REPORT ON THE DIVISION OF REVENUE AMENDMENT BILL B9 2020 - PORTFOLIO COMMITTEE ON PREMIER, FINANCE, COOPERATIVE GOVERNANCE, HUMAN SETTLEMENTS ...
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PORTFOLIO COMMITTEE ON PREMIER, FINANCE, COOPERATIVE
GOVERNANCE, HUMAN SETTLEMENTS AND TRADITIONAL AFFAIRS
REPORT ON THE
DIVISION OF REVENUE AMENDMENT BILL [B9 - 2020]TABLE OF CONTENTS
Page No.
1. INTRODUCTION 4
2. PROCESS FOLLOWED 4
3. OBJECTIVE OF THE BILL 4
4. PRESENTATION BY NCOP PERMANENT DELEGATE 5
5. PRESENTATION BY NATIONAL TREASURY 6
6. DELIBERATIONS BY THE PORTFOLIO COMMITTEE 8
7. ADVERTISING OF THE BILL 9
8. SUBMISSIONS FROM STAKEHOLDERS 10
9. RECOMMENDATIONS BY THE PORTFOLIO COMMITTEE 12
10. ADOPTION OF THE BILL 13
11. ACKNOWLEDGEMENTS 13
12. ADOPTION OF THE REPORT 13
Page | 2ACRONYMS
CASP Comprehensive Agricultural Support Programme
COSATU Congress of South African Trade Unions
MIG Municipal Infrastructure Grant
NW North West
NWPG North West Provincial Government
NYDA National Youth Development Agency
PFMA Public Financial Management Act
SCOPA Standing Committee on Public Accounts
SEDA Small Enterprise Development Agency
SAFTU South African Federation of Trade Unions
SCOPA Standing Committee on Public Accounts
Page | 31. INTRODUCTION
The Portfolio Committee on Premier, Finance, Cooperative Governance, Human Settlements and Traditional
Affairs exercises oversight over the Provincial Treasury through its assessment of the provincial-wide strategic
support provided to NWPG departments. The Constitution of the Republic of South Africa 1996 and the PFMA
1999 creates a basis on which oversight by Legislatures should be accomplished.
2. PROCESS FOLLOWED
The Division of Revenue Amendment Bill [ B9 - 2020] was formally referred by the Speaker, Honourable S.R.
Dantjie to the Portfolio Committee on Premier, Finance, Cooperative Governance, Human Settlements and
Traditional Affairs for consideration and reporting.
The Portfolio Committee recieved a briefing by the Select Committee on Appropriations and National Treasury
through a virtual meeting held on 8 July 2020 , on the Division of Revenue Amendment Bill [B9 - 2020] . The
Committee soon afterwards sent letters to the followings stakeholders to request written submissions on the Bill
- District Municipalities, Local Municipalities, Magosi a Bokone Bophirima, SEDA, COSATU, SAFTU, Wesval
Chamber of Commerce and NYDA. The Portfolio Committee then received a presentation from the NCOP
Permanent Delegate and National Treasury on the Division of Revenue Amendment Bill [B9 - 2020] through a
virtual meeting held on 15 July 2020.
3. OBJECTIVE OF THE DIVISION OF REVENUE AMENDMENT BILL [B9 - 2020]
To amend the Division of Revenue Act, 2020, in accordance with the Money Bills and Related Matters Act,
2009; and to provide for matters connected therewith.
Page | 44. PRESENTATION BY NCOP PERMANENT DELEGATE ON THE DIVISION OF REVENUE
AMENDMENT BILL
BUDGET ADJUSTMENTS COVID –19; 2020/21
✓ This presentation provides a simplified snapshot of the 2020 Division of Revenue Amendment Bill to
respond to Covid19 pandemic. It demostrates how resouces have been adjusted both in the provincial and
local government as a results of the pandemic. It is noted that both national and local government
allocations has been revised upwards for immediate response to Covid19.
✓ North West had initially received R33.0 million for the Covid19 component, and R 175.1million has since
been added to make the overall allocation amounts to R 208.1 million for Covid19 component.
✓ North West direct conditional grants have been adjusted downwards by R 661.0 million, however the
province has received an additional allocation of R 175.1 million and therefore the reductions were reduced
to R 485.9 million.
