Committee Reports: Adjustments Appropriation Bill; Division of Revenue & Conditional Grants

Meeting report

The Chairperson thanked Members who had responded to, made comments and suggestions on the Committee Reports.

Committee Report on Adjustments Appropriation Bill [B20-2021]
The Chairperson proposed that the Committee go straight to Observations and Recommendations.

Paragraph 4.4
Mr D Ryder (DA, Gauteng) asked the Committee to reflect on the People’s Budget collaborative submission in paragraph 4. Public participation was not supposed to be comfortable. Public participation was supposed to challenge the Committee. He did not agree with all the inputs from the People’s Budget Collaborative, and he definitely did not agree with its behaviour. He did believe that it had every right to attend and present as it saw fit. The chosen attitude in the delivery did the People’s Budget Collaborative a great disservice because it had some very good messages. The focus had shifted from the content into the way it was presented. That was of course a personal opinion. It had every right to behave as it saw fit. The Committee had seen how ‘firebrand’ activists presented their messages in the way they believed would be the most effective.

He reflected that Mr Carrim had received the short end of the stick. This may be the only time where he came up in support of Mr Carrim. Mr Carrim had received the short end of the stick. The way Mr Carrim was attacked was inappropriate. The Committee was extremely accommodating of the People’s Budget Collaborative. They had been given a huge amount of time to present, three times the amount of COSATU. It made the point that it represented a big group. However, the public needed to adhere to Committee meeting norms when they presented. Realistically, COSATU presented a far bigger membership than the People’s Budget. OUTA probably also had a bigger membership than the People’s Budget. The Committee needed to be able to enforce order in meetings going forward. The Committee needed to give people enough space to debate but still retain a degree of order in meetings.

The Chairperson asked if other members wanted to say something on the matter. She noted that Mr Ryder said it was the first time he would be coming to Mr Carrim’s defence. She did not see it as a defence of Mr Carrim. She saw it as a defence of the Committee. Mr Ryder was correct. Public hearings were not comfortable but there were also rules. If the Committee invited the public or organisations to make submissions and they wanted the Committee to treat them with respect, then they had to earn it. It was not a given. The tantrums thrown in the meeting made the meeting shift to the naming issue. She thought she was accommodating enough in reading the language and tension. The Committee would have to draw in the relevant sector committee to deal with the concerns. Most of the matters raised were not relevant to this Committee and it found itself having to take the bullet which was not meant for it. Members needed to protect meetings so that they do not deteriorate in the way it did. She lost network contact with the meeting, but she had been briefed on what happened afterwards. The Chairperson had wanted to address the presenter but was informed that they came back again. There was no need for such bitterness and such an attitude. The Committee and the organisation could differ, but they needed to find each other in a respectful manner. The language that was not allowed in the House was also not allowed in this Committee. Such rules needed to be applied. She agreed with Mr Ryder. She felt bad that Mr Carrim was singled out and attacked. The Chairperson was talked over. It was fine; the Committee would take the bullets. Next time, the Committee could not allow such things to happen.

Mr W Aucamp (DA, Northern Cape) congratulated the Chairperson on the quick correction she made with her gender address.

The Chairperson said that she was also a gender activist and people needed to teach one another.

Mr Y Carrim (ANC, KwaZulu-Natal) thanked Mr Ryder for his comments. He would have done the same if the roles were reversed. He did not want to respond to all issues. He apologised for accidentally using the word ‘she’. It was unintended. There was no malice. He saw a message in the chat group that the person concerned actually exited because of some injury or disability. If that was the case, it was fine. The Committee should have been told.

The Committee should deal with the broader issues of the relevant community, the LGBTQIA+. His point of order in the meeting was not so much that the person was misrepresenting what he had said. They had completely misrepresented what he had said. The point of order was about the claim of racism. He should have appealed to the Chairperson but the way it came out was wrong. The Chairperson was right to move on. To accuse somebody of potential racism meant that they had to be justified, whether it was a Committee member or civil society activist. Members also could not just make accusations. There was a case last year where a Member of Parliament called a civil society activist, a leader of a trade union federation, a liar. The Parliamentary Legal Advisor said that the Member had to withdraw that remark or leave. That was what the Committee should make very clear. Mr Ryder was correct.

