ATC230614: Report of the Select Committee on Appropriations on the Appropriation Bill [B3 – 2023] [National Assembly (Section 77)], Dated 14 June 2023

NCOP Appropriations

Report of the Select Committee on Appropriations on the Appropriation Bill [B3 – 2023] [National Assembly (Section 77)], Dated 14 June 2023

                                                              

1. Introduction

The Appropriation Bill [B3– 2023] was referred to the Committee, for concurrence, on 8 June 2023. In order to streamline the processing of the Bill, the Committee received a thorough briefing from National Treasury on the Bill, as tabled by the Minister of Finance, on 09 May 2023. Thereafter, on 17 May 2023, the Committee consulted with the Financial and Fiscal Commission (FFC) and the Parliamentary Budget Office (PBO) on the Bill. With respect to public participation, the Committee held public hearings on 24 May 2023, during which submissions were heard from Equal Education (EE), the Public Service Accountability Monitor (PSAM), the Organisation Undoing Tax Abuse (OUTA), and the Congress of South African Trade Unions (COSATU).  

 

1. Overview of the Bill

The Bill outlines various provisions that govern the utilisation of appropriated funds for the 2023/24 financial year. These include, under Clause 3, an explanation that amounts marked as specifically and exclusively appropriated in the Schedule may be used only for the purpose indicated, unless the amount or purpose is amended by, or in terms of, an Act of Parliament. Clause 4 provides that the Minister of Finance may, in writing, impose conditions on an amount in the Schedule, other than a conditional allocation, in order to promote transparency and accountability and the effective management of the appropriation; and stop the use of an amount in respect of which conditions thus imposed are not met. Clause 5 deals with the use of unspent funds, with subsection (1) explaining that, despite Clause 3 of this Bill and Section 43(4) of the Public Finance Management Act No 1 of 1999 (PFMA), the Minister may approve that unspent funds in an amount in the Schedule allocated for -

1. Transfers and subsidies to other institutions, be used elsewhere within the same main division;
2. Payment for capital assets, be used elsewhere within the same vote: or
3. Payment for financial assets, be used elsewhere within the same main division.

Subsection (2) states that the sum of the unspent funds in a main division of a vote approved for use in another main division of that vote, in terms of subsection (1) and section 43(1) of the PFMA, may not exceed eight percent of the amount appropriated under the main division; with subsection (3) indicating that the approval of the use of unspent funds in terms of subsection (1) must be disclosed in the National Treasury’s next quarterly report to the relevant parliamentary committees.  Subsection (4) provides that, despite any provision in other legislation to the contrary, the amount appropriated for the compensation of employees within a vote in the Schedule to this Bill may only be increased with the approval of the Minister of Finance; and that the Minister may not approve the use of unspent funds in terms of subsection (1) for compensation of employees. Subsection (5) states that section 43 of the Public Finance Management Act and the provisions of this Bill apply with the necessary changes to the use of unspent funds in the amount appropriated under a main division within a vote to defray excess expenditure within the same main division for another classification as envisaged in the definition of “purpose” in Clause 1; and that the sum of the unspent funds under a classification in a main division within a vote thus approved for use, may only exceed eight percent of the amount appropriated for the classification with the approval of the Minister of Finance.  

The amounts appropriated for each vote are set out in the Schedule to the Bill. The Schedule is divided by vote and by main division within a vote. A purpose is set out for each vote, programme and transfer and subsidy to a national department within a vote. Furthermore, allocations within a vote are categorised in terms of -

• Current payments (compensation of employees, goods and services, interests and rent on land);
• Transfers and subsidies;
• Payments for capital assets; and
• Payments for financial assets.

In the Bill, allocations marked with a single asterisk refer to specifically and exclusively appropriated allocations, including, but not limited to -

• All votes and national departments’ compensation of employee appropriations; and
• Conditional grants (also listed in the Division of Revenue Bill [B2 – 2023].

