public Enterprises and the Department of Public Service and
Administration.
QUESTION NUMBER 3313 (NW3969E)
Dr D T George (DA) To Ask the Minister of Finance:
How many fines have been (a) imposed on and (b) collected from taxpayers whose income falls below the taxation threshold for failing to submit taxation returns in the 2010-11 financial year?
REPLY:
Fines (really administrative penalties) may be imposed in respect of a wide range of administrative non compliance by taxpayers. One such area of non compliance is the failure to submit an annual income tax return as and when required by SARS. Administrative non compliance penalties must therefore be distinguished from additional tax, which is imposed in respect of the understatement or non declaration of income.
The obligation to submit an annual income tax return is informed by the source, nature and gross total amount of annual income of the taxpayer. An annual notice is issued by the Commissioner prescribing who is liable to submit an annual income tax return. The general requirement is that all persons with a gross income above the tax thresholds for the relevant tax year must submit returns. However there are instances where taxpayers with gross income less than the tax thresholds must also submit returns, such as traders, recipients of allowances paid in terms of Sec 8 (1)(a) of the Income Tax Act (e.g. travel allowance) and individuals with capital gains or losses in excess of the annual CGT exclusion.
PARLIAMENTARY QUESTIONS
It is only after the submission of an annual income tax return that SARS is able to calculate the final taxable income and tax liability taking into consideration allowable deductions.
Administrative penalties are currently imposed on taxpayers where information in the possession of SARS indicates that:
1. The taxpayer was liable to submit an annual income tax return based on the prescribed requirements for the relevant tax year; and
2. The taxpayer has failed to submit an annual income tax return for at least two tax years.
SARS issued a total of 315 263 administrative penalties in respect of returns due in the 2010/11 financial year. Of these, 15 007 (4.7%) were found after submission of their returns to have taxable income below the tax threshold, taking into account allowable deductions claimed. Of these, 13 881 were suspended on receipt of return (to a value of R3 698 750), 105 were remitted on request (to a value of R26 500) and 932 were partially or completely paid (to a value of R923 338 of the total outstanding amount of R1 436 750). In terms of the administrative penalties process, any taxpayer who receives an administrative penalty may apply for remission of this penalty where they can show just cause for the late/non submission of the annual income tax
return.
Where the final taxable annual income of a taxpayer consisting only of remuneration and/or interest income is below the tax threshold, SARS will generally approve the taxpayer's request for remission and waive the penalty. Any taxpayer who believes that SARS has not applied the correct legislative requirements in respect of their circumstances is urged to contact the SARS Contact Centre on 0800 00 7277. Where it is found that SARS has not catered for a particular set of circumstances, SARS will revise its process. SARS is currently reviewing its communication with taxpayers to clarify under which circumstances and conditions a taxpayer is required to submit an annual income tax return.
QUESTION NUMBER3263 [NW3879E]
DATE OF PUBLICATION: 21 OCTOBER 2011
Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:
(1) How does the country's primary budget balance in February 2009 compare with the primary budget balance in February 2011;
(2) whether a decline in the budget is a cause for concern; if not, why not; if so, what steps will be taken by the National Treasury?
NW3879E
REPLY:
(1) At the time of the budget in February 2009, the consolidated primary deficit was expected to be 1.4 per cent of GDP in 2009/10. As a result of the financial crisis, revenue came in roughly R66.4 billion below the budget target, resulting in a wider-than-anticipated deficit. The recently published 2011 Medium Term Budget Policy Statement (MTBPS) shows that the primary deficit reached 4.3 per cent in 2009/10, and is expected tomorrow to 2.9 per cent of GDP in 2011/12.
(2) The primary balance is an important determinant of a country's debt trajectory. Running a primary deficit for long periods of time can be problematic if it results in unsustainably high debt.
The acceleration in spending between 2007/08 and 2009/10, and falling revenue, resulted in a primary deficit. The moderation of spending, combined with a recovery in tax revenue, sets a clear and realistic path towards the elimination of this deficit and stabilisation of debt as a percentage of GDP. Should the economy fail to recover as predicted, ensuring long-term fiscal sustainability would require a combination of slower spending growth and policy measures to raise tax revenue.
The 2011 MTBPS shows that South Africa's national net loan debt is likely to stabilise at around 40 per cent of GDP in 2015/16. While this is relatively low by international standards, Treasury will aim to bring down debt over the longer term in order to create the fiscal space to weather another downturn.
QUESTION NUMBER 3151 [NW3678E]
DATE OF PUBLICATION: 14 OCTOBER 2011
Mr T Botha (COPE) to ask the Minister of Finance:
Whether the government was planning to impose a new tax on businesses in the five metro regions of the country to raise an additional R20 billion; if so, what are the relevant details?
NW 3678E
REPLY:
I will only comment on any new tax proposals as per the requirements stipulated in the Municipal Fiscal Powers and Functions Act. Announcement on the outcomes of this process would conventionally be made on Budget Day.
QUESTION NUMBER PQ3089 (NW3613E)
DUE TO PARLIAMENT: 28 OCTOBER 2011
3089. Mr G G Hill-Lewis (DA) to ask the Minister of Finance:
1. Why does the SA Revenue Services (SARS) require exporters to state (a) full ingredients lists, (b) proportions of ingredients and (c) details of the manufacturing processes of products exported to the European Union prior to shipping?
2. Whether the required specifications for exports to the EU are compliant with the protection of intellectual property rights of South African goods; if not, what action plans are being considered to rectify the problem; if so, how was this conclusion reached? NW3613E
REPLY:
1. The agreement on trade, development and cooperation (TOCA) between the European Union (EU) and South Africa provides, inter alia, detailed rules of origin in order to ensure that products benefiting from the preferential arrangements come only from South Africa or the EU.
In order to determine whether the correct the correct duty has been paid in respect of all imports and that the correct tariff heading has been declared in respect of all exports, importers and exporters are required as a matter of course to provide, inter alia, ingredients lists and proportions of those ingredients and details of the manufacturing processes. This is in line with international agreements and rules of origin including those set by the World Customs Organisation (WCO) which is the international governing body for customs rules. It is also in line with Section 49 of the Customs and Excise Act no. 91 of 1964 which provides the legislative arrangements for agreements in respect of preferential rates of duty. The provisions of Section 39 of the Act specify what documents importers and exporter are required to produce to SARS Customs when making an import or export declaration.
2. Any information acquired by SARS Customs officials in the performance of their duties are subject to strict confidentiality and secrecy provisions in terms of Section 4 of the Customs Act and may not be disclosed. In addition, with specific reference to the SA-EU Trade Agreement, Article 10 of Protocol 2 of this agreement specifies the confidentiality clauses applicable to any information communicated pursuant to the Protocols, including the protection extended under the relevant laws of the Contracting Party that received it. As such, any information provided does not pose a threat to intellectual property rights.