Mr Carrim noted that in the South African Communist Party (SACP) constitution, he had insisted that it state ‘he/she/they’ so that consciousness was aroused. If people only say ‘they’, some people would not understand the meaning. Some people might even think it was a grammatically incorrect word. If for a few years it stated ‘he/she/they’ then people would be made aware that there were people out there who had multiple gender or sexual identities. The Committee needed to respect their rights. They were a minority and a marginalised community.

In paragraph 6, the Committee should say something about the matter. The text should say that the Committee supported gender budgeting and gender mainstreaming. It should state, ‘the Committee fully supports the rights, needs and interests of the LGBTQIA+ community and requests National Treasury to, in future, explicitly set out what cross-cutting funding furthers this. The National Treasury and Cabinet should look into these matters very closely during the 2022 MTEF. The Committee fully recognises that this Parliament belongs to the people of this country and public participation was crucial to its effective functioning. While the Committee welcomes and encourages civil society to engage robustly with it, this has to be done in a way that is consistent with Parliament’s Rules, norms and procedures and with the necessary decorum. While civil society must be fully heard and its views given due consideration, ultimately, in any democracy, it is the elected Members of Parliament that have to take final decisions, after taking into account various competing interests’.

He agreed entirely with Mr Ryder that the #PeoplesBudget Collaborative had a right to come to Parliament. This was their Parliament. It was almost depressing that only two submissions came in an oral form. Parliament had even admitted how weak and ineffective it had been over the years and why people were alienated. Parliament had said all of those things. He thought that the PBC misunderstood what the Adjustments Appropriations Budget was and at some stage the Chairperson needed to contact them. The PBC had wanted changes now that went beyond what was there instead of saying that these were things that needed to be included in the three year cycle. Sometimes the public confused the role of Parliament and the Executive. He noted that the PBC needed to go to the National Assembly and fight its battles there. The problem was not its needs, interests and demands but was the way it dealt with them. It had not been about the needs of the organisations but about the one particular they. The Committee needed to support it. Parliament had gone quite far on gay rights, on abortion, on the abolition of the death penalty in South Africa. He could not pretend that he fully understood the KZN people he represented. The isiZulu speaking people were from his province. He could not speak for them in the way other who lived there in the rural areas could. Similarly, it was not about the issues; it was about the ways they managed the process. The Committee agreed with PBC’s values and principles but in practice the Committee did not know how to balance it out with the needs and interests of others.

The Committee could say something that while it agreed with their concerns it needed to find the balance. The PBC was right. Part of the problem was corruption and mismanagement but that was not solely the reasons government could not deliver. In short, this matter was not about disagreement. It was about the Committee and its relationship with civil society. At some stage, if the Chairperson thought it appropriate, she should meet with them and inform them that the Committee did not have a problem with the things that they said. The issue was with the way they did it. They had brought two people from their community to express their view and demanded to speak. The Chairperson was not in the meeting at the time. The Committee Secretariat intervened as he should and told them the rules. The PBC was given two opportunities to speak, and the Committee was given two opportunities to speak. It had been balanced. He could not see any fault in the way that the Chairperson chaired the meeting.

The PBC did not understand Parliament’s protocols. The funny thing was that he shared their values and had been arguing for the same things for five to ten years. He had no idea what the PBC was. He noted that the Committee had to upgrade as it had to do when it dealt with gay rights earlier. When it took the policy decision it had to adjust, adapt and learn the language. The Committee needed to do the same with this community. He noted that the meeting had set a precedent. In the 27 years he had been in Parliament, he had never come across such a thing. He could take criticism at any time. The PBC members had a right to say that Members were idiots, incompetent and could not function properly. But the PBC could not accuse the Members of potential racism. That was outrageous.

The Chairperson said that Members were on the same page about paragraph 4.4.

Mr Ryder commented on paragraph 5.1. The paragraph was fine as it was. He emphasised that National Treasury was in default of its own guidelines.