 

1. Summary of appropriated funds for 2023/24 financial year

Table 1: 2023 Appropriated funds

Summary of 2023/24 Appropriated funds
2023/24	R’ 000
Total Appropriated Of which Current payments              Compensation of employees              Goods and services              Interest and Rent on Land Transfers and subsidies Payments for capital assets Payments for financial assets	1 077 437 771   261 404 266 178 781 881 82 388 900 233 485 793 318 501 17 374 398 1 917 120

 

The total funds (excluding direct charges) available to be appropriated per vote for the 2023/24 financial year is R1.08 trillion. This is a decrease of R26.60 billion or 24 percent from the R1.10 trillion appropriated in the 2022/23 financial year. The total available funding, including direct charges to be appropriated, amount to R2.03 trillion. In terms of economic classification, the largest proportion, at R793.9 billion of the available funds, is allocated for transfers and subsidies in the form of social grants, conditional grants, transfers to public entities and post-school student subsidies. The second largest component, at R179.7 billion, is allocated for compensation of employees, which is directed towards labour-intensive departments in the Peace and Security Cluster (Police, Correctional Services, Defence and Justice and Constitutional Development) and Higher Education and Training, for salaries of lecturers at Technical and Vocational Education and Training (TVET) and Community Education and Training colleges.

Payments for capital assets, which are mainly for school infrastructure backlogs, Health and Police infrastructure construction, rehabilitation and maintenance and bulk regional water and sanitation infrastructure, amount to R18.4 billion for the 2023/24 financial year. Payments for financial assets amount to R1.97 billion and provides for the recapitalisation of the Land and Agricultural Development Bank of South Africa (R1 billion), as well as the World Bank (R278.3 million), African Development Bank and African Development Fund (R638.9 million).

4. Stakeholder submissions

4.1 Financial and Fiscal Commission (FFC)

The Financial and Fiscal Commission (FFC) noted that the largest appropriation at the national sphere was for the Social Development Vote, which would receive R263 billion in 2023/24 (growth of 8.8 percent); driven by the extension of the Social Relief of Distress (SRD) Grant and adjustments to the value of social security grants. The FFC indicated that there was still no clarity on sustainable and permanent support for unemployed individuals between the ages of 18 and 59, creating uncertainty for beneficiaries. The FFC also indicated that while the value of other social security grants had been adjusted, the value of SRD Grant remained unchanged since inception.

The FFC further noted that the allocation to the Cooperative Governance Vote was projected to increase by 11 percent in 2023/24. The additional funding was directed at the Local Government Equitable Share (LGES), which was welcomed as it served to protect the funding for basic services that is an integral part of the social wage package.

The FFC submitted that the Higher Education and Training Vote was projected to grow by 1.1 percent in 2023/24. However, an assessment of national spending by economic classification shows that transfers and subsidies to higher education institutions (HEIs) will decline by 3.7 percent in 2023/24. The decline affects current and capital transfers to HEIs. The FFC further submitted that, while a drive towards support for the development of a new, sustainable funding framework for fee-free higher education was carried through from the 2022 Budget to the 2022 Medium Term Budget Policy Statement (MTBPS) and the 2023 State of the Nation Address (SONA), the 2023 Budget was silent on this.

The FFC indicated that the Health Vote was projected to decline from R62.1 billion in 2022/23 to R60.1 billion in 2023/24. This included a reduction in the health allocation contained in the social wage package, implying that free healthcare will be affected. The FFC advised Parliament to request an explanation of how this reduction would impact the poor who rely on the public healthcare system.

The FFC further noted that the Transport Vote would dominate in respect of infrastructure spending over the next three years (R47.2 billion in 2023/24, R51.5 billion in 2024/25 and R56 billion in 2025/26), with the focus on the rehabilitation of provincial roads and reducing the rehabilitation backlog on national roads. However, notwithstanding increased infrastructure spending, the budget allocated to Transport declines from R94.9 billion in 2022/23 to R79.6 billion in 2023/24. The reductions are to the Aviation Oversight sub-programme (responsible for monitoring the performance of the Airports Company of SA, the Air Traffic and Navigation Services Company and the SA Civil Aviation Authority) and the Rural and Scholar Transport sub-programme. As these programmes are critical in ensuring safety in the sector, the FFC recommended that cuts should be focussed on non-essential spending items. In light of the high levels of crime in South Africa, the FFC welcomed the additional resources and recruitment drive being implemented under the Police Vote.