QUESTION NUMBER 3051 [NW3573E]
DATE OF PUBLICATION: 14 OCTOBER 2011
Ms A M Dreyer (DA) to ask the Minister of Finance:
(1) Whether (a) he, (b) the Deputy Minister and (c) any senior officials of his department intend to visit or have visited New Zealand during the 2011 Rugby World Cup Tournament; if so, what is the (i)(aa) name, (bb) rank and (cc) position or designation of each specified person accompanying (aaa) him, (bbb) the Deputy Minister and (ccc) each specified senior official and (ii)(aa) nature and (bb) official reason for the visit;
(2) what (a) total amount will be spent or has been spent on the trip and (b) is the (i) description and (ii) detailed breakdown of the amounts that will be spent or have been spent on (aa) accommodation, (bb) travel and (cc) subsistence costs?
NW3573E
REPLY:
(1 )(a),(b)&(c) None of those mentioned in 1 a to c visited New Zealand during the 2011 Rugby World Cup Tournament.
(2) N/A
QUESTION NUMBER: 3001 [NW3485E]
DATE OF PUBLICATION: 14 OCTOBER 2011
Mrs S P Kopane (DA) to ask the Minister of Finance:
Whether the Department of Health has applied for funding for the South African Demographic and Health survey since the 2007-08 financial year; if so, in each case, (a) on which dates, (b) what amount was requested and (c) what was the response from the National Treasury?
NW3485E
REPLY:
No, the Department of Health has not formally applied for funding for the South African Demographic and Health Survey (SADHS) since the 2007-08 financial year. Although some informal discussions were held 2-3 years ago, at the time the Department decided to incorporate the necessary questions into two community surveys of the HSRC. These included the SA Health and Nutrition Survey (SAHNES) for which the National Treasury approved a R4.6m transfer payment at the request of the Department of Health and the SA National HIV Behaviour and Health Survey. The National Treasury is fully aware of the widespread international use of regular DHS surveys to provide health information.
QUESTION FOR WRITTEN REPLY
QUESTION NUMBER 2942 [NW3413E]
DATE OF PUBLICATION: 23 SEPTEMBER 2011
Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:
How much money has the Government Employees Pension Fund (GEPF) paid to members who are entitled to a pension because they qualify for recognition of pensionable service as former members of non statutory forces or services? NW3413E
REPLY:
In terms of Cabinet Memorandums 8 of 2009 and 87 of 2010, Cabinet approved the Non Statutory Forces and subsequently the revised Non Statutory Forces (NSF) pension dispensation. The recognition of NSF Service was to address the disparity between Statutory Force members and former Non Statutory Force members. Parity between the Statutory Force members and the former Non Statutory Force members was a constitutional imperative and a crucial step in harmonizing and equalizing pension benefits of the two Forces members. In order to ensure an equitable recognition of NSF pension for former Non Statutory Force members, it was approved that the pension benefits of all former Non Statutory Force members be determined in accordance with the Government Employees Pension Fund's rules.
The Actuarial reserve that was set aside for the NSF dispensation as at 31 March 2011 amounted R 1 063 258 000. The cost of recognition for NSF benefits incurred in respect of the recognised NSF periods since date of inception up to 31 March 2011 amounts to R 553 509 000.
QUESTION FOR ORAL REPLY
QUESTION NUMBER: 90 [NW3412E]
Written Question No 2941
DATE OF PUBLICATION: 15 NOVEMBER 2011
Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:
Whether he intends to introduce amendments to section 37D of the Pensions Funds Act, Act 24 of 1956, to make preservation compulsory when cash payments are made to former spouses in terms of divorce orders? NW3412E
REPLY:
No, not at this stage. Government prefers to deal with the objective of preservation for retirements funds in a comprehensive way, rather than on an ad hoc basis. Though Government is aware of the disincentives that apply with regard to preservation in the event of a divorce, Government intends to deal with the issue of preservation as part of the boarder retirement reform process which prioritises preservation, but also recognises vested rights of current members. The proposal to preserve accumulated retirement benefits in the instance of job chances, retrenchment or divorce, is outlined in the National Treasury policy discussion document titled, "A safer financial sector to serve South Africa better", published on Budget Day in February this year, and is available on the Treasury website: www.treasury.gov.za .
QUESTION NUMBER 2892 [NW3363E]
DATE OF PUBLICATION: 23 SEPTEMBER 2011
Mr I M Ollis (DA) to ask the Minister of Finance:
(1) Whether the National Treasury has placed any (a) companies or (b) persons on the List of Restricted Suppliers, thereby prohibiting the public sector to do business with them; if so, in each case, what is the (i) name of said entity or person, (ii) nature of their business, (iii) reason for restricting this service and (iv) date on which they were restricted;
(2) whether any of the implicated (a) companies or (b) persons have since been removed from the list; if so, in each case, (i) which entity or person, (ii) when and (iii) what is the reason for removing the specified company or person from the list;
(3) whether the National Treasury has conducted any business with any of the (a) companies that or (b) person who have been removed from the list; if so, in each case (i) with which companies or persons, (ii) with regard to which services, (iii) for which time period and (iv) why did his department engage the specified company or person despite previous conduct? NW3363E
REPLY:
(1) Yes
Government institutions are empowered to restrict companies or persons from doing business with the public sector for a period not exceeding ten years if such companies or persons have obtained preferences fraudulently or failed to perform on a contract.
If an institution has imposed such a restriction on a company or person, the institution is required to inform the National Treasury of the imposition, including the names, reasons for restriction, the period of restriction and the date of commencement of the restriction, for placement onto the central Database of Restricted Suppliers (previously known as the List of Restricted Suppliers).
The details of 112 companies and persons are currently placed on the central Database which is updated on a continuous basis. The Database can be accessed on the National Treasury's website www.treasury.gov.za by clicking on "Database of Restricted Suppliers" at the bottom of the home page.
Since 2002, the Contract Management Unit within the Specialist Functions Branch of the National Treasury, that is responsible for the facilitation and arrangement of transversal term contracts on behalf of government, has restricted and placed the details of the following companies and persons on the Database of Restricted Suppliers: www.pmg.org.za/questions/table2892-2011.pdf
QUESTION FOR WRITTEN REPLY
QUESTION NUMBER 2873 [NW3343E]
DATE OF PUBLICATION: 23 SEPTEMBER 2011
The Leader of the Opposition (DA) to ask the Minister of Finance:
Since the establishment of the Register for Tender Defaulters, how many times has the provision of section 28(1) of the Prevention and Combating of Corrupt Activities Act, Act 12 of 2004, been enacted which allows an order to be issued for the particulars, conviction and sentence of a person or enterprise under the Act to be endorsed on the Register? NW3343E
REPLY:
The Department of Justice and Constitutional Development has, to date, submitted to the National Treasury only one notification in terms of the provision of section 28 of the Prevention and Combating of Corrupt Activities Act, Act Number 12 of 2004 (Act).
The notice, which was received in December 2010, confirmed that the Presiding Officer of the Specialized Crimes Court, Belville found Messrs Hishaam George and Isaac Petersen guilty in terms of the Act for corruption relating to contracts. In addition to passing a sentence, the Presiding Officer ordered that the particulars of the convicted persons be endorsed on the Register for Tender Defaulters.
To this end, the National Treasury has, in terms of section 28 of the Act, determined that the particulars of Messrs Hishaam George and Isaac Petersen be endorsed in the Register for aperiod of 5 years. Their particulars will, therefore, remain in the Register until 14 December 2015.
