AC211208: Report of the Standing Committee on Appropriations on the Adjustments Appropriation Bill [B20–2021], Dated 8 December 2021

Standing Committee on Appropriations

Report of the Standing Committee on Appropriations on the Adjustments Appropriation Bill [B20–2021], Dated 8 December 2021

 

The Standing Committee on Appropriations having considered the Adjustments Appropriation Bill [B20-2021] (National Assembly – section 77), referred to in terms of section 12 (15) of the Money Bills and Related Matters Act, 2009 (Act No. 9 of 2009) (as amended), reports as follows:

 

1. Introduction

The Minister of Finance tabled the Adjustments Appropriations Bill (henceforth referred to as the Bill) in Parliament on 11 November 2021 during the presentation of the 2021 Medium Term Budget Policy Statement (MTBPS). The Bill was tabled in Parliament in terms of section 12(1) and (2) of the Money Bills and Related Matters Act as amended by the Money Bills Amendment Procedure and Related Matters Amendment Act, 2018 (Act No. 13 of 2018). Section 12(1) of the Money Bills and Related Matters Act requires the Minister of Finance to table a national adjustments budget as envisaged in section 30 of the Public Finance Management Act, 1999 (Act No. 1 of 1999) (hereafter referred as the PFMA). Section 12(2) of the Money Bills and Related Matters Act requires that “an adjustments appropriation Bill must be tabled with a national adjustments budget”. The Bill was referred to the Committee on 24 November 2021 for consideration and report in terms of section 12(15) of the Money Bills and Related Matters Act. 

In addition to National Treasury briefing the Committee on the Bill in its entirety, the Financial and Fiscal Commission and Parliamentary Budget Office were also invited to comment on the Bill. Furthermore, to deliberate and understand the possible service delivery implications of the budget adjustments, the Committee invited national government departments who were affected by the budget adjustments to make oral and written submissions on the overall impact of these budget adjustments on their respective legislative mandate. The departments of Water and Sanitation and Transport were invited to make oral presentations on the Bill.  In addition to the invited stakeholders and departments, the Committee also requested the Departments of Health to make written submissions on the Bill.

 

To facilitate public participation and involvement, an advertisement was published in national and community newspapers from 5 to 12 November 2021 inviting general public and all interested stakeholders to make written submissions and comments on the Bill. The Congress of South African Trade Unions and Amandla.Mobi made comments on the Bill in response to the aforementioned advertisement. A public hearing on the Bill was held on 3 December 2021 via the Zoom virtual meeting platform.

 

Section 43 (1) of the Public Finance Management Act of 1999 (PFMA) allows Accounting Officers to utilise a saving in the amount appropriated under a main division (programme) within a vote to defray excess expenditure under another main division within the same vote, unless the relevant treasury directs otherwise. However, section 43 (2) states that the amount of savings under a main division of a vote that may be utilised in terms of subsection (1) may not exceed 8 per cent of the amount appropriated under that main division. To this end, the Committee identified 14 departments that have exceeded the 8 per cent requirement of the PFMA and National Treasury supplied the reasons for these virements and supported these virements. These departments were National Treasury, Basic Education, Higher Education and Training, Health, Women, Youth and Persons with Disabilities, Justice and Constitutional Development, Police, Communication and Digital Technologies, Forestry, Fisheries and Environment, Mineral Resources and Energy, Science and Innovation, Small Business Development, Tourism, and Trade, Industry and Competition. Furthermore, section 43 (4) does not authorise (a) the utilisation of savings on an amount specifically and exclusively appropriated for purpose mentioned under a main division within a vote, (b) the utilisation of savings on an amount appropriated for transfer to another institution, and (c) utilisation of savings on an amount appropriated for capital expenditure in order to defray current expenditure.

 

This report focuses on the proposed adjustments to the 2021 Appropriations Act (Act No. 10 of 2021) as tabled by the Minister of Finance and the matters raised during the engagements with the invited stakeholders and the organisations that made submissions in response to the Committee advertisements.

 

2. Overview of the 2021 Adjustments Appropriation Bill

 

The Adjustments Appropriation Bill provides for increases to allocations set out in the main Appropriation Act of 2021. In total, the net effect of the Adjustment Appropriations is an increase to vote appropriations by about R15 billion.

