Igama lethu sonke! [It's our name!]
Hon Speaker, hon members, comrades and distinguished guests - oh, there are no guests - the Budget is a financial instrument which the majority parties the whole world over use to ensure that their policy programmes are brought into effect through the provision of the necessary financial resources. Given that the programmes of the ANC government are targeted towards the poor, service delivery and the Budget are mutually reinforcing elements of a common objective, hence amendments to the Division of Revenue Bill are critical in ensuring that the fiscus does meet the priorities that the ANC has set government in terms of delivery in the different spheres of government.
The spending priorities are budgeted for through an adjustment to already- agreed-upon programmes or where an emergency may have arisen or there is a shift in the programme or responsibilities. These priorities of the ANC government, as set out in the ANC's 2009 manifesto framework document, are also reflected in the 2010 state of the nation address. Amongst other things, these are: expanding employment and safeguarding social security; improving the quality of education and skills development; enhancing the quality of health care; rolling out a comprehensive rural strategy; creating a built environment and human settlements to support economic growth; having programmes directed towards combating crime and corruption; and prioritising local government challenges.
With respect to the political rationale for an amendment to the Division of Revenue Bill, the key question that arises in this debate is whether the amendments in the Bill address the priorities and challenges that have arisen since the tabling of the Division of Revenue Bill in February, and whether the amendments retain the overall character of the Division of Revenue Bill as being equitable.
The Deputy Minister has also referred to section 214(1) of the Constitution of South Africa, which requires that every year a Division of Revenue Act determines the equitable division of nationally raised revenue between the three spheres of government. The Intergovernmental Fiscal Relations Act prescribes the process for determining the equitable sharing and the allocation of revenue raised nationally.
The resolve to create a better life for all and eradicate poverty through focusing on the ANC's seven priority areas obviously has an impact upon the decision to amend the Division of Revenue Bill. It follows that the certainty of meeting a priority is strengthened or weakened by the quality or quantity of resource allocation towards its realisation.
We are very mindful of the fact that there are intense and healthy discussions taking place around the intergovernmental fiscal relations and the need for change. This would be obvious since it is only in practice that shortcomings are revealed and the need for change is therefore recommended.
Changes to the local equitable share formula are necessary and we need to examine the SA Local Government Association, Salga, and the Financial and Fiscal Commission, FFC, proposals in this regard.
At the September 2010 national general council of the ANC these concerns were raised and the process of addressing them at our policy conference in 2012 will happen. Concerns over formulas and related matters governing and regulating transfers are part of these ongoing healthy debates.
Whilst this amending Bill cannot address certain critical issues since that falls outside the ambit of this Bill, it is worth mentioning, however, going forward that there are critical issues for the local sphere of government that remain unresolved like the replacement of the Regional Services Council levy.
During the committee public hearings into the Medium-Term Budget Policy Statement, MTBPS, a number of issues have been raised which going forward would need to be discussed as they have a direct bearing upon the division of revenue and subsequent amendments. Many of these relate to local government and the view of the department that additional funding to the baseline would be necessary in defined areas going forward.
The SA Local Government Association, Salga, for instance, had this to say to the committee:
There should be a systematic review of baselines to ensure that the revenue allocations to local government as a whole are congruent with its full range of developmental and service delivery responsibilities and the vertical share of local government meets the increasing demand for municipal services.
The magnitude of the funding should be such that it will enable municipalities to appoint the relevant skilled personnel to manage their finances, human resources, service delivery functions, and core administration. This will address one of the key priorities of the local government turnaround strategy that municipalities are currently implementing.
Availability of credible data on key variables relating to the socioeconomic, demographic and spatial profiles of municipalities needs to be addressed not only to update the data underpinning the formula, but also a more fundamental review of the structure of the formula itself.