TUESDAY, 19 MARCH 2002 __

          PROCEEDINGS OF THE NATIONAL COUNCIL OF PROVINCES
                                ____

The Council met at 14:05.

The Chairperson took the Chair and requested members to observe a moment of silence for prayers or meditation.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS - see col 000.

                          NOTICES OF MOTION

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Hon members will agree with me that we have spent quite some time on questions. May I therefore appeal to hon members to consider, where possible, waiving their right to move motions? I am not going to stop them - those who feel that their motions cannot be held over will be given an opportunity - but I am urging hon members to move motions only if they are extremely important.

Mr K D S DURR: Chairperson, I give notice that I shall move at the next sitting of this House:

That the Council -

(1) calls upon the Government of South Africa to focus upon South Africa’s priorities and its national interests, as this should be reflected in South Africa’s foreign policy and international relationships;

(2) recognises that it is not feasible on the one hand to seek the support of the free democratic and developed industrial world for South African and African initiatives, whilst on the other hand often aligning South Africa with undemocratic states whose values and actions are hostile to those very free states, ie Cuba, Iran, Iraq, Libya and Zimbabwe;

(3) notes that it strikes at the heart of South Africa’s credibility when we pay lip service to the values of free men and yet support those that would violate those very values as we have just seen in Zimbabwe;

(4) calls upon the Government to urgently reorder our foreign policy by bringing our actions into sympathy with our own constitutional values and those of countries that can have real meaning to our welfare, progress and economic expansion and that can add value to our society; and

(5) notes that South Africa has substantially slipped from the hard- earned moral high ground it claimed for itself.

            CONGRATULATIONS TO SOUTH AFRICAN CRICKET TEAM

                         (Draft Resolution)

Mr N M RAJU: Chairperson, I move without notice:

That the Council -

(1) notes that, notwithstanding the fact that the recently concluded second leg of the cricket test series between South Africa and Australia resulted in a drubbing of the Proteas 5-1, the South African national team did manage to retrieve an ample measure of national pride by vanquishing the world’s greatest cricket side in the final test match at Kingsmead with an inspirational display of guts, determination and passion - qualities that seemingly deserted the team in the previous five encounters; and

(2) congratulates the stand-in captain, Mark Boucher, and his team on their convincing victory and wishes them well in the exciting one- dayers commencing on Friday at Newlands.

Motion agreed to in accordance with section 65 of the Constitution.

               TRIBUTE TO DR CHRISTA ROODT OF PANSALB
                         (Draft Resolution)

Mnr A E VAN NIEKERK: Voorsitter, ek stel sonder kennisgewing voor:

Dat die Raad -

(1) sy dank en waardering uitspreek vir die baanbrekerswerk wat dr Christa Roodt van die Pan-Suid-Afrikaanse Taalraad gedoen het ten opsigte van die beperking van taalregteskendings en die bevordering van veeltaligheid;

(2) erkenning geen aan -

   (a)  die ewewigtigheid en ywer wat sy in mediasie geopenbaar het; en


   (b)  die passie waarmee sy veeltaligheid as  'n  werklikheid  in  die
       praktyk bevorder het; en

(3) haar ‘n suksesvolle akademiese loopbaan toewens met die wete dat die vlam van omgee vir taal en kultuur oor al die grense heen nie geblus sal word nie en steeds in diens van al die taal- en kultuurgemeenskappe in Suid-Afrika sal wees. Dankie met ‘n hoofletter!

Ons wens haar opvolgers sterkte en voorspoed toe. (Translation of Afrikaans motion without notice follows.)

[Mr A E VAN NIEKERK: Chairperson, I move without notice:

That the Council -

(1) expresses its gratitude and appreciation for the pioneering work done by Dr Christa Roodt of the Pan-South African Language Board with regard to limiting violation of language rights and the promotion of multilingualism;

(2) recognises - (a) the balanced manner and dedication she displayed in mediation; and

   (b)  the passion with which she promoted multilingualism as a reality
       in practice;

(3) wishes her a successful academic career in the knowledge that the flame of caring for language and culture across all boundaries will not be extinguished and that it will still be in the service of all the linguistic and cultural communities in South Africa. Thank you with a capital letter!