 

Table 1: Significant and unforeseeable economic and financial event

 

Vote and description of expenditure		R thousand
National government public sector salary adjustments		5,833,495
1	The Presidency	7,055
3	Cooperative Governance	5,861
4	Government Communication and Information System	6,946
5	Home Affairs	138,834
6	International Relations and Cooperation	32,500
7	National School of Government	2,897
9	Planning, Monitoring and Evaluation	5,263
11	Public Service and Administration	5,492
12	Public Service Commission	3,866
13	Public Works and Infrastructure	11,006
14	Statistics South Africa	44,090
15	Traditional Affairs	1,298
16	Basic Education	11,182
18	Health	30,810
19	Social Development	11,395
20	Women, Youth and Persons with Disabilities	1,969
21	Civilian Secretariat for the Police Service	2,082
22	Correctional Services	622,082
23	Defence	1,313,123
24	Independent Police Investigative Directorate	5,429
25	Justice and Constitutional Development	332,217
26	Military Veterans	3,021
27	Office of the Chief Justice	29,944
28	Police	2,867,766
29	Agriculture, Land Reform and Rural Development	109,861
31	Employment and Labour	52,780
32	Forestry, Fisheries and the Environment	64,889
33	Human Settlements	7,729
35	Science and Innovation	5,323
36	Small Business Development	2,785
37	Sport, Arts and Culture	7,753
38	Tourism	7,711
39	Trade, Industry and Competition	17,932
40	Transport	11,172
41	Water and Sanitation	49,432
Provincial government public sector salary adjustments		14,678,560
8	National Treasury
	(provincial equitable share)	14,678,560
Total		20,512,055

Source: National Treasury (2021) Adjustments Appropriation

 

Table 2: Unforeseeable and unavoidable expenditure

Vote and description of expenditure		R thousand
5	Home Affairs	40,000
	Electoral Commission of South Africa for the procurement of personal protective equipment
40	Transport	62,600
	South African National Roads Agency: R50.5 million for toll revenue loss and R12.1 million for damage to property
Total		102,600

Source: National Treasury (2021) Adjustments Appropriation

 

Table 3: Expenditure earmarked in the 2021 Budget speech for future allocation

Vote and description of expenditure		R thousand
National government		7,115,335
3	Cooperative Governance	284,000
	Presidential youth employment intervention to the Municipal Infrastructure Support Agent for innovative solid waste
8	National Treasury	841,000
	Presidential youth employment intervention to the neighbourhood development partnership grant for the city public employment programme window
17	Higher Education and Training	190,000
	Presidential youth employment intervention: R90 million for graduate assistants and R100 million for the performance model for demand-led skills training
18	Health	2,357,000
	R2.342 billion for the purchase of vaccines and R15 million for the allocation to Port Health Services as part of the presidential youth employment intervention
19	Social Development	208,000
	Presidential youth employment intervention: R178 million for provinces through the early childhood development conditional grant, and R30 million for the National Development Agency’s volunteer programme
20	Women, Youth and Persons with Disabilities	430,000
	Presidential youth employment intervention: R30 million for the Youth Enterprise Support Fund and R400 million for the national youth service
29	Agriculture, Land Reform and Rural Development	750,000
	Presidential youth employment intervention: Agriculture, Land Reform and Rural Development livelihoods programme
30	Communications and Digital Technologies	200,000
	Presidential youth employment intervention: Broadband Access Fund
31	Employment and Labour	258,000
	Presidential youth employment intervention: R238 million for the capitalisation of the national pathway management network, and R20 million for employment counselling and assessments
32	Forestry, Fisheries and the Environment	318,000
	Presidential youth employment intervention: R60 million for the People and Parks youth champions programme; R60 million for the biodiversity economy (support for 19 traditional authorities); R100 million for the expanded public works programme (infrastructure development and refurbishment in provincial conservation areas); R15 million for the South African National Biodiversity Institute; R14 million for biodiversity science, ecological infrastructure and human capital development (eco-monitors and eco-champs); R23 million for biodiversity science, ecological infrastructure and human capital development (to clear invasive alien plants, provide follow-up clearing of invasion alien plants, and replant indigenous vegetation); R36 million to catalyse climate-smart rural career pathways through job-creation programmes; and R10 million for the iSimangaliso Wetland Park Authority (land care and alien clearing)
35	Science and Innovation	67,000
	Presidential youth employment intervention: R25 million for the Duzi Umngeni Conservation Trust (enviro-champs), R32 million for the Water Research Commission (water graduate employment programme), and R10 million for the Council for Scientific and Industrial Research (experiential training programme)
36	Small Business Development	95,990
	Small Enterprise Finance Agency for the Township and Rural Entrepreneurship Fund
37	Sport, Arts and Culture	15,000
	Presidential youth employment intervention: R4 million for the District Six Museum, R9 million for the Museum of South African Hip Hop, and R2 million for the Phansi Museum Trust
38	Tourism	108,000
	Presidential youth employment intervention: R90 million for the infrastructure maintenance and beautification programme involving 40 provincial state-owned attractions, and R18 million for the tourism safety monitors programme
39	Trade, Industry and Competition	800,000
	Presidential youth employment intervention: Industrial Development Corporation (support social economic activities in communities)
41	Water and Sanitation	193,345
	Budget facility for infrastructure capital project allocation: R81.345 million for the George municipality water and sanitation project, and R112 million for the Umgeni Water Board (lower uMkhomazi bulk water supply scheme)
Provincial government		6,470,000
8	National Treasury
	Provincial equitable share	6,470,000
	R6 billion for the basic education employment initiative, R120 million for the appointment of social workers, and R350 million for staff and assistant nurses as part of the presidential youth employment intervention
Total		13,585,335

