Adjustments Appropriation Bill: Finalisation & Committee Report

Meeting report

The Chairperson said the responses deal with the Section 75 process, not the Section 76 process.

Members must be familiar with these sections as it is sometimes confusing.

The Chairperson asked if National Treasury is present.

Committee Secretary, Mr Lubabalo Nodada, read apologies for Mr M Moletsane (EFF, Free State), who was sick, and Mr E Njandu (ANC, Western Cape), who would join the meeting late. He said National Treasury is present.

The Chairperson said Mr Njandu co-opted Mr M Rayi (ANC, Eastern Cape) to be a part of the meeting, which is allowed if the Member is one of the National Council of Provinces (NCOP). She welcomed Mr Rayi.

Report of the Select Committee on Appropriations on the Adjustments Appropriation Bill [B10b – 2020]

Mr D Ryder (DA, Gauteng) thanked the Chairperson for adjusting the starting time of the meeting so Members can attend caucuses later the morning – the flexibility is appreciated.

At the previous Committee meeting, he made a comment on an unrelated report being covered. He raised an issue which questioned the legitimacy of the report based on the timing of it. After this, he reviewed the timelines and found his assertions incorrect.

As much as he thinks it is a Member’s duty to uphold the Committee to account and ensure things are correct, he felt Members always have to be fair in criticism. The Chairperson is robust and strong, but he feels it necessary to apologise to the Chairperson, the Committee, and especially the staff members. The timelines are actually 100% correct.

He said he was incorrect in his assertions and wants to place this on record. He sent an email to this effect on the day of the meeting, but thinks it is appropriate to repeat it in public on the same platform where he made the comment initially.

The Chairperson said it is very good and a bold move of Mr Ryder. She appreciated his apology.

All Members can learn from him.

The Adjusted Appropriations Bill was adopted the previous day in the National Assembly and sent to the Committee. The Chairperson asked Members to go to and concentrate on the observations and recommendations on page 21. There were some recommendations on the amendments, corrections or additions from Mr Y Carrim (ANC, KZN).

Mr Carrim said the amendments he suggested in the first place are directly for the Chairperson’s attention. He asked if point 5.4 on page 22 implies the Chairperson accepted the proposed change. He did not think it is controversial. If the majority agreed, he suggests and hopes the Chairperson will look at it and decide.

5.4 reads at the end, the Committee is concerned about the very low uptake on the loans. If he is correct, only R11.4 billion of the loans were taken up so far out of an initial possible amount of R200 billion. This is a very low percentage of about 5.5%. It is something to be concerned about and not just to observe. Later in the recommendations, the Committee said it wants to see more progress regarding this. The process might be simpler if people look at the latest version of the Report which includes the amendments in tracking.

If nobody has an issue with this, it will be fine. However, on 5.6 and 5.5 there are some changes. Point 5.5 concerns agriculture and jobs. This clause, and 5.6, are concerned with corruption. It is stronger than the original draft. This will be left to the Chairperson, but Mr Carrim noted he does not want to comment on every proposed amendment. He just takes it as tabled. If nobody objects to the amendments, then the Committee must accept it as almost all of the amendments are not highly controversial.

The Chairperson said what Mr Carrim raises makes sense. The volume or weight the word carries makes a difference. The Committee cannot just note the amendments. It must raise its concerns. The Chairperson did not want to decide on the issues raised, but wanted to give it to the Committee so the Committee can also express itself as previously done. She asked if Members agreed with the proposals for points 5.4, 5.5, and 5.6.

Mr S Aucamp (DA, Northern Cape), said, regarding the point 5.5, he is very glad the Committee is suggesting the R2.4 million deductions for cash be given back. However, he thinks what is missing when it comes to agriculture is the fact the Committee has quite a lot of discussions about drought and drought relief all of the time. It made it clear drought relief funds must be made available.

The Comprehensive Agricultural Support Project Grant (CASP) is there to support upcoming farmers. It was not where the buck should stop. When looking at the rest of the sentences, it speaks about food security. He said he really thinks it is important certain monies of the Department of Agriculture, Land Reform and Rural Development (DALRRD) be given back to assist the drought stricken farmers in various areas.

The Chairperson said the Committee must check what the recommendation said regarding 5.5. While this observation is made all of the time, in the previous meeting the Committee recommended it needs to have a meeting with the Select Committee on Agriculture and DALRRD, to deal with the issues raised by Mr Aucamp. She asked if any other Members have comments or observations on page 22 or 23.

Mr S Du Toit (FF+, North West) referred to the text written under 5.7 where it says, whilst the Committee welcomes the R1.1 billion relief fund for the taxi industry. He said this must be changed to notes. The reason for this is, currently the taxi industry is an unregulated industry which does not contribute to the tax base of the country. He agreed it is very important for people to be assisted, to sanitise, and to ensure the public transport sector of the country runs well. However, in seeing it is an unregulated industry not contributing to the tax base, and thus not contributing to the fiscus, he suggested it be changed to notes.

The Chairperson asked Members input on what Mr Du Toit said.

Mr Rayi noted the point raised by Mr Du Toit. However, he himself also serves in the Committee responsible for transport. On the following day, after the plenary, the Minister of Transport, Mr Fikile Mbalula, will brief the Joint Committee of the NA and the Select Committee of the National Council of Provinces (NCOP). There is an intended taxi indaba which will also look at the issues Mr Du Toit raised. This includes the formalisation and professionalisation of the taxi industry, and issues of taxation and subsidy. The condition of subsidy will be an issue of formalisation first. Therefore a subsidy will not be given unless the industry is formalised. Formalisation includes paying taxes. He provided this information and suggested 5.7 be left as is, with the understanding issues raised by Mr Du Toit are being attended to.

The Chairperson knows the Minister of Transport is talking about this issue and there was an outcry from the taxi industry. The Minister of Transport insisted the taxi industry must be regulated just like any other business. Until then it must be helped. She asked if the Committee can proceed with 5.7 as is.She thought what Mr Du Toit is saying is not really disagreeing with the observation, but notes the situation. The information from Mr Rayi addresses this.

Mr Du Toit said he is not agreeing by welcoming the R1.1 billion. He wants the Committee to note the public transport sector needs to be assisted like all other entities and small businesses need to be assisted. It seems as if the taxi industry is not contributing to the tax base of the country, but gets preference over other entities and industries with the R1.1 billion given to support it.

