COMMITTEE ANNUAL REPORT

JANUARY – DECEMBER 2003

  1. Name of the Committee: Select Committee on Finance
  2. Mandate of the Committee
  3. Vision / Mission:

    To ensure quality spending of financial resources and to provide a platform that would facilitate participation of all the relevant stakeholders.

    1. List of Entities Reporting to the Committee:
    2. National Treasury

      Statistics South Africa

      Development Bank of South Africa

      Finance and Fiscal Commission

    3. List of Entities that the Committee work with from time to time: (for which funds are not appropriated from parliament)

    Development Bank of South Africa

    Johannesburg Stock Exchange

    Financial Services Board

    South African Reserve Bank

    Other Banking Institutions

     

  4. Chairperson’s overview (summary for the year)
  5. 2003 was the most difficult, yet challenging year in the life of the committee since its inception in August 1999. This was so, because we were beginning to understand our work environment. The committee had set quite an engaging agenda in the beginning of the year, which was followed through to its challenging conclusion.

    Despite these challenges we were in position to execute our constitutional responsibilities that of passing important legislation, conducting public hearings and go on oversight visits to some of the institutions we are overseeing. The work we have done in the course of the year has been immense and we would like to commend government for making strides in areas where infrastructure never existed at all. Government has been able through DBSA to help municipalities, which do not have any form of revenue base to borrow money for infrastructure development (capital projects) for the benefit of the poorest of the poor in rural areas.

    We were able to approve the Municipal Finance Management bill for all municipalities in the country. This legislation is meant to provide a framework for treasury norms and standards in the public sector. We are of the opinion that in due course all municipalities will align their systems in accordance to the above-mentioned legislation. This legislation will result in improved service delivery, efficiency, a proper budgeting framework that is aligned to IDP’s and bring municipalities in line with the national budget framework (MTEF).

    Public hearings on the Preferential Procurement Policy Framework Act were successful in that many stakeholders participated and raised fundamental challenges we continue to face in this area of work. We were able to make clear recommendations in this regard after considering all the inputs made verbally and written. The committee hearings highlighted the need to align all government policies to make sure that the intended objectives and outcomes are not compromised through interpretation. The next parliament must pay particular attention to this issue because it is one of the leavers that government has to ensure and enable that blacks are empowered economically.

    The committee takes particular pride in the strides that it took pertaining to its involvement with the budget process and to ensure the involvement of provinces and municipalities in this very important event. The keen interest taken by chairpersons on the Standing Committees on Finance in the provinces speaks for itself and the extend to which the Division of Revenue Bill is amended each year, brings us to the conclusion that the level of maturity of provinces in dealing with budgetary issues cannot be underscored.

    I would want to take this opportunity to also thank the committee members, who executed their duties with commitment and purpose and to congratulate them for the hard work and quality results that was accomplished. Without their contribution the provincial participation and the quality of bills pushed trough the corridors of parliament would not have been possible. I am certain that this ripple of commitment on their side will surely eco in eternity and will be documented on the scrolls of time, I salute you one and all.

    My sincere thanks to all.

  6. Core Objectives (responsibility)

To ensure that funds appropriated by parliament is accounted for and to keep those bodies (National Treasury etc) accountable for the proper spending of finances in accordance with the Public Finance Management Act.

4.1 Legislation (Briefings and Hearings)

(Highlight briefly the main provisions of the Bills referred to the Committee, submission received and indicate any amendments made)

The Revenue Laws Amendment Bill aim to give effects to all outstanding Tax Proposals as outlined in the Budget of the year 2003 and to amend all related acts

The Revenue Laws A/B was introduced on 18 November 2003 and referred to the Portfolio Committee on Finance for consideration and repor and later o the S on Finance for report.

The Pensions Second (Supplementary) Bill aims to provide for the award of certain pensions benefits. The Bill was referred to the Portfolio Committee on Finance for consideration and report then to the Sc on Finance.