Source: National Treasury (2021) Adjustments Appropriation

 

Table 4: Roll-overs

Vote and description of expenditure		R thousand
1	Presidency	5,203
	R2.96 million for the implementation of action plans to address gender-based violence, and R2.243 million for compensation of employees
3	Cooperative Governance	94,200
	Disaster assessment and evaluation services in KwaZulu-Natal
6	International Relations and Cooperation	33,000
	Network connectivity (bandwidth)
14	Statistics South Africa	412,960
	Census 2021 pilot project: R344.649 million to purchase tablet computers; R200 000 for leave gratuity payments; R54.68 million for external computer advisors, advertising, communications and minor assets; and R13.431 million to appoint contract staff
16	Basic Education	210,000
	School infrastructure backlogs grant
22	Correctional Services	102,712
	R63.857 million for goods and services such as the procurement of uniforms, 9mm ammunitions, pepper sprays, filters, armour, leg irons, handcuffs, key bag pouches, holsters, shoulder straps and handheld metal detectors; and R38.855 million for the payment of outstanding invoices to the Department of Public Works and Infrastructure, and procurement of pistols
25	Justice and Constitutional Development	56,695
	State capture commission
28	Police	1,000,536
	R12.25 million for the semi-automated DNA processing system, R342.965 million for the upgrading of wide area network ICT infrastructure, R3.49 million for the conversion of 10 forensic response vehicles, R75 million for the upgrading of storage and disaster recovery capabilities, and R566.831 million for a payment to Polmed medical scheme for injury on duty cases
29	Agriculture, Land Reform and Rural Development	243,000
	Subsistence producers selected in phase 1 of the presidential youth employment intervention
33	Human Settlements	14,100
	Transfer payment to UN Habitat to fund the Southern African Development Community strategy on informal settlements
34	Mineral Resources and Energy	60,700
	R32.7 million for the non-grid electrification programme and R28 million for the solar water heater programme
37	Sport, Arts and Culture	31,790
	R7.8 million for job creation projects funded through phase 1 of the presidential youth employment intervention and R23.99 million for the creation of jobs to monitor compliance with COVID-19 regulations at sport events
41	Water and Sanitation	582,200
	R582.2 million for operational payments for the Vaal River pollution remediation project
Total		2,847,096

Source: National Treasury (2021) Adjustments Appropriation Bill

Table 5: Self-financing expenditure

Vote and description of expenditure		R thousand
4	Government Communication and Information System	800
	Expenditure to produce the Vuk’uzenzele newspaper, which is funded from revenue generated through advertising in the newspaper
5	Home Affairs	562,152
	Expenditure incurred issuing official documents, which is defrayed from revenue generated through issuing the documents
22	Correctional Services	329
	Expenditure for offender gratuities, which is funded from revenue generated through the hiring out of offender labour
23	Defence	514,618
	Expenditure for defence activities, which is defrayed from reimbursements from the United Nations for South Africa’s contribution towards peace support operations, and the sale of equipment and spares procured through the special defence account
Total		1,077,899

Source: National Treasury (2021) Adjustments Appropriation Bill

 