Paragraph 6.2.
Mr Ryder commented that paragraph 6.2 seemed to contradict itself. It said that National Treasury should approve the roll-over amount of R2.8 billion in line with the PFMA and Treasury Regulations. At the end it said that rolling over of funds due to poor management could not be allowed. The paragraph seemed to contradict itself. The Committee was saying that National Treasury should approve it, but at the same time it should not be allowed.

Mr E Njadu (ANC, Western Cape) replied that when the Committee engaged with National Treasury on rollovers, it emphasised that the money had already been committed in terms of the PFMA and Treasury Regulations. If there were commitments, then the rollovers would be approved based on the commitments.

Mr Carrim said that Mr Njadu was right and so was Mr Ryder. It could be misunderstood. What the Committee means to say was that where there was commitment and the project was near completion, meaning there was progress. This was very different from the next sentence. The Committee should add ‘on the other hand, the rolling over of funding due to poor management, planning and execution cannot be allowed’. That was a separate category where rollovers could not be allowed.

Mr P Dlomo, Content Advisor, said that he understood the proposal. The matter had been deliberated on between the Committee and Treasury. The recommendation was actually in line with the requirements of the Treasury Regulations and the PFMA so the Committee could not recommend anything outside the legal prescripts regulating financial management. However, the second part of the paragraph tried to eliminate any chances of having a rollover based on poor planning and project management. Those that were in line with the prescripts of the PFMA and Treasury Regulations were allowed where projects were nearing completion and funds had been committed for the projects. National Treasury followed a very rigorous process in approving rollovers. It did ensure that rollovers were in line with legal prescripts regulating financial management.

The Committee agreed to add ‘however’ to clarify paragraph 6.2.

Paragraph 6.3
Mr Ryder commented that this stated that National Treasury and the Department of Social Development should consider extending the R350 Social Relief of Distress Grant beyond March 2022, depending on the COVID-19 impact. It should also say ‘and financial affordability’. The affordability to Treasury was a key component that needed to be mentioned.

The Chairperson asked if ‘depending on the COVID-19 impact and economic recovery plans’ did not cover his point?

Mr Ryder proposed that financial affordability be added to that paragraph.

The Chairperson asked if Members agreed.

Mr F Du Toit (FF+, North West) supported Mr Ryder’s proposal.

Mr Carrim said that he understood Mr Ryder’s point and to a certain extent he agreed. Affordability often got reduced to simple rands and cents. National Treasury’s approach, like most treasuries around the world, was simply that without considering the social and political costs. He thought that the point was already covered by ‘economic recovery plans’. He noted that the country was severely stressed but R350 was pathetic. Given the large numbers of people, between nine and ten million, it was a huge amount which government could not easily afford. Affordability was not the right word. He thought it should say ‘taking into account budgetary constraints’. That was a broader term than affordability. Budgetary constraints was a generic point that meant government could decide that it was going to give people R350 because if it did not, it was only going to get worse as previously discussed. Even though there was no money, the costs would be even more to society. He provided the example of the July unrest. It was not about the financial affordability of R350 per person. It was about the whole budget and therefore choices could be made. Government could decide that it did not want to give money to sport or international relations, spending on luxuries for Department staff or MPs. It could instead give it to the poor. The whole budget needed to be taken into account and not just the affordability of the R350.

Mr Njadu said the Committee should not focus specifically on the R350. He agreed with Mr Carrim. If the matter was looked at holistically then R350 was nothing; it was nothing compared to what was happening on the ground. People were struggling during this time of Covid. The Committee should be arguing from a budgetary perspective. He did not think affordability should be included. It should state ‘taking into account budgetary constraints and depending on the COVID-19 impact and economic recovery plans’ and end it there.

Mr M Moletsane (EFF, Free State) agreed. The ‘budget affordability’ should be done away with.

Mr Carrim said that before the Committee moved on there was something it needed to think about. The Committee was going to go around in circles. There was a sense that the Committee was limp in what it said because it said ‘noted’ and ‘suggested’ and so on. The Committee needed to be a bit more decisive. It needed to include that the Committee would ask the PBO to look where Government could save money to give the R350 grant. Why could the Committee not mandate the PBO to do a study over the next six months to inform the Committee where money could be saved so that the grant could be afforded? His suggestion was that the Committee ask the PBO to do research on that and guide it, financially and technically.

