National Assembly approves Division of Revenue Amendment Bill

Thursday, November 17, 2022

The National Assembly (NA) has approved the Division of Revenue Amendment Bill.

The Bill was approved during the NA hybrid plenary on Wednesday.

The Bill and its annexures address changes to schedules; provincial allocations; local government allocation; gazetted conditional grant frameworks and allocations, and Bill clauses.

"An adjustments budget provides for unforeseen and unavoidable expenditure; appropriation of monies already announced during the tabling of the annual budget (but not allocated at that stage); the shifting of funds between and within votes where a function is transferred; the utilisation of savings, and the rollover of unspent funds from the preceding financial year," Parliament explained in a statement.

The Bill was tabled in Parliament by Finance Minister, Enoch Godongwana, during a presentation of the 2022 Medium Term Budget Policy Statement (MTBPS) on 26 October 2022.

The Act requires the Minister to table a Division of Revenue Amendment Bill with a revised fiscal framework if the adjustments budget affects changes to the Division of Revenue Act for the relevant year.

The Bill was referred to the Standing Committee on Appropriations on 9 November 2022 after the NA adopted the 2022 Revised Fiscal Framework.

Amongst the changes, Parliament requested to approve, include the shifting of funds between disaster grants following the floods that affected parts of the country.

These include the proposed shifting of R145 million from the provincial disaster response grant to the municipal disaster response grant and the proposed shifting of R120 million from the municipal emergency housing grant to the provincial emergency housing grant, amongst others.

The Bill further proposes additional funding for the reconstruction and rehabilitation of provincial infrastructure damaged by the December 2021 and April 2022 floods.

A proposed total of R117 million is added to the education infrastructure grant for schools in the Eastern Cape and KwaZulu-Natal Provinces for the reconstruction and rehabilitation of schools damaged by floods in December 2021 and April 2022.

Another proposed total of R1 billion is added to the provincial roads maintenance grant for the Eastern Cape, KwaZulu-Natal and North West Provinces for the repair of provincial roads damaged by the April 2022 floods.

Parliamentary spokesperson, Moloto Mothapo, said after deliberating and considering all the submissions made by National Treasury, the Parliament Budget Office and various stakeholders on the Bill, the Standing Committee on Appropriations welcomed the proposed allocations.

The committee also implored government to ensure the speedy distribution of funds to the affected areas in order to ensure that the intended beneficiaries receive the required assistance timeously.

“The committee noted with serious concern the recommendation by the South African Local Government Association (SALGA) that any envisaged bailout to Eskom must also consider the debt owed by municipalities and the 2023 budget should consider offsetting debt owed by municipalities to Eskom.

“The committee holds the view that the financial challenges faced by SOEs and some municipalities are self-inflicted and bailouts would create a problem... and complacency in all government institutions,” Mothapo said.

Mothapo said in its report, the committee recommended that the Finance Minister, working with all affected stakeholders, should ensure that National Treasury speedily releases disaster relief funding in order to minimise the social and economic impact of affected communities.

The committee also recommended that the Cooperative Governance and Traditional Affairs (COGTA) Minister must ensure that eThekwini Metropolitan Municipality effectively and speedily spends the proposed R92 million towards the procurement of identified land for the relocation of floods victims, who were previously residing in informal settlements that were washed away by the April 2022 floods.

It further recommended that the Basic Education Minister should ensure that Basic Education closely monitors the reconstruction and rehabilitation of public schools that were affected by the December 2021 and April 2022 floods in the Eastern Cape and KwaZulu-Natal provinces.

“The Minister must ensure that the department provides quarterly expenditure and progress reports on the reconstruction and rehabilitation of these affected schools,” Mothapo said.

Following a debate at its plenary, the NA adopted the committee’s report with its recommendations and passed the Division of Revenue Amendment Bill.

The Bill will now be sent to the National Council of Provinces for concurrence. –