Hon House Chair, hon Ministers, Deputy Ministers, hon Masondo, hardworking members of the Standing Committee on Appropriation, fellow South Africans, ladies and gentlemen, the African National Congress supports the 2019 Division of Revenue Amendment Bill hereafter referred to as Bill, because it continues to be a redistributive and pro-poor. This is a short Bill which does not drastically change the 2019 Division of Revenue Act. The net effect of the adjustment to the 2019-20 budget is an increase of about of R24,645 billion. The biggest contributor to this increase is the recapitalisation of Eskom. You will remember, hon members, that a Special Appropriation Bill recently passed by Parliament to assist Eskom to pay its debts and interests.
Hon members, the Money Bills enjoins Parliament to consult citizenry as it considers the Bill. This is inline with what the ANC believes that the people should be the architects of their destiny. During the process the committee engaged SA Local Government Association, Salga, and the Organisation Undoing Tax Abuse, Outa, and receives submissions from equal education. The input provided by the Financial and Fiscal Commission, FFC, is also valued.
The committee urges the Minister to engage with Salga meaningfully before the next budget. We are aware that they are part of the Budget Forum, but it was clear from our interaction that there are things which need more time between and amongst them. The biggest complaint is that the equitable share formula is loaded against local government. Thus, hon Deputy Minister, it is imperative that you engage with Salga. What has always been missing in these engagements is the voice of provincial governments. Although we had a few representatives from legislatures, unlike in Salga, there is no united voice representative of the sphere of government. Yet, provinces are 95% grant funded.
Lastly, what informs the bid is a lack of spending or underspending of the budget items and reprioritisation. Obviously,
hon members, the broader economic environment and Fiscal Framework have a bearing on the Bill. The downward revision of the GDP growth from 1,5% to 0,5% and unemployment rate of 29,1% in the country are critically factors in this Bill. The Bill will continue to try and help with stimulating the economic growth, assisting with job creation opportunities and providing the much needed safety net for those who are most vulnerable in our country.
The Division of Revenue ensures that there is redistribution of resources to the poor and rural areas. Although tax base is concentrated in urban areas, hon members, allocation through the Division of Revenue transfers higher per capita per household amount to rural areas and also, hon members, provinces that are poorer receive bigger share per capita. Rural municipalities receive more than twice allocations compared to the metros which have higher own revenue raising abilities. For instance, on average, rural municipalities receive R11 200 per household compared to R4 900 receive by metros per household.
Hon members, the committee is concerned about the inability to spend allocated monies by certain departments and local governments as can be seen in some conditional grants. The usage
of funds made available for capital projects as operational expenditure also denies our people of much needed services. This coupled with a detoriating state of financial management and local government level contributes to the lack of service delivery. Although Salga calls for more resources, we are making the point that money is not necessarily a panacea to local government challenges. As a committee, we are unequivocal in our demand for improved governance and financial accountability.
Local government debtors' book amounts to more than R165 billon - please note that. Local government debtors' book amounts to more than R165,5 billion, while their creditors amount R60,2 billion. This means that if everyone were to pay what he or she owes, local government would be in a positive cash position of R105,3 billion and everybody would be happy thereafter. What is worrying is that Parliament appropriates money to, among other things, pay municipalities. Some of them as reflected by the R10,3 billion at government institutions owe to municipalities. We are, therefore, calling on hon Ministers and director-generals to settle their debts owed to municipalities. [Applause.]
Abanye abantu-ke abangafuni ukukhokha komasipala, osomabhizinisi. Bakweleta omasipala ...
... R24,7 billion. This is more than two times the amount owed by government.
Kodwa uma sikhuluma asikhulumi ngabo ukuthi bayakweleta futhi asazi ukuthi yini indaba bengakhokhi ngoba izimali banazo. Bangabokuqala ukufika lana bathi, hhayi, umasipala uyakweleta, kodwa kubona ngokwabo bayakweletwa.
Sithi-ke, osomabhizinisi nezinkampani zabo nezinhlangano zabo ake benze isiqiniseko ukuthi kuyakhokhwa. Bese sithi komasipala, hambani niyolanda imali yenu kosomabhizinisi abanikweletayo. Lingisani umashonisa ukuthi uma ekuthola uhola abe esekulinde esangweni. Hambani-ke nani niyolanda izimali zenu.
Hon members, what is even more worrying at least from our interaction with Salga, is that we did not find a credible and clear strategy to collect what is owed to them. In addition, the
weak economy which has resulted in, among other things, under collection by the SA Revenue Service, Sars, and climbing debt-to- GDP ratio has closed the fiscal space for financial manoeuvring. Thus, reprioritisation and efficient use of the funds remains the only option. A situation where funds are allocated but not utilised can no longer be tolerated. We know that there are funds which are banked and not used an institution's budget on interests from their banks. This is suboptimal because the cost of that money to National Treasury is higher than what they get from the banks that is apart from the opportunity cost of that money.
Hon members, it is this understanding that made us to challenge local government and also come up with viable and sustainable growth strategies for the municipalities. Also the role of the small, medium and micro enterprises, SMMEs - women and youths own businesses - cannot be overemphasised. Growth shall not only come from big companies, but from these new players. It is thus critical that we, as parliamentarians, create enabling environment through proper funding and legislation. More energy for Salga should be stand on trying to identify growth opportunities.
