The Finance Committee deliberated on the Division of Revenue Bill [B8B-2005], a Section 76 Bill, which was introduced in the National Assembly and tabled a Negotiating Mandate on Monday, 07 March 2005.

• The Division of Revenue Bill was informally referred to Finance Committee on Monday, 28 February 2005 in terms of Rule 231(1) prior to the formal referral to the Committee on Friday, 04 March 2005 in terms of Rule 232(1) (a) read with 235(4); (6) and (7).

• The Finance Committee considered the Division of Revenue Bill on Friday, 04 March 2005; Monday, 07 March 2005; and finally on Tuesday, 08 March 2005.

· The Chairperson of the Finance Committee, Mr Bheki Nkosi and the Senior Committee Researcher, Ms Salome Omolo who attended the hearings on the Bill at the NCOP on Wednesday, 02 March 2005 briefed the Finance Committee on Friday, 04 March 2005.

· The Finance Committee held public hearings along with the Financial and Fiscal Commission (FFC) on Friday. 26 November 2004 with regard to the submissions made by the FFC on the Division of Revenue 2005/06 as well as proposals on the review of the Intergovernmental Fiscal Relations Systems (IGFRS) The public hearings were held at the Tshwane Old Council Chamber in the Capital City.

· On Tuesday. 01 March 2005. the National Assembly passed the Bill with amendments and transmitted it to the NCOP for concurrence and the Speaker subsequently formally referred the Bill as amended by the NA [B8B-2005] with the actual amendments [B8A-2005] to the Portfolio Committee on Finance for formal consideration in terms of Gauteng Provincial Legislature (GPL) Standing Rules 232(1) (a) read with 235(4); (6) and (7).

· The briefings on the Division of Revenue Bill by the Gauteng Permanent Delegate to the NCOP, Member Elliot Sogoni were received by the Committee on Friday, 04 March 2005. Member Sogoni also briefed the Finance Committee on the hearings and further deliberations of the NCOP Select Committee on Finance.

• The Finance Committee also took cognisance of the comments and support by the Member of Executive Council for Finance and Economic Affairs in Gauteng, to the Division of Revenue Bill.

· The Voting Mandate on the Division of Revenue Bill [88B-2005] was considered for adoption by the Finance Committee on Tuesday, O8 March 2005.

3. DETAIL OF THE BILL

Further to the recommendations and reservations noted in the Negotiating Mandate. the Finance Committee raised the following concerns:

• The process of fast-tracking does not allow for adequate engagement with the public. In order to facilitate proper public involvement in the Legislature process of the Division of Revenue Bill, the Committee feels that Provincial Legislatures should be allowed sufficient time for public hearings to take place before the Provinces could finalise their mandates in respect of the Bill. The Committee hopes that the referred Draft Legislations on Mandates would address this challenge. Further, the Committee believes that the fast-tracking process could compromise the quality of reporting on the mandates of the Bill.

· On the Local Government sphere, the Committee is of the opinion that where provision of houses has been approved, capacity would be an impediment if there is no accreditation. Thus the Committee recommends that where the delivery of houses has devolved to the Local Government sphere; Treasury has to ensure that there is capacity.

· The Committee is of the view that over expenditure attributable to non--compliance with the Legislative requirements and poor management procedures should not be funded from the Provincial Revenue Fund as long as the Social Assistance Transfers and Administration function is with the National sphere of Government.

· Over the Medium Term Expenditure Framework; the Committee would like to receive clear and more information about the implications of how the creation of the Agency on Social Assistance Transfers and Social Assistance Administration conditional allocations will function. The Committee is of the view that the assumption of the risk management along with the monitoring. evaluation and accountability thereof should be shifted with the function to the National Sphere of Government associated Social Assistance Transfers and Administration.

· The Committee believes that the transferring and reallocation of the Social Assistance Transfers and Social Assistance Administration allocations or a portion of such allocations from one Province into another could cause serious problems, unless it goes through the Legislative process.

In terms of Section 65 of the Constitution, the Finance Committee recommends that the House confer authority on The Gauteng Provincial Delegates to the NCOP to vote in favour of the Division of Revenue Bill [B8B-2005].