Report of the Select Committee on Finance on the Money Bills Amendment Procedure and Related Matters Bill [B 75B—2008] (National Assembly – section 75), dated 10 February 2009:

 

The Select Committee on Finance, having considered the Money Bills Amendment Procedure and Related Matters Bill [B 75B—2008] (National Assembly – sec 75), referred to it and classified by the JTM as a section 75 Bill, reports that it has agreed to the Bill with proposed amendments:

 

Long title

 

1.                                      On page 2, in the long title, after “Parliament” to insert “and for norms and standards for amending money Bills before provincial legislatures”.

 

Clause 4

 

1.         On page 4, in line 18, after “amendments to“, to omit “the Division of Revenue Bill,”.

 

Clause 8

 

1.                   On page 6, in line 26, after “within” to omit “16” and to substitute “30”.

 

2.                   On page 6, in line 49, after “at least” to omit “two” and to substitute “seven”.

 

3.                   On page 6, in line 55, after “within” to omit “16” and to substitute “30”.

 

Clause 9

 

1.                               On page 7, from line 6, to omit the whole of clause 9.

 

Clause 12

 

1.                   On page 9, in line 46, after “at least” to omit “2” and to substitute “seven”.

 

2.                   On page 9, in line 54, after “at least” to omit “4” and to substitute “seven”.

 

3.                   On page 10, in line 14, after “at least” to omit “4” and to substitute “seven”.

 

Clause 15

 

1.                                On page 10, from line 44, to omit “There is hereby established a Parliamentary Budget Office”, and to substitute “The Secretary to Parliament must establish a budget office within the administration for Parliament”.

 

2.                   On page 10, in line 45, after “provide” to omit “independent,”.

 

3.                   On page 11, from line 10, to omit subclauses (3) – (16).

  

New clause

 

1.                   On page 11, after clause 15, to insert the following new clause:

 

“Norms and standards for provincial legislatures

 

16. Provincial legislatures must adhere to the norms and standards for amending money Bills set out in the Schedule.

 

New Schedule

 

1.         To insert the following schedule after clause 16:

 

“Schedule

 

Norms and standards for provincial legislatures

 

Legislation enacted by a provincial legislature to provide for a procedure to amend money Bills must provide that the purpose of amending money Bills is to give effect to resolutions of the legislature on oversight, and must comply with the following principles:

 

(a)                               A money Bill sent to the Premier for assent must be consistent with:

(i)                                                       the relevant fiscal framework adopted by Parliament; and

(ii)                                                     the relevant Division of Revenue Bill adopted by Parliament.

 

(b)                                                 When considering an amendment a provincial legislature or any of its committees must ensure that there is:

(iii)                                                                   an appropriate balance between revenue, expenditure and borrowing;

(iv)                                                                   ensure that debt levels and debt interest cost are reasonable;

(v)                                                                     ensure that the cost of recurrent spending is not deferred to future generations;

(vi)                                                                   ensure that there is adequate provision for spending on infrastructure

(vii)                                                                  development, overall capital spending and maintenance;

(viii)                                                                consider the short, medium and long term implications of the fiscal framework, division of revenue and national budget on the long-term growth potential of the economy and the development of the country;

(ix)                                                                  take into account cyclical factors that may impact on the prevailing fiscal position; and

(x)                                                                    take into account all public revenue and expenditure, including extra budgetary funds, and contingent liabilities.

 

(c)                                                 In amending revenue Bills and revenue proposals a provincial legislature and its committees must:

(i)                                                                      ensure that the total amount of revenue raised is consistent with the fiscal framework approved by Parliament and the relevant Division of Revenue Bill adopted by Parliament;

(ii)                                                                    take into account the principles of equity, efficiency, certainty and ease of collection;

(iii)                                                                   consider the impact of the proposed change on the composition of tax revenue with reference to the balance between direct and indirect taxes;

(iv)                                                                   consider regional and international tax trends; and

(v)                                                                     consider the impact on development, investment, employment and economic growth.