As I conclude, House Chair, let me deal with the economics of small business being the source of economic growth and the employment creation.
Uma usomabhizinisi omncane enza inzuzo ka-R1 million ...
... the chances is that that small business will reinvest that money.
Kodwa uma ungxiwankulu enza inzuzo ka-R1 million uzoyithatha leyomali ayise ebhange ngeke ayitshale uthi emnothweni.
So, this is the long and short of it. Therefore, when we call for the support of small businesses, it is not just because of the good sounding phrases or we want to be political correct, we are also economically correct.
Asisekeni osomabhizinisi abancane. Ukhongolose uyaweseka loMthethosivivinyo. Ngiyabonga. [Ihlombe.]
Hon House Chair, the DA supports the report of the Standing Committee on Appropriations; however, the DA does not support the Division of Revenue Amendment Bill. The DA welcomes the presentations made by interest groups outside of Parliament and wishes to thank our stakeholders working within government structures.
The Division of Revenue cuts across all spheres of government. Underspending, and fruitless and wasteful expenditure remain a concern while millions of people are in need of basic services. The underspending of school infrastructure grants has become an embarrassment, while learners are still making use of pit toilets. The School Infrastructure Grant is amended to replace old and outdated school buildings. Grant funding is meant to bring human dignity to learners via access to water, sanitation and electricity.
Agb lede, dit is uiters belangrik dat die Parlement aandag aan die voortdurende droogte en klimaatsverandering in die meeste van ons
provinsies gee. Nasionaal, provinsiaal en plaaslike regerings sal nouer moet saamwerk om die voortbestaan van landbou, voedselsekerheid, markte en plaasgemeenskappe te beskerm.
Where necessary, municipalities and provinces must declare disaster areas and apply for national disaster relief funds.
Die Vaalrivier-stelsel verkeer in 'n noodtoestand. Die
R241,9 miljoen wat vanaf Water en Sanitasie skuif sal die Emfuleni Munisipaliteit in staat stel om ... waterwerkestelsel met 'n beoogte 28 nuwe pompstasies te verbeter. Dit sal 'n gesonde omgewing vir gemeenskappe skenk. Ons wil ook die weermag, wat die afgelope tyd ingewillig het om die Vaalrivier se infrastruktuur te beskerm, bedank.
House Chair, it is our responsibility in this Sixth Parliament to ensure that accountability becomes the new norm in government. Consequence management is absent at senior level. Within the context of the Division of Revenue Act, accountability includes compliance, and to report on and evaluate performance programmes.
It is clear that the National Health Insurance has become a special project for the ANC. The conditions under which patients receive treatment has deteriorated over time. Health services need to get more attention and more funding, and universal health care must be part of our country's vision. We must fix what is not working in the Health Department before transferring money to another health state-owned entity, SOE, as envisaged by the ANC.
No consequence management exists or is applied in current SOEs or in national and provincial departments. We cannot use the word savings. We must call it underspending. Call it what it is! We do not support the Division of Revenue Amendment Bill. I thank you. [Applause.]
House Chair, the Division of Revenue Bill in its current form is based on misguided assumptions influenced by international evidence without addressing South Africa's systematic structural problems that sustained apartheid spatial planning for the longest time. We know this because the Division of Revenue Bill is based on the same ideology as that of the Growth, Employment and Redistribution, Gear; the Accelerated and Shared Growth Initiative for SA, AsgiSA; and the failed National Development Plan, NDP. What are these assumptions?
Firstly, municipalities have the capacity to collect revenue efficiently. The reality is that since 1994 when the ANC agreed to pay large severance packages to retiring municipal employees, the majority of municipalities were left with skeleton staffs and have never recovered. Today, the majority of municipalities cannot collect revenue;
Secondly, people will start paying for services. This has not happened for two reasons. One, our people are unemployed and, two, the move towards treating basic services like water and electricity as profit-making services was driven by greed and a misguided principle of neoliberal policies from the Treasury;
Thirdly, there was an assumption that people will be employed and municipalities will benefit from a localised economy. This has not happened. In fact, there is no economic activities happening in municipalities; and
Lastly, another gross incorrect assumption was that rural areas will be developed into semiurban areas. The opposite happened. Too much attention is given to urban areas.
This is the reality, and we know that these assumptions are incorrect because out of all municipalities, more than 30% of them rely on transfers from the Division of Revenue more than their own revenue. If we remove metros and big municipalities like Polokwane, Mbombela, Rustenburg and others, this figure goes up to well over 50%.
All over the world it is the combination of two things that kick- starts the economy in a manner that transforms the lives of the people and grows the economy. Industrial policy that is based on the protection of infant industries in a manner that promotes localisation ... When you are building localised industries, municipalities must be at the centre of building basic infrastructure; building roads; providing water, sanitation and recreational facilities; and attracting people to come and work in these areas.
