ATC141105: Report of the Standing Committee on Appropriations on the 2014 Division of Revenue Amendment Bill [B11 – 2014], dated 05 November 2014
Standing Committee on Auditor General
REPORT
OF THE STANDING COMMITTEE ON APPROPRIATIONS ON THE 2014 DIVISION OF REVENUE
AMENDMENT BILL [B11 2014], DATED 05 NOVEMBER 2014
The Standing Committee on Appropriations, having considered the Division
of Revenue Amendment Bill [B11 2014], reports as follows:
1.
Introduction
The Division of Revenue Amendment Bill (henceforth referred to as the
Bill) was tabled in Parliament on 22 October 2014 by the Minister of Finance
during the presentation of the 2014 Medium Term Budget Policy Statement (MTBPS);
and referred to the Committee on 4 November 2014. The Bill addresses the
following matters:
·
Changes in the equitable division of nationally
raised revenue among the spheres of government;
·
Adjustments to Provincial Allocations;
·
Adjustments to Local Government Allocations;
·
Function Shifts; and
·
Changes to gazetted frameworks and allocations
(i.e. technical corrections).
This report focuses on amendments proposed in the Bill tabled by the
Minister.
2.
Equitable
division of revenue raised nationally, among the spheres of government
Table 1 hereunder outlines the equitable division of revenue raised
nationally among the three spheres of government as reflected in the Bill as
Schedule 1.
Table 1:
Schedule 1
Spheres of Government
R000
|
2014/15 Main Allocation
|
Adjustment
|
2014/15 Adjusted
Allocation
|
National
|
735 604 179
|
(6 222 624)
|
729 381 555
|
Provincial
|
362 468 075
|
|
362 468 075
|
Local
|
44 490 145
|
|
44 490 145
|
TOTAL
|
1 142 562 399
|
(6 222 624)
|
1 136 339 775
|
The net effect of the 2014 adjustments is a reduction in the 2014/15
estimates of expenditure from R1.143 trillion to R1.136 trillion. For 2014/15,
main budget spending was revised down by R6.2 billion to R1.136 trillion
compared with the 2014 Budget estimate. However, this still represents an
increase in expenditure of 8.5 per cent over the 2013/14 outcome.
3.
Changes in
provincial allocations
In terms of the Provincial Equitable Share, there were no
in
-year additions to the equitable share. All
non-discretionary obligations must be adequately provided for within provincial
budgets. Significant changes to the provincial grant allocations include:
Rollover of Conditional
Grant
-
R9.7million for KZN
for HIV and Aids (Life Skills Education) Grant
Conversions of Indirect
Provincial Conditional Grants to Direct Provincial Conditional Grants
-
R397.7m from
(indirect) School Infrastructure Backlogs Grant to (direct) Education
Infrastructure Grant for Western Cape.
A reduction of R375 million
from the indirect National Health Grant) through the following:
-
An amount of R262
million has been converted from the indirect National Health Grant- health
facility revitalisation component to the direct Health Facility
Revitalisation Grant for four provinces (Free State, KwaZulu Natal,
Northern Cape, North West);
-
A saving of R113
million was also declared on indirect grant National Health Grant.
4.
Changes in local
government allocations
Significant changes to the local government allocations include:
Disaster recovery:
-
R157 million for
disaster recovery to be transferred to municipalities in 5 provinces
(Gauteng, KwaZulu Natal, Limpopo, Mpumalanga and Western Cape) through the
Municipal Disaster Recovery Grant
Rollovers:
-
R1.5 million for
Tswaing
Local Municipality (NW) on the Municipal Water
Infrastructure Grant
-
R80.2 million for the
Municipal Infrastructure Grant
-
R18.6 million for the
Regional Bulk Infrastructure Grant (indirect grant)
Unforeseen and unavoidable
(Municipal Water Infrastructure Grant):
-
R15 million for
emergency boreholes in Giyani
-
R8.3 million for
emergency repairs to the Waste Water Treatment Works in
Bloemhof
(Dr Ruth
Segomotsi
Mompati District Municipality)
5.
Function Shifts
Following the national and provincial elections in 2014, several changes
to the functions and structures of national departments were announced and the
2014 adjustments budget provides for the following:
-
The sanitation
function has been shifted from the Department of Human Settlements to the
Department of Water and Sanitation. This shift is
effected
in the 2014 Adjustments Budget.
-
The following
conditional grants will move to Department of Water and Sanitation:
-
The Rural Households Infrastructure Grant (direct
and indirect) which funds on-site sanitation for rural areas where reticulated
services are not feasible;
-
Human Settlements Development Grant (indirect
portion) which funds the eradication of bucket sanitation.
6.
Changes to
gazetted frameworks and allocations
Section 16(2) of the Division of Revenue Act (No.10 of 2014) requires
National treasury to consult Parliament on any proposed changes to a
conditional grant framework for the purposes of correcting an error or omission
before gazetting the changes. The proposed changes to the provincial and local
government conditional grant frameworks include:
Education Infrastructure
Grant:
-
Correction to align
due dates for infrastructure plans with those in the 2014 Division of
Revenue Act (DORA);
-
Correction to maximum
amount that can be used for technical capacity from
R16 million to R26 million.
Health Facility
Revitalisation Grant:
-
Correction to align
due dates for infrastructure plans with those in the
DoRA
;
-
Correction to maximum
amount that can be used for technical capacity from
R16 million to R29 million.
National Health Grant:
Health Facility Revitalisation Component:
-
Correction to align
due dates for infrastructure plans with those in the
DoRA
;
-
Correction to details
required in plans that must be submitted;
-
Correction that report
does not have to be submitted to National Treasury as plans and other
documentation will already have been submitted.
National Health Grant:
National Health Insurance Component:
-
Correction to refer to
all health practitioners not only medical practitioners;
-
Contracting
corrected to purchasing services so that it doesnt require
professionals to provide services on provincial premises;
-
Omission of
implementing alternative models for supplying chronic medicines is
corrected;
-
Due date for business
plans corrected;
-
MTEF allocations were
incorrectly stated, these are corrected.
Provincial Roads Maintenance
Grant:
-
Correction to process
for publishing provincial project plans. These must be tabled in
provincial legislatures, not gazetted in provincial legislatures.
Human Settlements
Development Grant (indirect portion):
-
Indirect grant created
in 2014/15 to fund bucket eradication projects;
-
Grant framework
corrected to reflect that the Department of Water and Sanitation will
administer this indirect grant.
Details per municipality of the changes to municipal grant allocations
and details per province of the changes to indirect grant allocations will also
be gazetted
7.
Recommendation
The Standing Committee on Appropriations, having considered the Division
of Revenue Amendment Bill [B11 2014] (National Assembly section 76(1) (the
Bill), tabled on 22 October 2014 as part of the 2014 Medium Term Budget Policy
Statement and classified as a Section 76 (1) Bill, recommends that the Bill be
adopted, without amendments.
Report to be considered.
Documents
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