We wish her successors good luck and prosperity.]

Motion agreed to in accordance with section 65 of the Constitution.

                      DIVISION OF REVENUE BILL

            (Consideration of Bill and of Report thereon)

The DEPUTY MINISTER OF FINANCE: Chairperson and hon members, the Division of Revenue Bill is one of the most important Bills that this House must deal with every year. Firstly, it is a Bill required by section 214 of the Constitution, and section 76(4)(b) of the Constitution requires it to be dealt with as a section 76(1) Bill.

This Bill is at the heart of the budgets of all nine provinces and the 284 municipalities, so it is right and proper for this House to consider this Bill very carefully. In this regard, we must note and acknowledge the role of and the process undertaken by the Select Committee on Finance in processing this legislation.

There is also a second reason why this Bill is important for this House. Section 42(4) of our Constitution charges the National Council of Provinces with representing the provinces to ensure that provincial interests are taken into account in the national sphere of government by participating in the national legislative process and by providing a national forum for public consideration of issues affecting the provinces.

In providing this forum, this House enables the public to link this Bill to the core issues of how we fund our basic and social services, how we address poverty alleviation, etc. This is a discussion not only for this House, but for every one of the nine provincial legislatures and the 284 municipal councils.

This process is also the embodiment of co-operative governance, which is at the heart of our Constitution. It must be measured not only by allocations to each sphere, but also by how decisions have been reached. Firstly, the budget process is, and must be, driven by policy priorities. Secondly, given our three-year budgeting system, we build on the allocations already made for 2002-2003 in last year’s MTEF, which is our starting point for the 2002 Budget.

Soon after the 2001 Budget, Government initiated consultations on the 2002 Budget process by reviewing the medium-term priorities of all three spheres of government. These deliberations shaped decisions on the allocation of resources for the 2002 Budget. The division of revenue set out in the Bill gives expression to the Government’s policy priorities. It reflects the recognition by Government that our frontline provincial and local governments need to be strengthened in the fight to reduce poverty and vulnerability within our communities. These are the governments that our Constitution vests with implementing service delivery obligations to our people.

In order to determine the division of revenue between the three spheres, national Government has taken into account the recommendations of the Financial and Fiscal Commission and has consulted with provinces and organised local government. The consultation process involved the Budget Council, which includes all provincial MEC’s of Finance, and the Budget Forum, which includes Salga and its provincial local government associations. A joint Minmec with local government MECs and organised local government was also held, and premiers were invited to an extended Cabinet meeting.

An interministerial task team also assessed allocations to the local sphere. The 2001 Intergovernmental Fiscal Review also provided solid information on budget trends in the provincial and local spheres of government, and the pressures to be addressed when deciding on the division of revenue.

We have also taken on board the recommendation by Parliament to publish this Bill earlier by publishing a draft Bill in the Gazette on 6 December

1. In this regard, one would just like to say that 6 December is not the best of times to be publishing an important document such as this one, but I also think that given the nature of the budget process, it is going to be important for Parliament to take note of this and to make adjustments accordingly, so that it can place itself in a position to meaningfully contribute to shaping the Division of Revenue Bill.

Early publication of the draft Bill, which included frameworks for each grant and allocations by province, provided legislatures and the public with a near complete picture of intergovernmental fiscal flows and an opportunity to make their inputs before Budget Day. It also ensured more certainty for provincial governments as they finalised their budgets, and to enable them to plan for the spending of all funds available to them.

The Division of Revenue Bill, 2002, gives effect to section 214(1) of the Constitution and the Intergovernmental Fiscal Relations Act of 1997. These require an annual Act of Parliament to provide for the equitable division of revenue raised nationally among the three spheres of government. The spirit and intent of this Bill is similar to the 2001 Division of Revenue Act, with no significant changes to the functioning of the fiscal transfer arrangements.