However, the proposed Division of Revenue Bill does not picture a situation whereby the economy will be localised and municipalities will play an important role in building infrastructure to support the economy. There are no believable plans to raise revenue for municipalities. There are no believable plans to build capacity for municipalities through the Division of Revenue Bill
allocation. There are no believable plans to ensure that there is redistribution of resources between the spheres of government. The ruling party does not know what to do with municipalities ... [Interjections.] ... or how to even repurpose useless and dysfunctional provinces to reduce poverty and unemployment, and deliver services. The ruling party has reached a dead end and lacks creativity. The undisputed reality is that if the ruling party continues to allocate less than 9% of the revenue raised nationally, it is continuing with apartheid spatial planning and it will be safe to say that the ANC is practising apartheid spatial planning. [Applause.]
Thank you very much, hon Chair. The fine balancing act required at this time with the very limited resources we have to ensure and maximise the equitable division of revenue will be something of a fine craft.
Over the past few weeks in this House we adopted recommendations and reports of fiscal review, which the IFP supported. We did so because we will be constructive and we'll keep a close watch on making sure that government's fiscal policy and targets are met. Through this Division of Revenue, government must ensure that not only fiscal but also social sustainability is considered.
The phrase that says, the failure to spend is the failure to deliver rings true on the occasion but this time around we need to spend in sectors of our economy which will impact the lives of millions who are unemployed. Our revenue must address the needs and to see social and economic justice becoming a reality.
Our economy must insulate from further economic shocks to safeguard the interests of our people, in particular the poor and most vulnerable. We must ensure that the pressure not only comes from top down but also from bottom up; in that many municipalities are pressurised in their own budgets, and in many instances are indebted and unable to repay their bills.
The public sector wage bill is out of control, top heavy and places far too much pressure on the already constrained budget. We must place caps on both public wage growth and contingent liabilities in SOEs. This is critical if we wish to achieve what this House collectively adopted, and that is our commitment to fiscal sustainability.
Corruption, irregular expenditure, and fruitless and wasteful expenditure are true enemies of the state and they must be eradicated from the smallest entities, agencies and all provincial
and national departments. This must be done. Without consequences we will see more of the same. The IFP supports the Division of Revenue. [Applause.]
Thank you, hon House Chair. It is very clear that municipalities are the ANC government single biggest failure. No matter if a grant is direct or indirect it fails. Many grants were direct bond and then it was converted in Amendments Bills into direct grants because the municipality or the province could not spend the money and they were underexpenditure. Now, in this Division of Revenue Amendment Bill, we see that even the indirect grants are not being spent. So, what is very clear is that the ANC cannot govern. The failure is with government on all levels and on all levels there is a complete failure.
Where is the underexpenditure of the school infrastructure grant where we need infrastructure, the health facility revitalisation component grant, regional bulk infrastructure grant, underexpenditure; integrated national electrification programme grant, underexpenditure; and municipal system improvement grant, underexpenditure? There is a lack of planning and implementing on all levels of government, there is a lack of skills, there is a lack of competent officials who can deliver the services and there
is a lack of consequence management. People are getting away with wasting, stealing and mismanaging the money.
Ons verwelkom die R241 miljoen wat vir die Vaalrivier intervensie bedoel is. Die vraag is wel, is daar kundigheid om daar projek te stuur. Is daar kundigheid om daardie belangrike krisis aan te spreek?
As ons nie die Vaalrivier red nie, word die meeste van Gauteng se inwonders, die Vrystaat se inwoners en ander aangrensende provinsies se inwoners se watervoorsiening totaal en al bedreig. Ons kan dit nie toelaat nie.
Munisipaliteite faal. Mfuleni is een van daardie voorbeelde. Dit is daardie munisipaliteit and ander munisipaliteite wat veranderwoordelike is vir jare se besoedeling van die Vaalrivier.
Geen voorwaardelike toekenning gaan munisipaliteite red nie. Ons het kleiner munisipaliteit nodig. Ons het effektiewe bestuur nodig. Ons het mense nodig wat die mense wil dien en nie hulle sakke nie. Ons het 'n verantwoordelike regering nodig. [Tuusenwerpsels.]
Definitief nie, agb lid! Ons het dit definitief nie! Die Ouditeur- Generaal se verslag wat vandag ter tafel gel is, agb lid, wys dat u nie verantwoordelik is nie. Kyk na die onrelmatige uitgawes. Kyk na die verkwiste uitgawes.
Wat is die grootse probleem met hierdie verdeling van die billike aandeel? Die salarisrekening van die staat is te hoog. Dit is al waar u werklik kan bestee.
You can't spend the money of the necessary grants to improve our infrastructure and to create conducive environment for the economy to grow, but you can spend the money on inflated salaries. Let me get to the hon Buthelezi, the chairperson of the committee, the solution is not with outstanding debt hon member, because there is no money. People are getting poorer and poorer. Businesses can't perform especially in our rural areas. The solution is no longer there.
We have to create a conducive environment hoping that businesses can create employment so that there can be infrastructure and economic growth. At this stage there is none. Our rural economy
has failed ... and if you think that you will be saved by outstanding debt, you are dreaming big dreams. I thank you.
Thank you House Chair. The native fact of the 2019 adjustments in this Bill is a staggering increase of the budget allocation by R24 billion. This adjustment allocation is mainly due to the additional financial support to Eskom through the Special Appropriation Bill and to a lesser degree to increases in debt service costs, the contingency reserves and provisional allocations.