The Committee must note this and not necessarily welcome the R1.1 billion. The Committee is welcome to disagree, but he asked the Committee to note the concern regarding the wording of the specific phrase, and his reasons to support his stance.

Mr Carrim said this area is very complex. He does not personally know what the correct thing to do is, but it is true the taxi industry does not pay taxes. Some from the industry are super rich and should pay taxes like everybody else. The Committee must also bear in mind the taxi industry relieves the state of a financial burden because, prior to the taxis becoming as pervasive as it has, municipalities and the national fiscus often subsidised buses.

The Chairperson corrected Mr Carrim saying the provinces subsidise buses.

Mr Carrim said when looking at the early 2000 period, there was a huge fight over the buses in Durban eThekwini. There was conflict regarding who got the tender and so on. At that stage he was a bit surprised to see the purview or oversight responsibility lay with the municipality or metro, and not the province. He said he is not sure where it belongs.  Mr Du Toit is right in saying everybody must pay taxes. However, to be fair, while people are expected to pay taxes due, at the same time it is very tenable to suggest the taxi industry relieved the state of a financial burden. This is a very complex issue and the Committee is not ready to take any position as yet. 

Mr Rayi said the issue contested by Mr Du Toit is the wording welcome. Mr Du Toit suggests the Committee must rather put note. He disagrees with Mr Du Toit.

The Committee welcomes all interventions and measures government puts in place to alleviate the situation of everybody affected by Covid-19. The Committee must not make conditions when it comes to welcoming those interventions and government measures. For example, there are unemployed people who do not contribute to tax, and government has come up with interventions and measures to alleviate the situations of people by giving them R350. There are people who get money from the Unemployment Insurance Fund (UIF), whose companies are not contributing either.

The Committee welcomes all interventions and measures put in place by government. It is not putting any conditions on welcoming those who did not contribute to taxes. The issue of tax must be put aside. There is another process dealing with this situation when it comes to the taxi industry. This welcome is in line with the measure government put in place.

Mr Ryder noted Mr Rayi’s comment but did not welcome it. The Committee must take the knowledge regarding this Committee Report. Mr Rayi was not part of all of the consultations which took place and might not have the full picture. The full picture the Committee sees is tax compliance is a condition for most industries. The Committee flagged the fact this was not done for the taxi industry. The Committee did not necessarily have enough information to put forward an opinion or take a side.

By saying notes the Committee noted this. It is not expressing an opinion at the current stage. By saying welcome the Committee is taking sides and saying it supports it. He said he is more comfortable with notes based on the inputs which came from all of the Members, including Mr Rayi’s inputs. Without a fuller picture, the Committee cannot welcome and can only note.

Mr Carrim agreed with Mr Rayi. What he previously said is not to suggest the Committee must go with what Mr Du Toit said. He was simply saying the Committee must not take it further than it currently can. The current formulation is fine and he does not think the Committee must deepen it. It does not know the complexities.

He agrees with Mr Rayi. Mr Rayi was not present when the Committee processed the Appropriations Bill but this is irrelevant. The substance of what Mr Rayi says is valid in its own terms. It is almost as if he was part of the deliberations. Even if he was part of the deliberations, he would probably have said the same thing. Mr Carrim did not think what Mr Ryder said is fair. This will not be resolved. It is simply being said, as the ANC majority, the word welcomes is used in a qualified sense. The Committee is not a Transport Committee and Mr Rayi will know more about this than all other Members. Mr Rayi will know as he played another role before coming to Parliament. His intervention is not saying the word welcome be dropped, but rather it is more complex for the Committee to go beyond what it did. It must be left as is but the Committee must take note of what Mr Du Toit said.

At some stage, the Committee perhaps must say this as lawmakers. When processing the Property Rates Bill there was a huge debate and it finally went to the policymakers above the Committee. It agreed there are traditional leaders who can easily afford to pay property rates. This matter is still being processed by the ANC, but the fact of the matter is, the Committee’s position remains: everybody must pay taxes and those who are super rich must pay appropriately while taking into account the roles it plays. In a way, the taxi industry is relieving the state of a subsidy. Perhaps this must be taken into account when deciding on a tax system. This must be left for a proper discussion and the Committee must engage with the Committee on Transport as it does not know the issues well enough.

Mr Du Toit said obviously the ANC will steamroll 5.7 through, and not change the wording. Referring to Mr Carrim’s argument, the taxi industry is relieving government from a burden, he must put his hand up. The Committee must then put additional relief for farmers who are also relieving government of an additional burden of feeding the nation.

The Committee must be consistent in the way of implementing measures throughout the whole sector and not only focus where the voter base is.

The Chairperson said the information shared by Mr Rayi is public knowledge the Minister of Transport spoke about. The Committee must try not to discriminate and say it notes the relief on other sectors, but welcome the relief on other sectors. Whatever interventions the government does, it must be welcomed. The Chairperson said she saw the Committee as being divided. The Committee knew that at every meeting it speaks about, the relief and declaration was done on drought relief. This was a matter which was resolved in the House, even though it was not supported. The majority party decided on the matter which needs to be given more attention as per the recommendation. She does not think anybody will be harmed given the circumstances, explanation, and knowledge, the Committee has outside of what the Minister of Transport commented on. She made a ruling on this matter and asked the Committee to move onto 5.8.

Mr Ryder went back to 5.5. The Committee discussed the taxi industry for quite a while. The Committee did not discuss the whole issue regarding farmers. The Committee had numerous discussions on the drought relief but there was absolutely nothing in the Report saying this. The Committee supported CASP and agreed on this but did not say anything on drought relief. This refers to the time when the whole country was declared a drought disaster area in February this year. The Committee must include what it said in the meetings all along. The Committee was quite unanimous in its support for drought relief to farmers but the Report did not say anything regarding a need for reallocation towards drought relief.

The Chairperson said she is referring to the previous Bill. The Committee was very specific and emphasised on the issue of drought relief. She did not know if Members will be satisfied if, at every meeting, it had to speak about one item. Her take is the Committee must follow up on issues. The Committee made a decision it needs to call the DALRRD and relevant Select Committees on the matter to find out how far it is with implementing this, instead of repeating it over and over again. She asked the Committee to move forward, as Members asked to leave early and she hoped the Committee Members will not leave before the meeting finished.

