ATC231207: Report of the Select Committee on Appropriations on the Adjustments Appropriation Bill [B34 – 2023] [National Assembly (Section 77)], Dated 07 December 2023

NCOP Appropriations

Report of the Select Committee on Appropriations on the Adjustments Appropriation Bill [B34 – 2023] [National Assembly (Section 77)], Dated 07 December 2023

The Select Committee on Appropriations, having considered the Adjustments Appropriation Bill [B34 – 2023] (National Assembly – section 77), referred to it in terms of section 12 (15) of the Money Bills and Related Matters Act No. 9 of 2009 (as amended by the Money Bills Amendment Procedure and Related Matters Act, No. 13 of 2018) (the Money Bills Act), reports as follows:

1. Introduction

The Minister of Finance tabled the Adjustments Appropriation Bill [B34 – 2023] (the Bill) in Parliament on 01 November 2023 during the presentation of the 2023 Medium Term Budget Policy Statement (MTBPS). The Bill was tabled in terms of section 12(1) and (2) of the Money Bills Act. Section 12(1) requires the Minister of Finance to table a national adjustments budget as envisaged in section 30 of the Public Finance Management Act (No. 1 of 1999) (the PFMA); and Section 12(2) requires that “an adjustments appropriation Bill must be tabled with a national adjustments budget”. The Bill was referred to the National Council of Provinces (NCOP) and the Committee for concurrence on 06 December 2023, after the National Assembly had passed it.

2. Public participation process

To facilitate public participation, and in compliance with section 72 of the Constitution of the Republic of South Africa, an advertisement was published in national and community newspapers in 11 official languages from 02 to 04 November 2023, inviting the public and all interested stakeholders to make written submissions and comments on the Bill. Subsequently, in addition to receiving a briefing from National Treasury on the contents of the Bill and consulting with the Financial and Fiscal Commission (FFC) and the Parliamentary Budget Office (PBO), the Committee received written submissions from the Congress of South African Trade Unions (COSATU), the Budget Justice Coalition (BJC), Equal Education (EE); and Ilifa Labantwana. Except for Ilifa Labantwana, all the stakeholders also made oral submissions during a virtual public hearing on 01 December 2023.

3. National Treasury briefing

The National Treasury reported that adjustments had been required due to significant and unforeseeable economic and financial events, and when effecting these adjustments, the following had been taken into consideration:

Underspending within a Vote.
Cost containment guidelines on restricting non-core recruitment; significantly reducing traveling, conferences, workshops, and catering; postponement of capital projects including buildings and other fixed structures as well as machinery and other equipment.
Surpluses in public entities.

Due to the above-mentioned events, the Bill proposes reductions to national votes totalling R21.7 billion, as follows:

R1.52 billion from the Department of Cooperative Governance and Traditional Affairs.
R1.03 billion from National Treasury.
R1.99 billion from the Department of Basic Education.
R2.95 billion from the Department of Higher Education and Training.
R1.64 billion from the Department of Health.
R2.13 billion from the Department of Social Development.
R3.18 billion from the Department of Human Settlements.
R1.27 billion from the Department of Transport.

The Bill also provides for an additional amount of R23.55 billion to address budget pressures emanating from the 2023 public wage agreement. A total of R6 billion will be made available to national departments (Vote 22, Correctional Services: R800 million; Vote 23, Defence: R1.2 billion; and Vote 28, Police: R4 billion); while provinces will receive R17.55 billion through the Provincial Equitable Share (PES).

The Bill further provides for R1.55 billion to the Department of Cooperative Governance for unforeseeable and unavoidable expenditure; which includes R1.18 billion for the Municipal Disaster Recovery Grant for the reconstruction and rehabilitation of municipal infrastructure damaged by floods in the Eastern Cape, KwaZulu-Natal, Mpumalanga and Limpopo; and R372 million to replenish the Municipal Disaster Response Grant. In addition, the Department of International Relations and Cooperation will receive additional funding of R1.74 billion to address foreign exchange fluctuations.

