Date: 24/02/2004
Source: Democratic Alliance
Title: Taljaard: debate on the Division of Revenue Bill
Raenette Taljaard of the Democratic Alliance speaking on the Division of Revenue Bill
Madam Speaker
Honorable Members
The R327 billion revenue projection in this budget is to be primarily located at provincial and local government levels. Nationally raised revenue is divided to target considerable spending on an expended public works programme, via conditional provincial infrastructure grants and the municipal infrastructure grant, and a new conditional HIV/AIDS grant to be administered by provinces as part of the new comprehensive HIV/AIDS treatment and care strategy.
Growing Unemployment and Poverty In the submission to the Portfolio Committee on finance, the Financial and Fiscal Commission highlighted that the number of household in poverty rose from 28% to 33% between 1995 and 1999 - largely driven by growing unemployment. These vivid consequences and the link between unemployment and poverty cannot be glossed over by the Minister of Trade and Industrys recent smoke and mirror game on jobs figures.
The consequences of the unemployment crisis can also be seen, and felt in budgetary terms, in the pressure on social grant expenditure. When social grant expenditure grows from R10 billion (1993) to a projected R40 billion in 2004 with the highest real growth projected for social welfare a stance reminder is delivered on what South Africas non-negotiable top priority must be, economic growth and job creation. There is clearly no greater challenge than to engage in a considered and considerable national debate on measures to alleviate poverty and the possible contribution a BIG could make as part of discussions that look at tax reform of retirement savings, and tax proposals in the context of an affordable social security neb for a developing country with South Africas demographic profile.
The Expanded Public Works Programme and Division of Revenue Bill:
The Division of Revenue Bill takes the first step in rolling over the EPWP through a considerable allocation for the Municipal Infrastructure Grant. R1,7 billion is targeted at the Municipal Infrastructure Grant. Section 11 of the Bill introduces four new sub-clauses to facilitate the phasing in of the MIG.
Section 11 (6) requires municipalities to provide specific details on implementation of Capital budgets as part of a three year capital plan.
Compliance with these provisions will have to be carefully monitored by National Treasury, Councils and provincial legislatures to ensure that spending on the EPWP results in economically productive infrastructure.
While the DA believes that EPWP have a contribution to make to poverty alleviating in the context of South Africas structural skills deficit, and cannot provide long term solutions for job creation. While these programs, if closely monitored, can contribute to addressing the infrastructural backlog in South Africa, they will not arrest the unemployment crisis. Only higher savings and investment can provide the golden thread to higher economic growth and job creation.
In addition the DA would live to highlight two crucial factors that could hamper the roll-out of an expanded Public Works programme (EPWP). Firstly, the staggered implementation of the MFMA (Municipal Finance Management Act) may bring greater legal clarity for public - private partnerships for infrastructural development but the considerable upheaval its implementation will bring in municipalities where financial management capacity is stretched at best will limit the effective roll - out of private sector involvement through PPPS. Secondly, at the very time that government is launching its EPWP the meddlesome Minister of Public Works is placing new administrative share/es on the Construction Industry as part of a new registering process to check BEE credentials. These two factors could limit delivery even of the short-term EPWP jobs. Only real growth can bring real jobs. EPWP have a contribution to make but they are not the solution.
HIV/Aids and the DOR Bill: When the Minister tabled the Budget the DA joined the chorus of voices in civil society that welcomed the R2,1 billion additional allocation for the fight against HIV/AIDS. I would like to raise an issue of concern in respect of Clause 23(2) of the Division of Revenue Bill and the new HIV/AIDS grant allocation. In terms of this provision the Minister of Health and the Department of Health will have considerable say in realocating funding of the new conditional grant to provinces that are spending faster. Section 23(2) enables a transferring national officer to reallocate the newly created HIV/AIDS grant, of a portion thereof, to another province (after consulting the provinces concerned and with the written consent of the National Treasury) if the reallocation is necessary to shift funds from provinces spending less per month than as agreed with the transferring national officer at the beginning of the Financial Year.
According to Annexure E of the DOR Bill this will be done taking cognizance of the monitoring framework established by the National Department of Health and the reporting requirements specified by the National Monitoring and Evaluation Framework for Comprehensive Treatment and Care Programme. Based on the performance of the Minister of Health on the HIV/AIDS crisis the DA can but express the hope that the Minister will not frivolously redirect funds or play politics with the different provinces. In addition the DA trusts that government will finalise the tender for antiretroviral drugs and deliver these drugs to provinces before it starts penalizing provinces for not spending funds and engages in a process of reallocation.
Given the clear shift in prominence the provinces and municipalities enjoy in delivering on key areas of policy, this is the case in this DOR Bill on the roll-out of the new HIV/AIDS grant as well as the EPWP grants, the DA wishes to raise the caveat that the success of all those endeavors will revolve around capacity at provincial and local level to implement programmes. It is in this arena that too little has been done to ensure success.
While section 35 of the DOB Bill introduces a de facto amnesty for underspending on capital grants, this underspending reflects capacity constraints, This must be addressed.
The DA supports the DOR Bill.