QUESTION NUMBER 2853 [NW3321 E]
DATE OF PUBLICATION: 23 SEPTEMBER 2011
Mr P J C Pretorius (DA) to ask the Minister of Finance:
Whether he intends to introduce differentiated grant amounts when social grants are increased in future, so that recipients in urban areas who elect to receive their grants by way of electronic funds transfer (details furnished) will receive marginally more than those electing to receive grants at contractor-operated pay points despite being within reasonable range of banks and post offices; if not, why not; if so, what are the relevant details?
NW3321 E
REPLY:
Modern banking systems offer many advantages to beneficiaries of social grants including convenience, safety and flexibility. For this reason government wants to encourage beneficiaries to select the banking payment option. The UIF and RAF have already migrated exclusively (100%) to electronic payment while social grants are currently at around 47%.
Your suggestion will be discussed with the Minister of Social Development and SASSA. SASSA is currently adjudicating a tender for a mix of payment systems and once the outcome of this is clear we may be in a position to consider the viability of this proposal.
QUESTION NUMBER: 2822 [NW3286E]
DATE OF PUBLICATION: 23 SEPTEMBER 2011
Mr N Singh (IFP) to ask the Minister of Finance:
Whether he investigated the figures released by the National Treasury in respect of the fourth quarter spending by KwaZulu-Natal municipalities following their objections (details furnished); if not, why not; if so, what are the relevant details?
REPLY:
Before National Treasury publishes any municipal information, municipalities are afforded an opportunity in terms of an institutionalised verification process to certify the correctness of the information pertaining to their respective municipalities. This certification is signed by both the Municipal Manager as the accounting officer of the municipality and the Chief Financial Officer after which it is sent to the National Treasury. In respect of the publication for the fourth quarter of the 2010/11 municipal financial year, 59 out of 61 municipalities submitted signed copies of their returns to the National Treasury.
This means that 97 per cent of the municipalities in KwaZulu-Natal provided confirmation to the National Treasury that the information was indeed a true reflection of the state of finances.
Although National Treasury does institute broad checks and balances on the quality of the information, under-spending on capital grants and capital programmes is generally prevalent amongst municipalities. Therefore, if underspending on capital has been reported and this underspending has been certified as correct by the Municipal Manager and Chief Financial
Officer through signed off returns, then it is reported as such in the S71 publication. Overall accountability for the accuracy of the information therefore is vested with the municipality.
QUESTION NUMBER: 2821 [NW3284E]
DATE OF PUBLICATION: 23 SEPTEMBER 2011
Mr N Singh (IFP) to ask the Minister of Finance:
Whether he intends to introduce a change in the date of the financial year end of
municipalities to 31 March to bring it in line with the national financial year end; if not,
why not; if so, what are the relevant details?
NW3284E
REPLY:
1. Introducing a common financial year across the three spheres of government has
been considered previously and the overall benefits of introducing such a change
to the system and local government particularly have been debated.
2. On the one hand, aligning the financial years across government would seek to
resolve some of the challenges generally associated with aligning funding
allocations, planning for service delivery across spheres, increasing
accountability for government spending and so forth.
3. On the other hand, when the practical challenges associated with implementation
were considered, it was agreed that a common financial year would present a
number of difficulties for national, provincial and local government.
4. One of the first considerations was that the complexity of co-ordinating budget
processes across the three spheres of government would increase significantly.
This would inadvertently pose several risks. The co-ordination of the national
and provincial budget process is already complex and simultaneously including
local government into this process, while ensuring that the prescripts of the
MFMA are met, would only pose further complications to the system.
5. Secondly, municipalities require certainty on national and provincial allocations to
be received before including operating and capital grants in their respective
budgets. This means that all allocations must first be gazetted before a
municipality can conclude their budgets for tabling in Council. This implies that
there would be no space available for this key development should a common
financial year across the three spheres of government be considered.
6. Thirdly, the local government budget process is a ten-month long process with
community and stakeholder consultation forming an integral part of municipal
budgeting. Municipal budgets need to respond to community needs and
municipal legislation, such as the Municipal Systems Act and the MFMA
prescribe the conditions and timeframes for such consultation. Aligning financial
years would require that timeframes for consultation be shortened thereby
comprising community participation.
7. Fourthly, substantial changes will be required to existing legislation and current
processes. These include:
a. the Local Government: Municipal Finance Management Act, 2003 (Act No.
56 of 2003), including supporting regulations, circulars and guidelines, as
all timeframes in the Act are premised on the municipal financial year
running from 1 July to 30 June;
b. The Bulk price increases for municipal services, such as electricity and
water, as regulated by NERSA and the Minister of Water Affairs, must also
be published by 15 March to take effect from the next municipal financial
year (except if the Minister of Finance approves a later date in terms of
section 42(5) of the MFMA). Municipalities will only be able to produce
credible budgets if these allocations and costs are appropriately factored
into their budgets. As Eskom and water boards are also subject to the
April to March deadlines, it will be very difficult to shift these deadlines
forward. Municipalities will accordingly have to budget for these increases
based on historical trends and uncertain forward projections; and
c. The Municipal Fiscal Powers and Functions Act, 2007 (Act No. 12 of
2007), the Local Government: Municipal Systems Act, 2000 (Act No. 32 of
2000) and the Local Government: Municipal Property Rates Act, 2004 (Act
No. 6 of 2004), and the regulations made in terms of the Municipal
Property Rates Act, as these Acts are also premised on the current
municipal financial year running from 1 July to 30 June.
8. A further consideration is that the Office of the Auditor-General will not have
adequate capacity to undertake an audit of all 700 institutions in national,
provincial and local government within the legislated timeframes. This will result
in a delay in audit outcomes and impact on the oversight responsibilities of
Parliament.
QUESTION FOR ORAL REPLY
QUESTION NUMBER: 74 [NW3265E]
Written Questions No 2801
DATE OF PUBLICATION: 15 NOVEMBER 2011
Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:
Whether any cooperative banks have been developed since the Co-operative Banks Act, Act 40 of 2007, came into effect; if not, why not; if so, how many in the market for deposits (a) under and (b) over R20 million? NW3265E
REPLY:
Yes, 14 applications for registration as cooperative bankshave been submitted since the Co-operatives Banks Act came into effect. Eleven of these applications were below the R20 million threshold and three were above the R20 million threshold.
Of these applications, two co-operative banks have been registered, with one of them below the R20 million threshold and the other above the R20 million threshold.
The Honourable Member can find this and other information in the Combined Annual Report of the Supervisors of the Co-operatives Banks Development Agency (CBDA) and the South African Reserve Bank (SARB) and to the Annual Report of the CBDA, which were tabled in Parliament in July and September 2011 respectively.
I refer the member to page 17 of the 2010/11 CBDA Annual Report. It should also be noted that the Co-operative Banks Development Agency (CBDA) is providing support to those institutions that did not meet the minimum requirements as per the Cooperatives Banks Act.