Regarding expenditure announced during the tabling of the main budget for future allocation, the Bill appropriates R1 billion to National Treasury for the South African Revenue Service (SARS) to improve revenue raising capabilities.

The Bill makes provision for a roll-over of R338.47 million to the Department of Home Affairs, of which R300 million is for the Represented Political Parties’ Fund, and R38.47 million is for the digitalisation of records. An amount of R235.97 million is rolled over for the Department of Basic Education, of which R119.18 million is for payments for capital assets in respect of the Accelerated School Infrastructure Delivery Initiative (ASIDI) and the Sanitation Appropriate for Education (SAFE) Initiative within the School Infrastructure Backlogs Grant, R99.24 million is for workbooks, and R17.55 million for a management fee paid to the implementing agent for the School Infrastructure Backlogs Grant. The Bill further proposes a roll-over amount of R3.93 million to the Department of Employment and Labour for the refurbishment of existing buildings.

Furthermore, the Bill seeks approval of self-financing expenditure by votes totalling R1.962 billion, which is made up as follows:

R800 million to the Government Communication and Information System (GCIS), an expenditure to produce the Vuk’uzenzele Newspaper, which is funded from revenue generated through advertising.
R1.04 billion to the Department of Home Affairs, for expenditure incurred by issuing official documents, which is defrayed by revenue generated from issuing the documents.
R84 million to the Department of Health for an expenditure related to the COVID-19 vaccination programme, which is funded from revenue collected from costs recuperated from the COVID-19 vaccine programme.
R1.04 billion to the Department of Correctional Services for an expenditure for offender gratuities, which is funded from revenue generated from the hiring out of offender labour.
R751 million to the Department of Defence for an expenditure for defence activities, of which R717.50 million is defrayed from reimbursements from the United Nations, and R33.52 million from the sale of equipment and spares procured through the special defence account.
R79.02 million to the Department of Trade, Industry and Competition; R64.02 million for unitary payment in respect of the public-private partnership for shared campus accommodation, which is funded from unitary payments received from public entities and R15 million for expenditure towards the Industrial Development Corporation’s (IDC’s) Tirisano Construction Fund for projects that form part of the annual plan under the voluntary rebuilding programme settlement agreement.

Unspent funds and projected under-spending in the Bill totals R5.26 billion. This includes R1.36 billion declared unspent by the Department of Cooperative Governance from the Local Government Equitable Share (LGES) allocation due to lower than projected bulk electricity costs; R502 million by the National Treasury for payments for financial assets; and R100 million by the Department of Forestry, Fisheries and the Environment for agency and outsourced services due to the cancellation of contracts; as well as projected under-spending by national government of R797.3 billion and a repayment of R2.5 billion by local government to the National Revenue Fund (NRF).

Furthermore, the Bill requires Parliament to approve various virements between main divisions within votes. These include funds totalling more than 8 percent of the amount appropriated for a main division for a financial year; the use of funds appropriated for compensation of employees; the use of funds appropriated for transfers and subsidies; and the use of funds appropriated for payment for capital assets.

4. Stakeholder submissions

4.1 Financial and Fiscal Commission (FFC)

The Financial and Fiscal Commission (FFC) indicated that the 2023/24 in-year spending adjustments amounted to R10.3 billion, thus taking the total adjustments expenditure estimate from R2.043 trillion to R2.044 trillion. The FFC submitted that the need for upward adjustments to spending had been largely driven by two factors. The need to cater for obligations arising from the 2023 public wage agreement, which amounted to R24 billion; as well as debt-service costs, with an upwards adjustment of R14 billion being added to the February appropriation. The upward adjustment required due to debt service costs was effected as part of the adjustments to the direct charges against the NRF. The FFC added that this brought the adjusted appropriation in respect of debt service costs to R355 billion.

The total appropriation by Vote as per the 2023 Estimates of National Expenditure (ENE) was R1.077 trillion. Net adjustments as outlined in the Bill effectively reduced this amount by R12.4 billion, taking the total adjusted appropriation down to R1.065 trillion. The FFC reported that the bulk of the adjustments (R18 billion) had arisen due to the wage bill agreement and was required at the provincial level in respect of provincial departments of education (R11 billion) and health (R7 billion). The FFC explained that this had been included in the Provincial Equitable Share (PES) allocation as part of the direct charges against the NRF. The balance of R6 billion, largely for the Police Vote, had been required at national government level.