✓ The additional budget is intended to procure personal protective equipment, ventilators, the hiring of
additional staff to deal with Covid19
NORTH WEST ADJUSTMENTS PER CONDITIONAL GRANT
R ‘000 2020/21 budget Adjustment 2020/21 Adjusted Budget
School Infrastructure Backlog Grant 32 000 38 000 70 000
Education Infrastructure Grant 1 090 010 -197 260 892 750
Provincial Roads Maintenance Grant 1 059 163 -160 415 898 748
Comprehensive Agriculture Support Programme Grant 174 271 -36 019 138 252
Illima/Letsema Projects Grant 67 324 -14 811 52 513
HIV/AIDS (Life Skills Education) 16 791 -4 057 12 734
Maths, Science and Technology Grant 39 453 -5 892 33 561
HIV, TB, Malaria and Community Outreach Grant 1 628 527 175 100 1 803 627
Human Settlements Development Grant 1 493 031 -158 311 1 334 720
Title Deeds Restoration Grant 53 160 -34 760 18 400
Community Library Services Grant 138 733 -34 800 103 933
Mass Participation and Sport Development Grant 42 009 -14 698 27 311
NB: Allocations in brackets denotes-decrease in allocations)
Page | 5NORTH WEST MUNICIPALITIES
R ‘000 2020/21 budget Adjustment 2020/21 Adjusted Budget
Bojanala Platinum municipalities 2 804 070 420 615 3 224 685
Ngaka Modiri Molema municipalities 1 690 533 259 408 1 949 941
Dr Ruth Segomotsi Mompati municipalities 893 592 136 554 1 030 146
Dr Kenneth Kaunda municipalities 1 082 986 140 956 1 223 942
TOTAL ADJUSTED BUDGET: NW MUNICIPALITIES 6 471 181 957 533 7 428 714
Infrastructure transfer to local government 2 977 290 (72 754) 2 904 536
Direct transfer 2 669 025 (72 754) 2 596 271
Indirect transfer 645 075 (111 425) 533 650
Capacity building transfers to local government 117 433 - -
Direct transfers 97 433 - 97 433
Indirect transfers 20 000 (1 595) 18 405
TOTAL TRANSFERS TO THE NORTH WEST 3 431 533 (185 774) 3 245 759
5. PRESENTATION BY NATIONAL TREASURY ON THE DIVISION OF REVENUE AMENDMENT
BILL
➢ 2020 Division of Revenue Act was enacted on 23 June 2020
✓ Gazetted frameworks include additional conditions to allow for Covid19 spending from existing grant
baselines (Gaxette published on 3 July 2020).
✓ Enables the reprioritised use of about R 7.4 billion in grant funds for provinces and R 9 billion in grant funds
for local government.
➢ The Special Adjustment Budget tabled on 24 June 2020 includes a Division of Revenue Amendment
Bill that includes;
✓ Additions to new Covid19 component of the HIV, TB, Malaria and Community Outreach Grant.
✓ Additions of R 11 billion to the local government equitable share.
✓ Downward adjustments to some conditional grants (to fund other Covid response acdtivities)
➢ How the Covid19 response is being funded
✓ The increased government spending to respond to Covid19 is funded in part by increasing the deficit and
in part by reprioritising resources.
➢ The President announced that R130 billion would be reprioritised.
✓ R30 billion of this was to come from provinces (excluding conditional grants)
✓ In the adjustment budget, R100.9 billion in reprioritisations were effected.
Page | 6➢ Reprioritised funds come from:
✓ Savings on activities (travel, venue hire, catering) that are no longer possible.
✓ Unspent funds due to lockdown regulations (e.g. most infrastructure grants could not be spent under
level 4 and level 5 regulations).
✓ Identifying possible under-spending (provinces underspent their grants bymR3.4 billion in 2019/20, and
we identified potential underspending of R5 billion in local government that could be reallocated in
2019/20)
✓ Reprioritisations of this scale will however require the implementation of some projects to be delayed.
Due to the Grant suspensions, the following Grant allocations to the North West Province were reduced:
o Education Infrastructure Grant allocation was reduced by R197.3 million from R1.1 billion to R892.8 million
for 2020/21;
o Provincial Roads Maintenance Grant allocation was reduced by R160.4 million from R1.1 billion to R898.7
million for 2020/21;
o Comprehensive Agricultural Support Programme Grant allocation was reduced by R36 million from R174.3
million to R138.3 million for 2020/21;
o Ilima/Letsema Projects Grant allocation was reduced by 14.8 million from R67.3 million to R52.5 million for
2020/21;
o HIV and AIDS (Life Skills Education) Grant allocation was reduced by R4.1 million from R16.8 million to
R12.7 million for 2020/21;
o Maths, Science and Technology Grant allocation was reduced by R5.9 million from R39.5 million to R33.6
million for 2020/21;
o Human Settlements Development Grant allocation was reduced by R158.3 million from R1.5 billion to R1.3
billion for 2020/21;
o Title Deeds Restoration Grant allocation was reduced by R34.8 million from R53.2 million to R18.4 million
for 2020/21;
o Community Library Services Grant allocation was reduced by R34.8 million from R138.7 million to R103.9
million for 2020/21; and the
o Mass Participation and Sport Development Grant allocation was reduced by R14.7 million from R42 million
to R27.3 million for 2020/21.
