ATC200902: Report of the Select Committee on Appropriations on the Financial and Fiscal Commission’s Submission for the Division of Revenue 2021/22, Dated 02 September 2020

NCOP Appropriations

REPORT OF THE SELECT COMMITTEE ON APPROPRIATIONS ON THE FINANCIAL AND FISCAL COMMISSION’S SUBMISSION FOR THE DIVISION OF REVENUE 2021/22, DATED 02 SEPTEMBER 2020

 

1. Background

The Financial and Fiscal Commission (the Commission) is a Chapter 9 institution established in terms of section 220 of the Constitution. Section 3(2)(b)(i) of the Financial and Fiscal Commission Act, 1997 mandates the Commission to undertake research and report to Parliament and provincial legislatures and make recommendations. In terms of section 9(1) of the Intergovernmental Fiscal Relations Act, 1997 (Act No 97 of 1997), as amended [RP 177 – 2020], the Commission has tabled the Submission for the Division of Revenue 2021/22.

 

1. Terms of reference

This submission was referred by the National Council of Provinces to the Select Committee on Appropriations for consideration and report on 13 August 2020. In terms of the powers and functions conferred on the Committee by the Constitution, the Money Bills and Related Matters Act, 2009 (Act No 9 of 2009) (as amended by Act 13 of 2018) and the standing rules, it considered the submission as tabled.

 

The Committee invited the Commission to make a presentation on its submission, on 26 August 2020, and deliberated on it. The Commission’s delegation was led by the Chairperson of the Commission, Professor DanielPlaatjies. Other stakeholders invited were all Provincial Portfolio Committees on Finance and/or Treasury. This meeting was a joint meeting with the Standing Committee on Appropriations. 

 

1. Presentation by Financial and Fiscal Commission (FFC)

The Submission is divided into five chapters containing a number of specific recommendations. Chapter 1 provides the context, with an overview of the fiscal impact and response to COVID-19 and some of the intergovernmental challenges and financial gaps. It further highlights the importance of prioritising social services to improve socio-economic development. Chapter 2 reviews the intergovernmental fiscal relations (IGFR) system through the prism of social services, and looks at the structural functional and operational facilities and impediments to financing and delivering social services, as critical functions of provincial governments. Chapter 3 reflects on the implications of COVID-19 for socio-economic development, and the choice of a future economic path for South Africa, proposing that agriculture offers an opportunity not only to kick-start growth but also to ensure food security. In Chapter 4, the Submission deals with the sustainable financing of South Africa’s health care system and the National Health Insurance (NHI). This chapter examines the NHI reform in the context of legislative and intergovernmental fiscal requirements and discusses the critical success factors needed to achieve the unification of health care access through the NHI. Lastly, Chapter 5 assesses the main challenges to delivering family and community welfare services through a developmental approach, with an emphasis on Early Childhood Development (ECD) and inclusive education. The chapter looks at the bottlenecks affecting ECD education, examines the role of the state in light of recent reforms to expand compulsory ECD services and shift responsibility for the function, and evaluates government’s progress in rolling out inclusive education.

 

1. Committee decision

The Select Committee on Appropriations, having considered the Submission of the Financial and Fiscal Commission on the Division of Revenue Bill for 2021/22, tabled in terms of section 9(1) of the Intergovernmental Fiscal Relations Act, 1997 (Act No 97 of 1997), as amended [RP 177 – 2020], and referred to it by the NCOP for consideration and report, hereby reports that it has taken note of the contents of the Submission, which will be incorporated in the Committee’s Report on the 2021 Division of Revenue Bill.

 

Report to be considered.