The FFC welcomed the relatively small but important upwards adjustment of R1.6 billion under the unforeseeable and unavoidable expenditure category that was aimed at helping with damage caused by floods in the Eastern Cape, KwaZulu-Natal, Mpumalanga, and Limpopo.

The FFC further submitted that in-year adjustments in respect of roll-overs arising due to low spending within departments amounted to R578 million. The Department of Home Affairs was responsible for R338 million worth of roll-overs, while the Department of Basic Education was responsible for R236 million.

The FFC reported that the upward revisions required as part of the total in-year adjustments were off-set by a combination of baseline reductions (R22 billion), drawing down on the contingency reserve (R4.6 billion), and declared unspent funds and projected under-spending which amounted to R5.3 billion. According to the FFC, half of the R22 billion reductions were from four Votes. These were Human Settlements (R3.2 billion), Higher Education and Training (R3 billion), Social Development (R2.1 billion, of which R1.7 billion was reduced from the Social Relief of Distress (SRD) Grant and R4 million from grant administration as implemented by the South African Social Security Agency); and Basic Education (R2 billion).

4.2 Parliamentary Budget Office (PBO)

The Parliamentary Budget Office (PBO) submitted that the total estimated expenditure in 2023/24 increased by R10.3 billion, from R2 034.6 billion to R2 044.93 billion; while the adjustments to Vote appropriations amounted to a decrease of R12.4 billion, made up as follows:

Reduction to Vote allocations: R21.7 billion.
Additions to Vote allocations for the 2023/24 wage agreement: R6 billion.
Unforeseeable and unallocated expenditure: R1.7 billion.
Expenditure earmarked in the 2023 Budget: R1 billion.
Roll-overs: R578.4 million.
Self-financing expenditure: R1.9 billion.
Declared unspent funds (reductions to Vote allocations: R1.9 billion.

The PBO further submitted that adjustments to estimates of direct charges against the NRF amounted to R32 188.866 million, made up as follows:

President and Deputy President salaries cost: R6.2 million.
Debt service costs: R14 billion.
PES addition to the health and education departments for the 2023/24 wage agreement: R17.6 billion.
NRF payments: R266.7 million.
Payments in terms of Section 70 of the PFMA to the Land and Agricultural Development Bank of South Africa: R502 million.
Skills levy and sector education and training authorities (SETAs): R314 million.
Judges’ salaries: R114 million.

4.3 Congress of South African Trade Unions (COSATU)

The Congress of South African Trade Unions (COSATU) submitted that they were deeply concerned about significant austerity budgetary reductions to the following Votes and Programmes:

R214 million from Vote 2: Parliament, despite the need to rebuild the Legislature.
R1.1 billion from the Municipal Infrastructure Grant (MIG) and R1.3 billion from the LGES under Vote 3: Cooperative Governance and Traditional Affairs.
R1.5 billion from the School Infrastructure Backlogs Grant under Vote 16: Basic Education.
R959 million and R446 million from the District Health Programmes (HIV/AIDS) Grant and the Health Facilities Revitalisation Grant, respectively, under Vote 18: Health.
R1.7 billion from the Social Relief of Distress (SRD) Grant and R400 million from the South African Social Security Agency (SASSA) administration under Vote 19: Social Development.
R35 million from the National Prosecuting Authority (NPA) and R195 million from Legal Aid under Vote 25: Justice and Constitutional Development.
R402 million from Land Reform under Vote 29: Agriculture, Land Reform and Rural Development.
R213 million from Industrial Support under Vote 39: Trade, Industry and Competition.
R151 million from Information, Communication and Technology (ICT) support under Vote 30: Communications and Digital Technologies.
R10 million from the Commission for Conciliation, Mediation and Arbitration (CCMA) under Vote 31: Employment and Labour.
R2.5 billion from the University Education Programme under Vote 17: Higher Education and Training.
R2.2 billion and R828 million from the Urban Settlements Development Grant and the Informal Settlements Upgrade Grant, respectively, under Vote 33: Human Settlements.
R186 million from the Neighbourhood Development Partnership Programme under Vote 8: National Treasury.
R563 million from the Provincial Roads Maintenance Grant and R606 million from the Public Transport Network Grant under Vote 40: Transport.
R322 million from Water Resource Management and R581 million from Water Services under Vote 41: Water and Sanitation.
R431 million from the Integrated National Electrification Programme.