The FFC indicated that it was cognisant of government’s efforts to balance the protection of the social wage package with growth-inducing allocations to public infrastructure investment and additions to fight crime and corruption. However, it recommended that, in performing its oversight, Parliament should enquire how strategic departments will absorb reductions in their budgets and how the reductions are likely to affect service delivery; with particular focus on Health, Transport and Higher Education and Training. The departments with reduced allocations should, as far as possible, ensure that reductions are applied to non-essential spending items. The FFC further recommended that timelines needed to be devised for the finalisation of a new funding framework for the Higher Education sector.  

1. Parliamentary Budget Office (PBO)

The Parliamentary Budget Office (PBO) identified compensation of employees (COE) and contingent liabilities as possible risks to the 2023 appropriations. The PBO expressed concern over unfunded COE budgets in national departments and indicated that both the departments of Correctional Services and Defence showed an increase in personnel numbers but a decrease in expenditure between 2022/23 and 2023/24; and the Police showed an increase of 5 000 police trainees, but a reduction in the expenditure.

The PBO indicated that, while contingent liabilities were set to decline from R1.07 trillion (16.1 percent of GDP) in 2022/23 to R904.1 billion (11.4 percent of GDP) in 2025/26, mainly due to the debt relief to Eskom; it was concerned that many state-owned entities (SOEs) remained unable to adequately fund their operations and debt obligations and were even less able to optimally invest in infrastructure. Risks from independent power producers presented a low risk to public finances and exposure was expected to decrease from R187.1 billion in 2022/23 to R134 billion in 2025/26. Contingent liability exposure from public-private partnerships arose mainly from the early termination of contracts; and was expected to decline from R7.1 billion in 2022/23 to R2.9 billion in 2025/26; while the Road Accident Fund guarantee was set to increase to R371.7 billion by 2025/26 from R99.2 billion in 2015/16.

The PBO was of the view that it was critical for government to monitor and update contingent liabilities; and to improve the management of SOEs to profitability and self-sufficiency as listed under Schedule 2 of the Public Finance Management Act (1999) and Presidential interventions.

4.3 Equal Education (EE)

Equal Education (EE) submitted that the education sector was plagued by learning, infrastructure, spending, and governance challenges which could lead to an education blackout. EE listed the national critical infrastructure backlogs, as follows:

• 3 677 inappropriate schools with an estimated cost of R4.48 billion;

• 13 655 schools with no sanitation facilities, projected to cost R17.95 billion to construct;
• 8 265 schools needing additional classrooms which could cost R44.50 billion; and
• 6 310 schools with no water supply, with an estimated R6,67 billion needed for the installation.

EE emphasised that funding to the sector must address rising inflation and increasing learner enrolment, noting that the 2023/24 allocation did not meet this criterion, despite nearly R1 billion being added to the 2022/23 Medium Term Expenditure Framework (MTEF) projections.

EE welcomed the additional R1.5 billion for the Education Infrastructure Grant over three years to address overcrowding in schools and the R283 million added in 2023/24 to repair flood damaged schools in the Eastern Cape and KwaZulu-Natal. However, EE pointed out that the whole sector, from the national Department of Basic Education to school level, suffered from endemic spending issues such as under-spending and irregular, fruitless and wasteful expenditure. The state of schools would be drastically improved if education departments were to spend judiciously. EE emphasised the importance of acknowledging the looming education blackout and ensuring that schools get the money they needed to tackle the challenges they experienced. To this end, EE called on Parliament to –

• Reject the 2023/24 Budget and call for a budget for schooling that grows in line with inflation and learner enrollment;
• Take its oversight responsibilities seriously, by actively engaging the Department on how it spends monies, and apply proper consequence management; and  
• Ensure that proper oversight is provided if and when the norms and standards get brought to Parliament for amendment.