Mr Du Toit said if the Committee agreed to this then it was making more people dependent on government. This was supposed to be a helpline for people due to the impact of Covid-19 regulations and the economic situation the country currently found itself in. The Committee could not insist that people received R350 social relief from government. Why was government not looking at implementing ways of opening up the economy, lifting the restrictions, doing away with stringent labour laws to enable the economy to thrive? The Committee would be putting more strain on the economy by insisting that PBO look into making the R350 affordable and taxing the taxpayer more who was already taxed so much. He could not agree with Mr Carrim’s proposal.

Mr Njadu said that both sides of the coin needed to be looked at. The grant was based on the COVID-19 situation. It was a distress grant. He thought that Mr Du Toit was agreeing with Mr Carrim. The Committee should ask the PBO to look into the matter. It needed to be understood that it was a social relief of distress grant which was assisting people during COVID-19. It needed to be looked at from that perspective. A study needed to be done to look at how this would be possible going forward. The country would be dealing with COVID-19 for a very long time.

Mr Ryder said that Mr Carrim, Mr Du Toit and Mr Njadu were all correct. Parliament was busy with discussions around not only the R350 allocation but also the Basic Income Grant. Perhaps the Committee did need to ask the PBO to provide some insights on affordability of all of these going forward. This was going to appear before the Committee in due course anyway. The Committee would need to be well-informed as to what could be cut. Any budgetary adjustment required a give and take. To come up with that, sacrifices would be needed. Mr Du Toit was right. In terms of cost versus benefit what was the actual situation going to be. The PBO was well-positioned, providing it behaved as an independent body during its investigation to research widely and did not force its ideas on the Committee. This tied in with the zero-based budgeting principle that Treasury had put forward. Every department needed to look at the cost and benefit of each programme that ran under its umbrella. It needed to determine whether that was something that needed to continue going forward. The Committee needed to look at which programmes could be cut without causing service delivery challenges and without creating further taxpayer burden. Taking all three opinions together, the PBO should be well placed to put together a research document. He did not want it limited to the R350 grant. The Committee should talk more about social grant funding on a wider scale. He proposed that the scope be broadened beyond just the R350. He supported Mr Carrim.

The Chairperson said that the Committee agreed that it would like the social relief to be extended beyond the set date of 31 March 2022. The Committee would request the PBO to research so at a later stage it could make a decision that carried weight and was informed. After the research was done, the Committee would discuss the matter and try and resolve it. The Chairperson asked if Mr Du Toit was comfortable with that.

Mr Du Toit said that he was not comfortable and it was obvious that he was the minority voice at this stage. Currently, the country was being misled by what was going on with Covid. More people were being murdered daily in South Africa than people passing away from so-called Covid-related diseases. He had posed the question to Minister Dlamini-Zuma about lifting the state of disaster period when herd immunity was reached. The answer he received was that no, it would not be lifted. This was a carrot held in front of people’s noses. It was evident that what government was currently doing was making more and more people dependent on it. Government was worsening the state of living for everyone in the country then soothing those wounds with the ointment of R350. He was not being inhumane. He understood what hungry people looked like. He was dealing with them on a daily basis. He had a heart for people but what government was doing was making more and more people dependent on it. Government was creating this situation. He could not approve the R350 grant be implemented and for the grant to go on until the end of time. He strongly suggested that this Committee ask the PBO, government and Minister Dlamini-Zuma to see if it was necessary to have the current stringent regulations. The Minister of Labour needed to see if the current labour regulations were necessary. What needed to be done to open up the economy? He hoped all Members had seen the report and the response from the IMF about what was currently going on in South Africa. Government was slitting the throat of the people. He could not support it.