COSATU noted that these reductions were attributed to the need to cut costs, but asked whether it could also be due to a failure to spend the money as required, or whether it was identified savings to prevent wasteful expenditure. Furthermore, COSATU expressed concern about the impact of these reductions on service delivery, and asked what measures were being put in place to capacitate provincial and local government to spend funds effectively and efficiently.

4.4 Ilifa Labantwana

Ilifa Labantwana indicated that the reduction of R58.1 million from the Early Childhood Development (ECD) Grant, targeted at the infrastructure component, effectively reduced the Grant allocation from R102 million to R44 million for the 2023/24 financial year. While the reduction had been attributed to “slow spending”, Ilifa Labantwana argued that no plans had been announced to improve spending performance by provincial education departments, or how these reductions would impact on the country’s goals for expanding and improving early learning programmes.

Ilifa Labantwana further noted that the ECD Grant was the only allocation dedicated to supporting registration to early learning programmes and qualification for government subsidies, by ensuring ECD infrastructure met basic health and safety standards. Ilifa Labantwana further submitted that rather than reverting to cutbacks, the Department of Basic Education (DBE), the National Treasury and provincial education departments should work with the ECD sector to develop plans to ensure that these funds were spent efficiently. Failure to do so placed the anticipated increase to this component of the Grant in the 2024/25 and 2025/26 budgets at risk.

Ilifa Labantwana made the following recommendations:

Parliament should request reasons from the National Treasury for the R58.1 million cut to the ECD Grant: infrastructure component and provide information on steps being taken to ensure full expenditure of this Grant in 2024/25.
The Department of Basic Education and provincial education departments should urgently consult with the ECD sector on the optimum modalities for organising and spending the infrastructure component of the ECD Grant.
When funds are returned unspent to the fiscus due to “slow spending”, the rate of spending should be provided in the Adjusted Estimates of National Expenditure (AENE) and Explanatory Memorandum to the Division of Revenue Bill. These should also include reasons for the slow spending and the plans in place to improve the spending performance.
Any unallocated funds in the ECD Grant, for which no considered spending plans have been developed, should be allocated to provinces to be spent on ECD subsidies, as this is the quickest and simplest way to improve equitable access to early learning programmes.
Increasing the subsidy to R20 per child per day at a cost of R700 million per annum would partially make up for the effect of inflation, which has eroded the purchasing power of the subsidy since 2019 and would expand its reach to a further 300 000 children over three years. Since the subsidy is well targeted at children from low-income families, and a portion of the subsidy must be spent on food, increasing the subsidy value is a highly effective way to address child hunger and malnutrition.
In the medium-term, a gradual increase in the subsidy to R45 per child per day by 2030 would enable universal access to quality ECD programmes, a key goal of the National Development Plan (NDP).

4.5 Equal Education

Equal Education (EE) noted the reduction of the R58.1 million to the ECD Grant and expressed deep concern that, despite the Grant being insufficient to cater for the 4.7 million eligible children, the National Treasury had seen fit to reduce the maintenance portion of the Grant. ECD was crucial to address foundational challenges in learning outcomes, and EE argued that government funding of ECD remained inadequate at R17 per eligible child per day since 2019. EE were of the view that this inadequate funding model, together with cuts to the ECD Grant, contributed to the fact that children could not read for meaning by the time they reached the age of 10.

Equal Education further noted the addition of R10 billion to Basic Education for the 2023/24 financial year to implement the 2023 public service wage agreement and added that provincial education departments were constrained in hiring additional teachers as part of the National Treasury’s new cost-containment measures. EE submitted that this decision could mean larger classroom numbers and higher learner-teacher ratios in a sector plagued by overcrowding, which could threaten the already fragile educational outcomes.