 

1. Public Service Accountability Monitor (PSAM)

The Public Service Accountability Monitor (PSAM) submitted that nearly three decades into South Africa’s democratic era, much had been achieved in alignment with one of the most progressive Bill of Rights in the world. However, many black people in particular are still without adequate housing or sanitation and access to quality healthcare or education. In addition to weak governance and public administration, misuse of public funds constitutes a serious threat to the progressive realisation of human rights and optimal service delivery. Fighting corruption and enhancing governance and accountability should therefore be the core to realising sustainable and inclusive development and building a capable and developmental state. PSAM indicated that, while they were encouraged by the increased resource allocation to institutions established to prevent and eradicate corruption, provide oversight over procurement, manage the country's finances and support constitutional development, significant funding challenges still existed.

PSAM reported that several challenges existed within the Department of Justice and Constitutional Development, where several crime and corruption fighting entities were located. These included poor internal controls, slow recruitment leading to persistent vacancies, and poor contract and supply chain management, leading to delays in the procurement of goods and services and under-spending. PSAM further reported that, while increased allocations to the National Prosecuting Authority (NPA) had enabled it to fill vacancies and take important steps to rebuild capacity; its performance had not improved significantly and coordination with other departments remained an issue, resulting in outstanding cases and low conviction rates. PSAM noted that performance targets appeared to have been reduced over the MTEF, which it found concerning, given the increased budget allocation.

PSAM argued that the funding model of the Special Investigating Unit (SIU) and growing debt from departments and entities under investigation, was a threat to the sustainability of the SIU, which had, to date, performed relatively well on its mandate. In addition, PSAM highlighted that the National Anti-Corruption Advisory Council (NACAC) appeared to be funded from the Criminal Assets Recovery Account (CARA) and it was unclear how funds were allocated or spent, and it appeared that some allocated funds had not yet been spent. NACAC played an important role in supporting further development of the National Anti-Corruption Strategy (NACS) and establishment of a permanent body. The funding arrangements should be transparent and funds allocated should be used to ensure coordination and implementation of the NACS.

PSAM indicated that, given that numerous stakeholders were involved in anti-corruption efforts and weaknesses or performance challenges in one entity could impact overall outcomes, it was critical that these entities worked collaboratively to improve the efficient use of resources and secure better outcomes.    

 

1. Organisation Undoing Tax Abuse (OUTA)

The Organisation Undoing Tax Abuse (OUTA) confined its comments to Vote 5: Home Affairs, submitting that its research and investigations over the course of years, together with very recent developments, had raised some concerns over the funding provisions for the Independent Electoral Commission (IEC) and the Represented Political Parties’ Fund (RPPF). OUTA was concerned over the appropriation of R350 million to the RPPF under transfers and subsidies; submitting that National Treasury’s contribution to the RPPF had increased significantly over the past few years: from R149 million in 2018/19, R158 million in 2019/20, R163 million in 2020/21 and R167 million in 2021/22, to a massive R342 million in 2022/23, which was more than double that of the previous year; with the additional R350 million taking it to nearly R700 million for this financial year.

OUTA was particularly concerned about this additional increase, as the RPPF was run by the IEC which, according to its Annual Reports, had experienced budget cuts amounting to R769.7 million recently (R278.5 million for 2022/23; R240,2 million for 2023/24; and R251 million for 2024/25). These figures were supported by the IEC’s presentations to the Portfolio Committee on Home Affairs on 22 May 2022 and 28 February 2023. OUTA emphasised that the IEC was integral to ensuring free and fair elections, safeguarding the principles of security and safety within the electoral lifecycle, as well as promoting voter awareness and encouraging the public to register and vote; and that the IEC should be getting more funding, not political parties.