6. DELIBERATIONS BY THE PORTFOLIO COMMITTEE
Page | 7The Committee deliberated as follows, after the presentation on the Division of Revenue Amendment
Bill [B9- 2020];
6.1 Funds that have been allocated for food security in the province have not been spent accordingly ,a
concern was raised that currently there are loss of jobs in the agricultural sector .
6.2 The underspending of infrastructure projects in the province is a concern as some of the projects are
incomplete.
6.3 The Committee raised a concern on the Human Settlement Grant , that there is a downward adjustment
yet the are so many incomplete housing projects in the province as well as matters of illegal land
invasion.
6.4 The Comprensive Agricultural Support Programme grant has been reduced by R 36 million, the
Committee raised a concern that the province is rural , agriculture is one of the pillars if its economy
and it depends on farming and agricultural produce.
6.5 The directives that National Treasury send to local municipalities and departments on procurement and
processes needs to be re-looked at, a concern was raised that some municipalities in the province have
misused those directives during the lockdown period.
6.6 The Committee raised a concern that creation of jobs through small business entrepreneurs is not
addressed in the supplementary budget. This would create a conjucive environment in the province
were jobs can be created in the private sector throught the stimulation of entrepreneurship.
6.7 The Committee raised a concern that Ngaka Modiri Molema, JB Marks and Mamusa Local
Municipalities in the province failed to comply with and adhere to SCOPA directives.
6.8 A concern was raised that, Ngaka Modiri Molema Municipality claims to have spent R 93 million on the
repriotised budget for the COVID19 pandemic.
6.9 The Committee raised a concern that JB Marks Local Municipality spent R48m irregularily, when
SCOPA called them to account, the municipality resisted.
6.10 The Ilima / Letsema Projects Grant is supposed to assist vulnerable black farming communities in
achieving increased agricultural production, yet there is a downward adjustment on the grant. How far
is the province in relation to identifying beneficiaries for this grant.
6.11 Ngaka Modiri Molema District Municipality and Dr Ruth Segomotsi Mompati District Municipality have
serious challenges in relation to the Municipal Infrastructure Grant, as well as water and sanitiation
projects largely due to the fact that they are in a drought.
6.12 The Committee raised a concern that at Tswaing Local Municiaplity the waste water treatment plant
has not been functional for 3 years, yet the municipalilty says it spent R 8.5 million on it.
6.13 With reagrds to the Comprehensive Agricultural Support Programme, farmers are not being assisted
by the Departrment of Agriculture & Rural Development as they should be. There are projects that are
Page | 8funded through the programme such as water irrigation, yet 12 of them in the province do not have
water licences.
6.14 Mamusa Local Municipality failed to meet with SCOPA and displayed conduct foreign to proceedings
of Committees of Parliament with regards to the Powers, Privileges and Immunities Act of Parliament
and Legislatures.
6.15 The Committee raised a concern that there is unsufficient or no project planning at municipalites and
departments. This leads to projects being uncompleted and grants not being spent.
7. ADVERTISING OF THE BILL
In light of the COVID-19 pandemic the Portfolio Committee was unable to embark on Public Hearings throughout
the province. Stakeholders and communities were requested to submit written inputs.
Advertisements were posted on;
▪ North West Provincial Legislature Facebook page , North West Provincial Legislature Twitter handle
Regional newspapers
▪ The Mail, Klerksdorp Record and Rustenburg Herald
Community newspapers
▪ Ntsae Media (business INC and News fact) CIS Media, Ratlou News, Lekwa-Teemane Tribune, Molopo
News and Tlhabane News
Advertisements were broadcast on;
National radio stations
▪ Motsweding FM, SA FM and RSG FM
Community radio stations
▪ YOU FM, Mafikeng FM, Bophirima FM, Bodibedi FM, Vaaltar FM, Kopanong FM, Star FM, Aganang
FM, Moretele FM, Mafisa FM and Bojanala FM.
8. SUBMISSIONS FROM STAKEHOLDERS
Page | 9The following stakeholders were sent letters, a copy of the Bill and the presentation;
▪ District Municipalities
▪ Local Municipalities
▪ Traditional Leadership throughout the province
▪ SEDA
▪ COSATU
▪ SAFTU
▪ Wesval Chamber of Commerce
▪ NYDA
The following submissions were received;
8.1 The challenges on lockdown - lock down made economic shutdown and it caused lot of unemployment
rate
8.2 Poverty increased by unemployment.
8.3 Shops increased prices due to this pandemic.
8.4 Taxis increased prices due to this pandemic and lockdown.
8.5 More crimes and domestic violence increased during lockdown.
8.6 The budget for the Department of Social Development should be increased to be utilsed to buy school
uniform to kids whose parents are poor.
8.7 Vouchers were issued to emerging farmers, and those vouchers expired on the 30 th June 2020 and
later we told to return those, propose the process of re-issuing of vouchers to be sped up.