Mr Aucamp agreed the Committee discussed a lot of things on agriculture and CASP, yet CASP is the only thing put into the Report. If the Chairperson is saying the Committee must speak to other Committees who are to make presentations, then the statement about CASP must have been left out. This can be a mistake as the Committee wants the statement to be in the Report. The Committee cannot include one statement it discussed while other statements are not put in. The Committee made it clear farmers need assistance when it comes to the drought. He fully agreed. There must be money going towards CASP, but then the Committee must include what is discussed as a Committee, which is not done.

The Chairperson said she is trying to avoid a dialogue between herself and Mr Aucamp, and invited other Members back into the discussion before she makes a ruling on 5.5.

Mr Du Toit fully agreed the Committee must include the additional funding to go towards commercial farmers, considering funds were taken away. There was a whole drought budget taken away for drought relief, and this kickstarted the Covid-19 election campaign. It must be noted, since the Committee discussed it, the document must be a true reflection of what happened in the Committee meetings. He did not know why the Committee steered away from this and only focused on CASP. He supports and insists the Committee Reports note extra support is needed for farmers on drought relief. This must be included, and be handled as soon as possible. The Committee discussed the drought issue in a meeting in the previous year, the fact is DALRRD did not pitch, and no funds were moved towards supporting the agricultural sector and commercial farmers. It is of utmost importance this be included. The Committee has to see to it that food security is protected in the country. It cannot only focus on upcoming farmers. Existing farmers have to see there is a constant supply of food in the country and the drought is not over. He asked permission to provide the whole Committee with pictures and videos, since it is too expensive to take Members to the drought stricken areas, to show what is currently going on. The problem is most politicians only go to shops like Woolworths and Pick ‘n Pay to go and get groceries. Members do not see what is currently going on at ground level and the dire state the agricultural sector of the country is in. It is not about race, as there are farmers of all colours – it is about food security and feeding the nation as a whole.

The Chairperson asked for Members assistance on the issue of small and medium commercial farmers. She remembered in the last Committee meeting it dealt with the Report. The Committee spoke about this and took a decision. Members were not happy with this decision and the way forward, thus she is asking for help.

Mr Rayi differentiated between observations and recommendations so the Committee does not spend time on observations. This is what the Committee observed. If Members have recommendations, under the recommendations item the Committee can deal with the recommendations and see if it agrees with what is proposed or not. Otherwise, 5.5 is an observation of the Committee and the Committee must therefore move forward. If a Member has a recommendation arising out of 5.5, when recommendations are dealt with under the Report, the Member can note it. It can be tested with all Members of the Committee.

The Chairperson thought Mr Rayi assisted and supported what she said in observations made. The Committee will move onto recommendations. The main aim is for the Committee to check if the recommendations speak to the observations and findings.

Mr Carrim agreed with the Chairperson’s original point. The Committee cannot conflate different roles it is processing. In the first instance, this deals with a national Department and is an Appropriation Bill matter. The Committee says in the Report, it is concerned about the reduction in the allocation to the DALRRD for the reasons set out. When looking at the original revenue, it speaks about provincial issues, as in a Section 76 Bill. The drought affected different provinces differently. It is correct to raise the drought in the Division of Revenue Act (DORA), unless it is said the drought is in every province – which it may be. In this case it can be repeated here if it is something dealt with in DORA, as something which arose from a Section 76 preoccupation with a Bill. In a Section 75 preoccupation there are provincial perspectives, but on national departments. He agreed the Committee cannot repeat everything in DORA in the Appropriations Bill Report, as the Committee might as well then take the same Report and reproduce it. Unless the Committee says the drought applies to every province and it is a national issue. He did think it must appear in the current Report and it must appear in the DORA report.

Secondly, no one says drought is not an important issue. He asked when the ANC ever said so. It is utterly arrogant of Mr Du Toit to say the ANC is not on the ground. He asked where the FF+ get 55.8% of the rural vote. If Mr Du Toit wants to engage on issues he can do so, but when he says inflammatory things Members cannot just sit back and listen.

To be clear, the FF+ got 3% of the vote. He asked where these votes come from. What Mr Du Toit said is wrong and Members cannot get away with saying these things. It is provocative and as such ANC Members will be provocative as well. Mr Du Toit has no mandate to speak on behalf of the rural poor.

Mr Rayi has such a mandate, but not Mr Du Toit, as he does not represent the majority. Mr Du Toit cannot speak about the majority in drought stricken areas as this majority does not come from his party and he does not know these persons as well as other Members in the ANC do.

Mr Du Toit raised a point of order. He said it is fair for Mr Carrim to reply to what Members say but it seems as though he is stepping on toes and the truth hurts. The facts stand. The whole of South Africa is declared a drought stricken area by the Minister of Cooperative Governance and Traditional Affairs, Dr Nkosazana Dlamini Zuma. This happened in February at the beginning of the year, which was gazetted. The drought is a national matter. Mr Carrim rightfully said if it is a national matter it is then supposed to form part of the current document. He asked the Chairperson to check the comments on the virtual meeting.

The Chairperson said Mr Du Toit’s order is not sustained because he is now bringing in side-issues. Mr Du Toit is debating and doing what he is meant to do in Chambers. The Committee is not debating and opposing or challenging each other’s manifestos, nor how well each party does. She asked the issue not be politicised and noted the Committee is still on 5.5. The Committee is not deteriorating. She has the responsibility to make sure the decorum of the Committee is maintained. She pleaded with Members to not bring in side-issues and to focus on the papers.

Mr Du Toit said Members are asked to give input and this is what it is doing. Drought is not a side-issue. It must be addressed in the Report as it was discussed in the Committee.

Mr Carrim said that he will let his comments pass in view of the Chairperson’s ruling. There is a lot more he can say. People should focus on the issue all Members fully support the need to have a drought allocation and not to racialise it. It is a fact, a majority of ANC Members know the drought stricken areas far more than any other party, apart from individuals in the parties.

The Chairperson said all Members, irrespective of race, background, or economic status, need food. When talking about the food bank, this affects everybody, no matter if that person bought at Woolworths or at spaza shops. This is a very important issue as everyone wants to survive. It is a part of the government’s agenda.

