ATC210609: Report of the Select Committee on Appropriations on the Special Appropriation Bill [B5-2021] (National Assembly – Section 77), Dated 09 June 2021

NCOP Appropriations

Report of the Select Committee on Appropriations on the Special Appropriation Bill [B5-2021] (National Assembly – Section 77), Dated 09 June 2021

 

Having considered the Special Appropriation Bill [B5 – 2021], referred to it in terms of Section 13 of the Money Bills and Related Matters, Act No. 9 of 2009, the Select Committee on Appropriations reports as follows:

 

1. Introduction

Section 213(2) of the Constitution of the Republic of South Africa provides that money may be withdrawn from the National Revenue Fund (NRF) only in terms of an appropriation by an Act of Parliament. The Appropriation Act sets out to appropriate money from the NRF for the requirements of the State and to prescribe conditions for the spending of funds withdrawn. In executing this mandate, the Select Committee on Appropriations (the Committee) was established in terms of section 4(3) of the Money Bills and Related Matters Act, No. 9 of 2009. The Special Appropriation Bill [B5 – 2021] was tabled by the Minister of Finance on 24 February 2021 and it was referred to the Committee, for concurrence, on Friday, 04 June 2021.

 

1. Provisions of the Bill

The Bill proposes additional amounts to the following votes:

• An amount of R1.250 billion to Health to procure COVID-19 vaccines and implement a related COVID-19 vaccine research project.
• An amount of R2.826 billion to Social Development to fund the extension of the special COVID-19 Social Relief of Distress Grant.
• An amount of R2.7 billion to Public Enterprises to be allocated as follows:

1. R1.663 billion to SAA Technical SOC Ltd;
2. R819 million to Mango Airlines SOC Ltd; and
3. R218 million to Air Chefs SOC Ltd 

 

Post the tabling of 2020 Special Adjustments Appropriation Bill, the Department of Public Enterprises requested that a mechanism be found to transfer a portion of the business rescue funding to subsidiaries of South African Airways SOC Ltd (SAA). However, Parliament must approve this transaction. It should be noted that the R2.7 billion to be provided to subsidiaries is not in addition to the R10.5 billion already allocated to SAA in the 2020 Second Adjustments Appropriation Act.  In 20220/21, R7.8 billion was transferred to SAA and this R2.7 billion is the balance and it will be provided to SAA’s subsidiaries once the Bill is enacted.

 

1. Findings and Observations

During consideration of the Special Appropriation Bill [B5 – 2021], the Select Committee on Appropriations made the following findings and observations:

 

1. The Committee notes that the Billproposesan additional R1.250 billion for the Department of Health to procure COVID-19 vaccines and to fund COVID-19 vaccine research projects; R2.826 billion to Social Development to fund the extension of the special COVID-19 Social Relief ofDistress Grant; as well as R2.7 billion for the Department of Public Enterprises to be earmarked for South African Airways (SAA) subsidiaries namely SAA Technical, Mango Airlines, and Air Chefs.

 

1. The Committee further notes that the R2.7 billion is not a new allocation to the Department of Public Enterprises,but forms part of the R10.5 billion, which was approved by Parliament in the 2020 Second Adjustments Appropriation Act.

 

1. The Committee notes the allegations that SAA is unable to pay salaries for its workers. The Committee is of the view that this matter should have been long resolved, since the company received the R7.8 billion for the business rescue practitioners to implement a rescue plan and deal with challenges of this nature.

 

1. Recommendations

Having considered the Special Appropriation Bill [B5 – 2021], the Select Committee on Appropriations recommends as follows:

 

1. The Minister of Finance and the Minister of Public Enterprises should ensure that there is full compliance with all conditions prescribed for the R2.7 billion allocated to SAA subsidiaries as part of the R10.5 billion approved in 2020. Should there be non-compliance, the appropriate consequence management, including the stoppage of funds, should be instituted expeditiously and the matter reported to Parliament within a reasonable time. The Minister of Public Enterprises should ensure that SAA addresses its challenges around the payment of its personnel as soon as possible.

 

1. The Minister of Finance and the Minister of Health should ensure that funds earmarked for the procurement of vaccines and to fund COVID-19 research projects are spent according to plans and that value for money is achieved. Systems to prevent wasteful, fruitless, unauthorised and irregular expenditure should be put in place; and clear reporting frameworks, templates and procedures should be developed to publish vaccine expenditure reports for accountability and transparency purposes.

 

1. The Minister of Finance and the Minister of Social Development should ensure that funds earmarked for the extension of the special COVID-19 Social Relief of Distress (SRD) Grant are spent according to plans and that value for money is achieved. Systems to prevent wasteful, fruitless, unauthorised and irregular expenditure should be put in place with immediate effect; and clear reporting frameworks, templates and procedures should be developed to publish the expenditure on the SRD Grant for accountability and transparency purposes.

 

1. Committee Resolution on the Bill

The Select Committee on Appropriations, having considered the Special Appropriation Bill [B5 – 2021], referred to it for concurrence, and classified by the Joint Tagging Mechanism as a section 77 Bill, reports that it has agreed to the Bill without any proposed amendments.

 

The Democratic Alliance (DA), the Economic Freedom Fighters (EFF) and the Freedom Front Plus (FF+) reserved their positions on this Report.

 

Report to be considered.