Democratic Alliance
February 24, 2004
Source: Democratic Alliance
Title: Taljaard: debate on the Division of Revenue Bill
Raenette Taljaard of the Democratic Alliance speaking on the Division of Revenue Bill
Madam Speaker
Honorable Members
The R327 billion revenue projection in this budget is to be primarily located at provincial and local government levels. Nationally raised revenue is divided to target considerable spending on an expended public works programme, via conditional provincial infrastructure grants and the municipal infrastructure grant, and a new conditional HIV/AIDS grant to be administered by provinces as part of the new comprehensive HIV/AIDS treatment and care strategy.
Growing Unemployment and Poverty In the submission to the Portfolio Committee on finance, the Financial and Fiscal Commission highlighted that the number of household in poverty rose from 28% to 33% between 1995 and 1999 - largely driven by growing unemployment. These vivid consequences and the link between unemployment and poverty cannot be glossed over by the Minister of Trade and Industrys recent smoke and mirror game on jobs figures.
The consequences of the unemployment crisis can also be seen, and felt in budgetary terms, in the pressure on social grant expenditure. When social grant expenditure grows from R10 billion (1993) to a projected R40 billion in 2004 with the highest real growth projected for social welfare a stance reminder is delivered on what South Africas non-negotiable top priority must be, economic growth and job creation. There is clearly no greater challenge than to engage in a considered and considerable national debate on measures to alleviate poverty and the possible contribution a BIG could make as part of discussions that look at tax reform of retirement savings, and tax proposals in the context of an affordable social security neb for a developing country with South Africas demographic profile.
The Expanded Public Works Programme and Division of Revenue Bill:
The Division of Revenue Bill takes the first step in rolling over the EPWP through a considerable allocation for the Municipal Infrastructure Grant. R1,7 billion is targeted at the Municipal Infrastructure Grant. Section 11 of the Bill introduces four new sub-clauses to facilitate the phasing in of the MIG.
Section 11 (6) requires municipalities to provide specific details on implementation of Capital budgets as part of a three year capital plan.
Compliance with these provisions will have to be carefully monitored by National Treasury, Councils and provincial legislatures to ensure that spending on the EPWP results in economically productive infrastructure.
While the DA believes that EPWP have a contribution to make to poverty alleviating in the context of South Africas structural skills deficit, and cannot provide long term solutions for job creation. While these programs, if closely monitored, can contribute to addressing the infrastructural backlog in South Africa, they will not arrest the unemployment crisis. Only higher savings and investment can provide the golden thread to higher economic growth and job creation.
In addition the DA would live to highlight two crucial factors that could hamper the roll-out of an expanded Public Works programme (EPWP). Firstly, the staggered implementation of the MFMA (Municipal Finance Management Act) may bring greater legal clarity for public - private partnerships for infrastructural development but the considerable upheaval its implementation will bring in municipalities where financial management capacity is stretched at best will limit the effective roll - out of private sector involvement through PPPS. Secondly, at the very time that government is launching its EPWP the meddlesome Minister of Public Works is placing new administrative share/es on the Construction Industry as part of a new registering process to check BEE credentials. These two factors could limit delivery even of the short-term EPWP jobs. Only real growth can bring real jobs. EPWP have a contribution to make but they are not the solution.
HIV/Aids and the DOR Bill: When the Minister tabled the Budget the DA joined the chorus of voices in civil society that welcomed the R2,1 billion additional allocation for the fight against HIV/AIDS. I would like to raise an issue of concern in respect of Clause 23(2) of the Division of Revenue Bill and the new HIV/AIDS grant allocation. In terms of this provision the Minister of Health and the Department of Health will have considerable say in realocating funding of the new conditional grant to provinces that are spending faster. Section 23(2) enables a transferring national officer to reallocate the newly created HIV/AIDS grant, of a portion thereof, to another province (after consulting the provinces concerned and with the written consent of the National Treasury) if the reallocation is necessary to shift funds from provinces spending less per month than as agreed with the transferring national officer at the beginning of the Financial Year.
According to Annexure E of the DOR Bill this will be done taking cognizance of the monitoring framework established by the National Department of Health and the reporting requirements specified by the National Monitoring and Evaluation Framework for Comprehensive Treatment and Care Programme. Based on the performance of the Minister of Health on the HIV/AIDS crisis the DA can but express the hope that the Minister will not frivolously redirect funds or play politics with the different provinces. In addition the DA trusts that government will finalise the tender for antiretroviral drugs and deliver these drugs to provinces before it starts penalizing provinces for not spending funds and engages in a process of reallocation.
Given the clear shift in prominence the provinces and municipalities enjoy in delivering on key areas of policy, this is the case in this DOR Bill on the roll-out of the new HIV/AIDS grant as well as the EPWP grants, the DA wishes to raise the caveat that the success of all those endeavors will revolve around capacity at provincial and local level to implement programmes. It is in this arena that too little has been done to ensure success.
While section 35 of the DOB Bill introduces a de facto amnesty for underspending on capital grants, this underspending reflects capacity constraints, This must be addressed.
The DA supports the DOR Bill.
Democratic Alliance
February 24, 2004
Advertisement
EMAIL THIS ARTICLE SAVE THIS ARTICLE FEEDBACK
To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here