 

4.6 Congress of South African Trade Unions (COSATU)

The Congress of South African Trade Unions (COSATU) indicated that it had hoped for a bold Bill that would protect workers from inflation, rebuild the State, decisively tackle corruption, provide relief to the unemployed and put measures in place to stimulate the economy. However, while acknowledging that there were positive interventions in the Bill at a macro level, it submitted that overall, the Bill failed to address the biggest challenge of economic stagnation. COSATU did welcome the additional allocations of R37 billion to key frontline service departments, state-owned-entities (SOEs) and social security; but expressed concern over continual under-spending in a climate of scarce resources. It further welcomed the funding increase of 6.1 percent to the National Student Financial Aid Scheme (NSFAS); the 7.7 percent increase in funding for Agriculture and Land Reform; and the 11.4 percent increase in funding for roads.  However, COSATU found the following below-inflation increases, amounting to cuts in real terms, deeply offensive: Basic Education (3.1 percent), Health (2.7 percent), Industrial Financing and Exports (2.4 percent), South African Police Service (SAPS) (3.7 percent), Courts and Correctional Services (2.9 percent), and Home Affairs (-0.8 percent).  COSATU was of the view that the austerity approach to key public services was reckless and would further weaken the capacity of the State to provide quality public services, upon which society and the economy depended.

COSATU submitted that additional funding to fill critical vacancies at the National Prosecuting Authority (NPA) and the South African Revenue Service (SARS) would boost the fight against corruption and tax evasion.

   

5. Findings and observations

Having deliberated and considered all the submissions made by the above stakeholders on the Appropriation Bill [B3 - 2023], the Select Committee on Appropriations made the following findings and observations:

 

1. The Committee welcomed the Bill, which proposes the overall allocation (excluding direct charges) of R1.08 trillion for the 2023/24 financial year; and further noted that this was a decrease of at least 24 percent from the R1.10 trillion appropriated in the 2022/23 financial year.  

 

1. The Committee noted that the Bill did not contain any allocation for the construction of the uMoloto Rail Project between Limpopo, Mpumalanga and Gauteng and further noted the decision that had been taken that economic development issues for the residents of Mpumalanga should be prioritised within their own provincial budgets and that the matter of the uMoloto Development Corridor had been handed over to the Mpumalanga Provincial Government.   

 

1. Whilst the Committee welcomed all measures taken by government to deal with matters related to gender-based violence (GBV) and femicide, which included funding for an additional 40 sexual offences courts; an increase in the number of Thuthuzela Care Centres; and victim-friendly rooms in all police stations, the Committee was concerned that there was no clear funding earmarked for the implementation of the National Strategic Plan to ensure that all gender issues, including those of the LGBTQIA+ community, were progressively mainstreamed. 
2. The Committee welcomed the fact that the Department of Health had taken steps to address the issue of medico-legal claims through improved case management systems, including forensic investigations through the Special Investigations Unit (SIU). The Committee further noted the urgent need for government to re-introduce the State Liability Amendment Bill, providing for periodic, rather than once-off payments for claims; and the fact that far-reaching reforms were needed for medico-legal cases, including a new model for handling claims. 

 

1. Whilst the Committee noted the fact that the tertiary training of engineers and doctors was much more costly, it was concerned over the fact that the amount allocated to the Department of Higher Education and Training was three times more than the allocation to the Department of Basic Education; especially in light of the reports that the majority of Grade 4 learners could not read for meaning; the fact that only about 7 percent of the country’s population would obtain a university degree; and the fact that the culture of teaching, learning and inappropriate structures remained a challenge.    

 

1. The Committee was concerned that the larger portion of the funds allocated in the Bill was earmarked for social support and the public sector wage bill, instead of ensuring that resources were allocated in a more sustainable manner over the long term to infrastructure development and growing the economy to create much-needed jobs.

 

1. The Committee welcomed the fact that the Bill included an additional allocation of R1.3 billion to the National Prosecuting Authority (NPA), of which R750 million was earmarked for section 38 appointments, which allowed for the incorporation of specialist expertise from the private sector to deal with complex cases, including those emanating from the Zondo Commission’s Report.