Table 6: Declared unspent funds and projected underspending

Vote and description of expenditure		R thousand
8	National Treasury	250,000
	Transfers and subsides to the South African Secret Service
10	Public Enterprises	17,000
	Compensation of employees
17	Higher Education and Training	85,000
	Compensation of employees
18	Health	160,000
	R150 million on the health facility revitalisation component of the national health insurance indirect grant, and R10 million on the health facility revitalisation grant
26	Military Veterans	50,000
	Military veterans’ benefits
30	Communications and Digital Technologies	8,425
	Compensation of employees
39	Trade, Industry and Competition	42,500
	Tirisano Construction Fund Trust
40	Transport	1,340,000
	Public transport network grant
Total declared unspent funds		1,952,925
National government projected underspending		3,775,000
Local government repayment to the National Revenue Fund		2,500,000
Total		8,227,925

Source: National Treasury (2021) Adjustments Appropriation Bill

 

The National Treasury has reported the following virements that needs to be approved by Parliament:

• National Treasury (Vote 8): a proposed total of R90 million is shifted from the direct component to the indirect component of the neighbourhood development partnership grant to fund project preparations, planning and implementation for municipalities facing project implementation challenges.
• Basic Education (Vote 16): a proposed R97 million is shifted from the school infrastructure grant goods and services component to fund shortfall in in the workbooks project.
• Higher Education and Training (Vote 17): a proposed total of R65 million is shifted from the technical and vocational education and programme to the university education for additional funding to the National Student Financial Aid Scheme (NSFAS).
• Health (Vote 18): A proposed total of R317 million is shifted from the National Health Insurance Grant (Contractors, business and advisory service) to other grants within the department.
• Women, Youth and Persons with Disabilities (Vote 20): a proposed total of R2.3 million is shifted from the Social Transformation and Economic Empowerment programme (contractors) to fund the compensation of employees of the Gender-based Violence Council.
• Justice and Constitutional Development (Vote 25): a proposed total of R421.8 million is shifted from the auxiliary and associated programme to the administration programme for ICT maintenance.
• Police (Vote 28): a proposed total of R250 million is shifted from the administration programme (construction and upgrading of police stations) to the visible policing programme for overtime payments.
• Communications and Digital Technologies (Vote 30): a proposed total of R7 million is shifted from the ICT international relations and affairs programme (payments to international organisations) to the ICT information society and capacity development programme towards the State Information Technology Agency for the national e-government project.
• Department of Environment, Forestry and Fisheries (Vote 32): a proposed total of R124.9 million and R120.7 million is shifted from the environmental programmes (expanded public works programme) towards the South African Weather Service operations and the South African National Parks operations respectively. 
• Mineral Resources and Energy (Vote 34): a proposed total of R30.6 million is shifted from the mining, minerals and energy policy development programme (alignment with classification circular 21 of 20182) to mineral and energy resources programmes and projects (business advisory services). Furthermore, a proposed total of R2.1 million is shifted from the mine health and safety inspectorate programme (centralisation of payments to sector education and training authorities) to the administration programme for the Mining Qualifications Authority.
• Science and Innovation (Vote 35): a proposed total of R33.9 million, R70 million, R5.7 million is shifted from various components of the technology innovation programme (Medical Research Council, various institutions’ innovation project research and Green nanochemistry (University of the Western Cape), nanomedicine platform (Tshwane University of Technology/Nelson Mandela University)) to fund the Network for Genomic Surveillance and mRNA technology transfer hub, and the National Research Foundation (Square Kilometre Array) respectively.  Furthermore, a total of R105 million is shifted within the research, development and support programme for the National Research Foundation (Square Kilometre Array), whilst a proposed total of R25.9 and R35 million is shifted from the research, development and support programme towards the socioeconomic innovation partnerships programme for the National Research Foundation (Square Kilometre Array).
• Small Business Development (Vote 36): a proposed total of R13 million is shifted from the administration programme to various other programmes of the department.
• Tourism (Vote 38): a proposed total of R52 million is shifted from the tourism sector support services programme (tourism incentive programme) to the destination development programme to fund the expanded public works programme (Development Bank of Southern Africa).
• Trade, Industry and Competition (Vote 39): a proposed total of R15 million is shifted from the spatial industrial development and economic transformation programme (Operating leases, operating payments, travel and subsistence, and venues and facilities) to the industrial financing programme for the manufacturing development incentives. An additional R6 million is shifted from the inward investment attraction, facilitation and aftercare programme (contractors, and travel and subsistence) to the industrial financing programme towards the manufacturing development incentive. Furthermore, an additional R10 million is shifted from the economic research and coordination programme (business and advisory services; catering; consultants; stationery, printing and office supplies) to the industrial financing programme towards the manufacturing development incentives.