EE highlighted the extent of infrastructure backlogs in schools, coupled with the lack of maintenance of existing infrastructure, and indicated that they had hoped for a sustained long-term commitment for increased school infrastructure funding for a more lasting impact. EE found the downward adjustments to the Education Infrastructure Grant (EIG) and the School Infrastructure Backlogs Grant (SIBG) alarming; noting that the National Treasury had attributed these to: “significant and unforeseeable economic and financial events”. Whilst noting this, EE submitted that the decision to cut the school infrastructure budget amidst severe backlogs in the sector may have devastating impacts on learners in under-resourced schools. EE indicated that the Department of Basic Education and provincial education departments had for many years reported limited resources as a reason for not meeting their targets, especially on school infrastructure. Budget cuts, however slight, would exacerbate and provide justification for non-performance as the National Treasury’s renewed austerity measures would lead to half of the planned projects for 2023/24 not even making it to the starting line.

EE further commented that the Bill could hamper the ability of education departments to meet their annual goals and broader constitutional mandates, worsening pre-existing challenges to provide quality services to school communities. Learners attending public schools across the country who relied entirely on government funding could be the most affected and punished by such austerity measures.

The EE made the following recommendations:

The Committee should reject this austerity budgeting and call for the reversal of the cuts to ensure pro-poor spending.
The National Treasury should adopt a progressive approach to Basic Education funding that ensures that education budgets grow in line with inflation and learner enrollment at the very least.
The relevant Committees should take their oversight responsibilities seriously, by ensuring efficiency and effectiveness in departments’ use of available resources to achieve quality service delivery, particularly in Basic Education.

4.6 Budget Justice Coalition

Noting the ECD Grant reduction of R58.1 million, and that the R17 subsidy had not increased since 2019, the Budget Justice Coalition (BJC) indicated that the funding for ECD was inadequate and had not accounted for inflation. BJC submitted that, at 13 percent, food inflation was eroding the real value of the Grant and would likely translate into reduced nutritional support for children under five years of age; a group most in need of adequate nutrition to prevent malnutrition and stunting.

The BJC was concerned about the downward adjustments in the Education Infrastructure Grant (EIG) as it could leave many schools without the means to address poor sanitation and infrastructure; while the Department of Basic Education had reported that 728 schools nationwide, predominantly in the Eastern Cape, still used only pit toilets. In addition, in September 2023 the Western Cape Education Department had reported that 249 schools had been affected by a severe storm in the Province, of which over 150 had reported infrastructure damage, ranging from minor to severe. The BJC commented that, the damage caused by the more frequent occurrence of extreme weather conditions made the reduction in the allocation to the EIG even more concerning, because most provinces relied entirely on the Grant for constructing, upgrading, repairing, and rehabilitating public school infrastructure.

Moreover, the BJC raised concern about the proposed reduction of R441 million from the Health Infrastructure Grant and the R1 billion from the District Health Programmes Grant, directed at the HIV/AIDS funding component; as these cuts may lead to regression in the country’s progress to ensure that 6 million people were on antiretroviral therapy (ART) by the end of the 2023/24 financial year. This was against a priority action outlined in the National Strategic Plan (NSP) for HIV, tuberculosis (TB) and sexually transmitted diseases (STIs) for 2023; and while the 2023 NSP stated that baseline allocations for HIV, TB and STIs must be protected. The BJC were of the view that, not only did budget cuts constrain the ability of the health system to provide quality healthcare, but it also reduced capacity to bolster spending quality.