 

1. The Committee noted that the existing disaster funding system had been carried through to the 2023 Budget; with emergency housing grants being shifted to the national Department of Human Settlements to enable a more rapid response in case of floods; including immediate response relief and recovery grants, which was included in the budget of the Department of Cooperative Governance; and that historic disasters had been provided for in the adjustments budget. Furthermore, the Committee also noted that there was a dedicated fund to support the agriculture sector in the case of disasters, to which the Bill allocated R1 billion over three years to assist all farmers.  

 

1. The Committee remained concerned that the strict conditions attached to the Social Relief of Distress (SRD) Grant, meant to address corruption and maladministration in the social grants space, might have caused the Grant not to reach most of the intended beneficiaries and therefore it might not be making the desired impact on the poverty and unemployment experienced by many people. The Committee shared the FFC’s concern around the lack of permanent and sustainable intervention for unemployed individuals between the ages of 18 and 59. Moreover, the Committee noted that a permanent intervention in the form of a basic income grant might end up costing about R130 billion in 2030. 

 

1. The Committee agreed with the FFC’s concern around the reduction in allocations to the Health and Transport sectors and the fact that these departments needed to indicate how they planned to absorb such reductions in their 2023 budgets. The move towards allocating more resources for the rehabilitation of provincial roads was also noted; however, the Committee was of the view that a balanced approach was needed between maintaining provincial and national roads, without disadvantaging either sphere.  

 

1. The Committee was concerned about the impact that the worsening Rand/US Dollar exchange rate would have on ordinary citizens, and further noted that, apart from the value of the currency decreasing, there was also a lack of value for money spent, with productivity decreasing and causing further economic decline. The Committee agreed with the Parliamentary Budget Office’s (PBO) view that the worsening exchange rate would lead to higher cost of living, and that the situation was exacerbated by the costs related to load shedding; and that interest rate hikes had a limited impact on inflation and high unemployment.

 

1. The Committee was concerned over the fact that some sectors, such as the South African National Defence Force (SANDF), continued to be under-funded and that the majority of its equipment was ageing and no longer serviceable. However, the Committee was of the view that equally, no amount of funding would solve the problems if government did not implement consequence management for non-performance and failure to spend according to plans.

 

1. The Committee was concerned over the fact that many state-owned entities (SOEs) remained unable to adequately fund their operations and debt obligations, and were even less able to optimally invest in infrastructure; and it was further concerned that South African Airways (SAA) had not submitted financial statements at a time when a Strategic Equity Partner was most needed.

 

1. The Committee agreed with COSATU’s assertion that unemployment was dangerously high at 42.4 percent, and that government needed to create an environment that was conducive to investment. The Committee was of the view that part of the solution was to grow the economy, and that government needed to address the obstacles to growth, such as load shedding; crime and the decimation of Metrorail and Transnet.

 

1. The Committee agreed with Equal Education that the historical failure of the education system had impacted negatively on post-matriculants wanting to apply for jobs and other opportunities; and that more resources needed to be earmarked for Early Childhood Development (ECD) as a foundation for the entire education system. However, the Committee noted, based on its in-year monitoring process, that the allocated ECD funding had not been spent as required.

 

1. The Committee remained concerned about the slow progress with regards to the process of public service rationalisation across all three spheres of government, which had been initiated two decades ago; as this would have assisted government to partly address some of the capacity challenges, by placing skilled and qualified public servants where they were most needed.    

 

 

1. The Committee agreed with OUTA’s concern over some unjustifiable cost escalations that had been reportedly identified in the Prestige Accommodation and State Functions Programme in the Department of Public Works and Infrastructure, with specific reference to an article reporting that government had paid R93 million to upgrade the homes of Ministers and Members of Parliament.

 

1. The Committee was seriously concerned over the 175 out of 259 municipalities that were reportedly in financial distress, and agreed with COSATU about the importance of implementing consequence management for non-performance, given the large amounts of funding, earmarked for infrastructure, reportedly being returned to the National Revenue Fund (NRF) because of a lack of capacity to spend, while municipal infrastructure was falling apart.

