Parliament, Thursday, 24 March 2022 – The National Assembly (NA) has agreed to the Division of Revenue Bill at its plenary sitting this afternoon. The Bill provides for equitable division of funds raised nationally among the national, provincial and local spheres of government for a particular financial year.
It also provides for determining each province’s equitable share of the provincial share of revenue and for any other allocations to provinces, local government or municipalities from the national government’s share of revenue.
The 2022 Division of Revenue Bill proposes the following:
- Additional allocation to address immediate spending pressures, including extending the special Covid-19 social relief of distress grant for 12 months until March 2023, and bolstering provincial transfers for health and education.
- Setting aside a portion of higher than expected revenue to narrow the budget deficit. This in turn mitigates the impact of higher interest rates on debt-service costs and improves the long-term debt outlook.
- Supporting growth through a range of reforms, including the infrastructure-build programme financed through innovative funding mechanisms and supported by improved technical capacities.
The Committee received briefings on the Bill from the National Treasury and had engagements with the Financial and Fiscal Commission, the Parliamentary Budget Office as well as the South African Local Government Association, as required by Section 214 (2) of the Constitution of the Republic.
In line with section 9 (5) (b) of the Money Bills Act, the Committee held extensive public consultation engagements, including public hearings and calls for public submissions which were published in the media. The Women on Farms Project and the Amandla.mobi. are among the stakeholders that made submissions before the committee.
Having deliberated and considered all the submissions made by the various stakeholders on Bill, the Committee, among others, noted and welcomed the proposed additional R24.6 billion over the medium term to the Provincial Equitable Share to support provincial education departments in addressing educator numbers and other shortfalls within the sector. The Committee also noted with concern the proposed reduction of R1.7 billion from the Provincial Roads Maintenance grant in 2022/23 for the incentives portion allocated to provinces. “The Committee has always been against random allocation of scarce resources without first having proper plans on how these resources are to be utilised”, the report noted.
The Committee further noted and welcomed the proposed additional R1.7 billion to the direct Neighbourhood Development Partnership grant to fund the continuation of government’s response to job losses due to the impact of Covid-19 through city-led public employment programmes as part of the Presidential Employment Initiative over the next two years.
The Committee recommended that the National Assembly agree to the Bill without amendments. However, among other things, it also recommended that:
- The Minister of Finance and the Presidential Management Office ensure that the funds allocated towards the Presidential Youth Initiatives are spent within the required guidelines and frameworks in order to avoid potential abuse and corruption.
- That the Department of Basic Education provide the Committee with detailed plans on how the additional R24.6 billion to provincial equitable share to address the shortages of teachers and materials will be spent and monitored to attain value for money.
- That the Minister of Cooperative Governance and Traditional Affairs ensures that the Department of Cooperative Governance report to the Committee on the disbursement of the proposed R2.1 billion allocated towards repairing of infrastructure damaged by storms and floods in KwaZulu-Natal in 2019 and 2020.
- That National Treasury provides, as part of in-year monitoring, comprehensive quarterly reports to the Committee on gross violations of the MFMA and PFMA, including the names of repeat offenders in failing to implement programmes and projects.
The Bill will be transmitted to the National Council of Provinces for consideration.
ISSUED BY PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA
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