Adjustments Appropriation Bill & Eskom Debt Relief A/B: Committee Reports; Proposed division of revenue and conditional grants allocations to Provinces and Local Government

Meeting report

The Committee Secretary, Mr Lubabalo Nodada, advised that the Chairperson, Ms Mahlangu, was still on sick leave. In her absence, Mr Mohai, in his capacity as alternate member of the Committee, availed himself to chair the meeting.

Mr Mohai asked if his position of taking on the responsibility in the interim was subject to the approval of the Committee.

Mr D Ryder (DA, Gauteng) said it was highly unusual that the adoption of reports would be chaired by someone who had not been part of the processes leading up to the compilation of the reports. However, he welcomed Mr Mohai’s election and felt that he could not do worse than the previous acting Chairperson.

Mr Mohai asked if Members who had been part of the process would prefer Ms Mamaregane (ANC, Limpopo) to chair the meeting.

Mr Ryder said he was satisfied for Mr Mohai to proceed.

Ms N Nkosi (ANC, Mpumalanga) said as an alternate member, the election of Mr Mohai as acting Chairperson was not a problem.

The Acting Chairperson said Mr Ryder made a fair comment. The important principle to carry through was that Members take ownership of the reports. He welcomed the contributions of Members in the process thus far in dealing with critical issues facing our country. He acknowledged the presence of National Treasury officials on the platform. He wished the Chairperson and Mr Carrim, who both have been going through health challenges, a speedy recovery. He called on the Committee Secretary to present the minutes for consideration.

Adoption of Minutes
The Committee Secretary presented the outstanding minutes. The Committee adopted the following minutes without amendments:
28 November 2023; and
1 December 2023.

The Chairperson enquired from the Committee Secretary about the process to be followed for tabling the reports.

The Committee Secretary advised that the practice of the Committee was to not go through the report on a page-by-page basis but to start with the section on observations and findings, followed by the recommendations section. He proceeded in this manner with the tabling of the three reports.

Draft Report on 2023 Adjustments Appropriation Bill
The Committee Secretary paged through the observations and findings in section 5 of the report.

Mr Ryder raised a further observation for inclusion in the report. Through discussion with his colleagues, he became aware that the Adjustments Appropriation Bill had not been presented to other committees. For example, the Transport and Public Works Committee never received briefings from the affected departments. He requested that the following observation and the subsequent recommendation be included:

The Committee notes that the Select Committees with oversight over the appropriations had not been briefed on the proposed adjustments. This was not giving them an opportunity for engagement oversight. He recommended that in the future, departments impacted by adjustments must brief the relevant Select Committees on the impact of the adjustments on the relevant departments and the services expected from them.

The Acting Chairperson felt there was no harm in including the recommendation because the proposal had no impact on the work of the Committee.

Mr W Aucamp (DA, Northern Cape) supported Mr Ryder’s proposal.

Ms Nkosi did not support the recommendation because it was not part of the work of the Committee.

The Acting Chairperson asked how the matter had been dealt with in the past.

The Committee Secretary reminded Members that briefings in Parliament on section 75 Bills occur during the BRRR process in Portfolio Committees. Conversations do happen at the national level during the MTBPS discussions.

The Acting Chairperson replied to the Committee Secretary that it was section 77 and not section 75 Bills that he referred to. But his point stands. The Bill is dealt with more prominently in the Portfolio Committee. He asked what the NCOP should do to improve the interaction in this regard.

Mr Ryder said while the proposal was not dealing directly with the duties of this Committee, it would add to the process and deepen the engagement in Parliament. He believed his recommendation would strengthen the credibility of the process.

Mr Aucamp agreed that the recommendation would improve interaction with other committees. The observation and recommendation were valid and should be included as the official wish of the Committee.

The Acting Chairperson said Members needed to agree that the matter would be further explored and a review should be done on how the process unfolded. All committees should be briefed on the Appropriations Bill. The Committee should be allowed to ventilate the issue but for now, it is agreed that the recommendation would add value and the matter should not be left unattended.

The Committee Secretary paged through the recommendations in section 6 of the report. Members had no further comments to add. He proceeded to read the following conclusion, as noted in section 7 of the report, into the record:

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 Acting Chairperson obtained confirmation from Members that the report summed up the engagements that took place, and that it was a fair reflection of the discussions. Mr Ryder, Mr Du Toit, and Mr Moletsane reserved the positions on the report on behalf of their respective political parties, i.e. the DA, FF+, and EFF. The report was duly adopted.