Mr Carrim said that the Freedom Front Plus was entitled to its views. He did not think anybody in government, Parliament or political parties wanted people to be dependent on a nanny state. The country was where it was. He agreed that the ANC, as the governing party, needed to take responsibility for that. Obviously government wanted the economy to grow, jobs to be created, investment to come in to create those jobs. No one wanted to be dependent on grants. It was dehumanising and did not allow them to fulfil their potential. The economy needed to grow and the conditions for that needed to be created. Investment and jobs were needed. Everyone agreed on that. But in the meantime, this was what government had to do. As long as there were poor and marginalised people, government needed to cater for them. That was humanity in his view and the view of a significant majority in the country. All the Committee was asking PBO to do was a study. That was all. Was the R350 viable and if so, how? If not, why? Mr Ryder was right. The Committee was not talking so much about the R350. The Committee’s mandate should be how viable was the the Basic Income Grant. As a Committee, notwithstanding the FF+, it had repeatedly said that taking into consideration budgetary and other constraints it believed government should seriously consider a Basic Income Grant. That was the view of the majority of the Committee. It was the Committee’s standing position. The Committee went on and on saying the same thing but it was not doing anything about it. The Committee needed to get the PBO in. Mr Ryder went on and on about how non-independent the PBO was. There was nothing wrong with the PBO saying that there needed to be more state involvement. National Treasury did not have the monopoly over wisdom any more than the PBO. That was the right of PBO. That was the PBO’s independent view and it could not be forced on the Committee. The PBO had done very good work on previous issues. In the past, the PBO was called to do work on various projects on the Public Sector Wage Bill and if it was doable or not.

The Chairperson said that the Committee agreed based on the majority of members that the Committee would request the PBO to do the study.

Paragraph 6.5
Mr Ryder commented that it should read ‘Noting and supporting COSATU’s proposal’ because all of the members wanted to see a clear and realistic plan to spend the money allocated to education, water and sanitation.

The Committee agreed.

Paragraph 6.6
Mr Ryder commented on paragraph 6.6. It was broadly something all members agreed on. This was a broad stroke that the Committee was putting out there that it notes COSATU’s recommendation that given the current economic conditions, National Treasury and Cabinet should explore implementing a 25% salary package cut for members of the Cabinet, Provincial Executive and Mayoral Committees, as well as executive managers in all government entities, state owned entities and metros. He agreed and emphasised ‘metros’. The salary offerings for executive managers in the grade three and four municipalities meant that there was difficulty attracting good staff to the grade three and grade four municipalities. It was not financially attractive to suitably qualified people and they would earn more in the private sector. The same thing applied to Mayors and MMCs in the grade one to four municipalities. They were not well remunerated given the level of responsibility they were given. He did not want an across-the-board cut that affected all municipalities. It should be specific to only metros.

Mr Aucamp said that he agreed with the proposal.

Mr Carrim said the proposal made sense unless there was a hidden DA agenda. He agreed with it.

Mr Aucamp said it seemed as if Mr Carrim and the DA were agreeing more and more.

Paragraph 6.8.
Mr Ryder noted paragraph 6.8 suggested that government should consider reversing budget cuts to key programmes that would impact its ability to implement industrial manufacturing and export programmes to improve economic growth. It did not say what government could do to counter that. Every budgetary 'give' had some 'take' attached to it. The Committee should include ‘and re-evaluate all other programmes for cost and benefit’.

Mr Njadu said that paragraph 6.8 said that the Committee noted COSATU’s recommendation that government should consider reversing budget cuts to key programmes. That needed to be underlined: key programmes. This would impact on government’s ability to implement industrial, manufacturing and export programmes to improve economic growth. That sentence was giving full meaning to the recommendation. The Committee should leave it as is.

The Chairperson said that there were two views on the table. She asked for the view of others.

Mr Carrim said that Mr Njadu covered COSATU’s view. He did not have a strong view on it.

On the Chatbox, Mr Ryder had asked from where the money would come.

The Chairperson said that the Committee had an engagement with COSATU on this matter. The Committee had taken a recommendation that the PBO should do a study to guide the Committee if what COSATU recommended was feasible in terms of financial resources. What could the Committee say to Treasury or Cabinet on where to source the money? Government could source the money by re-evaluating all other programmes for cost and benefit. If the Committee said all other programmes then the Committee would remember what it had raised when dealing with the Division of Revenue Bill and Amendment Bill. The Committee had been complaining that monies could not just be shifted. The Committee had commented on SAPS and teachers and those departments that relied more on personnel. She was not sure. Members needed to apply their minds correctly.

