Parliament, Wednesday 16 November 2022 – The National Assembly (NA) has during its hybrid plenary this afternoon passed the Division of Revenue Amendment Bill.

The Bill was tabled in Parliament by the Minister of Finance, Mr. Enoch Godongwana, in terms of section 12(4) of the Money Bills Amendment Procedure and Related Matters Act No. 9 of 2009 (as amended by the Money Bills Amendment Procedure and Related Matters Amendment Act No. 13 of 2018) - on 26 October 2022 during the presentation of the 2022 Medium Term Budget Policy Statement (MTBPS).

The Act requires the Minister to table a Division of Revenue Amendment Bill with a revised fiscal framework if the adjustments budget affects changes to the Division of Revenue Act for the relevant year. The Bill and its annexures address changes to schedules; provincial allocations; local government allocation; Gazetted conditional grant frameworks and allocations; and Bill clauses. An adjustments budget provides for unforeseen and unavoidable expenditure; appropriation of monies already announced during the tabling of the annual budget (but not allocated at that stage); the shifting of funds between and within votes where a function is transferred; the utilisation of savings; and the roll-over of unspent funds from the preceding financial year.

The Bill was referred to the Standing Committee on Appropriations on 9 November 2022 after the NA adopted the 2022 Revised Fiscal Framework. Amongst the changes Parliament is requested to approve is the shifting of funds between disaster grants following the floods that affected parts of the country. These include the proposed shifting of R145 million from the provincial disaster response grant to the municipal disaster response grant and the proposed shifting of R120 million from the municipal emergency housing grant to the provincial emergency housing grant amongst others.

The Bill further proposes additional funding for the reconstruction and rehabilitation of provincial infrastructure damaged by the December 2021 and April 2022 floods. A proposed total of R117 million is added to the education infrastructure grant for schools in the Eastern Cape and KwaZulu-Natal provinces for the reconstruction and rehabilitation of schools damaged by floods in December 2021 and April 2022 and another proposed total of R1 billion is added to the provincial roads maintenance grant for the Eastern Cape, KwaZulu-Natal and North West provinces for the repair of provincial roads damaged by the April 2022 floods.

Having deliberated and considered all the submissions made by National Treasury, the Parliament Budget Office and various other stakeholders on the Bill, the Standing Committee on Appropriations welcomed the proposed allocations and implored on government to ensure the speedy distribution of these funds to the affected areas in order to ensure that intended beneficiaries receive the required assistance timeously.

The Committee noted with serious concern the recommendation by the South African Local Government Association (SALGA) that any envisaged bail-out to Eskom must also consider the debt owed by municipalities and the 2023 budget should consider offsetting debt owed by municipalities to Eskom. The Committee holds the view that the financial challenges faced by SOEs and some municipalities are self-inflicted and bail-outs would create a problem of moral hazard and complacency in all government institutions.

In its report, the Committee recommended, amongst others, that the Minister of Finance, working with all affected stakeholders, ensures that National Treasury speedily releases disaster relief funding in order to minimise the social and economic impact of affected communities; that the Minister of Cooperative Governance and Traditional Affairs must ensure that the eThekwini Metropolitan Municipality effectively and speedily spend the proposed R92 million towards the procurement of identified land for the relocation of floods victims who were previously residing in informal settlements that were washed away by the April 2022 floods; and that the Minister of Basic Education ensures that the Department of Basic Education closely monitorsthe reconstruction and rehabilitation of public schools that were affected by the December 2021 and April 2022 in the Eastern Cape and KwaZulu-Natal Provinces. The Minister must ensure that the Department provides quarterly expenditure and progress reports on the reconstruction and rehabilitation of these affected schools.

Following a debate at its plenary today, the NA adopted the Committee’s report with its recommendations and passed the Division of Revenue Amendment Bill. The Bill will now be sent to the National Council of Provincesfor Concurrence.

ISSUED BY THE PARLIAMENT OF THE PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA

Enquiries: Moloto Mothapo