Budget Vote Process & Analysis of Department of Transport Strategic Plan: briefing by Committee Staff; Committee Programme

Meeting report

Welcome
The Chairperson opened the meeting by thanking Members who arrived on time. She announced that two members would be arriving late. Without further ado, she presented the agenda to the Committee and asked whether there were other issues that could be added for consideration. No other item was added to the agenda.
 
 
Committee Programme
Ms Valerie Carelse, Committee Secretary, highlighted the Committee’s planned programme. She informed Members that the upcoming engagement with the Department would be on the budget in the context of the expenditure framework. She added that the entities would not be part of this and would instead be presenting at a later stage.

Mr M De Freitas (DA) said that in this Portfolio there were 16 entities and what usually happened in the past was the Committee would start off listening to an entity and then at the end it would have to rush through the presentations, especially for those entities at the end of the queue. He suggested that there be a division of time through out the day. In his view, there was not enough time, with just one day allocated. He understood that it this can not be helped for practical reasons. He advised that the Committee plan the day and put times for each entity and advise them beforehand about their allocated slots so that it gave enough time for each entity and that those at the back of the queue were not disadvantaged because the Committee had run out of time.

Ms Carelse clarified that the House Chairperson had said that because this was an election year, things would be done differently. The Committee used to call all the entities over a 2-3 day period and dealt with the Department’s budget vote afterwards. This time the focus would only be on the Department’s strategic plan, APP and budget because the budget that was going to be debated on was the one submitted in terms of the Expenditure Framework. The focus would therefore be on the strategic plan of the Department.

The Chairperson noted that the Committee would be “short-circuiting” a number of issues as it would be focusing on the Department’s budgets without looking at the entities. In her view, she felt that the Committee might want to look at the entities at a later stage. All committees only had one month where all the budget votes had to be passed. She wanted to hear from Members on how to deal with the entities.

Mr L Ramatlakane (ANC) said that in terms of the schedule and timeframes that the Committee had for the budget to be adopted, it may not have time to listen to the entities. However, the Committee could still accommodate them later in the programme after the budget work had been concluded. The engagements could be part of the Committee’s oversight to monitor how the budget was being implemented.

Ms D Carter (COPE) noted that Monday was constituency day and suggested that the Committee could spread the engagement over two days and have at least some of the entities if not all of them appear before the Committee.
 
The Chairperson noted that there were two proposals and asked for additional input from Members.
 
Mr M Sibande (ANC) stated that the Committee should not put pressure on itself. The budget was specific because it was dedicated to the Department, which was a mother body for all the entities. Monday was not possible because it was a political party day and it differed from party to party. Lastly, he noted that the proposal was meaningful; however Monday was not an option in his view.

The Chairperson agreed with Mr Sibande and Mr Ramatlakane and therefore asked the Committee whether the Committee Programme should be adopted as it proposed.
 
Mr Ramatlakane supported the Committee programme is it stood. He was seconded by Ms S Xego-Sovita (ANC).
 
Committee Minutes
The Chairperson tabled the document for consideration. The minutes were dated 24 June 2014.

Members went through the document page-by-page. They were satisfied with the content and adopted it with no changes.

The Chairperson welcomed the Committee Secretary and the Committee Researcher to make their presentations.
 
Workshop on the BudgetVote
Dr Sifiso Ngesi, Committee Researcher, explained what a budget was, the relevant legal framework, role players in the budget cycle, expectations and enumerated the key government policy documents that were relevant for budget oversight. (see attachment)
 
Discussion
The Chairperson thanked the Researcher for his presentation and invited the Committee to engage with the presentation.
 
Mr Lamatlakane stated that the presentation was just intended to help the members of the Committee to understand the legal framework that the Committee operated within and asked the Chairperson to move to the main item on the agenda, which was the budget vote itself.
 
Presentation on Budget Vote Process
Mr Carelse briefed Members about the practical aspects of the Committee process to finalise the budget. She mentioned that every year around March, departments and entities tabled their strategic plan and annual performance plan (APP) in Parliament. The relevant Minister, as the executive authority, was responsible for tabling this documentation. The tabling was announced in the Announcement, Tabling and Committee Reports (ATC). When this is referred to the Committee, it would state for consideration and report. This meant that there was an obligation on the Committee to draft a report and report to the National Assembly before the budget vote debate. Once the committee report was finalised it must also be published in the ATC, with 11 July 2014 being the deadline date this year. The budget debate would take place in Extended Public Committees and were scheduled to start on 15 July. Once referred to a committee, it must develop a programme for considering and reporting on a budget vote and APP referred to it.