Mr Dlomo said that what was important to note on this recommendation was that National Treasury did the cost-benefit analysis exercise before cutting budgets on specific programmes. However, there were specific criteria that National Treasury followed to identify programmes where cuts could be made. That criteria could include under expenditure of a certain programme or under performance because of various reasons. the Committee had been emphasising over time that cuts should not happen to programmes that affect service delivery. The ability to implement programmes was also important. On the point raised by Mr Ryder about evaluation, before budget cuts were done, as covered by the recommendation itself, those cost-benefit analyses were conducted on the specific programmes. The addition by Mr Ryder would not make any difference as far as National Treasury was concerned. The cost-benefit analysis was done before the cuts were done. Cuts were not done willy-nilly. They were done following a specific process which included the cost-benefit analysis.

The Chairperson said that Mr Ryder’s point was already covered in the recommendation. The Chairperson asked to move on.

Paragraph 6.9
Mr Ryder noted that the wording had been changed from the draft which said the Committee ‘agreed with’ and now it said ‘notes’. He was covered on that point.

The Chairperson asked if there was anything the members wanted to raise before the Committee went to paragraph 7.

Ms E Grunewald, Committee Secretary, said that 6.6 until 6.10 stated the Committee was ‘noting’. The view of the Secretariat was that the Committee was not recommending anything. Those points needed to be located under Findings and Observations because these was no recommendation. The Secretariat proposed that paragraphs 6.6 to 6.10 be moved. Then one recommendation should be added to the effect that National Treasury and the relevant Departments should follow up on paragraphs 5.12 to 5.16 and report back to the Committee within six or three months. The Secretariat were trained very strictly that recommendations were recommendations. If it said the Committee noted something then that was not a recommendation, it was just a finding.

The Chairperson said this was correct. That would help the Committee with follow up, do its oversight and hold the Executive accountable on its recommendations.

The Committee agreed to the changes.

Mr Dlomo reminded Mr Carrim that in paragraph 6.12 there were a few issues he had raised, and asked him to send the draft of the suggested changes. It covered what Mr Ryder had raised.

Mr Carrim said that the Committee wanted to separate gender budgeting and gender mainstreaming. That had been there since 1996. This was something specific. The report should say that the Committee fully supported gender budgeting and gender mainstreaming. The Committee fully supports the right, needs and interests of the LGBTQIA+ and requests National Treasury to explicitly set out what cross-cutting funding furthers this in future. Treasury and Cabinet should look into these matters very closely henceforth and not wait for the next MTEF cycle. The Committee was recommending what was going into the new budget.

Having heard the comments made by Mr Ryder and other members on the relationship between civil society and the Committee, he thought that there needed to be a separate point, 6.13. It was a generic point and could be applied to anybody. The report should include that this Committee recognises that this Parliament belonged to the people of this country and public participation is crucial to its effective functioning. Whilst the Committee welcomes and encourages civil society to engage robustly with it, this has to be done in a way that is consistent with Parliament Rules, norms and procedures and with the necessary decorum. While civil society must be fully heard and its views given due consideration, ultimately, in any democracy, it is the elected Members of Parliament that have to make final decisions, taking into account the competing interests. There was a school of thought that people from below should shape policies. It was the whole idea of the people’s commune from below. It was a non-Marxist, anarchist, left-wing view. That Parliaments and political parties were inevitably oligarchic and authoritarian. The Committee needed to try and understand the PBC. They might feel that this was like a constituent assembly. It was not just a matter of attitude or style or insistence that a view was agreed to no matter what was happening in Parliament. There was a view and thinking that he had come across that he had shared in the 70s. That there should not be a Parliament but people deciding for themselves, a Paris commune idea. That might have influenced what the PBC did. The Committee had to tell them how Parliament in a democracy worked. Nothing stopped them from standing for election. Nothing stopped them from having a PBC platform. Nothing stopped them from taking multiple sexual and gender identities as a platform. It was happening in Europe. The Committee had to deal with civil society generally.