The Municipal Finance Management Bill aim to secure sound and sustainable management of the financial affairs of municipalities and other institutions in the local sphere of government, and to establish treasury norms and standards for the local sphere of government. The initial briefing was held on February 2002. After the conclusion of public hearings and extensive deliberations with all the major role players, which included the Portfolio Committee on Provincial and Local Government, the Portfolio Committee on Finance and the South African Local Government Association (SALGA), the committee concluded it deliberations by presenting a redraft of the MFMB on 3 September 2003 (see ATC, no x, pg 11). The committee received 20 submissions on the MFMB during the hearing and deliberation process. The Bill was amended by the Select Committee on Finance and the proposed amendments were referred to thePortfolio committee for consideration. The Portfolio Committee considered the proposed amendments on 21 November 2003 and after deliberations agreed to the proposed amendments.

This Bill aim was to amend the Financial and Fiscal Commission Act, 1997, so as to extend the functions of the FFC Commission to bring the number and appointment procedure of the Commission in line with Section 221 of the Constitution. It further wants to alter certain procedures in respect of financial matters in order to bring said Act into line with the Public Finance Management Act, 1999. ThePortfolio Committee formally considered its report with amendments on 30 May 2003. After the Select Committee on Finance proposed amendments to the Bill its was referred back to the Portfolio Committee for consideration. After consultation with all political parties, and in terms of NA Rule … the Bill was placed on the order paper for debate.

 

The main provision of the Bill was to provide recognition of service rendered in a non-statutory military force or service by a member of the Fund as pensionable service. The Portfolio Ccommittee concluded its deliberations and the committee adopted the Bill with amendments on 28 May 2003, after which the Select Committee dealt with the bill and adopted it.

The Bill provides that the right to pension in terms of the that Act ceases when a right to a pension in terms of the Government Employees Pension Law A/B, 1996, is recognized, and to make it clear that the provisions does not affect a dependent’s right to receive a pension in his or her own right in terms of section 1 of the Special Pensions Act, 1996. The committee concluded its deliberations and the Portfolio Committee adopted the Bill with amendments on 28 May 2003, after which the Sc on Finance adopted it.

The main provision of this Bill is to provide for Exchange Control Amnesty with accompanying tax measures in respect of voluntary disclosure by an applicant, advisor or physical facilitator of any contravention of the Exchange Control Regulations or failure to comply with the provisions of the Income Control Act, 1962, to the extend it relates to foreign assets. Prior to the introduction of the Bill the committee held public hearings affording civil society with the opportunity to engage with committee on the bill. The committee adopted its report.

This Bill aim is to rectify gender insensitive provisions. National Treasury briefed the committee on 31 March and unlined the main provisions of the Bill. No public hearings were held and the committee received no submissions on the Bill. The Select Committee on Finance adopted the Bill on 2 April 2003.

The main provision of the Bill is to provide for the equitable division of revenue to be raised nationally among the national, provincial and local sphere of government for the 2003/2004 financial year and reporting requirements allocations pursuant to such division. The committee held public hearings on the Bill and heard evidence from the FFC, the National Treasury on the Bill and Municipalities were received. The committee concluded its deliberations on the Bill and adopted the Bill with amendments on 3 March 2003. The Bill was amended by the NCOP and referred to the committee for consideration.

 

 

The main provision of this Bill is to appropriate additional amounts of money for the requirements of the department of Social Development and the department of Foreign Affairs in respect of the 2002/03 financial years. The initial briefing on the bill was taken. after which the committee formally consider the bill and adopted the bill with no amendments.

This bill provides for the defrayal of a loss on the Gold and Foreign Exchange Contingency Reserve Account and that payments to defray a loss should be a direct charge against the National Revenue Fund. The initial briefing on the bill was taken after which the committee formally consider the bill and adopted the bill with no amendments.