 

 

1. Adjustments per identified department

 

The section below outlines the adjustments on budget allocations for the departments, which were identified by the Committee for briefings and written submissions on the Bill.

 

1. Department of Water and Sanitation (Vote 41)

 

The Department of Water and Sanitation’s 2021/22 main appropriation of R16.910 billion was adjusted upwards by R824.977 million to R17.735 billion. Total expenditure as at the end of the second quarter of the 2021/22 financial year was R5.710 billion or 32 per cent of the adjusted appropriation. In terms of non-financial performance, as at the end of the second quarter of the 2021/22 financial year, the Department reported that it achieved only 64 per cent of its targets.

 

1. Department of Transport (Vote 40)

 

The Department of Transport’s 2021/22 main appropriation of R66.703 billion was adjusted downwards by R1.266 billion to R65.437 billion. The Department spent R29.047 billion to date of reporting or 44 per cent of the total available budget of R66.703 billion, against the benchmark expenditure drawing target of R31.928 billion indicating an underspending of R2.881 billion. In terms of non-financial performance, as at the end of the second quarter of the 2021/22 financial year, the Department reported that it achieved 89 per cent of its 55 targets.

 

1. Department of Health (Vote 18)

 

The Department of Health’s 2021/22 main appropriation of R62.543 billion was adjusted upwards by R2.227 billion to R64.771 billion. The Department’s expenditure as at the second quarter of the 2021/22 financial year was R34.020 billion or 50.21 per cent of the adjusted appropriation.

 

1. Comments and hearings on the Bill with identified stakeholders

 

The section below provides an overview of the comments that were made on the Bill by the invited stakeholders.

 

                                                                                       

1. Financial and Fiscal Commission

 

The Financial and Fiscal Commission (FFC) submitted that total adjustments effected during 2021 were dominated by the following aspects; (i) provision to cover the increased costs associated with the 2021 public service wage agreement, (ii) implementing the Presidential Youth Employment Intervention, (iii) equity injection to Denel SOC Ltd (Denel) and (iv) the provision for the purchase of vaccines and (v) funding the extension of the Social Relief of Distress Grant (as per Second Special Appropriation Act, 2021).

 

The FFC indicated that adjustments to the estimates of direct charges against the National Revenue Fund amounted to just under R42 billion and were driven by increased Provincial Equitable Share funding required for the public sector salary adjustment. Furthermore, an adjustment to the appropriations totaled just over R15 billion and was primarily focused on the Presidential Youth Employment Interventions. The FFC submitted that total adjustments (including the 2021 Special Appropriation) resulted in total estimated spending for 2021/22 increasing by R59.850 billion (from R1.834 trillion to R1.893 trillion), while non-interest spending saw an upward adjustment of R59.4 billion.

 

In conclusion, the FFC submitted that it supported the Bill and made the following comments: 

 

• Provision for wage increases, the purchase of vaccines and, to a lesser extent the assistance provided to Denel, could be seen as necessary adjustments where government had limited discretion. 

• Notwithstanding Government's guarantee obligation, action to restructure SOEs was urgent and remained a long-standing challenge as these continue to be a drain on already stretched state resources. 
• The FFC submitted that it awaited the details of the public sector remuneration strategy which should provide a blueprint for a sustainable approach to managing the public sector wage bill into the future.

• The FFC welcomed the roll-out of phase 2 of the Presidential Employment Initiative that had a distinct focus on youth employment. Given current high levels of unemployment facing the youth, it is anticipated that this programme will bring relief and build additional skills that would assist in gaining full time employment amongst the youth, if its objective is realized. FFC submitted that this will boost the economy and enable inclusive economic development for a sustainable future.   
• FFC reiterated its submission to Parliament on the 2021 Second Special Appropriation Bill; whilst it agreed with the adjustment required to extend the Social Relief of Distress Grant, given the experience of the implementation and relief brought by the grant, there was a need for the Minister of Finance to consider the policy options and affordability of some form of income protection/Basic Income Grant. This will enable better planning and prevent the need for stopping/reintroducing support measures for poor and vulnerable South Africans.