The Chairperson suggested that Mr Carrim send the draft to the Committee Secretariat.

The Committee agreed to the content that Mr Carrim presented.

Mr Ryder commented that the Democratic Alliance would reserve its position but said: Well done on a comprehensive and well-compiled report.

The Chairperson asked for a mover for the adoption of the report. Mr Carrim moved for the adoption of the report. Ms M Mamaregane (ANC, Limpopo) seconded the adoption of the report.

Mr Ryder said that the DA reserved its position.

Mr Du Toit said that the FF+ reserved its position.

Mr Moletsane said that the EFF reserved its position.

The Committee Report on the Adjustments Appropriation Bill [B20-2021] was adopted.

Committee Report on Division of Revenue & Conditional Grants
The Chairperson asked for the Committee to consider the Observations.

Mr Ryder commented on paragraph 9.1. He noted that the scheduling of today’s House sitting in conflict with the Committee meeting when the Committee knew what business it had to do was most unfortunate. Placing pressure on the Committee to pass these reports was a little unfair. He understood there was a need for brevity but the compression of this programme had really been problematic. To sacrifice the quality of the reports as a result was unfair on the Committee.

The majority of his inputs on this report revolved around the same issue: 9% of the national fiscus had been allocated to local government and the move now to 9.6%. He was going to bash on this in several of his inputs. The report said that the Committee welcomed the proposed allocation of 9.6% to local government over the next three years but that the Committee did not think that it was sufficient. It was generally held across all the parties that the move from 9 to 9.6% was insufficient. He thought that needed to be noted in the paragraph. Perhaps by adding a line at the end that said exactly that: the increase to 9.6% while appreciated was insufficient.

The Chairperson asked if that was the view of the Committee?

Mr Aucamp agreed with Mr Ryder. Mr Du Toit agreed with Mr Ryder.

Mr Njadu said that he was not clear on what Mr Ryder said and the context behind it.

The Chairperson said that Mr Ryder was speaking about the 9.6% to local government over the next three years.

Mr Carrim said was that not what the Committee believed anyway. More should be allocated to local government provide that they spent it properly. That was what the Committee said.

The Chairperson said that Mr Ryder was suggesting it be added that 9.6% was not enough.

Mr Carrim asked if the Committee should add that it urged local government to spend money allocated to it from the national fiscus more productively and effectively? Mr Ryder was right because it was what the Committee said.

The Chairperson asked if Mr Njadu understood.

Mr Njadu said that he was happy with how the sentence stood in the report.

Mr Moletsane agreed with Mr Ryder that 9.6% was too little.

Mr Dlomo asked for clarity. They would add the increase of 9.6% to local government was still low.

The Chairperson said that it was captured correctly.

Mr Ryder commented on paragraph 9.3 which said the Committee noted the provincial equitable share (PES) was updated annually and the Committee welcomed that changes would be phased in. The problem was that every year provinces in their final mandates disagreed with the equitable share. It needed to be stated that better communication between the provinces and Treasury was required on this matter going forward.

Mr Du Toit supported Mr Ryder’s proposal. He added that the spending of the equitable share should also be monitored. There was the challenge of provinces not spending adequately.

The Chairperson said that the Committee had made a special request to Portfolio Committees to assist it in oversight and monitoring at the provincial level and local level. The Chairperson asked if members agreed with that addition?

Mr Moletsane agreed with the addition. Every year the provinces complained that the equitable share should be revisited.

Mr Aucamp agreed with the addition.

Mr Njadu said there was consensus on the matter among the members of the Committee.

Mr Ryder said that on paragraph 9.5 the Committee members were going to agree to disagree. It was not worth getting into a debate on that now.

Paragraph 9.6 went back to the matter of the 9.6%. The Committee noted that colleges of agriculture will be shifted to national government, as will the funding provided through the Comprehensive Agricultural Support Programme Grant. This was shifting again. What this was effectively doing was that it was pretending that money was being put to provinces but it was centralising and taking the grants from direct grants to indirect grants. It was putting that spending power back to National Treasury. He did not want to amend the paragraph but he did want to make the point that the shifting of grants from direct grants to indirect grants was changing the ratio of fiscal allocation between national, provincial and local.