This Bill has made provision for the disestablishment of the Bophuthatswana National Provident Fund and for the transfer of its assets and liabilities and for the repeal of the Bophuthatswana National Provident Fund Act. The initial briefing on the bill was taken after which the committee formally consider the bill and adopted the bill with no amendments.

The Bill made provision for the repeal of the Sefalana Employee Benefits Organisation Act. The initial briefing on the bill was taken after which the committee formally consider the bill and adopted the bill with no amendments. No public hearings were held and the committee received no submissions on the Bill.

The committee concluded its deliberation on the bill.

The committee rejected the bill in principle.

The main provision of this Bill was to amend the Long-term Insurance Act, 1998.

      1. Matters other than mandated legislation
        1. International agreements

The following international agreements were tabled in terms of Section 231(2) of the constitutions that requires approval by resolution by both the National Assembly and the National Council of Provinces.

The Committee received a formal briefing on all agreements from the South African Revenue Services on Tuesday, 18 November 2003. The committee then proceeded to adopt a report on all abovementioned agreements in terms of Section 231 (2) of the Constitution.

        1. Hearings on Matters of national interest, if any

Preferential Procurement Policy Framework Act B5-2001

The Select Committee on Finance held hearings from the 08 – 10

From the 8th – 10th September 2003 the Select Committee on Finance hosted public hearings concerning the Preferential Procurement Policy Framework Act (PPPFA) No 5 of 2000. The act was referred jointly to both the Select and Portfolio committee in 1999 and was dealt with in accordance with the procedure established by section 76(1) of the Constitution. Reason

The aim of the hearings was to hear from civil society and industry how far the PPPFA has achieved its objectives since its inception, and how far it gives effect to section 217(2) of the Constitution. The hearings also investigated the legislative problem areas, which may warrant government intervention in order for the act to become a key policy instrument to effectively ensure economic transformation in South Africa.

The report seeks to propose recommendations that would be in the best interest of the act in order to identify and attempt to address the shortcomings in the act, to the benefit of HDI’s.

    1. Oversight
    2. (Briefly indicate places where the committee conducted oversight, its findings and recommendations on the visit/s)

      1. Annual Reports

Address of the Governor of the South African Reserve Bank - 26 August 2003.

      1. Implementation of legislation – Indicate whether the committee held meetings with the department with regard to the implementation of legislation.

      1. Institutional Oversight

The Committee visited Projects administered by the Development Bank of South Africa in two provinces: Kwazulu-Natal and Limpopo Province from the 06 – 08 August 2003.

      1. International / national visits (capacity building)

 

 

    1. Committee activities
    1. Invitations for Chairperson – Any invitation received on behalf of the Committee and not in his/her individual capacity.

5.2 Conferences

5.3 Any other

 

6. Financial statements

    1. Provincial visits - costing
    2. Catering
    3. Oversight

 

  1. Appendices

  1. COMPOSITION OF COMMITTEE

MEMBERSHIP:

MEMBER

DATE APPOINTED

(in current Parliament)

DATE DISCHARGED

African National Congress

     
     

Ralane, Mr T

Mahlangu, Ms Q D

20th August 1999

 

Thompson, Ms B

20th August 1999

 

Taabe, Mr T

20th August 1999

 

Lucas, Mr G A

20th August 1999

 

Makoela, Mr M I

20th August 1999

 

Kolweni, Mr Z S *

20th August 1999

 

Ntwanambi, Ms N D*

 

 
     
     
     

     
     

Democratic Alliance

Botha, Ms C S*

   

Sono, Ms N B

   

Raju, Mr N

20th August 2003

 
     
     
     

Inkatha Freedom Party

     
     
     

New National Party

   

Conroy, Dr E A

20th August 1999

 
     
     

United Democratic Movement

     

Sogoni, Mr H T*

   
     
     

African Christian Democratic Party

     

Durr, Mr K D S*

20th August 1999

 
     

Pan Africanist Congress of Azania

     
     
     

United Christian Democratic Party

   
     
     
     

* indicates an alternate member