Appropriations Standing Committee adopts 2016 division of Revenue Bill
The Standing Committee on Appropriations has adopted the draft report on the 2016 Division of Revenue Bill.
The adoption of the report follows a public consultation process wherein inputs were received from various stakeholders, such as the Financial Fiscal Commission (FFC), South African Local Government Association (SALGA) and Equal Education (EE).
Subsequent to the public hearings and the inputs that were received during the public consultation process, the Committee noted that economic growth had been revised down since the tabling of the 2015 Medium Term Budget Policy Statement (MTBPS).
The Committee expressed concerns about the capacity of provincial and local governments to spend infrastructure allocations. This situation has led to reduced allocations. During its deliberations, the Committee was of the view that under-expenditure on infrastructure allocations hampered economic growth and undermined the achievements of the country’s National Development Plan goals.
The Committee welcomed the report by National Treasury that the local government equitable share would not be withheld during March 2016 tranche. Members of the Committee emphasised the need for continuous monitoring of expenditure relating to the spending performance of local government equitable share.
In its findings and observations, the Committee noted with concern the submission by SALGA that Eskom billed municipalities far more than the cost of electricity provided, and that Eskom, the power utility, had not agreed to the signing of service delivery agreements with municipalities. The Committee agreed to call in Eskom and local governments for further deliberations on this important issue and further recommended that the Department of Cooperative Governance and relevant stakeholders find ways of addressing the issue of fair billing of electricity having due regard to the principles of value for money and equity for services delivered to citizens.
The Committee noted the EE submission’s concerns about the funding and service delivery model of scholar transport. Furthermore, members of the Committee noted the proposal by EE that scholar transport should be allocated as a conditional grant.
Members of the Committee were of the view that National Treasury (NT) in consultation with the Department of Basic Education (DBE), Department of Performance, Monitoring and Evaluation and relevant stakeholders should conduct a comprehensive evaluation of spending and implementation performance of the scholar transport programme and schools infrastructure programme.
The Committee having considered the 2016 Division of Revenue Bill also recommended National Treasury in partnership with Financial and Fiscal Commission and South African Local Government Association form a task team that will complete a post municipal demarcation review that would assist all stakeholders in understanding the impact of boundary changes on municipal viability, budgets and overall local economic development.
For media enquiries or interviews with the Chairperson, please contact:
Yoliswa Landu
Tel: 021 403 8203
Cell: 081 497 4694
E-mail: ylandu@parliament.gov.za