QUESTION FOR ORAL REPLY
QUESTION NUMBER: 72 [NW3252E]
[Written Question No 2789]
DATE OF PUBLICATION: 15 NOVEMBER 2011
Mr G P D Mac Kenzie (Cope) to ask the Minister of Finance:
Whether he intends to consider a progressive tax on mines in order to ensure equitable distribution of mining profits to counteract the call for the nationalisation of mines; if not, what is the position in this regard; if so, what are the relevant details? NW3252E
REPLY:
The Minister of Finance normally only makes new tax announcements on Budget Day, or when tabling tax legislation. I will therefore only focus on announcements already made in previous budgets or tax legislation, all available to the Honourable Member on the treasury website www.gov.za. I will not comment on any taxes that I may be considering for the next or future budgets. You are, however, invited to make any suggestions or provide proposals to me, for consideration for future budgets.
There is already a royalty a minerals (in accordance with the Mineral Royalty and Petroleum Resources Act of 2008 (Act 28 of 2008)), which came into effect on 1 April 2010.
Let me repeat what I have already replied to three similar questions this year. I refer to Question 19 (asked by Dr D T George of the DA) published on 10 February 2011), Question 1214 (asked by Adv H C Schmidt of the DA) published on 15 April 2011 and Question 235 (asked by Mr K A Sinclair of COPE-NC) published on 29 July 2011. This is in addition Question 1678 (Dr P J Rabie of the DA) published last year on 28 May 2010,
The mining sector currently makes a significant contribution to national revenue. In addition to being subject to the normal corporate income tax of 28 per cent (except for gold mines, which have a special dispensation), VAT and other taxes, the mining sector is also subject to a mineral royalty. The royalty rates on various minerals are based on two formulae that incorporate a profit element, and thus effectively taxes the profits in the mineral sector at a higher rate than the normal corporate income taxes, as both the royal and corporate income tax are imposed on mineral profits.
In accordance with international classification of revenues, revenue from mineral and petroleum royalties are regarded as non-tax revenues, as they are a resource rent rather than a tax. The audited collection of mineral royalties for the 2010/11 financial year was just over R3,55 billlion. The collections for the current financial year (up to 30 September 2011) is just under R2,4 billion, and is expected to be R4,89 billion for the full year (as noted in 2011 Budget Review Table 5.3 and MTBPS Table 3.3). The amount actually collected from royalties is published monthly by the National Treasury, 30 days after the end of each month, in accordance with Section 32 of the PFMA. These reports are available on the National Treasury's website under the link "Monthly press releases".
QUESTION NUMBER PQ 2721 [NW3182E]
DATE OF PUBLICATION: 16 SEPTEMBER 2011
Mr I M Ollis (DA) to ask the Minister of Finance:
(1) (a) Who is the preferred service provider that is used by the National Treasury for the hiring of vehicles and (b) why is the specified service provider preferred;
(2) whether the National Treasury has a fixed contract with the specified service provider; if not, why not; if so, what are the relevant details;
(3) what is the (a) name of the service provider and (b) reason for using the specified service provider in each instance where vehicles have been hired for use by him or his Deputy Minister since March 2010?
REPLY:
(1)(a) The service providers used by National Treasury's travel agency for car hire are:
(i) Avis;
(ii) Europcar; and
(iii) Budget car rentals.
(1)(b) Special discount government rates has been negotiated with them.
(2) Yes. There is a fixed contract with these service providers. The details contained are that the service provider ensures representation in all the areas where vehicles are being allocated.
(3)(a) Avis and Europcar.
(3)(b) These service providers are contracted by National Treasury to provide hired vehicles for official purposes.
Question 2719
Mr J F Smalle (OA) to ask the Minister of Trade and Industry:
(1) How many tenders for the scanning of documents have been issued by the (a) Companies and Intellectual Property Commission and (b) its predecessor over the past five financial years for which information is available in each case;
(2) If more than one tender was issued, why could the job not have been done by one company;
(3) (a) to which suppliers have each of these tenders been awarded and (b) what was the original amount of each tender that was awarded;
(4) whether any of these tenders have experienced any scope creep; if so, what are the relevant details?
Response:
1(a) According to the Companies and Intellectual Property Commission (CIPC), no tenders were issued in relation to scanning of documents.
1(b) According to CIPC, the Companies and Intellectual Property Registration Office (CIPRO) issued one tender for the scanning of documents. Three (3) other contracts during this period were procured through quote system in line with supply chain management (SCM) processes.
(2) According to CIPC, CIPRO followed a phased approach to the patents scanning project and phase one was co-funded by the Department of Science and Technology (OST). The number of documents to be scanned had been estimated and the actual amount of documents that required scanning exceeded the initial estimation. Having assessed the remaining documents that required scanning, a quotation process was followed to complete the scanning of all patent documents. The scanning of index cardex cards was a separate project. The catalogues are housed in special metal cabinets that could not be moved to another building due to their weight and therefore had to be replaced by an electronic version.
Response:
(3)(a) According to CIPC, phase one of the scanning of South African Patents documents for the period 1988 until August 2008 was awarded to Scanco Digital Services for R 929,097.56 throu9h an open tender process and to Business Connexion and for R329, 669.76 through three quotes system using the SCM process (no tender process as amount was below the R500 000 threshold).
Phase two Patent documents for the period 1960 to 1987 for scanning Cardex cards was granted to Metrofile for R432 000 and for Scanning of the Granted Patents for the period 1920-1959 to complete the Electronic Patent Database for the purposes of novelty search was awarded to Menico Records Management for R420 000 through SCM process.
(4) According to CIPC, there was no scope creep for the tender.
QUESTION NUMBER NO 2661 [NW3114E]
DATE OF PUBLICATION: 16 SEPTEMBER 2011
Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:
Whether he envisages that the faster pace at which public sector remuneration is permitted to increase above that of the private sector, will impact on (a) taxation and (b) economic growth; if not, what is the position in this regard; if so, what are the relevant details?
NW3114E
REPLY:
Over the current budget cycle there is no reason to suspect that public sector remuneration trends relative to those in the private sector will impact significantly on taxation or economic growth.
Nevertheless, an important principle of responsible budgeting is that taxes should adjust to reflect changes in the structural (or long-run) level of expenditure. While wages have been growing above inflation over the past five years, this does not necessitate higher structural spending and taxation. For example, higher wages could be accommodated within the budget by reducing other expenditures, or by limiting the number of new staff in the public sector. Neither of these is an ideal response to above-inflation wage growth. In the short term, large increases in the wage bill can boost consumption and output. However, over the longer term, divorcing wage bill growth from productivity improvements could have significant costs. For example, by crowding out other kinds of expenditure, wages can reduce the share available for capital projects, thereby reducing the potential for long-run growth. Furthermore, by limiting the hiring of new staff in the public sector, the state will have fewer front-line staff serving the nation.
For these reasons, government aims to rebalance spending away from short-term consumption to long-term investment. An important first step will be to close the current deficit (i.e. the difference between consumption spending and revenue). In line with the fiscal guidelines published in the last budget, we believe that borrowing to fund consumption should only be used to support the economy in the short term. Borrowing to fund wages over the long-term, however, is unfair to future generations who will be burdened with these debts.