8.8 People in rural areas are always forgotten when the lockdown was inpassed, most of the clinics that
are there are not really sanitised as the ones in cities.
8.9 Schools are not well inspected, this is after one of the teachers or child from a rural school tested
positive for COVID19 no proper cleaning is done.
8.10 People in rural areas are forced to buy groceries at high prices from Indian tuckshops.
8.11 We are used to a certain sense of entitlement, access to luxuries in our villages we can only dream of.
8.12 In some areas, harvesting of crops is a serious threat and the closure of markets , produce is being
dumped.
8.13 Since COVID19 markets are inflating food prices, consumers cannot afford because the prices are too
high.
8.14 Why don’t the government close schools and only deal with Grade 12 until next year, 2021.
8.15 During lockdown we faced many challenges on different levels namely; pregnancy, economically,
Page | 10socially and medically
8.16 Groceries and other household necessities are at higher prices, we are also unable to get work hence
most companies operate at 50% capacity.
8.17 The economy is struggling on many factors that cannot be explained in public.
8.18 Lockdown has a very negative impact hence we are not allowed together with people of nor over 50.
8.19 Medical institutions are overwhelmed by the state of infected people, our Health Practitioners are
working very hard to stabilise the pandemic.
8.20 Every individual and every department is negatively affected by the pandemic.
8.21 The budget allocation for the Department of Social Development should provide vouchers instead of
food parcels.
8.22 The budget for the Department of Social Development to be increased to assist needy parents in buying
school uniform for disadvantaged children.
8.23 Government has created a burden to itself by promising the unemployed youth a social relief of
R350.00, how long will the government sustain such assistance.
8.24 It is proposed that government establish some co-operatives for young people and instead of giving out
that social relief of R350-00, rather save that amount for 12 months and fund those co-operatives to
sustain young people even beyond the corona virus era.
8.25 The budget allocation of the Department of Health, a concern was raised that tests in laboratories for
COVID19 are expensive, it is therefore proposed that the budget for the department be increased to
accommodate the underprivileged to test for free.
8.26 Since the COVID19 epidemic began, a concern was raised that the market has inflated food prices and
this resulted in disadvantaged communities being unable to afford the price of food.
8.27 The transport industry has also increased their fares and there is no social distancing within taxis this
is a concern.The budget for the Department of Education must be increased, to enable the department
to offer bursaries to learners from Grade 10 until Grade12 and too remove bottlenecks for bursary
application to allow applicants who are at least 40 years to apply and not only up to 35 years.
9. RECOMMENDATIONS BY THE PORTFOLIO COMMITTEE
The Committee recommends as follows;
Page | 119.1 National Treasury working together with Provincial Treasury must put strigent measures in place on
accountability on spending of funds by municiaplities and departments, on the COVID19 supplemetary
budget.
9.2 Provincial Treasury must not release municipal equitable shares and conditional grants of defaulting
municipalities , subject to submission of reports to comply with regulations and procedures.
9.3 Provincial Treasury must transfer grants directly to local municipalities in order for identified projects to
be completed.
9.4 The appropriation for the agricultural sector in the province be increased so that food security is
maintained and there is no loss of jobs in the sector.
9.5 Unspent Infrastructure grants must not be re-allocated to a department rather they be transferred to
another department.
9.6 The Human Settlement grant in the province must be increased to accommodate the incomplete
housing projects in the province .
9.7 National Treasury and Provincial Treasury, working together must strengthen processes of emergency
procurements .
9.8 National Treasury and Procivincial Trasury working together must enforce project planning at
municipalities and departments , that have timeframes.
10. ADOPTION OF THE BILL
The Division of Revenue Amendment Bill [ B9 – 2020] be adopted with the proposed amendments.
Page | 1211. ACKNOWLEDGEMENTS
The Chairperson of Committee thanked all the present Members for their commitment to the oversight process
of the Division of Revenue Amendment Bill [B9– 2020].
The Chairperson of Committee would also like to thank the support staff for contributing in compiling this report.
12. ADOPTION OF THE REPORT
The Portfolio Committee recommends that the House approve the passing of the Division of Revenue
Amendment Bill [B9- 2020] and mandate the North West Permanent Delegate in the National Council of
Provinces to vote in support of the Division of Revenue Amendment Bill [B9 – 2020] as tabled by the Minister of
Finance.
I present to this House, the report of the Portfolio Committee on Premier, Finance, Cooperative Governance,
Human Settlements and Traditional Affairs for consideration and adoption.
____________________
HON. A. MOTSWANA
CHAIRPERSON: PREMIER, FINANCE, COOPERATIVE GOVERNANCE, HUMAN SETTLEMENTS AND
TRADITIONAL AFFAIRS
____________________
DATE
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