Mr Ryder referred to 5.8 saying he hopes it is a less controversial change. The comment in the first sentence said the Committee notes the budget for the South African National Defence Force (SANDF) increased by as much as the budget for the Department of Health (DOH). This is not factually correct as the Department of Defence (DOD) budget increased by more. This must be empirically recorded.

The Chairperson asked National Treasury to help the Committee on this point. She was not a part of the previous two meetings where the matter was dealt with. She asked if the budget increased by more or equally.

Concerning the Members who were present in the previous meeting, she asked if this is what was observed according to the presentation from National Treasury.

Mr Carrim said this is an empirical issue and not an ideological or racial issue. If the issue is empirical then Mr Ryder is correct. If he is incorrect then he must be told this. The Committee researchers drafted this. It must be checked with National Treasury offline so whatever is correct can be done. If National Treasury cannot correct this now, the Committee must move on. This is an empirical issue and he agrees with Mr Ryder. If it is not the case then it must be mentioned.

The Chairperson was of the opinion this is a big matter. Whatever the Committee did and whatever it reports to the nation must be correct as it will be held accountable for it.

The Committee Content Advisor said the observations are derived from the deliberations of the Committee. When checking the Minutes of 23 July 2020, when National Treasury presented, the issue was captured as found in the observation. The figures will need to be checked. If the figures show SANDF was given more money, it must be changed as such.

The Chairperson asked if Members agree to hand the matter to the Committee Secretary and Content Advisor to go and verify it with National Treasury. It can only be confirmed by the figures. The Committee is not to rely on what it discussed but rather to wait on the figures.

Mr Ryder shared the presentation of the Parliamentary Budget Office. It showed an increase for the DOD of R4 billion and the increase to DOH of R2.9 billion. He did not think there is any room for argument.

The Chairperson asked if all Members can see the difference in the figures.

Dr Mampho Modise, Deputy Director-General: Public Finance, National Treasury, apologised for the delay. When the allocation was done it was not a matter of what is important vis-a-vis what is not important. How the allocation was done is, National Treasury got the applications from different departments.

Mr Ryder said this is not the issue. The issue is a simple one of fact. The question is if the increase for the DOD higher is than the increase of DOH. The ideological positions did not need to be argued.

Dr Modise thought Members must look at the allocation to the DOH in totality. It cannot be looked at as a National Department only, because over R20 billion was reprioritised to the DOH at a provincial level. Therefore, when looking at the total allocated to the DOH, it is over R22 billion, while the DOD was allocated R4 billion. When looking at the allocation to the DOH, Members must look at what money was moved for health purposes. It is also not only the DOH to which money was allocated for health purposes. It also included the Department of Public Works and Infrastructure where some reprioritisation was done for the quarantine sites. The total health budget had to be looked at across all departments and at different spheres of government.

Mr Ryder said this contradicted everything Mr Carrim said. Mr Carrim said this Report is not DORA and the Committee must focus on the National Appropriation Bill. What happened in DORA, if for drought or health, is a separate matter. The main Appropriation Bill is now dealt with, and it is clear more is allocated to the DOD than to the DOH.

Mr Carrim raised a point of order and said this is exactly what he did not say. He said the Committee must avoid repetition unnecessarily, and in this context it had validity. However, in the general sense Mr Ryder referred to, it is very tenacious. The issues must be focused on as there are no policy differences. This is what he was trying to tell Mr Du Toit. If Mr Du Toit avoided inflammatory issues, such as who knows the drought stricken areas better, then the issue must be focused on. Here, the issue is simply if more money was given to the DOD as against the DOH.

Once this is stated, Members will not have a policy issue as it is an empirical fact. He asked what is being fought about. The issue which can be differed on is not what the figures say, but what the figures mean. If he understood correctly, Dr Modise is helping by saying this is correct and by consequently looking at the DOH’s increase it will not be a fair reflection of what has gone to other departments dealing with health related issues. Presumably this also relates to a previous fact put before the Committee, about the DOD serving a military role and doctors assisting. He read this somewhere about doctors sent to the Eastern Cape. The Committee must agree on what the facts are and the drafters must give a meaning to it. He also wanted to raise questions around this issue because, if the figures are true, he questioned its meaning. If the figures are written in this way it can mean something very different. If someone picks up one sentence out of the Report, it will become news saying more money was allocated to the DOD than to the DOH. It will say the state is becoming militarised and so on. The facts must be dealt with, and reworded to take into account the issue raised by Dr Modise.

The Chairperson asked that Members reword 5.8 as identified by Mr Ryder. From what Dr Modise said, the meaning of what is written in the Report is different. When going down, the Report also spoke about the South African Police Services (SAPS). 5.8 must be redefined because SANDF is a National Department. The comparisons made to the DOH refer to the DOH at a national level. It is its responsibility to coordinate and intervene, with actual health interventions and work done at provincial levels where DORA is dealt with. Actually, the DOH is allocated the most as a Department. She suggested the Committee not misrepresent itself and the country regarding the paragraph. She requested Mr Carrim work with the Content Advisor and Dr Modise to redraft this paragraph so it gives it meaning, and so any person who comes across the paragraph is able to understand what is referred to.

Mr Carrim replied with due respect, saying he did not think he must do the drafting as people will raise issues. The Content Advisor and Dr Modise can do this and give him a copy. He will look at it, but he does not want to draft it, as he does not want to get involved in all of the issues. He thinks the Chairperson is correct.

The Chairperson said she does not want to be drawn into this as she addressed the issue, and made a ruling on it. As Chairperson of the Committee, she delegates to Mr Carrim, the Content Advisor, and Dr Modise, to please assist in crafting the recommendation.

Mr Carrim said this is inappropriate but will do it because the Chairperson said so.

The Chairperson continued, noting Mr Ryder for 5.14 on page 24.

Mr Ryder said it is a political cheap shot to highlight one particular municipality. There are many municipalities and departments which regularly surrender funds to the National Revenue Fund (NRF). It is up to the Committee if it wants to keep this in the Report. He thinks it is inappropriate.

Mr Carrim said when he saw 5.14 it struck him as odd. He did not know if he agreed with Mr Ryder’s words, but what he says is credible. There is no need to mention it as it is not fair. There are other municipalities run by the ANC in a worse off position. The Content Advisor is getting too political.

