Authorisation of R17bn for Eskom displeasing – SCOA

Tangible plans needed in addressing vast number of challenges faced by SOEs

SCOA adopts its report on the 2019 Appropriations Bill

19 July 2019

The Standing Committee on Appropriations (SCOA) has adopted its report on the 2019 Appropriations Bill. Contained in this report, is the proposed amendments tabled by the Minister of Finance, Mr Tito Mboweni, on 25 June 2019.

The amendments include the Minister of Finance’s authorisation of the R17.652 billion to Eskom on 2 April 2019. This authorisation was done through section 16 (1) of the Public Finance Management Act, 1999 (PFMA) as a result of a delay in accessing the planned drawdown cash injection from the China Development Bank, which resulted in Eskom not being able to meet its financial obligations.

In processing the Bill, the committee acknowledged the challenges facing Eskom and the importance of not allowing Eskom to fail, but registered its displeasure over the implementation of section 16 of the PFMA by the Minister of Finance.

As part of the public participation process, various stakeholders and interested parties were given the opportunity to make written submissions and attend the committee’s public hearings which were held in Parliament on Tuesday, 16 July 2019.  Submissions received drew the committee’s attention to the need for tangible plans in addressing the vast number of challenges faced by state-owned enterprises (SOEs), especially Eskom, the South African Broadcasting Corporation (SABC), Passenger Rail Agency of South Africa (Prasa) and Denel.

Suggestions were also made on the need to assess whether the Department of Basic Education has the capacity to deal with Early Childhood Development (ECDs), which was moved from the Department of Social Development.

The committee also had to take into consideration the proposed technical amendments following the President’s announcement of revised Cabinet portfolios, which necessitated a reorganisation of departments, including the establishment of new departments. These new votes only constitute technical corrections to the 2019 Appropriation Bill and do not alter the overall funding proposal made in the Bill.

In its report, the committee raises a number of concerns which include trends in service delivery performance versus expenditure, which show that while departments regularly exhaust their allocated budgets, the attainment of performance targets continues to be a challenge and is uneven across the sectors.

The committee also makes a number of recommendations which include that the Minister of Finance, together with the Minister of Planning, Monitoring and Evaluation, take critical steps to monitor and address the mismatch between the budget expenditure and performance targets achieved in national government departments, which has been a persistent challenge for the past years.

The committee is pleased with the efforts and contributions made by stakeholders such as the Financial and Fiscal Commission (FFC), Congress of South African Trade Unions (Cosatu), the Parliamentary Budget Office (PBO) and individual members of the public such as Mr Guy Harris.

The Chairperson of the committee, Mr Sfiso Buthelezi, highlighted the importance of public participation in the budget process, and encouraged the meeting to look at ways of motivating members of the public to participate in the budget process to create a “people’s budget”.

Whilst the time period to process the Bill was much shorter than usual, given the fact that the Bill lapsed after the last sitting of the National Assembly (NA) prior to the 2019 general elections, and had to be revived by the NA on 27 June 2019, the committee is pleased about having complied with all the regulations required to process the Bill.

Issued by Felicia Lombard on behalf of Parliamentary Communication Services, 19 July 2019