 

 

6. Recommendations

The Select Committee on Appropriations, having considered submissions from various stakeholders on the Appropriation Bill [B3 - 2023], recommends as follows:

 

1. The Minister of Finance should gazette the Appropriation Bill [B3 – 2023], which proposes the overall allocation (excluding direct charges) of R1.08 trillion for the 2023/24 financial year across the national departments; and ensure that specific measures are taken to make sure that these funds are utilised for their intended purpose and according to the approved departmental plans; as any spending deviation resulting from poor planning is unacceptable.  

 

1. The National Treasury and the Department of Planning, Monitoring and Evaluation should, within 60 days of the adoption of this Report by the House, ensure that measures to prevent irregular and fruitless expenditure are established across government departments to safeguard the 2023 Budget, as required by section 38(1)(c)(ii) of the Public Finance Management Act No.01 of 1999. This includes developing a clear irregular expenditure register, which should be updated regularly as part of the necessary control measures.     

 

1. The National Treasury, the Department of Public Service and Administration and the Department of Planning, Monitoring and Evaluation should, within 60 days of the adoption of this Report by the House, come up with a plan to ensure that officials who violate supply chain management and other public finance management prescripts are held accountable and even prosecuted, where necessary. When the executive authority discovers any irregular expenditure, section 38(h) together with section 81 of the Public Finance Management Act No.01 of 1999, should be implemented immediately to address the irregularities. These provisions set out clear steps for consequence management, including disciplinary processes.

 

1. The National Treasury, the Department of Public Service and Administration and the Department of Planning, Monitoring and Evaluation should, within 60 days of the adoption of this Report by the House, develop a clear plan to ensure that the internal audit personnel across departments are adequately capacitated by recruiting properly qualified people; and that independent audit committees are established to ensure that effective and efficient internal controls and risk management systems are well maintained to address non-compliance.  

 

1. The Department of Transport, together with the Mpumalanga Provincial Department of Public Works, Roads and Transport should, within 90 days of the adoption of this Report by the House, develop a plan to ensure that the construction of the uMoloto Rail Project between Limpopo, Mpumalanga and Gauteng is prioritised and fast-tracked, given the amount of fatalities on the uMoloto Road. This should include all other strategic road infrastructure projects that could assist government to address road accidents, as well as improving transportation of goods and services.  

 

1. The National Treasury, together with the Department of Women, Children and People with Disabilities (DWCPD) should, within 60 days of the adoption of this Report by the House, put measures in place to ensure that adequate resources are allocated for the implementation of the National Strategic Plan to ensure that gender issues, including those of the LGBTQIA+ community are progressively mainstreamed. The Committee supports gender budgeting and urges the DWCPD to ensure that approved plans are aligned to the allocations in order to realise gender mainstreaming. 

 

1. The Department of Health should, within 60 days of the adoption of this Report by the House, urgently fast-track the re-introduction of the State Liability Amendment Bill, in order to make provision for periodic, rather than once-off payments for claims, while also ensuring that the necessary reforms are implemented for medico-legal cases, including a new model for processing claims.  

 

1. The Department of Basic Education should, within 60 days of the adoption of this Report by the House, develop a clear plan to ensure that value for money earmarked for education is being realised, given that education is one of the largest budget items. The Committee is of the view that a balance between adequate resources and the quality of teaching is needed in order to address the issue of the majority of Grade 4 learners reportedly not being able to read for meaning; and that more resources are required for the Early Childhood Development Programme as a foundation for the entire system.  Furthermore, the Department of Basic Education must develop a clear plan to fast-track the eradication of inappropriate structures, including ablution and sanitation facilities, and overcrowding in schools.      

 

1. The National Treasury, together with the Department of Public Enterprises and the Board of the South African Airways (SAA) should, within 60 days of the adoption of this Report by the House, develop measures to ensure that no public funds are used to bail out the SAA; having secured a Strategic Equity Partner (SEP) which owns 51 percent shares of the entity. Parliament should continue to intensify its oversight work to ensure that public funds are not utilised for endless bailouts to state-owned entities (SOEs) due to mismanagement.    

