CONFERRAL OF VOTING MANDATE TO THE NCOP PERMANENT DELEGATES ON DIVISION OF REVENUE BILL, [BSB-2005].
The Portfolio Committee on Finance and Economic Development was briefed on the principle and provisions of the Bill by the NCOP Permanent Delegate during a Committee meeting held on 04 March 2005. It must, however, be noted by this House that the Division of Revenue Bill is introduced on an annual basis.
The NCOP Permanent Delegate briefed the Committee as follows:
The core of the Division of revenue is contained in the seven Schedules in the Bill. The total revenue anticipated nationally is R273, 5 billion for financial year, April 2005. Provinces' share of revenue is R134, 7 billion which is R24 billion more than the revised estimate for the last financial year and local government R9, 6 billion. Limpopo Province received R27, 5 billion during this financial year which is 13, 18 percent of the total transfers to all provinces. Limpopo Province received R9, 2 billion allocated for Conditional Grants.
There were major changes in the provincial fiscal framework which informed the 2005 MTEF. Firstly, conditional grants framework has been revised to take into account the social security grant function that moves to the national sphere from 1 April 2005. Secondly, a new conditional grant was introduced to fund the recapitalisation of further education and training colleges. Thirdly, the housing conditional grant takes into account the new housing policy which shifts responsibility for housing to accredited municipalities, particularly metropolitan and major urban category B municipalities.
There is also a change on delivery of primary health care by municipalities. The Health Act (Act No.61 of 2003) shifts the basic primary health care currently provided by some municipalities, excluding environmental health, from municipalities to provincial governments from 2005.
After accreditation of metropolitan municipalities to take more responsibility for housing planning and delivery, the housing grant will be allocated to municipalities via the province. There are no changes on provincial taxes for 2005/2006 as no province has submitted to the Minister of Finance any formal application in accordance with the Provincial Tax Regulation Process Act (Act No.53 of 2001). Provinces are expected to apply for some new taxes to be approved during the course of the 2005 MTEF.
The Division of Revenue Bill introduces a new clause, clause 13 sub-section 2(d), in order to counteract the low rate of capital spending by provinces.
The Municipal Infrastructure Grant in local government is the second largest allocation which is 32 percent in 2005/2006.
The Committee is concerned with the following:
· Integrated Development Plans of municipalities are drafted by consultants, do not reflect the reality on the around and are not necessarily implemented.
· Committee; in the Legislature do not oversee the municipalities and it is difficult to get feedback on how municipalities are progressing.
· Capacity to monitor implementation at the municipal level. MEC's attend MIN-MECs but do not brief Committees after their meetings.
· Whether training modules used for training in municipalities are in line with their functions and duties.
The Committee found that the Bill this year introduced new provisions to improve intergovernmental co-ordination and Performance by:
· enabling Ministers of concurrent functions in section 26 of the Bill to make recommendations on improving service delivery.
improving governance over administration of social grants through sections 15 and 30 of the Bill.
strengthening the provisions on withholding, stopping and re-allocation of funds in section 33, 34 and 35 of the Bill.
ensuring that conditional grant funds are spent in line with their purpose, as outlined in section 31 of the Bill, and preventing fiscal dumping when there is under spending on such grants and;
improving planning and monitoring of infrastructure grants through sections 13,14 and 37 of the Bill.
on Conditional grants, Department of Health spent as follows:
Name of Conditional Grant % spent 2004/05
Health Professions Training & Development Grant 36%
Comprehensive HIV and AIDS 26, 9%
Integrated Nutrition Programme Grant 17,5%t
Hospital Management and Quality Improvement Grant 57,7%
The Committee recommends that;
there should be improvement in communication between the municipalities and provincial government
integrated development Plans should reflect the reality in the municipalities and be implemented effectively.
there should be an improvement in sharing of information between National Council of Provinces and the Committees in the legislatures,
The Committee having considered and supported the Bill recommends to the House to confer a final mandate on the NCOP delegates to vote in favour of the Bill to pass into law.