The BJC made the following recommendations:

It reiterated its call for gender-responsive budgeting (GRB) to be implemented with various inputs from stakeholders; with clarity being provided on the guidelines and avenues for engagement by stakeholders.
The Participatory Human Rights Impact Assessment (HRIA) must be inculcated more deliberately in the 2024 budget and MTBPS, ensuring that any revenue-raising mechanisms do not increase inequality and undermine people's rights to access quality basic education and healthcare services.
Investment in the quality provision of basic education services and transparent, cost-effective and accountable public procurement within the education sector are encouraged, as continuous budget cuts to Education and ECD programmes fail to protect and prioritise the development and well-being of children living in South Africa.
Over the past decade, health care funding has seen real-term cuts, with the main budget for 2023 cutting funding by 4.9 percent in real terms and cuts to programmes such as HIV/ AIDS, TB and health care infrastructure should be addressed urgently, as reducing the quantum of spend will threaten the quality of health services provided.
The Social Relief of Distress (SRD) Grant must be expanded, and its value increased to the Food Poverty Line of R760; and the Grant must be considered in the MTEF while working with stakeholders on pathways towards a Universal Basic Income Grant (UBIG) and pursuing additional sources of finance and tax revenue for an UBIG. Challenges hindering access to the SRD Grant must be resolved, such as the exclusionary online-only application process and flawed bank and database verification processes.

5. Observations and findings

The Select Committee on Appropriations, having considered the inputs from the above stakeholders on the Adjustments Appropriation Bill [B34 – 2023], made the following findings:

The Committee noted that the total appropriation by vote in the 2023 Estimates of National Expenditure (ENE) was R1.077 trillion, however, during the 2023 MTBPS this amount was reduced by R12.4 billion, resulting in the total adjusted appropriation of R1.065 trillion.
The Committee remained concerned about the total reduction of R21.7 billion the Bill proposed to critical national departments, including Cooperative Governance and Traditional Affairs, National Treasury, Basic Education, Higher Education and Training, Health, Social Development, Human Settlements; and Transport, and further agreed with COSATU and Budget Justice Coalition’s concerns around the negative impact of these reductions on service delivery.
The Committee noted the adjustments of R32.1 million to the estimated direct charges against the National Revenue Fund (NRF), including the President and Deputy President’s salaries, debt service costs, Provincial Equitable Share (PES) additions to the health and education departments for the 2023/24 wage agreement, payments in terms of section 70 of the PFMA to the Land and Agricultural Development Bank of South Africa, the Skills Levy; sector education and training authorities (SETAs), and judges’ salaries.
The Committee noted that the national departments will only receive R6 billion of the additional R23.5 billion earmarked to address budget pressures emanating from the 2023/24 public wage agreement; and that this will be allocated to Correctional Services, Defence and Police.
The Committee welcomed the announcement of an additional R1 billion for the South African Revenue Service (SARS) to improve its revenue raising capabilities, and the additional R1.74 billion earmarked for the Department of International Relations and Cooperation to address foreign exchange fluctuations.
The Committee noted the R300 million roll-over amount for the Department of Home Affairs, which is earmarked for the Represented Political Parties Fund (RPPF) to assist represented political parties to prepare for the 2024 elections, as well as the R38.40 million for the digitisation of records.
The Committee noted the R235.97 million roll-over amount for the Department of Basic Education for payments for capital assets in respect of the Accelerated School Infrastructure Delivery Initiative (ASIDI) and the Sanitation Appropriate for Education (SAFE) Initiative within the School Infrastructure Backlogs Grant (SIBG); workbooks; and a management fee paid to the implementing agent for the SIBG.
The Committee joined the Financial and Fiscal Commission in welcoming the additional R1.55 billion to the Department of Cooperative Governance for unforeseeable and unavoidable expenditure for the Municipal Disaster Recovery Grant, to reconstruct and rehabilitate municipal infrastructure damaged by floods in the Eastern Cape, KwaZulu-Natal, Mpumalanga, and Limpopo; and R372 million to replenish the Municipal Disaster Response Grant.
The Committee agreed with Ilifa Labantwana that, rather than reverting to budget cuts as shortcuts, the Department of Basic Education (DBE), the National Treasury and provincial education departments should work with all stakeholders to develop plans to ensure that the early childhood education (ECD) funds were protected and spent efficiently.
The Committee noted Ilifa Labantwana’s recommendation that any unallocated funds in the ECD Grant, for which no considered spending plans have been developed, should be allocated to provinces for the ECD subsidies, as this could be the quickest and simplest way to improve equitable access to early learning programmes.
The Committee agreed and supported the view of Ilifa Labantwana that in the medium-term, a gradual increase in the subsidy to R45 per child per day by 2030 would enable universal access to quality ECD programmes and, as a key goal for the National Development Plan (NDP), this should be pursued.
The Committee agreed with Equal Education and the Budget Justice Coalition that budget cuts could hamper the ability of education departments to meet their annual plans and broader constitutional mandates, and that a progressive approach to Basic Education funding was needed, ensuring that education budgets grow in line with inflation and learner enrollment, at the very least, to provide access, and quality services to schools.
Whilst the Committee welcomed the Budget Justice Coalition’s call for gender-responsive budgeting (GRB) to be implemented with inputs from various stakeholders, it is important to note that several recommendations in this regard have been made by the Committee to the executive in the past.