Paragraph 9.10 spoke to government increasing 9.6% to local government. The Committee thought that the allocation to provinces was increasing but actually it was a move by National Treasury to have national control over those grants previously managed by local government. It was a little bit of centralisation of control. He wanted to that the Committee notes with concern the growing trend of allocating indirect grants which creates a false narrative of increased allocations to local government when in fact these were merely National Department projects being rolled out at local level; and it wishes to emphasise the importance of the three spheres of government and the distinctions between the spheres. The lack of capacity at certain municipalities should not drive a culture of centralised powers and functions that was in direct contradiction of the Constitution. He felt very strong about this and it was part of the Committee discussions. The fact that monies were being moved back and responsibilities taken back and centralised in the National Departments was actually fudging the 9.6%. In reality, if one took out the indirect grants the country was actually going backwards. It would actually be more like 8%.

The Chairperson asked for the view of the members.

Mr Carrim said that the Committee needed a fuller debate. The Committee agreed with Mr Ryder but he thought it was too strong. It was not a conspiracy. The ANC felt that it had a very strong local government model. The ANC was very committed to that. On the one hand when grants were given to municipalities, they did not spend it on what they were supposed to spend it on. Then the province and national government, Treasury and other departments got accused of not doing their job. Thereafter government decided it was no longer going to do direct grants, it would be doing indirect grants so that it could be better managed from provincial and national levels. Then there were accusations of them being draconian. He thought there needed to be a softer formulation of this. There needed to be further discussion on this matter with Treasury. He agreed with first part about the growing trend which gave a false narrative. He discussed the point about the lack of capacity at certain municipalities. He did not agree with the claim about the culture of centralisation of powers. Saying it was a culture was saying that it was a way of life National Treasury saw itself heading in the next few years. He thought that was harsh. He did not think it was going that far. There were practical reasons for it. There needed to be a softer version of what was suggested. If the majority agreed with this version he was fine.

Mr Njadu said that when this point was put in the report the Committee needed to say that it would have to get an assessment on direct and indirect grants so that the Committee had a holistic report for a clear understanding of exactly how National Treasury was looking at the impact of direct and indirect grants. An assessment needed to be done to look at where departments, provinces and municipalities needed support and how this matter could be dealt with. He suggested that the Committee have an assessment on this matter. He did not believe that it was a centralisation of powers and functions. That point was not that good. There was consensus on this point but the Committee also needed an assessment.

The Chairperson asked if the Committee was fine with that addition.

Mr Carrim said that the report should say that the Committee was concerned about the increasing tendency but it could not say that it was a culture of centralisation. That was going too far. It may well become that but the Committee needed to fight it. He did not think there were any differences between what Mr Ryder was saying and what he was saying. Simply, the Committee needed further discussion. It should include that the Committee would like this matter to be discussed with National Treasury in the first quarter of next year. After that, the Committee could reach a conclusion. The Committee needed to express concern on what seemed to be a trend but the Committee could not say that it was a culture.

The Chairperson asked for a mover for the adoption of the report.

Mr Njadu moved for the adoption of the report. Mr Carrim seconded the adoption of the report.

Mr Ryder said that the DA reserved its position.

Mr Du Toit said that the FF+ reserved its position.

Mr Moletsane said that the EFF reserved its position.

The Committee Report was adopted.

The Committee adopted the minutes of 3, 7 and 10 December 2021.

In the 3 December minutes Mr Ryder noted that Mr Njadu had a few things to say in his debate the other day about the negotiating mandates. Mr Njadu quoted from the Act that covered negotiating mandates but he quoted selectively from that Act. Looking at section 8(2) of that Act, it made it clear that the Select Committee could have other matters that it deliberated on which may inform the provinces’ mandates a little or may differ from the provinces’ mandates. He told Mr Njadu to read the full Act and then the debate could be continued in the new year. He moved for the adoption of the minutes.

The meeting was adjourned.