The Chairperson asked Members if they agree to do away with 5.14. This will affect the numbering.

Mr Rayi thought the numbering must stay the same and such as the City of Cape Town must be deleted. It must just read the Committee is also concerned with municipalities and other government departments.

Mr Carrim said all Members know 5.14 is very true about Cape Town but it will not be said.

The Chairperson said the City of Cape Town must be removed from the paragraph. The paragraph must be maintained though. She asked if Mr Ryder is comfortable with this agreement.

Mr Ryder agreed.

The Chairperson continued onto the recommendations on page 25.

Mr Ryder said 5.2 specifically relates to the amendment to Section 6. It was introduced into the Appropriation Bill and sought to give the Minister of Finance additional powers. There is no recommendation from the Committee emanating from the observation. There are substantial comments made in the Committee about concern regarding the additional powers being used for the bailing out of State-Owned Entities, specifically South African Airlines. There is concern about the exact use of the money as a behind-the-scenes shuffle of funds to assist with bailouts. He thought this should be captured somewhere in the recommendations. This is because the Committee is trying to note the Minister of Finance is given the additional powers. Some Members do not agree with it, if it is merely to provide a smokescreen for the Minister of Finance to do things he is not prepared to do through the normal course. As a result, the additional powers must be used specifically as detailed within the law for unanticipated, unexpected expenditure, and not for trouble or problems brewing for some years. He proposed the Committee add an additional paragraph to this effect.

The Chairperson struggled to hear Mr Ryder as a result of connectivity issues but understood he wants to propose an additional recommendation.

Mr Ryder confirmed this.

The Chairperson asked if there are any Members who want to speak to what Mr Ryder raised.

Mr Rayi wanted a repeat of what Mr Ryder proposed, as it sounded as though it is an observation rather than a recommendation.

The Chairperson asked Mr Ryder to try and craft his addition so the Committee can discuss it and understand what it is he proposed. There is a confusion regarding if it is an observation or recommendation. She struggled to hear his proposal in totality because of connectivity.

The Content Advisor said there is a recommendation on 5.2 which is 6.2. The recommendation is not adequate and Members can strengthen it. However, the notion there is no recommendation for 5.2 is incorrect.

The Chairperson asked Mr Ryder to check if 6.2 covers what he proposes.

Mr Ryder noted 5.2 and 6.2 did not speak to each other at all and there is no correlation in his view.

The Content Advisor directed Mr Ryder to 6.4.

The Chairperson asked Mr Ryder to check 6.4.

Mr Ryder said the Chairperson is correct, 6.4 corresponds to 5.2. However, he did not feel it went far enough and asked the Committee to strengthen it, to recommend any movements of the Minister of Finance are exactly in line with the prescripts of all the requirements thereof, and the expenditure must be unforeseen.

Mr Carrim recalled a telephonic exchange between himself and the Chairperson regarding this matter. Here the two of them raised something overlapping with what Mr Ryder said. The Chairperson and himself broadly agreed with what Mr Ryder was saying, but it cannot be said the Minister of Finance must abide by the law otherwise it must be done for every little thing. What can be said is the Committee must monitor the Minister of Finance. He does not know to what extent and how much power the new 6.1 gives the Minister of Finance. The Committee can make the general point it will carefully monitor the use of the new power if there is such a thing. He asked if this is actually a new power and if so, why. Thereafter, the Committee can take a position on this. The Committee must not decide in the abstract. He asked Dr Modise to explain, but if other Members know about this then it is fine. In short, the Committee can make a more general statement saying the Committee will carefully monitor the use of the power. Mr Ryder is correct in saying 6.4 does not directly correspond to paragraph 5.2 of the Report. Perhaps Dr Modise can explain the issue from this side.

The Chairperson said it is the Committee’s responsibility as the oversight body to make sure any Minister or executive authority does not abuse the power given to it.

Dr Modise said this is not a new power the Minister of Finance will have. It has always been in Section 6 of the Public Finance Management Act (PFMA). The reason why it was brought to the Committee is because it was announced in the Budget. Now the Minister of Finance will be able to deal with it as there is a new Bill. All that is asked for, is when the Minister of Finance announces the Budget Speech, it will be things he can still do given the special Bill. Initially, the way National Treasury must do it is through putting the clause in the Appropriation Bill in advance. National Treasury did not put the clause in, it realised amendments must be done. However, this is not a new power the Minister of Finance will have. This is just a mechanism which will allow the Minister of Finance to use the funds for the purpose which will be in the PFMA. For example, the special Budget had a R90 billion set aside for employment creation. This section will allow the Minister of Finance to disperse the funds to different departments before getting to the October Medium Term Budget Policy Statement (MTBPS). It was a mechanism of how the Minister of Finance could disperse the funds. This will then be presented in Parliament once a decision is made.

The Chairperson said Dr Modise’s response assisted a lot and provided comfort. It is not a new power given to the Minister of Finance as it is something which was in the PFMA. The Committee also needs to ensure this is not misinterpreted at other levels and needs to play its oversight. With this understanding she proceeded to page 26.

Mr Ryder said he is not sure all Members agreed with Dr Modise. Dr Modise’s response is not the impression created at the Committee meeting, where it was indicated the powers are original powers given to the Minister of Finance. He is not sure the information given by Dr Modise is the understanding created in the Committee. This is a Committee report and Dr Modise took the wind out of his sails.

The Chairperson referred to the Members who were in the meeting. Her understanding is, what Mr Ryder raised is what was discussed in the meeting. What Dr Modise was doing is clarifying or trying to correct this.

Mr Carrim said this is not an ideological or policy issue. The Committee agreed on a lot more than what is being made out. If Mr Ryder is right then he is right – it is either a new power or not. If it is a new power, then it is correct to draw attention to this as it is the Committee’s parliamentary and constitutionally defined responsibility to hold the Minister of Finance to account. However, he thought Dr Modise is correct. He did not vividly recall National Treasury saying something else the previous week. He did not think Dr Modise will lie insofar as the differences in interpretation. If it is a new power, it means there must be an amendment to the PFMA. When Mr Ryder uses the word new power he immediately thought this is not the correct word but he understood what he is saying. What Mr Ryder means is exercising a power he or she already has. The Minister of Finance could not have a new power as the new power has to come from the Committee as Parliament decided. There were no amendments to the PFMA he knew of, as it will come through the Committee. What Dr Modise said resonated with what he himself, and the Chairperson said during a telephonic exchange. Endless hours cannot be spent on this. He asked the Content Advisor if this is a new power as it did not seem to be the case. He asked if it was a power being exercised which was not used before. For example, in the law it is often said a Minister may regulate on A, B, C or D. If the Minister then does not regulate on it for 10 years and in the 11th year he or she then decides to regulate on the matter, this is not a new power. It just required Parliament to be more alert regarding why the Minister suddenly made the decision to exercise a regulatory power in the law he or she is allowed. This is why the Committee cannot say it is a new power. Mr Ryder is right and Members are not disagreeing – it is not a policy issue and the Committee just has to get the wording right.