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


Draft Report on 2023 Proposed Division of Revenue and Conditional Grants Allocations
The Committee Secretary paged through the observations and findings in section 7 of the report.

Mr Ryder said traditionally, local government received about 9% of the national fiscus allocation. National Treasury allocated a big chunk to the national government, a smaller chunk to provincial government and leaves a paltry 9% to local government. In late 2019, the Financial and Fiscal Commission (FFC) identified the matter as a major challenge which was causing the problems in local government. A review of the local government funding model had been a discussion point for a number of years. In addition, the portion of allocation from the national fiscus to local government needed to increase above 9%. National Treasury had increased the portion of the budget allocation to 9.8% when the budget was presented in February 2023. But the 2023 Adjustments Appropriations took away the gains, and the local government allocations took a bigger hit. He therefore proposed the following observation and recommendation:

The Committee notes the disproportionate high reductions in allocations for local government. This is despite previous demands for the ratio for local government to be increased and National Treasury’s undertakings in this regard, as well as the many inputs from local government and other stakeholders. He recommended that National Treasury reviews the local government funding model and calls for more meaningful commitments to increase the proportion of the portion allocated to local government. He pleaded with the Committee to consider his proposal favourably.

Mr Aucamp supported Mr Ryder’s proposal.

The Acting Chairperson said the recommendation would be fair if the disproportionate allocations were not mentioned in the report. Mr Ryder was suggesting that the huge challenges faced by municipalities was due to the disproportionate allocations. He sought the views of other Members on this issue.

Mr Du Toit supported the inclusion of the matter because it definitely formed part of the discussions.

Mr Moletsane agreed with the recommendation. He did not foresee a solution to the problem as long as local government was receiving less than 11% of the allocations.

The Acting Chairperson asked Mr Ryder to repeat the last aspect of his recommendation.

Mr Ryder said the equitable share formula needed to be reviewed. The Committee recommends that National Treasury reviews the local government funding model and calls for more meaningful commitments to increase the proportion of the national revenue allocated to local government. He drew attention to the fact that Mr Carrim supported this view and that he was party to the drafting of the White Paper on this matter.

The Acting Chairperson obtained agreement from Members with Mr Ryder’s proposal.

The Committee Secretary noted in the Chat Platform that Mr Carrim agreed that the recommendation was important.

The Content Advisor, Mr Dlomo, said Mr Carrim’s input would be included in the report.

The Committee Secretary proceeded to page through the recommendations in section 8 of the report.

The Acting Chairperson obtained confirmation from Members that the report summed up the issues discussed. Mr Ryder, Mr Du Toit and Mr Moletsane reserved the positions on the report on behalf of their respective political parties, i.e. the DA, FF+ and EFF.

The report was duly adopted.

ATC231207: Report of the Select Committee on Appropriations on the Proposed Division of Revenue and Conditional Grant Allocations to Provinces and Municipalities as Contained in the 2023 Medium Term Budget Policy Statement, Dated 07 December 2023


Draft Report on 2023 Eskom Debt Relief Amendment Bill
The Committee Secretary paged through the observations and findings in section 4 of the report. Members had no further comments to add.

The Committee Secretary paged through the recommendations in section 5 of the report. Members had no further comments to add.

He proceeded to read the following Committee decision into the record:

The Select Committee on Appropriations having considered the Eskom Debt Relief Amendment Bill [B38 – 2023] (National Assembly – section 77); referred to in and classified by the Joint Tagging Mechanism, recommends that the Bill be adopted without proposed amendments.

The Acting Chairperson obtained confirmation from Members that the report accurately reflected the discussions. Mr Ryder, Mr Du Toit and Mr Moletsane reserved the positions on the report on behalf of their respective political parties, i.e. the DA, FF+, and EFF.

The report was duly adopted.

Read: ATC231207: Report of the Select Committee on Appropriations on the Eskom Debt Relief Amendment Bill [B38 – 2023] (National Assembly – Section 77), Dated 07 December 2023


Closing Remarks
The Acting Chairperson thanked Members for processing the reports. The Select and Finance Committees usually dedicate more time compared to other Committees to process the very important issue of appropriating the budget. He appreciated the contributions of the Committee and National Treasury officials to deal with issues that had been flagged and which had strengthened the process. He expressed appreciation for the work of the Administration Team and the Support Staff. He trusted that everyone would find the festive season a restful time. He extended his wishes to Mr Carrim and Ms Mahlangu for a quick recovery.

The meeting was adjourned.