 

1. Parliamentary Budget Office

 

The Parliamentary Budget Office (PBO) submitted that the revisions in the current financial year were mainly due to the allocation of the R11 billion provisionally allocated for the Presidential Employment Programme, allocations to provide for the national and provincial government public sector salary adjustments, roll-overs that could be the reason for slow spending estimates, and virements that are not in line with the provisions of the PFMA.

 

The PBO highlighted the fact that virements and shifts between main divisions/programmes are also allowed during the adjustments appropriations process, of which 12 required Parliament’s approval. The PBO also highlighted the spending trends vis-a-vis performance and submitted that South Africa’s public spending levels were not matched by high levels of quality or efficiency in the services delivered. It highlighted that the Department of Military Veterans showed the slowest spending, 27.7 per cent despite having a budget reduction.

  

1. Public submissions on the Bill

 

The section below provides summaries of the inputs made by organisations and individuals in response to the advertisement calling for submissions from the public on the Bill.

 

1. Congress of South African Trade Unions

 

The Congress of South African Trade Unions (COSATU) made the following comments and proposals in respect of the Bill:

 

Public Sector Wage Bill	Government should respect collective bargaining in the public service, entities, SOEs and local government and engage those bargaining councils and fora on matters of collective bargaining, including the wage bill and signed wage agreements. Government should work with Organised Labour to establish a single collective bargaining and wage regime for the entire state, including SOEs. Government should implement wage caps for executive managers in the SOEs and entities. Government should implement a 25 per cent package cut for members of the Cabinet, Provincial Executive and Mayoral Committees as well as executive managers in the state, entities, SOEs and metros. Open the Ministerial Handbook for public comment to ensure that the exorbitant perks for the executive are removed and a more modest regime adopted. Government should reverse the head count reduction for key frontline service delivery posts e.g. SAPS and Basic Education.
Basic Education	The failure by Basic Education to meet 80 percent of its target to provide sanitation to 1000 schools during the Covid-19 pandemic was indefensible and the Minister of Basic Education and the Director-General for the Department need to be held accountable. Department of Basic Education should table a clear and realistic plan in Parliament to ensure all schools have access to decent water and sanitation by the end of 2022.
Health	Government should reverse the proposed reductions to the Department of Health over the MTEF, in particular funding for the NHI. COSATU welcomed the proposed overall increase for health as follows: R2.3 billion for the fight against Covid-19; Medical interns (Human Resources and Training) R 246 million; and R15 million for Primary Health Care jobs under the Presidential Employment Programme.
Government Communication and Information Systems (GCIS)	GCIS and the Department of Health need to be sufficiently resourced to run a mass media and education campaign on the need to vaccinate; and The R150 million allocated to Digital Vibes by the Department of Health should be seized and allocated to GCIS.
Employment and Labour	COSATU welcomes the R245 million for employment opportunities under the Presidential Youth Employment Programme. Government should reverse the cuts and reprioritise funds to the CCMA. This will impact upon their ability to deliver essential protection to workers.
Social Development	COSATU expressed concerns about the impact of cuts to key public service delivery functions, in particular the cuts over the next 3 years to Social Security by 16.9 per cent with the potential ending of the Covid-19 Special Relief of Distress Grant of R350 Government should reverse the cuts to key social security departments that will impact upon their ability to deliver essential social relief e.g. the Covid-19 SRD allocations to SASSA.
Trade, Industry and Competition	Government should reverse cuts to key programmes that will impact upon their ability to industrial, manufacturing and export programmes.
Neighbourhood Development Partnership Grant	COSATU welcomed the adjusted allocation of R841 million to the Neighbourhood Development Partnership Grant which has also seen the employment of 32 663 persons in neighbourhood cleaning and greening programmes. COSATU submitted that such programmes should be enhanced and extended and means found to ensure their sustainability. Concerns were expressed about the R52 million cut for Financial Accounting and Supply Chain Management Systems when Government’s SCM and accounting systems are a porous sieve with billions lost annually to corruption and wasteful expenditure.
Transport	The Department of Transport and PRASA should table a plan to rebuild PRASA to Parliament and be held accountable for its implementation.
Water and Sanitation	The Department of Water Affairs and Sanitation as well as the eMfuleni Municipality should table a plan to address the Vaal River crisis to Parliament and be held accountable for its implementation.
Higher Education and Training	COSATU expressed concern about the R1.3 billion cut in University Infrastructure Projects as worrying given the backlog in student accommodation and the need to expand the size of classrooms to adjust for social distancing in future. It welcomed the R90 million allocation for the employment of junior lecturers through the Presidential Employment Programme
Women, Youth and Persons with Disabilities	The Department of Women, Youth and Persons with Disabilities and the NYDA should table a plan for this funding to create jobs to Parliament and be held accountable for its implementation.
Forestry, Fisheries and the Environment	COSATU welcomed the allocation of R250 million for employment opportunities under the Presidential Employment Programme.
Agriculture, Land Reform and Rural Development	COSATU welcomed the allocation of 750 million for employment opportunities under the Presidential Employment Programme.
Tourism	COSATU welcomed the allocation of R159 million for employment opportunities under the Presidential Employment Programme.
Small Business Development	COSATU welcomed the allocation of R138 million for small businesses, township and rural entrepreneurship.
Cooperative Governance and Traditional Affairs	COSATU welcomed the allocation of R284 for the Presidential Employment Programme Noting the Auditor General South Africa’s report on dysfunctional municipalities, COSATU proposed that Government should provide a clear stabilisation, recovery and repositioning plans for embattled municipalities and a road map to move towards the District Development Model.

