Committee Reports on 2009 Medium Term Budget Policy Statement, FFC Annual Report, Conditional Grants

Meeting report

Committee draft Report on  2009 Medium Term Budget Policy Statement (MTBPS)
Mr Mkhethwa Mkhize, Content Adviser for the Committee, tabled the draft Committee Report on the 2009 Medium Term Budget Policy Statement (MTBPS) and briefed the Committee. There was a need to look at the  spending issues around the Money Bills Amendment and Related Matters Act. The Report focused on government spending and the content of the MTBPS.

Bullet Point 2 referred to the Budget Priorities for the Medium Term. The report essentially covered five spending priority areas of the Government. These were job creation, education, health, rural development and the fight against crime and corruption. Job creation would be achieved through the Extended Public Works Programme (EPWP). The Department of Health was at an advanced planning stage of the National Health Insurance Scheme. Rural Development was a serious challenge. The Department of Rural Development and Land Reform would use 80% of its budget for land reform. This posed a dilemma, as only 20% of the budget would be left for spending on actual rural development.

Bullet point 5.4 was very important as this was the section where the most serious challenges on the MTBPS were highlighted. He asked that the Committee consider this in particular, as the recommendations were based on rural development strategies, and highlighted some of the most important challenges for the government.

Discussion
Mr S Mazosiwe (ANC; Eastern Cape) asked for comments concerning the role that other departments played, for example the Department of Water Affairs.

The Chairperson responded by referring to the bottom of page 12 of the report and added that the Minister of Finance had asked for better coordination between Departments. Extension Officers were not doing their jobs properly. They should be monitored.

Mr R Lees (DA; KwaZulu Natal) stated that he was comfortable with the draft Report, except for the last line of bullet point 5.4 on page 12. The statement contained therein was a generalisation.

The Chairperson responded that the Minister had said that the Department was in discussion with Agri-SA. The matter referred to in the document was under discussion.

Mr Mazosiwe said that the statement was a reflection of reality but not every farmer was guilty of inflating land prices.

Mr T Harris (DA; Western Cape) recommended that the wording of the last sentence in bullet point 5.4 should be changed.

The Chairperson said that the Department of Agriculture should look more closely at this problem.

Mr Mkhize agreed with the Chairperson, saying that rural development was a factor in each and every department. There was a proposal that all departments should have a rural development strategy. The Portfolio Committee on Rural Development and Land Reform had a critical role to play, in terms of monitoring other departments on implementation, which appeared to be the main problem.

The Chairperson said that nothing stopped the Select Committee on Appropriations from meeting with the Select Committee on Agriculture, and asking what happened in terms of allocations.

Mr Mkhize recommended that the Committee should look at bullet points 6 and 7.

Mr Harris made a proposal that , whilst he had no problem with the findings and the reflections in bullet points 6 and 7, these did not accurately reflect the report in its entirety. He was of the view that the points made were valid, but encompassed only a small percentage of the report. The Committee had to have a broader response as the key debate in the country was the sustainability of the fiscal budget. He strongly recommended that the findings and recommendations should be dramatically expanded, to make them relevant to what was currently being debated in the country.

Mr Mkhize responded that the Select Committee on Appropriations had a clear mandate in terms of the Money Bills Amendment Procedure and Related Matters Act, which was summarised clearly on page 1. The Committee's recommendations were based on three key areas of the spending priorities, the  proposed division of revenue, and the proposed substantial adjustment on conditional grants. He said that, ideally, what Mr Harris was saying should have been included in the previous report which dealt with economic policies and the Fiscal Framework. The Committee would not, however, be prevented from making the recommendations in this meeting and including them in this report. The report that this Committee jointly adopted with the Standing Committee on Finance was that the mandate would entail looking at macro-economic projections as well as the fiscal framework. The current mandate of the Committee was to look at spending issues, division of revenue and conditional grants.

Mr Mazosiwe said that the point Mr Harris was making was still valid. He proposed that the proposals that Mr Harris had put forward should be included.

The Chairperson asked what the recommendations of the Standing Committee on Finance were, since this Committee had held hearings, whereas the Select Committees on Finance and Appropriations had not.

Mr Mkhize responded that the recommendations were that the roll over of conditional grants should not be shifted from one municipality to another, due to lack of spending capacity. The second recommendation was that the government should ensure that there were enough resources for the land reform strategies. It was the opinion of the Standing Committee on Finance that the Department of Public Works was not doing enough in terms of its asset register. The third recommendation was that the Department of Water Affairs should make adequate provision, planning and budgeting to fund the maintenance of water Infrastructure.