6. Recommendations

The Select Committee on Appropriations, having been briefed and engaged with the above stakeholders on the Adjustments Appropriation Bill [B34 – 2023], recommends as follows:

The Minister of Finance should, within 60 days of the adoption of this Report by the House, approve a roll-over amount of R338.40 million for the Department of Home Affairs, earmarked for the Represented Political Parties Fund (RPPF) to assist political parties to prepare for the 2024 elections, and for records digitisation. This should be done in line with section 6.4 of the Treasury Regulations.
The Minister of Finance should, within 60 days of the adoption of this Report by the House, approve a roll-over amount of R235.97 million for the Department of Basic Education for payments for capital assets in respect of the Accelerated School Infrastructure Delivery Initiative (ASIDI) and the Sanitation Appropriate for Education (SAFE) Initiative within the School Infrastructure Backlogs Grant (SIBG); workbooks; and a management fee paid to the implementing agent for the SIBG. This should be done in line with section 6.4 of the Treasury Regulations
The Minister of Finance should, within 60 days of the adoption of this Report by the House, approve a roll-over amount of R3.93 million for the Department of Employment and Labour for the refurbishment of its existing buildings. This should be done in line with section 6.4 of the Treasury Regulations.
The Minister of Finance should, within 60 days of the adoption of this Report by the House, approve all the virements and shifts as envisaged in section 5 of the Appropriation Act 2023, while Parliament approves all virements that exceeds 8 percent as per the requirements of section 43 of the Public Finance Management Act of 1999. These include funds which are appropriated for compensation of employees and payment for capital assets.
The Department of Basic Education and provincial education departments should, within 90 days after the adoption of this Report by the House, consult with all early childhood development (ECD) sector stakeholders on the optimum modalities for organising and spending the infrastructure component of the ECD Grant to ensure coherency and consistency in the sector.
The National Treasury, together with the Department of International Relations and Cooperation should, within 60 days of the adoption of this Report by the House, develop measures to ensure that the additional amount of R1.74 billion, which is earmarked to address foreign exchange fluctuations is spent according to the approved plans; and the same applies to National Treasury, together with the South African Revenue Service (SARS), with respect to the additional amount of R1.0 billion allocated to SARS.
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, develop clear mechanisms to ensure that the additional R1.55 billion earmarked for unforeseeable and unavoidable expenditure; for the Municipal Disaster Recovery Grant to reconstruct and rehabilitate municipal infrastructure damaged by floods in the Eastern Cape, KwaZulu-Natal, Mpumalanga, and Limpopo; and the R372 million to replenish the Municipal Disaster Response Grant is utilised strictly for its intended purpose. Parliament will monitor this.
Whilst the Committee supports some of the necessary budget cuts, given the current state of economic growth and increasing debt service costs, the National Treasury, together with the Department of Public Service and Administration and the Department of Planning, Monitoring and Evaluation should take further steps to ensure that social programmes are always safeguarded from such reductions, and proper measures are developed and implemented to stimulate economic growth.

7. Conclusion

After having complied with section 12 of the Money Bills and Related Matters Act No 9 of 2009 (as amended), the Select Committee on Appropriations, having considered the Adjustments Appropriation Bill [B34 - 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 proposed amendments.

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

Report to be considered.

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