 

 

 

1. Amandla.Mobi

 

Amandla.mobi made a submission on behalf of members of the amandla.mobi community who have tried to engage with the Minister of Finance, Mr E Godongwana, and National Treasury ahead of the tabling of the 2021 MTBPS, through the platform: https://act.amandla.mobi/campaigns/godongwana_mtbps. Amandla.mobi highlighted the content of the proposals sent to the Minister of Finance for consideration by the Committee.

 

Amandla.mobi made the following proposals:

 

• Increase and keep the R350 Social Relief of Distress grant until it is turned into permanent Basic Income Support, valued at the upper-bound poverty line (currently R1 335 per person per month) for people aged 18 to 59 with little to no income.
• Caregivers receiving the Child Support Grant should receive Basic Income Support, as well as refugees, permanent residents, asylum seekers and migrant workers. These demands were part of a petition we are running with Black Sash, who have been working for years on this issue.
• Increase the Child Support Grant to R950 per child.
• Increase the Old Age grant to R 2 150 per month.
• Expand Child Support Grant to include pregnant mothers.
• Increase all other grants by no less than R300.
• Increase Personal Income Tax for those earning over R1 million annually.
• Commit to introducing an annual net wealth tax at a higher rate of 3 per cent for those with wealth of more than R3.8 million, 7 per cent for those with wealth of more than R30 million and 9 per cent for those with wealth of more than R146 million.
• Pro-poor interventions and commitments such as dramatically reducing the medical aid rebate and eliminating retirement fund contributions or rebates for those earning over R1 million a year.
• Increase the Health Promotions Levy (HPL) to 20 per cent, as well as significant tax increases on tobacco, alcohol and especially carbon tax.
• With regard to public participation, ensure the majority of people are aware that National Treasury is accepting public comments that will inform budget priorities. This requires advertising the public comment period and process widely and in multiple languages.
• Ensure that anyone anywhere can submit public comments for free. To implement this, National Treasury should provide a toll-free number that does not require or use airtime, and a process where people can call in, learn more about the budget decisions and have their public comments captured by National Treasury staff. At the very least, National Treasury should provide a cell phone number by mid-January 2022, that members of the public can send public comments to through, either a phone call, SMS or WhatsApp message. Currently, National Treasury only provides a landline that costs airtime to call and excludes the majority, whereas a cell phone number would make submitting public comments slightly more accessible.

 

1. Committee findings and observations  

 

Having deliberated and considered all the submissions made by the above stakeholders on the Adjustments Appropriation Bill [B20–2021], the Standing Committee on Appropriations makes the following findings and observations:

 

1. The Committee notes and welcomes the proposed additional allocation of R50.2 million to the South African National Roads Agency for toll revenue loss and R12.1 million for damage to property during the July 2021 unrest. Given the important role that is played by SANRAL in connecting the key economic nodes of South Africa and South African trade partners in Africa, the committee supports this intervention by government in in order to minimise the financial impact of the July 2021 unrest. 

 

1. The Committee notes and supports the proposed allocation of R40 million to the Independent Electoral Commission of South Africa for the procurement of personal protective equipment. The local government elections are mandated by the Constitution of the Republic of South Africa, and the Committee is in support of this proposed allocation given the critical mandate that IEC plays in South African democracy, within the confines of the Covid-19 pandemic and its associated restrictions.