The increase in budget deficit debt levels which are estimated to increase from R3 trillion to R4,5 trillion over the medium-term and debt service costs as well as the increased bailouts to state- owned enterprise, SOEs, particularly Eskom, will result in less being spent on social needs such as education and health. This I am sure we all agree that it is unacceptable.
The ACDP shares the views expressed by many that the country is facing a debt trap. We have said that hard decisions are necessary to save the economy and prevent the country from going over the fiscal cliff. The National Treasury has given the country an opportunity that should not be squandered with its Discussion
Paper on broad range of economic reforms required t kick-start economic growth. If these are implemented with speed and care, we, the ACDP, believe that they can lay the basis for much faster inclusive economic growth.
As far as this Bill is concerned, we are fully aware of the severe challenges facing the municipalities as highlighted by the speakers and the Auditor-General. Whilst municipalities must get their houses in order, it is possibly the time to revisit the equitable share determination for municipalities. We are pleased that the National Treasury is looking into this, however, no timeframe has been given to revise that formula.
In addition, the nonpayment of municipalities of bulk water and electricity is placing an intolerable burden on these service providers. Consideration should be given to withholding parts of the full equitable share ... [Inaudible.] ... that are due to be paid now to municipalities on 02 December that will send a very strong message to municipalities. The ACDP also shares concerns expressed by other members about the reductions of various grants set out in the Bill including the school infrastructure grant largely due to under spending. This, of course, is unacceptable.
In our view, the National Treasury needs to strengthen the oversight of those conditional grants and intervene in those provinces that are underresourced or undercapacitated. The same applies to the underspending at the local government level, R445,5 million under spending on those grants. Again, the National Treasury and Department of Co-operative Governance and Traditional Affairs must intervene to assist those local municipalities that are struggling because that is where service delivery is rendered and it is the most important. I thank you.
House Chair and hon members, despite the tough fiscal environment of stagnant economic growth, it is the responsibility of this House as it comes to this Division of Revenue Amendment Bill, to ensure that reductions in the budget related more to curbing the rate which budgets were growing rather than on cutting on essential expenditure. By this I mean we want to highlight that we are still not happy or we are concerned about the cutting of the important grants such as the basic school infrastructure grant, which are important for the infrastructure needs of the different schools around the country.
Much has been said about the failure of municipalities to pay their Eskom debt over the past few months without looking at the
picture holistically. Yes, some of the smaller municipalities are their own worse enemies sometimes. Many poor municipalities are bloated ... [Inaudible.] ... as a result, funds originally earmarked for service delivery end up being used for compensation of employees. In addition, it is concerning that despite capacity support programmes to some of these municipalities extended by government over the years, they still plead a lack of capacity as a result there are number of underexpenditure on grants and poor performance on issues.
On the flip side of the coin, this House has to deal with the debt that many municipalities are owed by government departments. During his 2018 Budget Speech in the National Assembly the Minister of Finance said that the failure by government to pay municipalities for services rendered threat to municipal financial stability and made a commitment to remedy the situation. However, more than a year after the statement was made national and provincial government departments still owes some of the country's struggling municipalities over R9 billion as you are aware.
In the very same speech, the Minister stated that National Treasury director-general had instructed that all government departments and public institutions to pay suppliers on time or be
charged with financial conduct. Despite this instruction - as you are aware - national and provincial departments currently owes South African small businesses over R7,1 billion in unpaid invoices older than 30 days.
I am not sure how this government then intends to achieve its gross targets given the fact that small businesses are an important engine for economic growth. House Chair, we want to repeat a point we made while we were on the election campaign trail that the dire nature of the country's finances requires the development of fiscal rules. The fiscal rules will help us to impose a long lasting constraint on fiscal policy through numerical limits on budgetary aggregates. These rules entail budget balance rules, debt rules, expenditure rules and revenue rules. Furthermore, through these rules we will also be able to develop fiscal responsibility laws, independent monitoring bodies as well as law enforcement procedures. I cannot over emphasise the importance of these step.
The consequences of us leaving this important task of ensuring intergenerational fiscal equity to the political wing of government ... [Time expired.] ... are too ghastly to contemplate.
Siyabulela. Oowu mama uyalingxamela eli xesha xa indim kodwa ubumncedile la mfana ebe lapha phambi kwam.
USIHLALO WENDLU (Nks M G Boroto): Hayi kudala kubomvu apho kuwe, nawe ndikuncedile. Suka apho. [Kwahlekwa.]
House Chairperson, the Division of Revenue Amendment Bill seeks to align state spending with the nation's priorities. It is about determining equitable slices of the revenue pie for national, provincial and local departments to maximise the impact of state spending on improving the lives of the people and the environment in which they live. In a constraint economy, once budget divisions are agreed upon, the next step is to ensure that each rand allocated is appropriately spent.
The number one tool for holding those who hold the pearls strings at all levels of government accountable is transparency. The more government business is open to scrutiny, the less space for misspending and corruption. Just earlier, the Auditor-General announced that South Africa's national and provincial government has an irregular expenditure that has grown to R62 billion from R51 billion, with further material losses of R2,8 billion.