QUESTION NUMBER 2636 [NW3087E]
DATE OF PUBLICATION:
Mr. N J J van R Koornhof (Cope) to ask the Minister of Finance:
Whether the Government is keeping the national net loan debt from breaching the R1 trillion ceiling; if not, (a) why not, (b) what was this debt at 30 July 2011 and (c) what is the debt projected to be at 31 December 2011; if so, (i) how is this being achieved and (ii) what is the current status of this debt? NW3087E
REPLY:
Rather than a debt ceiling, we have proposed a sustainable debt trajectory. National government's net loan debt consists of total domestic and foreign debt, less the cash balances of the National Revenue Fund. In the 2011 Budget Review net loan debt is forecasted to surpass R1 trillion in 2012/13. This rand value is less important than the size of debt relative to GDP. Even with a worsening economic outlook, we project that debt will stabilise around 40 per cent of GDP in 2015/16. This is low by international standards, and well below levels that are thought to be harmful to growth. Our S&P international credit rating has remained unchanged since 2005, showing continued market confidence in our fiscal outlook.
Net loan debt amounts to R859 billion by end June 2011 and is estimated to reach R999 billion by the end of March 2012. Government's borrowing requirements are financed through issuing domestic short-term – and long-term loans, foreign loans and the use of cash balances. The primary source of funding remains domestic borrowing through a combination of Treasury bills, fixed-income – and inflation-linked bonds. As at end June 2011, national government's debt portfolio comprises of 91 per cent domestic and 9 per cent foreign debt.
National Treasury published a set of fiscal guidelines in the 2011 Budget Review, founded on the principles of counter cyclicality, debt sustainability and intergenerational equity. We are confident that our fiscal policy continues to achieve these objectives.
QUESTION NUMBER 2626 [NW3042E]
DATE OF PUBLICATION: 09 SEPTEMBER 2011
Dr D T George (DA) to ask the Minister of Finance:
(1) Whether, with reference to investigations by the Financial Services Board (FSB) into abuse of surplus amounts by pension funds, any internal investigation unit exists to perform this function; if not, why not;
(2) Whether this function was outsourced to external service providers; if so, (a) what are the names of the service providers and (b) what total amount was paid to each service provider?
REPLY:
(1) Yes, the FSB has an Inspectorate Department which investigates various issues including any abuse of surplus funds. Inspectors from the Inspectorate Department, comprising of both permanent employees and contracted specialists, form part of the various inspections and investigations directed by the Registrar of Pension Funds, including investigations into the abuse of surplus amounts by pension funds.
(2) No, investigations into the abuse of surplus amounts have never been contracted out to external service providers. Instead, when the Inspectorate Department requires specialist skills for any particular investigation, they may contract specialists to assist the Inspectorate Department. These contracted specialists are accountable and report to the Registrar or the Registrar's staff, and are subject to the prescripts of the Inspections Act. They are remunerated
as per an agreed contract.
(a) and (b) are not applicable, as the FSB's investigative function into the abuse of surplus amounts has not been contracted out to external service providers.
QUESTION NUMBER 2625 [NW3041E]
DATE OF PUBLICATION: 09 SEPTEMBER 2011
Dr D T George (DA) to ask the Minister of Finance:
(1) Whether, with reference to the envisaged implementation of the Youth Wage Subsidy on 1 April 2012, any implementation plans have been developed; if not, why not; if so, what are the relevant details;
(2) whether this function was outsourced to external service providers; if so, (a) what are the names of the service providers and (b) what total amount was paid to each service provider?
REPLY:
(1) The youth employment subsidy discussion paper, entitled "Confronting youth unemployment: policy options for South Africa", was released on Budget day. The discussion paper proposed that the youth employment subsidy be implemented from 1. April 2012 following a process of consultation that included:
Discussions have taken place within the Economic Sectors and Employment Cluster and consultation with social partners began at Nedlac on 10 May 2011. These discussions are on-going and alongside the public comments received on the discussion paper will inform a revised document. Initial proposals regarding implementation are included in the discussion paper. These outline that the proposed incentive be administered using the existing Pay As You Earn platform operated by the South African Revenue Service (SARS). The SARS PAYE system will grant employers three options for claiming the youth employment subsidy:
- Employers pay the net balance of PAYE tax and subsidies every six months.
- Employers pay the net balance of PAYE tax and subsidies on a monthly basis and reconcile every six months.
- Collect PAYE tax as per usual, cash flow every six months and allow for a tax credit or rebate for the value of subsidies.
The discussion paper also includes an assessment of design issues such as employee and employer eligibility, subsidy duration, value and profile, and conditions of employment. These form an important part of the discussions that have taken place during the consultation process.
(2.) This function has not been outsourced to external providers.
QUESTION FOR ORAL REPLY
QUESTION NUMBER 64 [NO3037E]
DATE OF PUBLICATION: 15 NOVEMBER 2011
[Written Question No 2621]
Mr S B Farrow (DA) to ask the Minister of Finance:
Why has South African National Road Agency Limited (SANRAL) not been funded directly from the fuel levy revenue which is provided for by section 34 of the SANRAL Act, Act 7 of 1998, on a ring fenced basis? NO3037E
REPLY:
Section 34(1) of the SANRAL Act, Act 7 of 1998, provides for SANRAL to be funded through twelve categories of revenue, including capital invested in or lent to the Agency, loans raised by the Agency, toll revenue, fines, income generated through developing, leasing out or otherwise managing the Agency's assets and moneys appropriated by Parliament. While section 34(1)(b) allows for levies on fuel to be paid to the Agency in terms of any law that provides for such a level, the de jure position is that there is no such levy. Instead, Government's approach is to fund SANRAL directly and transparently for it non-toll road network through appropriations on the Transport vote.
Such appropriations are in part financed through the general fuel levy that accrues to the National Revenue Fund.
QUESTION NUMBER 2574 [NW2987E]
DATE OF PUBLICATION: 09 SEPTEMBER 2011
Mr N Singh (IFP) to ask the Minister of Finance:
Whether any measures are currently in place to protect the economy from capital flight in the event of another global recession; if not, why not; if so, what measures?
REPLY:
Yes, South Africa's flexible exchange rate provides a shock absorbing mechanism for the economy in the event of capital outflows. A real depreciation of the exchange rate would make exports more competitive and push up the cost of imports, in turn reducing the current account deficit. However, our prudently managed fiscal and monetary policies – which aim to keep the country's debt burden at a sustainable level and control inflation – are essential to support investor confidence and reduce the probability that capital outflows become destabilising.
South Africa has a relatively low external debt burden, which means that a weaker currency does not materially affect the country's balance sheet. Unlike many other emerging markets, we are fortunate to have a deep and liquid domestic bond market that allows the government and private sector to borrow money in rand. The domestic banking sector is also primarily funded in local markets, which is why we did not experience the same acute liquidity squeeze in the last crisis as many banks overseas which depended on dollar or euro funding.
Over the past few years South Africa's gross foreign exchange reserves have increased to a level that more than adequately covers our foreign obligations. South Africa's gross reserves amounted to US$51.5 billion in August 2011 from US$34.3 billion in August 2008, just before the collapse of Lehman Brothers. If necessary, some of these reserves could be used to ease
temporary market stress in response to global market turmoil.