Dr Modise said National Treasury will help the Committee. She will work with the Committee researchers to see. For the past 10-15 years Section 6 was in the Appropriation Bill and the Minister of Finance used it several times – even to give money to the South African Broadcasting Corporation and so on. She asked if she could put together examples of the instances in each year where the Minister of Finance used Section 6 and submit it to the Committee so it can see how National Treasury used Section 6 in the past. She hopes this will allow the Committee to understand the instances in which the Minister of Finance used Section 6.

The Chairperson did not have a problem with Dr Modise’s suggestion. The issue now is the Committee must resolve how to move from what Mr Ryder raised, while taking into consideration what Dr Modise and Mr Carrim raised.

Mr Ryder thought Dr Modise’s offer will be widely accepted. With the understanding the Committee did not go through this type of process before, he asked if perhaps Dr Modise can also indicate to the Committee why an amendment to the Appropriation Bill is needed, if it is just to exercise powers already held. He asked why this amendment is introduced to the Committee halfway through the process. Perhaps National Treasury can clarify this for the Committee. Mr Carrim’s comments are well accepted and he agrees the Committee must monitor the use of the power. He did not think Members are all in agreement but it is possibly because Members do not all have the same understanding. He asked if National Treasury can help the Committee understand exactly why the amendment is brought.

Mr E Njandu (ANC, Western Cape) logged in late and said he believed his apology was accepted. He said the matter under discussion is a legislative matter. The Minister of Finance is functioning under the Public Finance Management Act (PFMA). When listening to Dr Modise, her response clarified how processes are unfolding within the legislation. He fully accepts the explanation by Dr Modise, so the Committee will be able to close this point on the explanation which was given regarding Section 6 of the PFMA. The Committee must move forward regarding the explanation given by Dr Modise, as it is satisfactory for clarifying the matter to the Committee, as to how the Minister of Finance operates.

The Committee Secretary asked the Chairperson for the right to highlight his understanding of the amendment. His understanding is Section 6 was always present in the Appropriation Bill or Act. It was used by National Treasury before, and only the wording is amended. In this instance, there were two words inserted: the word an and the second adjustment. This was inserted because it is the first time there is an adjustment in the middle of the year before the tabling of the MTBPS, whereas normally the Committee deals with the Adjusted Appropriation Bill. This is his understanding but he thinks Dr Modise can expand on it. Regarding if he is correct or incorrect, Dr Modise can correct his understanding. The provision could be read with Section 43 of the PFMA, which prohibits certain movements from economic classifications.

The Chairperson said Dr Modise heard what Members raised even after her explanation. She will be making a ruling after Dr Modise spoke on the matter. She asked Dr Modise to provide a further explanation.

Dr Modise asked if Adv Empie Van Schoor, Chief Director: Legislation, National Treasury, can help the Committee to resolve the matter.

Adv Van Schoor said it is not an amendment to Section 6 of the PFMA, but an amendment of Section 6 of the Appropriation Act which was passed by Parliament earlier in the year. As the Committee Secretary explained, the problem is the wording in the section which said it must be utilised before an adjustment to the Appropriation Bill is tabled. National Treasury did not foresee when the Appropriation Act was passed earlier in the year that there would be another Adjustments Appropriation Bill. So, the wording now curtailed the Minister of Finance from exercising certain provisions in Section 6 of the Appropriation Act. As Dr Modise explained earlier, the power was in the previous Appropriation Acts for a number of years. It is thus not a new power and the main thing is simply to enable the Minister of Finance to use this power. This is because the moment the Adjustments Appropriation Bill is tabled on 24 June 2020, the Minister of Finance could not exercise that power anymore, given the wording thereof.

The Chairperson thought the Committee must discuss and request clarity from the legal and financial minds to interpret and make the Committee understand Section 6. Everyone must be on the same level. Having said this, the Committee did not undermine what Mr Ryder said. It must be on the lookout for anything which might be abused. Power must not be abused – this is the Committee’s responsibility. Regarding the amendment and legislation, she thought everyone has the same understanding. With this, she ruled the matter be closed, and the Committee move on to the next item which is 6.6.

Mr Carrim accepted the Chairperson’s ruling but had one practical issue. Given the explanations, as was correctly said, Mr Ryder is correct to be weary, and wrong to think it is a new adjustment of a power. Having said this, he asked if it is really necessary for Dr Modise to provide all of the instances on how the power was used over the last ten years. It is a lot of work and unnecessary. He asked if the Committee really still wants her to do this.

The Chairperson said her ruling is clear. There is no need for Dr Modise to provide those instances after the discussion because further clarities were provided. Her ruling is, all Members understood Section 6 and are all on the same level. The legal mind of Advocate Van Schoor closed the matter and the Committee was on the same level. The Committee just needed to be alert to ensure the powers are not being abused. She continued on to Mr Aucamp, who noted 6.6 on page 26.

Mr Aucamp did not want to repeat what he said earlier with regards to 6.6, but the Committee was now at the recommendations. 6.6 spoke exactly to what was discussed before. It is important 6.6 reflects the recommendations of the Committee. One of the recommendations the Committee discussed all of the time is the fact it needs to look at drought relief to the farmers. The words drought relief is not mentioned once in the whole Report. He thought, in the recommendations where it is said the Committee is of the view more resources are required in the agricultural sector to support South Africans to produce food for themselves, the Committee had to say it must be there for drought relief as well.

The Chairperson referred to 6.6 and the drought relief, Mr Aucamp suggested there must be something speaking to drought relief because there is no word speaking to drought relief.