With this disappointing audit results, it is time to stop talking and institute better systems of accountability and transparency. Such systems help us emerge stronger from our economic crisis and contribute to avoiding recurrences in future. Good calls on the department to put systems in place to prevent and detect corruption. This can be done by putting in reactive controls, corrective controls, internal prevention controls and supply chain management controls.
We talk about the Fourth Industrial Revolution, and therefore we must use technologies like blockchain in supply chain management systems. Good also calls on government departments to implement contract and consequence management systems. Those responsible for irregular expenditure must face the consequences for their actions and must be held accountable. Good pleads with government department to ensure that there is broad agreement with regard to where and how money should be spent, and the principles of advance economic social environmental and spatial justice should underpin all actual spending. Good supports the municipalities infrastructure grant, the National Health Insurance indirect grant and the school infrastructure backlog grant, amongst others. In conclusion, I would like to say that Good supports the Bill. Thank you.
... Ministers and hon members, like the Chairperson indicated, the ANC supports the Division of Revenue Bill. Hon members, the majority of South African population depends on public health facilities for their wellbeing. According to the General Household Survey, seven in every 10 households use public health facilities rather than private hospitals. The survey further shows that in a population of over 56 million, only 16,9% of South Africans had medical aid in 2017. Twenty five percent of households with medical aid are concentrated in Gauteng and the Western Cape. Limpopo province has the lowest rate of medical coverage of 8,3%, followed by the Eastern Cape and KwaZulu-Natal at 9,9% and 12,6% respectively. This is a direct reflection of a deep unequal society and it is against this context that as the ANC we support the drive for the implementation of the National Health Insurance. We cannot in this day and age allow for inequality of access to quality health services.
To continue, the ANC says that good quality health services for all is non- negotiable. The changes and interventions in the
Division of Revenue Bill, amongst others, is 289,3 million that is shifted from the National Health Insurance direct grant, personal services component to the direct National Health Insurance grant for contracting health professionals to enable provinces to pay nurses, doctors and other professionals to create further capacity in health facilities. A total of R89,3 million is rolled over from the procurement of medical equipment and linen, especially for hospitals in Limpopo provinces.
Most of the reductions in the NHI indirect grant come from funds that were not spent in some provinces, and this has no bearing or impact on the roll- out of the NHI. The most recent General Household Survey indicates that the ANC government has made significant progress to give South Africans access to safe drinking water. In 2017, 88,6% of South Africans households had access to piped water. However, more needs to be done for rural communities where 3,7% of the population still fetch water from rivers, from streams, from stagnant water pools, dams and springs.
The recent drought has significantly damaged the economy and threatened our people's right to safe drinking water. However, we also note that the devastating drought has taught us important
lessons about the value of water and the need of treating water as a precious and scarce resource.
We all know that water and electricity infrastructure development and maintenance is capital intensive. It is for this reason that as Members of Parliament and leaders, we should pay for these services and equally encourage our people to pay for the provision of these services. We need to revise the Masakhane Campaign; to instil a culture of payment for services.
According to SA Local Government Association, Salga, by the end of June 2019, households owed municipalities R118,6 billion.
Re re fa re ntse
But I also want to say to the Minister and MECs of Public Works, it is unacceptable that government departments and their entities should be owing municipalities. And accounting officers and chief financial officer, CFOs, should be held responsible. An amount of R10,3 billion owed by organs of state is no small money. None of them should boast about their performance when one sphere of
government is burdened by their lack of payment for services. But I also want to respond to the hon Wessels, and say that businesses owes municipalities R24,7 billion.
Dit is baie geld wat die ... [Onhoorbaar.] ... werke kan herstel en baie dienste in gemeenskappe verbeter.
Hon members, remember that in terms of the Local Government Fiscal Framework, the size of own revenue to be generated by municipalities is determined by the volumes of water and electricity that is consumed by businesses and nonpoor households. So, nonpayment for these services denies municipalities an opportunity to raise the requisite 70% to fund their budget, resulting in the inability of these municipalities to deliver on the intended objectives.
The municipal disaster recovery grant allocation of R113 million to Ethekwini Metropolitan Municipality and R20,3 million to Ugu District Municipality to repair roads that were damaged by floods in 2017 is appreciated. But also, it is concerning to see reductions from local government indirect grants due to projected
underexpenditure in the regional bulk infrastructure grant, the integrated national electrification programme grant and the municipal systems improvement grant. Local government is at the coalface of service delivery and these reductions will definitely have a negative impact on services at this level.
We are calling on National Treasury and the Department of Co- operative Governance and Traditional Affairs to support municipalities in ensuring that they develop plans on how to improve spending at this level. The amendment that to be made in the Division of Revenue Act on school infrastructure backlogs grant is critical to demonstrate the progress that has been made by the ANC government in the education sector. These are critical to reflect the increase in the number of schools provided with improved sanitation from 195 to 717 schools, and water from 177 to 227 schools. Seven hundred million rand was added to this grant in the 2019- 20 financial year to make sure that we can address sanitation appropriate for education, which is called safe Infrastructure.
