House Chairperson, hon Deputy President, colleagues, the ANC government's steely resolution to create a better life for all and roll back the frontiers of poverty through focusing on its five manifesto priorities is demonstrated in the division of revenue across all three spheres. It follows, therefore, that the certainty of meeting these priorities is strengthened or weakened by the quantity and quality of resource allocation towards this realisation.
The centralisation of revenue raised nationally is intended to foster the centripetally and spherically autonomous implementation of the ANC government's priorities to create hope and restore dignity to ordinary people. The idea of South Africa as a unitary state characterised by high inequalities should inform the division of revenue.
A division of revenue which is shorn of a historical basis is prone to inadvertently catalysing the equal treatment of unequals. Therefore, as a developmental tool, the division of revenue should be acutely aware of righting the wrongs of the past and redressing those imbalances.
South Africa is a country in transition from a past marked by the exclusion of the majority from decent services and amenities. This was engineered to perpetuate the system of coexistence between the opulent elite and toiling majority. The creation of Bantu native reserves had no developmental genesis and implementation, but ensured comfort and plenty to the ruling oligarchy. This malicious intent is what bequeathed to our young democracy the so-called rural and poor provinces and municipalities.
Section 214 (1) of the Constitution of South Africa requires that -
An Act of Parliament must provide for -
an equitable division of revenue raised nationally among national, provincial and local spheres of government.
This is the report of the Bill the Minister tabled in this House. The Intergovernmental Fiscal Relation Act, Act 97 of 1997 also prescribes the process for determining the equitable sharing and allocation of revenue raised nationally.
The Minister of Finance has, as required by the Money Bills Amendment Procedure and Related Matters Act, Act 9 of 2009, responded to the recommendations of Parliament at the adoption of the Medium-Term Budget Policy Statement, MTBPS. The response is contained in the Budget Review in Annexure A.
There is an urgent need for Parliament to train Members of Parliament on this Act and to accelerate the process of implementation because the Act guides us on the procedures of amending or not amending the money Bills, especially the Budget. Contained in the Division of Revenue Bill, as required by section 214 of the Constitution, is the share of national government and the equitable shares of provinces and municipalities, including conditional grants to provinces and municipalities.
The Bill seeks to regulate the procedures to be followed on how and when these resources should be transferred to provinces and municipalities. It spells out the roles of national departments as transferring offices and the requirements of the receiving offices.
During the hearings we observed that the National Treasury and the departments administering certain grants needed to pay closer attention to the procedures provided for in the Intergovernmental Fiscal Reviews, IGFR. A dispute arises when conditions of reporting appear to exclude the departments that are responsible for implementation. The reports from all the implementation agencies, municipalities or provinces must be communicated to the relevant departments without creating an unnecessarily complicated reporting regime for the implementing agency or municipality. These reports should be and can be co-ordinated at both provincial and national level. We expect the 2011 division of revenue to include a clause addressing this matter.
The Committee on Appropriations recommends that the National Treasury and the Co-operative Governance and Traditional Affairs, Cogta, continue to engage on the matter of unspent conditional grants that municipalities fail to return to the national fiscus as required by the Public Finance Management Act and the Local Government: Municipal Finance Management Act. It should further investigate whether National Treasury can deduct a balance from the funds that have not been returned from the equitable share.
The Public Finance Management Act and the Local Government: Municipal Finance Management Act provide clear guidelines on procedures to be followed regarding unspent conditional grants. Therefore, we would encourage Cogta and National Treasury to hold workshops for their municipal treasuries and to report to Parliament by the end of May.
Treasury regulations require that agents apply for a rollover of unspent but committed funds. Parliament would like to engage National Treasury to withhold the funds of municipalities that do not have capacity to spend. As a committee we insist that any transferring national officer must produce proof of the steps taken to build capacity in that municipality, as required by the Constitution and the Local Government: Municipal Finance Management Act.
The withholding of funds is tantamount to penalising the communities that reside in those municipalities. Though withholding of funds is legal, punishment should be directed to the officials, not to the communities. In fact the next division of revenue must include a clause that allows for a fraction of the grant, for example, 4% or 5%, to provide for capacity- building.
Currently there are demonstrations demanding service delivery in different municipalities. Many of these demonstrations are directed at the wrong people. Demands for services such as housing, crime prevention and jobs don't necessarily belong to the municipalities but to other spheres.
The committee supports the Expanded Public Works Programme, the EPWP, which intends to create longer working time. However, the national Department of Public Works must insist on portable skills that can be certificated, as was originally planned in this programme. We suggest that the Portfolio Committee on Public Works follows up on this matter.
The other challenge is that municipalities that can't spend cannot report on what they have done. As a result they are unable to be allocated further funds. Again, poor communities get penalised if these municipalities have not provided a report. This department will review the system.
I would like to express my sincere gratitude to the members of the committee who worked long hours to produce the report; committee secretary, Mrs Thoko Xaso; the researchers in the committee; my secretary; and the other support staff who really supported us. I thank you. [Applause.]