Mr T Chaane (ANC; North West) said that the recommendations focused on rural development only, but these still complemented issues of appropriation. He noted some of the areas that Mr Harris had highlighted.

Mr Harris said that the Committee had to comment on the appropriations. He proposed that the task team should expand the recommendations so as to include six of the other sections that the Minister had included in the report.

Mr Chaane asked for more clarity on the recommendations of Mr Harris.

Mr Lees clarified that Mr Harris was saying that the body of the report covered the main issues. However, the conclusion highlighted only one issue of rural development. Mr Harris felt that the conclusion should also have touched on some other areas.

Mr Mazosiwe said that the four bullet points were very broad and covered the role of the Departments of Public Works, Cooperative Governance and Traditional Affairs, and Water Affairs. The main question would be which other areas were not covered.

The Chairperson said that the Ministry would be present at an upcoming debate, where Mr Harris would have an opportunity to present his recommendations. However, he pointed out that the Minister had been very clear in saying that the priorities of government had been set, and what was left was how to align them with available resources. That was the challenge.

Mr Harris recommended that the Committee should draw up a recommendation that was more inclusive of the issues raised in the report. He was not comfortable with the fact that the report’s conclusions only highlighted one of the six sections. He felt that there should also be specific comment on the other five sections.

Mr Mazosiwe recommended that Mr Harris should work with the Content Advisor on these recommendations and comments of the Committee.

Mr Mkhize requested some time in which to do so.

The Chairperson reminded the Committee that this Report was very important as it was dealing with the national budget of South Africa.

Mr Lees agreed with the Chairperson.

After a recess allowed for the redrafting process, the Committee studied a new draft.

Mr Mazosiwe asked why points 6.1 to 6.5 of the recommendations now drafted by Mr Harris and Mr Mkhize were duplicated.

Mr Harris responded that the logic behind this was that the findings were meant to emphasise the recommendations made, and were not recommendations in themselves.

The Chairperson asked if there was agreement on point 6.1, and received confirmation from Members that there was.

Mr S Montsitsi (ANC; Gauteng) asked what was reviewed at bullet point 7.4.

The Chairperson responded that this referred to the input and measurable output.

Mr Harris referred to page 10 of the original report from the Content Advisor and he recommended that the Committee should adopt the Human Sciences Research Council's recommendations of increasing the Health Budget.

The Chairperson responded that when the Minister was addressing the House and also when addressing the Committee, he had said that the basis for this was being laid and would take time.

Mr Mazosiwe said that he had no problems with issues of efficiency in the Health sector. This should, however, not be a precondition for the implementation of the National Health Insurance Scheme (NHI). He recommended that the proposal should be reflected as a separate proposal altogether.

Mr Harris said that the main problem in the Health sector was that the budget was not sufficient.

The Chairperson interjected, and said that the Minister had indicated that in the Health sector there was a huge administration but a small section of practitioners. This needed to be turned around.

Mr Mazosiwe said that he supported the recommendation of a separate proposal in relation to health issues, that stood apart from the recommendations in respect of the NHI.

Mr Chaane agreed.

Mr Mazosiwe stated that another framework was needed as a new recommendation.

Mr Harris recommended that the wording should be changed to read as follows: “The Committee recommends that additional increases are appropriated in the budget in 2010 to address the quality of service in the public sector, which is a key condition for the implementation of the National Health Insurance Scheme.

Mr Montsitsi said that conditions should not be placed on the NHI by the Committee.

Mr Harris said that he could not agree with the recommendation in point 7.5 on the NHI, and his view reflected the views of his party. He noted that he would record a dissenting opinion in respect of this clause.

The Chairperson noted his view.

The Report was adopted, with amendments.

Committee’s Report on the Financial and Fiscal Commission Annual Report
Members of the Committee adopted the Committee’s draft Report on the Financial and Fiscal Commission Annual Report, with grammatical amendments.

Committee’s draft Reports on Conditional Grant Spending
The Committee tabled and considered the draft Committee Reports on the Conditional Grants Spending. However, they were not happy with the drafting, saying that the only properly drafted report was that relating to the Conditional Grants Spending Report by the Department of Arts and Culture.

Members asked that the other three reports should be re-drafted structurally to reflect the same structure as the Report on the Department of Arts and Culture.

The meeting was adjourned.