The ANC is equally concerned by the reduction of R40 million of the school infrastructure grant. We saw children writing exams under the scorching heat in this country. This infrastructure
needs to be addressed. We have also seen and heard the MEC saying that is will take us more than 100 years to eradicate the deplorable latrines that we see our children being subjected to in rural areas.
We cannot have a situation where our children here in South Africa are still carrying the burden of segregated apartheid planning in terms of education and allocation of resources. [Time expired.] So, we are saying that we want to make sure this infrastructure is developed ... Thank you, House Chairperson. [Interjections.]
Hon House Chair, the NFP welcomes the report of the Standing Committee on Appropriations on the Division of Revenue Amendment Bill tabled here today. Let me at the very outset say that the NFP will support the report tabled here today. One of the reasons for supporting it is that the committee itself has been very vocal.
It has been deliberating on this issue and it has ensured that we put in a clause there that there must be consequence management, but more importantly that there has to be periodic reporting to the committee so that we can deal with the matter appropriately at
the time to ensure that there is consequence management and there is either necessary action that has been taken over.
I hear every single party in this House talk about corruption - every one of them! However, you find one thing which is strange: Not a single one of them talk about what I have repeatedly been drawing the attention of this House to - the corruption of the constituency allowances that you give political parties, where they don't have constituency office, there is no stuff and there is nothing happening there, but nobody is willing to do anything about it. Why - because, we are benefitting from it.
So, it is really a serious problem. When corruption benefits you, we don't want to talk about it. When it doesn't benefit you, then we are making an issue about. But, I think it is matter.
The issues of grants in my understanding are being created because there are relevant structures that are not spending their money. They are not performing. As a result, you have to create these grants. But, what do these things do in essence while we appreciate that we are distributing those resources.
Let us not forget that you are doing it at the expense of some project that is not being completed. What is very important is to deal with the inefficiency of the departments that are not spending their money appropriately. One good example is economic development in South Africa depends on infrastructure development. Year in and year out, we are underspending in terms of infrastructure development. That, I think, is one of the main issues that we need to look at.
I think one of the solutions to many of these municipalities who are owed a lot of money is to put in prepaid water meters, put in prepaid electricity meters so that people are paying you in advance. Maybe that's one of the real ways to go.
More importantly, I think, we should try to endeavour to get every municipality at some stage to have its own development to become self- sufficient. We need to take industry to these municipalities, create businesses, and create industry there so that they can become self- sufficient. They cannot be relying on national government for resources continuously.
Let me also admit that while we talk about9% of resources going to local government and municipalities, the corruption level at local
municipalities in getting value for money is extremely high. That is where Salga is failing us in being able to do. However, my time is up. The NFP supports this report that is table here. Thank you. [Applause.]
Chairperson, there have been some important contributions from other members in this debate and, in particular, I think hon Swart made a good proposal; and so did Mr Kwankwa about introducing fiscal rules. I thank them for those contributions.
However, the two ANC speakers, hon Buthelezi and hon Peters, tried to mount a defence of this budget and this division of revenue and I will deal with the defence in a second. Before I do, I just want to make a point that the one person who isn't here to defend his own division of revenue is the Minister. I think that is quite a shocking and inexcusable absence.
He has rolled out the Deputy Minister, Dr Masondo, to come and defend this division of revenue, but he was here to table it. He has proposed these cuts to basic services and now he is not here to defend it. That is not on!
Now, if we come to hon Buthelezi speech, he says that this division of revenue is pro-poor and distributive. Hon Peters says that the ANC remains completely committed to improving basic health care for the poor and the implementation of the NHI.
I will never say that anyone is deliberately misleading the House because the Chairperson would rule me out of order, but I do think that we should just appreciate the evidence and hon members can make their decision for themselves about whether any misleading has taken place.
The fact is that this budget - this division of revenue - proposes deep and very painful cuts to the basic services on which the poor people critically rely everyday, and which the public at large depend. For that reason, the DA cannot and will not support any division of revenue that cuts basic services to the poor people in order to move money from those basic services to fund zombie state-owned entities and in order to fund a bloated public wage bill. [Applause.]
I want to ask a genuine question to the ANC and I invite Dr Masondo to answer it when he has the opportunity: How do you justify subsidising air travel for the middle class by continuing
to bail out SA Airways and SA Express at the cost of basic services to the public and to the poor people in particular? [Interjections.] How do you justify it? Please come here and give us some justification, sir.
Business class passengers sipping frank champagne on the way to Washington or London are being subsidised by bus drivers from Mitchells Plein. That is unacceptable and unethical. It is not just bad policy; it is mad policy. It is insane and indefensible. So, let the record show today that the party that claims to the mental of being pro-poor, as Mr Buthelezi said, is cutting budgets meant for basic services to the poor people.
It is the DA that is unequivocally the party protecting basic services; ... [Applause.] ... protecting hospitals; protecting clinics, Minister - as much as you scream and shout, it is true; protecting schools; protecting teachers; and protecting the poor people.
So, where are the ANC cutting? A hundred and twelve million rands from the Department of Health; R350 million from the NHI shows you how much the ANC cares about that; R43 million from Cervical Cancer Vaccination Programme; R40 million from Schools
infrastructure programme; R250 million from the Electrification Grant that is meant for rolling out new electrification in previously unserved communities.