Mr Du Toit wanted to add and drought support to commercial farmers to the first sentence behind the words ‘CASP’.

The Chairperson wanted to understand Mr Du Toit. It is the second time Mr Du Toit spoke about commercial farmers and left other farmers out. She asked if there is a reason for this.

Mr Du Toit said there is a reason for him highlighting commercial farmers. It is because the agricultural support programmes currently running are for upcoming farmers and black farmers support. Commercial farmers are non-racial and farmers of all races form part of the commercial farming arena. He highlighted commercial farmers since there is already support for the agricultural sector and upcoming farmers. He believed the Committee must support everyone in a fair manner and not discriminate against any farmer.

Mr Rayi wanted to suggest 6.6 be left as is in the recommendation. His understanding on the issue of drought relief is it must be dealt with according to disaster declared, and must be followed up according to this. The last meeting of the Committee he attended in November of the previous year, dealt with the issue of the drought. In fact, National Treasury confirmed there is money some provinces are not accessing. This is different from the issue of CASP which is reflected. It is a totally new thing which has nothing to do with the observations and findings. If Members have an issue, Members want to take up regarding drought, he does not think it belongs in the particular issue currently dealt with – it is a matter which can be followed up as part of the disaster declared by the Minister of Culture.

Mr Carrim did not personally see a problem with including drought relief, notwithstanding everything he said. However, he did not agree the Committee must mention commercial farmers. He realised people represent certain constituencies but have a problem when the ANC represents those constituencies. He did not know how the ANC cannot have the same right it had, as it was a democracy after all. There are subsistence farmers as well, who are not in the commercial market sector but are also affected by the drought. The drought affects everybody, not just commercial farmers, and also affects people who shop in the fanciest of places as was rightly said. He is not aware, but the drought was actually declared a national disaster in February. He suggested the Committee just say something about including drought relief as it is for everybody, including commercial farmers, subsistence farmers, and the rich and the poor who are affected by food security. This is especially so now when hunger is stalking the country. Mr Rayi might be correct in saying the drought relief did not belong here, but this is neither here nor there for him. He felt it should be slotted in somewhere by the Content Advisor and his team, but he is not going to fight about it. He just does not think commercial farmers are to be looked at alone.

The Chairperson told Mr Du Toit, the Committee must rather not specify commercial farmers to avoid falling into the trend of discriminating against other farmers who are classified farmers. All farmers are important. All Members of the Committee who are from different political parties and have constituencies in the sector spoken about, must try not to discriminate unnecessarily between upcoming and commercial farmers. This matter is next to Mr Du Toit’s heart. When the Committee met with the relevant Department, she suggested the Committee highlight the issue and put it out there, this is how Mr Du Toit felt. As a Committee, it must be inclusive of every category of farmers.

Mr Du Toit agreed with the Chairperson and suggested the Committee state all farmers because 6.6 does not make mention of commercial farmers. The Committee must say drought relief for all farmers and it will be inclusive of everyone.

Mr Aucamp said the Committee has a very good solution on what was proposed. As was rightly said, the Committee must not distinguish between farmers at all. All farmers need assistance, Black or White, or small, commercial or upcoming farmers. Each and every farmer suffered under the drought and had to get some help. He referred to Mr Rayi saying the drought disaster is not there anymore and it is one thing the Committee discussed. The Committee arrived at the solution and just had to put in the words emphasising relief of problems farmers experienced regarding drought all over the country.

The Chairperson asked if she can continue onto page 27.

Mr Carrim asked if he can raise another issue related to 6.6. The words as much as possible of the R2.4 billion reduction was added. He said this because the Committee must not put pie in the sky recommendations it knows are not going to happen. There is no way National Treasury is going to return the R2.4 billion. He asked where the money is. The Committee did not agree the amount of money must be taken away for the reasons set out. In the way the Committee worded things, the team must also be a bit realistic because if pie in the sky recommendations do not get implemented, then people will ask what the point is of coming to the public hearings to make recommendations which are not doable. These are doable but are just not followed up. When the Committee couched its recommendations, it must be realistic regarding what is feasible, possible and doable. All Members want the R2.4 billion to go back but it is not going to happen.

The Chairperson asked if there is anything Mr Carrim wants to suggest regarding what he raised.

Mr Carrim said the words are already added. The R2.4 billion is not going to be returned, so when the Committee said National Treasury has to reinstate it this was not realistic. Therefore the Committee just had to say, as much as possible must be returned and the Committee has to fight for it within the parliamentary structures, and outside of the parliamentary structures through the Committee’s other structures and powers.

The Chairperson asked if the Content Advisor got Mr Carrim’s suggestion.

The Content Advisor confirmed he captured Mr Carrim’s proposed amendment. As long as the Committee agrees with it, so it will be captured.

The Chairperson said the Committee agrees with the proposed amendment and proceeded onto page 27.

Mr Carrim asked if he can draw attention to a comment made. When looking at 6.8, he did not know where this came from or what the implications are. It read The Committee is of the view that the R3.2 billion earmarked for the Land Bank recapitalisation should only be transferred to the Bank upon submission of credible turnaround strategic plans. This is correct. 6.8 then continues with, and, if need be, government and the Land Bank should revisit the current banking model of the Bank, which does not allow it to take deposits, to make it more efficient and effective, so it can become less reliant on state bail-outs. In principle this is correct, but he asked if Members actually took a position as a Committee, the Land Bank must revisit its banking model. He asked if the Committee actually felt the Land Bank must take deposits. He asked if this is a policy position or if it is merely discussed without the Committee deciding. He is not for or against it but wants to understand its implications. He asked if somebody can explain what the implications are.

The Chairperson said Mr Carrim wanted assistance and assurance through Members reminding each other, as people who participated in the previous meetings. He asked if anyone can assist Mr Carrim.

Mr Ryder thought Mr Carrim is quite correct. There are some comments about re-evaluating development finance institutions (DFIs), the business model, and the environment which it operated in. It did not seem a direct comment relating to the old terminology of deposit-taking institutions and did not recall any discussion specifically detailing this. It is merely a case the Committee needed to re-evaluate the business model and ensure its viability. The Committee did not make any suggestions as to future policy.

The Chairperson asked if Members agreed with what Mr Ryder and Mr Carrim were saying and asked if the Committee could move with this understanding.