 

1. The Committee notes and welcomes the proposed allocation of R7.1 billion earmarked in the 2021 budget, particularly proposed allocations towards Presidential Youth Employment Initiative. Even though the Committee understands the impact that Covid-19 has had, particularly on the levels of unemployment amongst the youth. The Committee is of the view that a framework or standard guideline on the types of jobs to be created with a benchmark remuneration standard for each job category is necessary to avoid inconsistences and potential abuse of these funds. Given the recent experience on the distribution of food parcels, the Committee is of the view that National Treasury and the Presidency should have a well-defined approach to the implementation of this scheme, to ensure uniformity across all departments.

 

1. The Committee notes and welcomes the proposed R2.96 million roll-over to the Presidency for the implementation of action plans to address gender-based violence. Gender based violence has been one of the key problems facing democratic South Africa, and the Committee is in support of the initiatives by government to curb and ultimately end gender based violence in South Africa.

 

1. The Committee notes the proposed R582 million rollover of the indirect regional bulk infrastructure grant to fund the operational payments for the Vaal River pollution remediation project in Emfuleni Local Municipality. However, the Committee is concerned that this project is taking too long to complete and is of the view that government sponsored projects should have clear time lines in order to avoid cost escalations, which have proved to be costly to the fiscus in other government sponsored projects.

 

1. The Committee notes with concern the total of R50 million declared as unspent funds for the military veterans’ benefits. Given the plight of the military veterans and their old age, the Committee recommends that the department should avoid this in the future.

 

1. The Committee notes with concern the proposed allocation reduction of R1.3 billion on the public transport network grant for City of Cape Town to align to its revised implementation plan of myCiti phase 2A. The Committee has always raised concerns about the reduction of this grant due the important role it plays in providing reliable public transport network and services for the poor majority who are still reliant on public transport to commute to various working places. The Committee is of the view that government needs to find a long-term solution in order to assist cities in spending this grant. The Committee is concerned about the continued reduction of this grant; which intends to address some of the apartheid spatial planning wherein the poor must commute every day from townships and far rural areas to their work places in the cities.

 

1. The Committee notes with concern the R150 million declared unspent funds on the health facility revitalisation component of the national health insurance indirect grant, and R10 million on the health facility revitalisation grant of the national health insurance indirect grant. The Committee is concerned about the possible delays in the implementation of the National Health Insurance Scheme.  

 

1. The Committee notes and welcomes the proposed total of R90 million shifted from the direct component to the indirect component of the neighbourhood development partnership grant to fund project preparations, planning and implementation for municipalities facing project implementation challenges. Municipalities are at the centre of service delivery, the committee is in support of this initiative by government to support struggling municipalities to implement key projects and deliver services to the people, particularly rural municipalities.

 

1. Recommendations

 

The Standing Committee on Appropriations, having considered submissions from various stakeholders on the Adjustments Appropriation Bill [B20–2021], recommends as follows:

 

1. On the declared unspent funds of R1.3 billion on the public transport network grant for the City of Cape Town, the Minister of Transport and the City of Cape Town must provide a detailed report to Parliament on the reasons and implications for the delays in implementing the MyCiti phase 2A. The Committee wants to understand why there are delays in the implementation of this project and the remedial action taken to correct this problem. This will assist the Committee to avoid recommending the appropriation of funds that will not be spent and possible future reduction of this grant.

 

1. That the Minister of Defence and Military Veterans provide a detailed report to Parliament on the actions taken to address the concerns of the military veterans and the implication and reasons for the R50 million declared as unspent for the military veterans’ benefits.

 

1. That the Minister of Finance and the Project Management Office at the Presidency ensure that the funds allocated towards the Presidential Youth Initiatives are spent within the required guidelines and frameworks in order to avoid potential abuse and corruption.

 

 

1. Committee Recommendation on the Bill

 

The Standing Committee on Appropriations, having considered the Adjustments Appropriation Bill [B20–2021], referred to it and classified by the Joint Tagging Mechanism (JTM) as a Section 77 Bill, recommends that the Bill be adopted, without amendments.

 

1. Conclusion

 

The relevant Executive Authorities must send the responses to the recommendations as set out in section 7 above to Parliament as well as the Committee within 60 days of the adoption of this report by the National Assembly.

 

 

Report to be considered.