 

(d)                                                 The standing rules of the provincial legislature must provide for timeframes to introduce and consider money Bills, with or without amendments, with due regard to

(i)                                                                      its constitutional obligation to facilitate public involvement in its legislative and other processes of the legislature and its committees; and

(ii)                                                                    comments from the member of the Executive Council who is responsible for financial matters in the province.

 

(e)                                                 The report of a committee of the provincial legislature that proposes amendments to the provincial annual budget must, in respect of each amendment:

(i)                                                                      indicate the reason for such proposed amendment;

(ii)                                                                    demonstrate how the amendment takes into account the broad strategic priorities and allocations of the relevant budget;

(iii)                                                                   demonstrate the implications of each proposed amendment for an affected vote and the main divisions within that vote;

(iv)                                                                   demonstrate the impact of any proposed amendment on the balance between transfer payments, capital and recurrent spending in an affected vote;

(v)                                                                     set out the impact of any proposed amendment on service delivery;

(vi)                                                                   set out the manner in which the amendment relates to prevailing departmental strategic plans, reports of the Auditor General, committee reports adopted by the provincial legislature, reports in terms of section 32(2) of the Public Finance Management Act, annual reports and any other information submitted to the provincial legislature or committee in terms of the standing rules or on request; and

(vii)                                                                  include any responses from the member of the Executive Council who is responsible for financial matters in the province or any other member of the Executive Council.

 

(f)                                                   The report of a committee of the provincial legislature that proposes a conditional appropriation of a sub-division of a main division within a vote to ensure that the money requested for the main division will be spent effectively, efficiently and economically must: ;

(i)                                                                      consider comments from the member of the Executive Council who is responsible for financial matters in the province or any other member of the Executive Council; and

(ii)                                                                    specify the conditions that need to be met before the a provincial legislature may resolve to release the funds.

 

(g)                                                 A provincial legislature may appropriate an amount specifically and exclusively for a purpose mentioned under a main division within a vote.

 

(h)                                                 A provincial legislature must pass, with or without amendments, or reject the provincial annual budget within four months after the start of the financial year to which it relates.

 

(i)                                                   Notwithstanding any provision in this legislation, a provincial legislature or a committee may consider an amendment to a money Bill proposed by the member of the Executive Council who is responsible for financial matters in the province in order to make technical corrections to the Bill.”

 

 

MEMORANDUM ON THE OBJECTS OF THE MONEY BILLS

AMENDMENT PROCEDURE AND RELATED MATTERS BILL, 2008

 

1.                                On page 12, at “2. OBJECTS OF THE BILL”, after the last sentence to insert “The Bill requires that legislation enacted by a provincial legislature to provide for a procedure to amend money Bills must comply with norms and standards set out in the Schedule.”

 

2.                   On page 12, at “3. CONTENT OF THE BILL”, to omit item 3.9.

 

3.                                On page 13, at “3. CONTENT OF THE BILL”, after item 3.15, to insert the following new item: “Clause 16 provides that provincial legislatures must adhere to the norms and standards for amending money Bills set out in the Schedule.”

 

4.                   On page 13, at “3. CONTENT OF THE BILL”, after item 3.16, to insert the following new item: “The Schedule provides that the legislation of a provincial legislature which provides for a procedure to amend money Bills must provide that the purpose of amending money Bills is to give effect to resolutions of the legislature on oversight, and must comply with the same principles found in the provisions of the Bill.”

 

5.                                On page 13, at “6. FINANCIAL IMPLICATIONS FOR THE STATE”, after “budget of Parliament.” to omit the following:

 

“Although the salary and allowance of the Director is linked to the senior management level in the public service, and as such can be estimated accordingly, costs of other personnel and incidental costs such as information systems and consultancy fees depend on the range of functions required from the Office from year to year.”