Our prudential framework governing the offshore exposure of institutional investors and pension funds are also important safeguards against destabilising capital flight. Foreign asset limits were increased by 5 percentage points in December 2010 to 25 per cent for retirement funds and 35 per cent for institutional investors, but the limits remain well within international benchmarks and consistent with our financial stability objectives.
QUESTION NUMBER 2573
DATE OF PUBLICATION: 09 SEPTEMBER 2011
Mr N Singh (IFP) to ask the Minister of Finance:
(1) Whether he has received an application from the Public Protector for additional funding; if not, what is the position in this regard; if so
(2) Whether he has considered the application; if not, why not; if so,
(3) Whether he has allocated additional funding to the Office of the Public Protector; if not, why not; if so, what are the relevant details?
REPLY
(1) Yes, submissions have been made by the Public Protector for additional funding as part of the medium term expenditure planning process for the 2012 Budget. A submission has also been made for an in-year budget adjustment for 2011/12, for consideration by the Treasury Committee.
(2) Yes, all submissions received are consolidated by the National Treasury. Submissions by the Public Protector and other government entities will be considered by the Treasury Committee in respect of the in-year adjustment and by the Ministers' Committee in respect of the in-year adjustment and by the Ministers' Committee on the Budget with respect to the 2012 medium term expenditure framework.
(3) Recommendations of the Treasury Committee in respect of in-year adjustments, if any, or of the Ministers' Committee on the Budget in respect of the 2012 medium term expenditure framework, will be tabled in Parliament as part of the 2011 Adjustments Appropriation and the 2012 Budget, respectively.
QUESTION NUMBER 2422 [NW2817E]
DATE OF PUBLICATION: 02 SEPTEMBER 2011
Mr I M Ollis (DA) to ask the Minister of Finance:
What amount was (a) claimed by and (b) paid to (i) him and (ii) his deputy minister for subsistence and travel in each month in the 2010-11 financial year?
REPLY:
QUESTION NUMBER 2393 [NW2784E]
DATE OF PUBLICATION: 02 SEPTEMBER 2011
Adv A de W Alberts (FF Plus) to ask the Minister of Finance:
Whether he has (a) taken any steps or (b) any systems in place to curb corruption in the Government's procurement process; if not, why not; if so, what are the relevant details?
NW2784E
REPLY:
Yes, steps have been taken and systems put in place. Following a gap analysis that was conducted to determine possible procurement related fraud and corruption a Treasury Instruction was issued by the National Treasury on 31 May 2011. This instruction note aims to take the following steps and put the following systems in place to curb corruption in the government's procurement processes:
- Institutions are compelled to submit their tender plans containing all planned procurement above R 500 000 to the relevant treasuries before 30 April of each financial year. The implementation of the plans will be monitored by the relevant treasuries. This measure will contribute towards the reduction of the "March spike" where institutions are merely inviting and awarding bids for the purpose of avoiding the surrender of unspent voted funds;
- Institutions are required to publish the names, preferences claimed and where practical the total bid prices of all bids received on their websites within 10 working days after closure of the bid. This will enhance transparency;
- Prior to the award of any bid, the names of the directors / trustees / shareholders of the preferred bidder are to be verified against the institution's staff establishment in order to determine whether or not any of the directors / trustees / shareholders are employed by the institution. This is intended to mitigate against any possible conflict of interest;
- Institutions are compelled to ensure that the tax matters of preferred bidders are in order and that the names of preferred bidders and their directors / trustees / major shareholders are not listed on the Register for Tender Defaulters and the Database of Restricted Suppliers. The Register for Tender Defaulters and the Database of Restricted Suppliers have been posted on the National Treasury's official website;
- Bids in excess of the value of R 10 million may only be advertised and awarded after the relevant treasury has verified that budgetary provisions exist for the acquisition of the goods or services and that such goods and services are aligned with the targets/outputs indicated in the strategic plan of the institution;
- Prior to the award of any bid in excess of R10 million, internal or external auditors are required to provide the Bid Adjudication Committee with written confirmation to the effect that the bid specifications were compiled in an unbiased manner and that the bid evaluation process was conducted in terms of the criteria stipulated in the bid documents;
- Previously there were no prescribed thresholds for the expansion or variation of orders against the original contract. The expansion of construction related contracts are now limited to a maximum expansion or variation of orders up to 20% of the original contract value or R20 million, whichever is the lower amount. For all other contracts the threshold is prescribed at 15% or R15 million, whichever is the lower amount. Any expansion or variation in excess of these thresholds will only be permitted subject to the prior written approval of the relevant treasury. Such requests will only be considered in exceptional cases and where good reasons exist; and
- The compulsory publication of information related to contract awards, the prohibition of placing of orders for goods and services and arranging with suppliers for such goods and services to be invoiced and paid for in the next financial as well as payment of amounts owing to creditors within the prescribed period of 30 days, are re-iterated.
Further measures will be taken in due course should current investigations indicate the need.
QUESTION NUMBER 2279 [NW2651E]
DATE OF PUBLICATION: 29 AUGUST 2011
Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:
Whether it is Government policy to furnish tender information and details, on tenders amounting to more than R1 million to losing bidders on request; if not, what is the position in this regard; if so, what are the relevant details? NW2651E
REPLY:
No. It is not government policy to furnish information and details on bids above R1million to unsuccessful bidders.
Institutions are, however, compelled to publish the following information, related to successful bids, on their websites, in the Government Tender Bulletin and in the media where the bids were originally advertised:
(a) Contract numbers and description;
(b) Names of the successful bidder(s) and preferences claimed;
(c) The contract prices(s); and if possible
(d) Brand names and dates for completion of contracts.
Irrespective of the value, when requested for in writing, any bidder should be provided with reasons why his or her own bid was unsuccessful.
QUESTION NUMBER 2277 [NW2649E]
DATE OF PUBLICATION: 2 September 2011
Dr N J J van R Koornhof (COPE) to ask the Minister of Finance:
Whether he intends to call a summit to focus on the economy and bind all South Africans to unite in support of a mutually agreed growth pact; if not, what is the position in this regard; if so, what the relevant details?
NW2649E
REPL Y:
No. The New Growth Path (NGP) adopted by government embodies the country's growth path.
South Africans agree that the fundamental challenge facing us is the high unemployment rate. Active debates around the growth strategy are a critical component in improving the strategy and forging national consensus. The NGP continues to be an anchor for dialogue under the auspices of NEDLAC which brings together labour business, civil society and government.
All South Africans must become increasingly aware that the global economy and the South African economy is going through an uncertain and slow recovery from the recession. All sections of our country will have to contribute to the success of any growth trajectory which can successfully create jobs and higher growth.
QUESTION NUMBER 2206 [NW2581 E]
DATE OF PUBLICATION: 19 AUGUST 2011
Mr P J C Pretorius (DA) to ask the Minister of Finance:
Whether he received a request from the Department of Justice and Constitutional Development for permission to develop a new accounting system to replace the current JDAS (Justice Deposit Account System); if so, (a) when was the request received and (b) what was the outcome of the request?