If that is where they are cutting, where are they spending? An extra R33 billion to Eskom; R9 billion in debt write-off to SA Airways; and more bailouts for SA Broadcasting Corporation, Denel and Alexkor on the horizon.
Today, Minister Gordhan says that he agrees with Minister Mboweni that there should be no more money for SA Airways. Well, that's a good step in the right direction. But, frankly, it is a bit rich to say that after government has already committed to R9 billion in debt forgiveness just a few weeks ago in the MTBPS. If you mean it, then shut down SA Express immediately! [Applause.] Put SA Airways into business rescue and stir down the unions in the strike.
Let's be clear, we have got to get spending and debt out of control. At the moment, it is out of control. It is absolutely right that the Minister cuts expenditure, and he needs to cut more. However, he must cut from zombie SOEs, and he must cut from bloated public wage bill. He must not cut from direct basic
services to the poor people. That is why it is wrong what this division of revenue is doing and we will not support it. Thank you. [Applause.]
Hon Chairperson, ...
... mhlawumbi masiqale ngezinto zokuqala ezithi ...
... the ANC supports the 2019 Division of Revenue Amendment Bill because it meets the litmus test through the protection of social spending, especially toward education and health. This protection of social spending is achieved at the bedrock of slow economic growth and the shrinking of fiscal resources. The ANC-led government through this Division of Revenue Amendment Bill recognises the need to accelerate the narrowing of the budget deficit and the stabilisation of government debt.
Chairperson, the Division of Revenue Amendment Bill sets a platform for future accelerated growth. Moreover, this new dawn growth is based on the need to employment, improve government, increase investment, stabilise SOEs and manage the Wage Bill. The
government as mandated by the ANC 54th National Conference has the responsibility to revive economy, to ensure social protection of the poor and vulnerable in our society.
We want to seize the opportunity and invite all of the society and fellow South Africans across political affiliations to join in this effort at this moment of hope and this new dawn.
Chairperson, it is unfortunate that you would have political parties which do not have any clue of where do we want to take South Africa to. They do not have any clue of what is it that the national democratic society is. Parties like the DA and the EFFPlus, I am deliberately saying EFFPlus. [Interjections.] The DA as we speak now has reached a ceiling. They have no issues to raise. Their worry as we speak now is that Herman Mashaba is on his way out on 27 November. [Interjections.] They should be busy lobbying other parties now as to who is going to take charge. Worse after ...
... begqiba ukuthuka abantu bakuthi bebabiza ngeengcuka.
Now, they are just in disarray towards ... [Interjections.]
Talk about the budget.
Let me tell you. They are in disarray towards the national democratic society. In the journey of reducing the national debt and the budget deficit, the economy must be revived. All three spheres of government must work together with business and other relevant stakeholders to provide and enable an environment for faster and more inclusive economic growth.
Chairperson, I see some members come here and grandstand. [Interjections.] Some members were grandstanding here taking the pain of people from Emfuleni Municipality as if they love them. We know that they do not love them because the polluters are their friends. The polluters there are big businesses, which are their friends. [Interjections.] It's just that when we talk of a South Africa ...
Kule meko iyiyo ngoku ...
We don't want to behave like them where we see South Africa ...
... ise lilizwe labamhlophe nabantsundu becalu-calulana. Kwimibutho yabo ngaphakathi kukho abo bahlalele ukuza kuqhwaba izandla. Ayikho enye into abayenzayo ngaphandle kwaloo nto. Eyona nto abayenziwayo yeyokuba bayasetyenziswa babe abantu babo phaya ezantsi bengcikivwa bexhatshazwa ngabo aba bantu babane bebaqhwabela izandla. Jonga le meko bahleli kuyo ngoku. Bajonge ukuba bahleli njani apha? Baphi abantu bakuthi? Baze apha ukusixelela...
... now when this Division of Revenue Bill is beginning to address inequalities. [Interjections.]
Kungona siqala ukubona thina into yokuba...
...Bill beginning now to address the very inequalities. This Bill as we speak now is equity in action. [Interjections.] This Bill as we speak now, it is the one we have been seeing all along. [Interjections.]
Please take your seat, hon Mlenzana. Why are you rising, hon member? Order! Hon April, please take your seat.
I wonder if you will take a question.
Hon Mlenzana, are you ready to take a question?
Yes, I am ready. [Applause.]
You can stand hon Mlenzana and wait for your question.
You claim that this budget decreases inequality. How does it decrease inequality to subsidise business
class passengers on SAA with a salary of a bus driver from Mitchells Plain? [Interjections.]
Chairperson, I think we have to understand here. It's a pity ...
... aba bantu abahlali nasezikomitini. [Welewele.]
They are just coming here to howl.
Order! Hon Mhlongo, please your member asked the question. Let him respond. Why do you make noise now? Continue hon Mlenzana.
This question that he has asked it's a sign of lack of understanding. [Interjections.] Here what this Bill does, it takes money not reduce or cut it.
We are going towards the budget day in February and we are talking of entities and departments, which have not spent the money.