Mr Carrim suggested the Committee remove the reference to deposit-taking, not because it disagreed but because it did not know what the implications are. Whoever drafted it may well be correct but he asked the Committee put this in abeyance because it needs to discuss it carefully. Personally, he was not saying no to it because he did not know if it is valid or invalid. The next time the Committee met with the Select Committee on Agriculture, as found in the Committee’s agenda, the issue must be brought up and the Content Advisor and his team must put a paper together on why it possibly thinks it is the correct thing to do. National Treasury must tell the Committee why it is not possible. The positive thing is it may be right but the Committee must first discuss it.

The Chairperson said Mr Carrim raised his concern and is not sure if it will make any difference to retain or remove the reference. She confirmed the Committee will live with it and wants Members to further confirm. She did not want to take unilateral decisions for the Committee.

Mr Carrim said regarding 6.8, with due respect, the Committee is suggesting the whole paragraph be left but the words does not allow it to take deposits be taken out. He finds it very hard to believe in the foreseeable future there will be a Land Bank seeking to primarily address African emerging farmers who are able to function on the criteria of a commercial bank. This is not a policy decision the ANC took, as it has no mandate to say these things as far as he is concerned. The best thing to do is to leave everything out, referring to form. 6.8 must stop at revisiting the current banking model of the bank, which makes it more effective financially and operationally. The Committee cannot say more as it is a big leap and it does not know what the implications are as it did not discuss it.

The Chairperson asked the Content Advisor if he captured the proposal.

The Content Advisor confirmed the proposal was captured.

The Chairperson thanked the Committee. The Committee had fruitful discussions and will all own up to the Report as a full reflection of its hard work. The engagement helped those who had a lesser understanding of the issues. She continued onto the next part of the report to get a mover for the adoption of the report as a true reflection.

Mr Carrim said one of the things the Committee needs to think about is, in its recommendations it kept saying National Treasury must do something. It must be in the MTBPS. This makes sense at one level because the MTBPS is coming very shortly, in three months time. The Committee will have a special engagement with National Treasury and other stakeholders on a matter before the adjustments come. This is because in the previous terms it used to live at National Treasury as it had quarterly reviews. This is not done at the NCOP. Perhaps this is while the Committee is in the Covid-19 situation and the rules are for joint meetings. Some of the issues the Committee raised in its Report are given to the staff to advise when it has a quarterly meeting it must be a joint quarterly meeting, taking into account some of the issues in the Committee’s report.

Another point the Committee has to think about is sometimes the Committee observes things but has not decided what it wants done. It must be a mechanical relationship although, in general, there should be recommendations flowing from observations, but not always. Finally, in the powers vested in the Chairperson and Mr Njandu, a decree should be issued for Mr Rayi to join the Committee as an honorary life Member because he brought more insight than the rest of the Committee did.

The Chairperson said she will take the first part of what Mr Carrim said and put it in the concluding remarks. It will help a lot if it is captured as a concluding remark as a way forward. She asked if Mr Carrim agreed and if he is comfortable with this.

Mr Carrim said it is the Chairperson’s and Committee’s call. In future, Members as the Committee must decide if it is not going to wait for MTBPS and the Budget. The matter of procedure is what the Chairperson will handle – she will send a letter to the staff and say when there will be public meetings.

The Chairperson said, as a Select Committee it will conclude on this note.

Mr Carrim said the Content Advisor can include a paragraph saying the Committee would, before the MTBPS, with the Committee on Appropriations on the NA’s side, address some of the issues in a joint meeting.

The Committee Secretary had a comment on clarifying what was discussed together with Mr Carrim. He asked if it will not be proper if Mr Carrim said is not captured on the Report but on the minutes of the Committee as a resolution taken by the Committee. Going forward, if there are issues the Committee feels strongly about then it must ensure joint meetings with the NA Committee. 

The Chairperson asked Mr Rayi what his take is on the suggestion the Committee must not capture it on the Report, but it at least form part of the resolutions in the minutes taken on today’s meeting.

Mr Rayi agreed with the suggestion.

The Chairperson asked if the Committee agreed.

The Committee agreed.

The Chairperson asked for a mover for the Report.

Mr Njandu proposed, after the broad and careful deliberations and recommendations made by the Committee, the Report be adopted.

Mr Carrim seconded the adoption of the Report.

Mr Z Mkiva (ANC, Eastern Cape) seconded the adoption of the Report.

Mr Ryder said the Report is excellent and a reflection of what was discussed. There are certain small nuances which required further consultation between himself and his colleagues from his caucus.

For only this reason, he asked the Committee to note the DA will reserve its position on the Report until it has an opportunity to fully deliberate.

Mr Du Toit said the FF+ also reserved its position on the matter.

The Chairperson thanked the Committee for its deliberations and inputs. She moved on to the next item, being the Minutes.

The Content Advisor alerted Members to two issues. On the question of an engagement with National Treasury, the Committee focused more on the legislative processing and did less on the monitoring of activities as Members would know. There is a meeting taking place before the MTBPS with National Treasury, where National Treasury will discuss and present the Provincial and Local Government Grant Expenditure of Conditional Grants. Some of the issues being ventilated now are still going to arise in the meeting because National Treasury will present specific sector expenditure on Conditional Grants. Members will have more take and a clearer understanding on what happened before the MTBPS. This is part of the mandate of the Committee – to look at the quarterly expenditure of grants at a provincial and local government level. The activity must happen on a quarterly basis, so the engagement continues.

The second issue is he sent a draft paragraph to Mr Carrim on the health and defence issue. As soon as Mr Carrim okays the paragraph, he will factor it into the Report.

The Chairperson asked the Content Advisor to remember she spoke of the consultation with Dr Modise for the figures.

The Content Advisor confirmed he requested the communication channels so it can be sent to Dr Modise.

Consideration and adoption of Committee minutes

Committee minutes dated 21 July, 23 July and 24 July 2020 were adopted without amendment.

The Chairperson said the meeting came to an end. From now on the Committee will give the Secretariat administration to consolidate it. There will be a presentation of the Report the following day in the plenary at the House. Hopefully the Report will be adopted. She thanked everyone who participated.

Members were told to check messages and emails as there is something sent to Members for their attention in the NCOP, although she did not have the power to announce it.

The meeting was adjourned.