REPLY
(a) Implementation of the JDAS commenced in 2000, prior to implementation of the Integrated Financial Management System (IFMS). An application for permission to replace the aging JDAS system was received from the Department of Justice and Constitutional Development during January 2011.
(b) After various discussions, approval was granted subject to:-
· specifications being made available to the IFMS project to prevent duplication;
· a competitive bidding process being followed for acquisitions subsequent to final approval being granted; and
· the acquisition being funded from own budget.
QUESTION FOR ORAL REPLY
QUESTION NUMBER 45 [NW2528E]
[Written Question No 2157]
DATE OF PUBLICATION: 15 NOVEMBER 2011
Mrs J D Kilian (Cope) to ask the Minister of Finance:
Whether, with reference to the recently announced financial bridging arrangement to Swaziland, the grant was made subject to the (a) unbanning of all political parties and (b) release of political prisoners (details furnished); if not, why not; if so, what are the relevant details? NW2528E
REPLY:
The request from the Swaziland government was for a loan from the South African Reserve Bank to the Swaziland central bank, which loan will be guaranteed by the South African Government.
The request was not for a grant. No agreements have been signed to date and there has been no progress on this matter.
QUESTION NUMBER 2142 [NW2485E]
DATE OF PUBLICATION: 16 AUGUST 2011
Mr M Swart (DA) to ask the Minister of Finance:
Whether the National Treasury has conducted any studies to ensure that departments have the necessary capacity to spend funds allocated to them with regard to the (a) large amount of funds that have been rolled over from the 2010-11 financial year by government departments and (b) Treasury's agreement to redistribute these funds in the current financial year; if not, why not; if so, (i) when was this study conducted and (ii) what are the main (aa) findings and (bb) recommendations?
NW2485E
REPL Y
A central study, focusing on the capacity within departments to spend funds culminating in a report produced with recommendations, has not been conducted by the National Treasury.
The reason for this relates to the nature of the budget process. The budget process engages closely with the capacity of government departments to spend their allocations. Analyses based on detailed engagements with departments inform all funding recommendations. These analyses take into account the unique circumstances facing each department at the various stages of the year. A key aspect of this is assessing whether a department has the capacity to spend the funds that it requests. Departmental requests for funding are not recommended for approval when, amongst other factors, the finding is that a department is unable to demonstrate its ability to spend the funds requested effectively and efficiently.
QUESTION 2138 [NW2447E]
DATE OF PUBLICATION: 19 AUGUST 2011
Mr K B Manamela (ANC) to ask the Minister of Finance:
What are the (a) political conditions, (b) timeframes and (c) monitoring mechanisms given to Swaziland with regard to the loan? NW2447E
REPLY:
a) Loan amount (clarification)
The Government of South Africa has agreed to provide a conditional guarantee for a loan of R2.4 billion from the South African Reserve Bank (SARB) to the Central Bank of Swaziland (CBS).
The loan guarantee is premised on four pillars. These are:
· Confidence building measures to be undertaken by the Government of the Kingdom of Swaziland;
· Fiscal and related technical reforms required by the IMF and to be implemented by the Government of the Kingdom of Swaziland;
· Capacity building support to be provided by South Africa; and
· Co-operation in multilateral engagements.
The Government of Swaziland has committed to give renewed impetus to these processes by:
i. Broadening the dialogue process to include all stakeholders and citizens of the Kingdom of Swaziland;
ii. Agreeing on milestones and time-frames;
iii. Allowing the parties to the Swazi dialogue to determine appropriate reforms needed;
iv. Agreeing to ensure that the above processes take place in a conducive environment that is open and enjoys legitimacy amongst the people of Swaziland and the region.
b) Time frames
The loan from the SARB to the CBS will be made available in three equal tranches, once the negotiations with the relevant parties have been finalised.
The second and final payments will be made in October 2011 and February 2012. The last installment for the repayment of the loan will be in January 2019. Each of the tranches are link to a set of fiscal reform and governance conditions. For example, the first tranche is conditional on specific expenditure adjustments. The second tranche is conditional on the tabling of the Public Finance Management Bill and reframing from using Foreign Reserves to finance the budget.
The repayment of the loan will take the form of a debit order against the SACU account that is held by SARB on behalf of the Government of the Kingdom of Swaziland. The repayment will coincide with the quarterly payment schedule of SACU transfer payments by South Africa in its capacity as the manager of the SACU Common Revenue Pool.
c) Monitoring mechanisms
The Joint Bilateral Commission for Cooperation's annual meetings will be used to assess progress of the implementation of the Confidence Building Measures.
QUESTION NUMBER 2132 [NW2406E]
DATE OF PUBLICATION: 19 AUGUST 2011
Mr N Singh (IFP) to ask the Minister of Finance:
Whether any progress has been made to meet the inflation targeting goals set by the National Treasury; if not. why not; if so, what are the relevant details?
NW2405E
REPLY:
Yes, there has been significant progress in attaining the inflation target which is to maintain headline CPI inflation within a range of 3 to 6 per cent on a continuous basis.
CPI inflation fell below 6 per cent in February 2010, and has remained within the target range for the past 17 months. It reached a low of 3.2 per cent in September 2010 and rose to 5.3 per cent in July 2011 driven in large part, by external shocks to oil and food prices. Inflationary pressures have been contained by factors such as the relatively weak recovery in domestic demand and the strong rand.
The Reserve Bank implements inflation targeting in a flexible manner. This means that monetary policy is set after due consideration of all the factors impacting on Inflation as well as the performance of a range of macroeconomic variables and issues affecting financial stability. For example, in the presence of large external shocks a temporary overshoot of the target may be tolerated in order to avoid sharp movements in interest rates that would unnecessarily harm growth.
Despite this flexible approach, South Africa's record of achieving the target is good relative to international experience: inflation has exceeded the target band 54 per cent of the time compared with the international average of about 60 per cent.
One of the original objectives of the inflation targeting policy was to make the SARB more accountable for its actions and increase the transparency and predictability of monetary policy. In this respect there have been significant improvements relative to the previous regime:
- The Monetary Policy Committee (MPC) is required to clearly explain the rationale for interest rate decisions in its MPC statement, which is communicated in a televised press conference that can also be viewedlive on the SARB's website;
- The Governor appears regularly in Parliament before the Portfolio and Select Committees on Finance;
- The Bank publishes a Monetary Policy Review (MPR) twice a year to broaden understanding of the factors impacting on inflation and the rationale for monetary policy decisions:
- The bi-annual Monetary Policy Forums held in major centers across South Africa provide opportunities for the public to engage directly with senior SARS officials on issues affecting monetary policy.
- The SARB's role in monitoring financial stability is also crucial and has been strengthened since the crisis.
These efforts at transparency appear to have made a significant difference in making monetary policy more predictable, which has also helped to improve financial markets and citizens' understanding of the Reserve Bank's policy actions.
Despite these improvements, inflation remains heavily influenced by past inflation developments in South Africa i.e. it is highly persistent. A key challenge is to reduce the volatility of inflation expectations and to make them more forward looking. This is because more stable expectations can help to reduce the volatility of inflation and interest rates, especially in the presence of large shocks.