[Interjections.] So, we are taking this money because it has not been spent. [Interjections.] Let me continue.
Thank you very much, hon members. Order! Continue, hon Mlenzana.
Chairperson, before my time expires I want to appeal to South Africans, particularly the local municipality level. Let me start with Joe Gqabi Municipality.
Njengoko sisazi ukuba uMasipala wesiThili iJoe Gqabi uye wehlelwa sisithwakumbe sentlekele, siye sabeka bucala imali engange- R67 million eza kusetyenziswa liphondo ukuqinisekisa ukuba abantu baseJoe Gqabi baphila ubomi obungcono. [Kwaqhwatywa.] Xa siphehlelela lo Mthetho oYilwayo siyaqinisekisa siyi-ANC ukuba siya kuzifezekisa izithembiso zethu kuni mhla sasinicela ukuba nisivotele.
The ANC supports the Bill. [Applause.]
Thank you House Chairperson and hon members for this robust debate. The Minister is not here because he is representing the President at the G20 meeting. Unfortunately, both the President and the Minister aren't the holy spirit, they can't be everywhere at the same time. [Applause.]
This debate takes place against the backdrop of a very difficult situation and significant ... [Interjections.]
On a point of order!
Hon Masondo, please take your seat. Hon Swart, why are you rising?
I find that comment absolutely disgraceful ... [Interjections.] ... that he is referring to the President as the holly spirit. I would ask that the hon Deputy Minister withdraw that?
Noted. You can continue hon Masondo. There is no point of order in hon Swart's point.
I meant they are not omnipresent - they can't be everywhere at the same time. This debate ... as I
said ... takes place in a very difficult economic situation and under very significant constrained fiscal outlook in the midst of high unemployment and high levels of inequality.
The Division of Revenue Act is a powerful tool for redistribution. It takes revenue raised primarily from taxes collected in the core urban areas and reallocates resources to spend on delivery for public services across our country particularly in rural areas. It provides for schools, clinics, roads and basic services in deep rural areas, informal settlements, townships and suburbs in our growing cities.
The Division of Revenue Act recognises the uneven development of our country. The rural parts of our country continue to be much poorer and as a result, the division of revenue allocation allocates more per capita to rural provinces. It also allocates grants for infrastructure based on infrastructure backlogs for service delivery in different parts of our country.
The Bill before the House today amends some of the allocations in the Division of Revenue Act but it does not alter the contours of the redistribution achieved through the Act. The Bill contains
several relatively small and mainly administrative changes to the Division of Revenue Act.
Funds are shifted between direct and indirect grants between provinces and municipalities to ease the implementation of some of the projects. Funds on projects that are anticipated to underspend are reduced thereby reducing the need for government to borrow money that is likely to go unspent.
Allocations are reprioritised to relieve pressure in some of the critical areas such as hiring critical staff in the health sector. The nature of these adjustments reflects a government that is responsive to change and also prudent in how we manage public resources. The fact that there are fewer changes in this amendment Bill reflects that government is sticking to the plans that we laid in the budget that we tabled in February thereby providing stability and predictability in the transfers to the provinces and municipalities.
The Minister of Finance, in tabling the Medium-Term Budget Policy Statement, MTBPS, in this august House on 30th August, highlighted the growing debt. Our debt now is R3,1 trillion and is projected to grow to R4,5 trillion in 2020. The root causes of this debt is
the low economic growth leading to low revenue, wage bill, the recapitalisation of the state-owned enterprises, SOEs, and the contingent liabilities are amongst other causes of this debt.
The low economic growth has a significant impact on the fiscus because it reduces our ability to generate revenue. The debt service costs, the interest that we pay on our debt, wage bill, recapitalisation of the SOEs have shifted our expenditure away from infrastructure and other needs of our people.
We are one notch towards a junk status by the Moody's rating agency. If we continue on this fiscal and economic trajectory, we will be further downgraded to a junk status. The junk status will increase our payment on this debt, which is a big problem. Therefore, our funding shortfalls on imported expenditure items such as infrastructure and learner support material will increase. The corporates operating in South Africa will also have to pay high interest rates thus making it difficult for them to retain and increase investment which will lead to the decline with regard to revenue as well as job losses.
If we continue on this unsustainable fiscal path, which is based on borrowing to finance the wage bill, bailouts of SOEs, we will
not be able to provide the services that the people have elected us for.
We don't have to wait anymore before we are in trouble. Procrastination of implementation of concrete policy programmes and projects is no longer acceptable under these conditions. Dealing with the current unsustainable debt levels will require collective efforts, including sacrifices by all of us; labour, business, communities and ourselves as public representatives.
All spheres of the government need to play their part in making sure that we grow the economy, we reduce the wage bill and resolve the problems besetting the SOEs. This will mean, amongst other things, looking at the wage bill, SOEs, for instance, we should not just look at the national government but we should look at all spheres of government; local governments and the provincial governments. In other words, we should look at entities at the provincial government as well as local government. [Time expired.] ... It is for this reason that we have been visiting municipalities to basically deal with all these challenges, from wage bill, as well as the SOEs at the local level and municipality level. Thank you House Chairperson. [Applause.]
Question put: That the Bill be read a second time.
The House divided.