Committee Report on 2019/20 Budget

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Finance Standing Committee

05 March 2019
Chairperson: Mr Y Carrim (ANC), Mr C De Beer (ANC, Northern Cape)
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Meeting Summary

The Standing and Select Committees on Finance met for consideration and adoption of the Report on the Fiscal Framework and Revenue Proposals. The Committees considered the report jointly and adopted it separately.

 

On observations and recommendations, the Committees believe that the government has managed the economy reasonably well. In particular, the fact that pro-poor spending will once again grow in real terms was welcomed. The Committees agreed with National Treasury that there is an urgent need to ensure sustainable finances by containing the budget deficit and stabilizing public debt. The Committees also agree with National Treasury’s aims of supporting the restructuring of the electricity sector, reducing the immediate risk of Eskom to the economy and public finances, renewing economic growth by strengthening private sector investment, improving the planning and implementation of infrastructure projects and rebuilding state institutions. The Committees welcome the progress being made on growth-enhancing reforms including the preparations to allocate the telecommunications spectrum, reform visa requirements and remove barriers to mining investment. The Committees once again pointed out that considerable money could be saved by acting firmly against fruitless, wasteful and irregular expenditure and corruption, and improving the efficiency and quality of spending. Moreover, considerably more revenue could be raised through tackling illicit financial flows and corruption in broader society far more effectively. The Committees reiterate their strong view that public servants who violate the Public Finance Management and commit other transgressions of the law should be acted against in terms of the law. Effective consequence management was called for.

 

A DA Member noted the Committees’ observation that government has managed the obtaining economic challenges reasonably well over the period under review (paragraph 6.1). The DA did not believe this was the case. There was a lot more that government should and could have done especially in relation to challenges in state-owned entities (SOEs) and to contain the public wage bill. He agreed these were difficult economic times but the reason why SA was in this particular predicament was because government has not managed the economy well. The DA did not agree with the sentiment at all. Further, on the Committee’s observation that the biggest challenge was to rescue Eskom (paragraph 6.11), the DA disagreed with this. Instead, the challenge was how to break the monopoly that Eskom enjoys, and to restructure the entity so that it could operate more efficiently. The DA certainly did not agree that Eskom in its current form needs to be rescued. It is just a bottomless pit into which money is being thrown into. The Co-Chairperson said the Committees were not going to reopen discussions held during previous engagements. By Committee, the report meant the majority in the Committee. However the DA had the option of noting its objections by adding a few lines in the report. In a multiparty democracy, every party has a right to express its views.

 

The Standing Committee adopted the report and the DA reserved its position. The EFF rejected the report.

 

The Select Committee adopted the report and the DA reserved its right on the report.

Meeting report

Consideration of Report on the Fiscal Framework and Revenue Proposals

Mr Carrim welcomed everyone and indicated the two Chairpersons had worked on the Report on the Fiscal Framework and Revenue Proposals jointly with Committee staff. The report had been sent to Members prior for perusal. On observations and recommendations, the Committees believe that the government has managed the economy reasonably well. In particular, the fact that pro-poor spending will once again grow in real terms was welcomed. The Committees agreed with National Treasury that there is an urgent need to ensure sustainable finances by containing the budget deficit and stabilizing public debt. The Committees also agree with National Treasury’s aims of supporting the restructuring of the electricity sector, reducing the immediate risk of Eskom to the economy and public finances, renewing economic growth by strengthening private sector investment, improving the planning and implementation of infrastructure projects and rebuilding state institutions. The Committees welcome the progress being made on growth-enhancing reforms including the preparations to allocate the telecommunications spectrum, reform visa requirements and remove barriers to mining investment. The Committees once again pointed out that considerable money could be saved by acting firmly against fruitless, wasteful and irregular expenditure and corruption, and improving the efficiency and quality of spending. Moreover, considerably more revenue could be raised through tackling illicit financial flows and corruption in broader society far more effectively. The Committees reiterate their strong view that public servants who violate the Public Finance Management and commit other transgressions of the law should be acted against in terms of the law. Effective consequence management was called for.

 

Dr D George (DA, Western Cape) noted the Committees’ observation that government has managed the obtaining economic challenges reasonably well over the period under review (paragraph 6.1). The DA did not believe this was the case. There was a lot more that government should and could have done especially in relation to challenges in state-owned entities (SOEs) and to contain the public wage bill. He agreed these were difficult economic times but the reason why SA was in this particular predicament was because government has not managed the economy well. The DA did not agree with the sentiment at all. He further commented on the Committee’s observation that the biggest challenge was to rescue Eskom (paragraph 6.11). The DA disagreed with this. Instead, the challenge was how to break the monopoly that Eskom enjoys, and to restructure the entity so that it could operate more efficiently. The DA certainly did not agree that Eskom in its current form needs to be rescued. It is just a bottomless pit into which money is being thrown into.

 

Mr Carrim said the Committees were not going to reopen discussions on this. By Committee, the report meant the majority in the Committee. However the DA had the option of noting its objections by adding a few lines in the report. In a multiparty democracy, every party has a right to express its views.

 

Adoption of Report by Standing Committee

Mr Carrim noted this was the final Report on the Fiscal Framework and Revenue Proposals report for the Committee whose term comes to an end as the fifth Parliament dissolves. He expressed the Committee’s fullest appreciation to the work of the Committee Staff. He put the Report up for adoption.

 

Ms P Nkonyeni (ANC) moved for the adoption of the Report.

 

Ms N Ntantiso (ANC) seconded.

 

Mr A Lees (DA) said the DA reserved its position.

 

Mr F Shivambu (EFF) rejected the report.

 

The Report on the Fiscal Framework and Revenue Proposals was adopted with amendments.

 

Adoption of Report on the Fiscal Framework and Revenue Proposals by Select Committee

Mr De Beer put the report up for adoption.

 

Mr E Makue (ANC, Gauteng) moved for the adoption of the report.

 

Mr T Motlashuping (ANC, North West) seconded.

 

Dr George said the DA reserved its right on the report

 

The Report on the Fiscal Framework and Revenue Proposals was adopted with amendments.

 

Mr De Beer thanked everyone and adjourned the meeting.

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