Credible and forward-looking monetary policy can help to keep inflation low and reduce the volatility of expectations. However, we also need to improve people's understanding about the costs of high inflation and the role of monetary policy in managing it. Complementary policies to address structural issues that reinforce inflation persistence in the economy are also necessary, such as counter-cyclical fiscal policy that helps to manage demand over the business cycle, increased competition to reduce high mark-ups and clearer rules for the setting of administered prices.
QUESTION NUMBER 2070 [NW2337E]
DATE OF PUBLICATION: 12 AUGUST 2011
Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:
(1) How do the loan conditions as set by the Government in respect of the R2.4 billion loan to Swaziland differ from the conditions initially set by the World Bank and the International Monetary Fund;
(2) whether the National Treasury intends imposing additional conditions on the Swaziland Government; if not, what is the position in this regard; if so, what are the relevant details?
NW2337E
REPLY:
(l) The five conditions that relate to fiscal reforms, as contained in the Memorandum of Understanding that govern the R2.4 billion loan to Swaziland, have been aligned with the conditions of the World Bank and the international Monetary Fund, and also the African Development Bank. The common thrust of the conditions relate to: expenditure adjustments; public finance legislation, including oversight and auditing; monetary policy; and areas of priority spending.
(2) The conditions pertaining to the loan are set out in the MoU. These conditions have clear timeframes and actions. The National Treasury does not intend to introduce additional conditions at this stage.
QUESTION NUMBER 2068 [NW2334E]
DATE OF PUBLICATION: 12 AUGUST 2011
Mr P D Dexter (Cope) to ask the Minister of Finance:
Whether the National Treasury has been informed of research done by a certain company (name furnished) which indicated that collections from carbon tax could be as high as R82.5 billion on the assumption that the equivalent of R165 per ton of carbon dioxide can be levied; if not, what is the position in this regard; if so, how will this money be spent/allocated?
REPLY:
Yes, the National Treasury is aware of various estimates made by various analysts and companies on the impact of any carbon tax that may be imposed, including the amount referred to by the honourable member. It should be noted that these estimates are just that; estimates that are based on assumptions by those that are doing the estimations, and should be
treated with some caution.
As the honourable member is aware, such estimates are a response to
the discussion document published by the National Treasury on 13 December 2010, entitled, "Reducing Greenhouse Gas Emissions: The Carbon Tax Option". The National Treasury has received 70 written submissions on the said discussion paper, and also engaged with various companies and business organizations / chambers on the impact of a carbon tax.
After taking into account the various comments and inputs, the National Treasury intends to publish later this year a revised policy paper that will elaborate on design options, and allow for a second round of comments, before a final proposal is made. It is only once this final proposal is
announced that one can assess the full impact of a carbon tax, and also consider the opportunities available for innovative companies within any sector. It should also be noted that it is only at that stage that an assessment can be made as to whether the overall impact of a carbon tax is revenue positive, negative or neutral, as this depends on whether other complementary measures are also taken, either to reduce other taxes and/or or to spend towards priorities as determined by government, including relief to the poor, transitional support to energy and trade intensive sectors, such as the proposed energy efficiency tax incentive and renewable energy initiatives.
QUESTION NUMBER 2067
DATE OF PUBLICATION: 12 AUGUST 2011
Mr P D Dexter (Cope) to ask the Minister of Finance:
Whether the National Treasury has been informed of companies in the mining industry who fear that the levying of a carbon tax may add as much as 10% to the cost structure of already struggling mining companies; if not, what is the position in this regard; if so, how does he intend ensuring that (a) the proposed carbon tax does not affect investment in the mining sector and (b) this increase in costs does not affect jobs?
REPLY:
Yes, the National Treasury is aware of various estimates made by mining and other companies on the impact of any carbon tax that may be imposed. Such information is the direct result of requesting public comments to the discussion document published by the National Treasury on 13 December 2010, entitled, "Reducing Greenhouse Gas Emissions: The Carbon Tax Option". The National Treasury has received 70 written submissions on the said discussion paper, and also engaged with various companies on the impact of a carbon tax, including the Chamber of Mines and individual mining companies.
It should be noted that any estimate made by a company or sector (or analyst) on the impact of a carbon tax relies on a host of assumptions that they make, and hence should be treated with some caution. After taking into account the various comments and inputs, the National Treasury intends to publish later this year a revised policy paper that will elaborate on design options, and allow for a second round of comments, before a final proposal is made. It is only once this final proposal is announced that one can assess the full impact of a carbon tax, and also consider the opportunities available for innovative companies within any sector.
(a) and (b) Not applicable
QUESTION FOR ORAL REPLY
QUESTION NUMBER 39 [NW2248E]
Written Question No 2002
DATE OF PUBLICATION: 15 NOVEMBER 2011
Mr D J Maynier (DA) to ask the Minister of Finance:
(a) At how many (i) international and (ii) domestic hotels/guest houses were (aa) he and (bb) the Deputy Minister accommodated during the period 1 April 2009 up to the latest specified date for which information is available and (b) what (i) was the (aa) name, (bb) star rating and (cc) city location of each specified establishment, (ii) was the (aa) duration and (bb) purpose of the stay in each case and (iii)(aa) was the total cost of the accommodation and (bb) is the breakdown of the accommodation cost in each case? NW2248E
REPLY:
Ministerial duties require Minister and Deputy Minister to travel, and such travel is not limited to the seats of office. These duties require them to travel around the country to fulfil their schedules. In addition the work of the Finance Ministry involves a wide ranging built in agenda of international commitments that include, but are not limited to WEF, G20, IMF, World Bank, African Development Bank, Investor relations and State Visits.
With regards to international visits, cognisance should be taken that accommodation is usually arranged by the relevant Embassy and by the organisers of the event for security and other logistical purposes.
Find the details of accommodation attached here
Apart from the provision of the Ministerial guidelines, the expenditure outlined below is regulated and scrutinised by the Department and Ministry to ensure value for money.
For the period May 2009 to August 2011
(a) (i) International establishments
(aa) Minister Gordhan – 24
(bb) Deputy Minister Nene - 10
(ii) Domestic establishments
(aa) Minister Gordhan - 16
(bb) Deputy Minister - 8
(b) (i) (aa) Minister and Deputy Minister stayed at various establishments during this time, the details of which have been submitted to the Leader of Government Business.
(bb) Star ratings ranging at these establishments range from 3 to 5 stars
(cc) Various international and domestic city locations for Minister and Deputy Minister
(ii) (aa) Minister - Spent duration of 61 nights in international hotels and 61 in domestic hotels (this includes a total of 38 days spent in establishments in Cape Town whilst official accommodation was awaited). The duration ranged from 1 to 6 days Deputy Minister – Spent duration of 25 nights in international hotels and 12 in domestic hotels
(bb) Purpose - Various ministerial duties for Minister and Deputy Minister
(iii) (aa) Total Cost of Accommodation R631, 130.21
(bb) Minister
- International Accommodations R336,508.43
- Domestic Accommodations R94, 248.85
Deputy Minister
- International Accommodations R 167, 020.51
- Domestic Accommodations R 33, 352.42