 

1. The National Treasury, together with the South African Revenue Service (SARS) should, within 60 days of the adoption of this Report by the House, develop clear measures to stimulate economic growth through investing in systems to improve the tax compliance rate, currently at about 64 percent, as well as collection; including improved customs in order to protect local manufacturers against counterfeit goods.  

 

1. The National Treasury together with the South African National Defence Force (SANDF) should, within 60 days of the adoption of this Report by the House, ensure that a clear plan is put in place to allocate adequate resources for the SANDF and to ensure that proper plans are developed to fix its ailing infrastructure, while making sure that funds are not absorbed by the compensation of employees. The National Treasury should assist the SANDF to address the excessive spending on compensation of employees, which impacts negatively on other economic classifications such as maintenance of its facilities and capital assets.

 

1. The National Treasury together with the Department of Public Works and Infrastructure (DPWI) and the Department of Cooperative Governance should, within 60 days of the adoption of this Report by the House, ensure that there is a plan for the Expanded Public Works Programme (EPWP) and the Community Works Programme (CWP) to improve the skills transfer process and further position these programmes to support small, medium and micro enterprises (SMMEs), while ensuring the expansion of new economic sectors; such as recycling. The Committee is of the view that these measures will benefit the poor and vulnerable and the economy at large.  

 

1. The Department of Public Works and Infrastructure (DPWI) must, within 60 days of the adoption of this Report by the House, investigate the allegations of tender corruption reportedly leading to unjustifiable cost inflation in the Prestige Accommodation and State Functions Programme of the DPWI, where the cost of upgrading the homes of Ministers and Members of Parliament was escalated to R93 million. The Committee believes that consequence management must be enforced for the transgressors, including prosecutions.   

 

1. The National Treasury and the Department of Planning, Monitoring and Evaluation should ensure that funds are allocated in a more sustainable manner over the long term by ensuring that more funding is earmarked for infrastructure development and in a way that seeks to grow the economy in an inclusive manner to resolve the triple challenge of poverty, unemployment and inequality in society.  

 

1. The National Treasury together with the Department of Justice and Constitutional Development and the National Prosecuting Authority (NPA) should, within 60 days of the adoption of this Report by the House, come up with a clear plan to fast-track the section 38 appointments of specialist expertise to assist with complex cases, including the implementation of the Zondo Commission’s recommendations.

 

1. In light of the call from various stakeholders and provinces, the National Treasury together with the Department of Cooperative Governance and the South African Local Government Association (SALGA) should, within 90 days of the adoption of this Report by the House, work together to revisit the shifting of the emergency housing grants to the national Department of Human Settlements. The Committee is of the view that a balanced approach is needed, while ensuring a prompt response when disasters take place.

 

1. The National Treasury and the Department of Social Development should work together to expedite the review of the current social grant system; and to find a solution to develop and implement a permanent intervention in the form of a basic income grant (BIG) to cushion unemployed individuals against the poor economic climate. The Committee is mindful of the current slow growth of the economy, however, it believes that there are still other tax options that can be explored to fund this in the long term. An update on this matter should be provided to the Committee during the 2023 Medium Term Budget Policy Statement (MTBPS).     

 

1. The Department of Cooperative Governance and the South African Local Government Association (SALGA) should, within 60 days of the adoption of this Report by the House, develop a plan to support the 175 municipalities reportedly in financial distress, and ensure that consequence management is implemented for non-performance, to avoid infrastructure funds being returned to the National Revenue Fund (NRF) due to a lack of capacity to spend.

 

 

7. Committee decision

The Select Committee on Appropriations, having considered the Appropriation Bill [B3 – 2023], 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)) and the Freedom Front Plus (FF+) rejected the Report and the Economic Freedom Fighters (EFF) reserved its position on the Report.

 

Report to be considered.