Ms Carelse highlighted that the discussion this morning about whether it was feasible to invite the entities at this stage and how much time to allocate were all part of the process. The process may also include participation through advertising for comment. If the committee wanted to ask public for their view on the budget, then this was allowed, however it would take two weeks to give the public time to comment. The
Committee may also ask stakeholders, such as academics and research institutions to give input on the matter.

Ms Carelse stressed that the Committee must include the following when processing a budget:
-an analysis by parliamentary committee researcher and content support;
-political overview by relevant executive authority; and
-briefing by accounting officer

Ms Carelse stated that after the presentation by the Department, the Committee would deliberate then draft and adopt its report. The report would include observations and recommendations to the NA on whether the budget should be approved or not. Because everything was compressed this year and many of the Members were new, the Committee could state in its report that it did not have adequate time to properly consider the budget.

Analysis of Budget Vote: 37
Dr Ngesi took the Committee through the analysis of budget vote: 37. He firstly provided an overview of the Department focusing on the primary tasks, that is, the provision of safe, reliable, effective, and fully integrated transport operations. In addition, the Department was mandated with ensuring safety & security across all modes of transport.  In an endeavour to discharge its mandate effectively & efficiently, the Department has organised itself into 7 programmes:
-Administration;
-Integrated Transport Planning;
-Rail Transport;
-Road Transport;
-Civil Aviation;
-Maritime Transport; &
-Public Transport

Dr Ngesi provided an overview of the 2013/14 financial year, noting that the Department had spent R39bn or 99.2% of the total available budget by the end of the 4th Quarter and was behind on total spending by R317 million or 0.8%. This was mainly due to under-spending in Civil Aviation & Public Transport Programmes.
Dr Ngesi reported that the budget allocation of the Department for 2014/15 sought to respond to the cardinal issues raised in the National Development Plan (NDP). This was evidenced by R21.6 bn (44.4%) & R15. bn (30.9%) of the budget allocation which went to the Road Transport and Rail Transport Programmes respectively & R11.3 bn (23.2%) that was allocated to the Public Transport Programme.

Dr Ngesi further highlighted the allocation per programme and highlighted the nominal and real increases or decreases.

Discussion
The Chairperson thanked Dr Ngesi and asked Members to engage with the presentation.

Mr C Hunsinger (DA) noted on several slides and in several of the programmes, there was a distinction at the end which referred to the increase in budget and then inflation as an indicator was used to discount the percentage. He did not understand the significance of this. According to his understanding of inflation as an economic indicator was that it was retrospective; it could not discount the future percentage because one does not know what the future inflation would be even after the next financial year. He therefore sought clarity on what the significance was of showing a discounted percentage.

Mr Sibande replied that the information was to equip and prepare Members for their interaction with the department. Though relevant, this question must be directed at the Department. He also had questions but the researcher was not the relevant person to address this to. The presentation was only a guideline.

The Chairperson said that Mr Hunsinger was just seeking more clarification but not opposing.

Ms Carter said that the figure might be showing that there is an increase but in actual terms there was no increase. In addition, she commended the researcher for producing a good document.

Dr Ngesi responded that the distinction between nominal and real terms was usually intended to give reality. If you compare the two terms you might find that there is no increase.

Dr Ngesi replied that the distinction between nominal and real was intended to give clarity where one might be of the view that there had been an increase. However, if one took inflation into account in real terms one may find that no increase had taken place.

Dr Ngesi added that the Research Unit analysed information based on the estimates of national expenditure. He agreed with Mr Sibande that the Department would be best placed to deal with questions about budget allocation.

Mr Ramatlakane stated that the presentation provided useful information. Referring to Mthatha airport, he said that there were questions that the Department would indeed be asked to clarify. In addition, he would seek answers on issues relating to road infrastructure development, maintenance, monitoring and consultants. He further expressed concern about the monitoring of metros and provinces and called for the Committee to find out whether there would be a split of expenditure in terms of monitoring and consultation.

Mr Sibande noted that Members were on the right track. Before the debate, the Department must account and respond to issues that Members were going to raise.

A Member sought clarity on when the Department was supposed to do the transfer to the provinces and municipalities?

Mr Sibande noted that this was a relevant question. However, he suggested it should be noted and raised with the Department.

Dr Ngesi replied that the Division of Revenue Act (DORA) spelt out the timeframes when the transfers to provinces municipalities ought to be made. The question was whether there was adherence to this stipulation. He therefore advised that the question should be asked along those lines.

Mr Sibande noted that the Committee had dealt with all the issues for the day. He asked everyone to work together as a team and to put their political differences aside.

The meeting was adjourned.