This Bill must be read with the Budget Review, particularly annexure E, which is also attached to the Bill. This annexure outlines Government’s response to the proposals of the FFC, the assumptions we use and formulae that were applied in order to arrive at the final division of revenue between the three spheres. The attached appendices to the Bill provide more details on each grant.

I think, again, I do want to emphasise the point that one has interaction that takes place between the FFC and the national Treasury, and one also has interaction of the FFC with Parliament at national level, as well as with provincial legislatures. I think that one of the things that challenges us is how to manage the interaction that takes place across the board in that fashion, so that we can make the best of that interaction.

This Budget increases provincial transfers from R121 billion this year to R132 billion for 2002-03, rising to R152 billion in 2004-05. The provincial share grows at 7,9% per annum over the next three years. The local government share increases from R6,5 billion this year to R8,5 billion in 2002-03, and rises to R10,9 billion in 2004-05. The local share rises rapidly at 18,3% per annum. Quite clearly, there is quite a strong focus, firstly, to support the transition of local government, and secondly to ensure that we support and strengthen local government, because it is really at the heart of Government delivery of basic services.

The Schedules to the Division of Revenue Bill provide a summary of these transfers. Schedule 1 of the Bill allocates R288 billion in 2002-03, with the provincial equitable share amounting to R119 billion, and the local government equitable share amounting to R3,9 billion. After deducting debt service costs and the contingency reserve, national Government is allocated R96 billion.

Schedules 3 to 6 allocate further conditional and other grants to provinces and local government. Provinces receive conditional grants amounting to R13 billion in 2002-2003, increasing the total amount of funds to be transferred to provinces to R132 billion, as against the R119 billion that I spoke about earlier on, and that is 55,8% of the allocated funds available after debt servicing. Local government receives a further R5 billion in conditional grants, bringing its total share to R9 billion, or 3,6% of allocated expenditure.

This year’s Division of Revenue Bill provides R13 billion more for additional spending. This represents a major boost to real spending across all spheres. Over the next three years, both the provincial and the local share of national revenue rises faster than inflation, and I think that is important because it means that we are indeed significantly increasing expenditure in Government. These increases reflect Government’s commitment to the delivery of basic services to reduce poverty and vulnerability.

The increased allocation to provinces will result in greater spending on increases to old age pensions, child support and other grants, as well as for provincial infrastructure. The 2001 Budget provided for significant increases in infrastructure allocation to provinces. The 2002 Budget maintains this trend, with the allocation rising from R1,9 billion in 2002- 03 to R2,8 billion in 2004-05. As a result, provinces will receive R7,3 billion from this grant over the three-year period, an increase of about 25% over the 2001 Budget.

It is anticipated that provinces will use this grant effectively to deal with infrastructure backlogs in schools, health facilities, provincial roads and so on. It is going to be important that we really ensure, all of us, here at national level and in the provinces, that these significant increases on infrastructure spending are indeed utilised effectively. Indeed, when we talk infrastructure, the tendency is to think more of the grand schemes, the large projects, but I think the important issue here is that this infrastructure spending must help to enhance the quality of life of our people. So we talk about roads, we talk about health facilities, we talk about schools.

Provinces will also deal with the pressures of HIV/Aids. The allocation for the HIV/Aids grant increases from R130 million in 2001-02 to R346 million in 2002-03, rising to R574 million in 2004-05. This will step up the preventive programme initiated by Government in the 2000 Budget.

A three-year allocation of R392 million is also provided to improve hospital management and the quality of health care. The programme started as a pilot and will gradually be expanded to other hospitals. The appointment of chief executive officers for hospitals and the delegation of management powers to these executive officers, should herald a period of real improvement in the running of our major hospitals.

The changes to the hospital tertiary services and training grants will extend funding for tertiary services to 27 hospitals from the current 10 in all provinces. They will also support extending training of specialists and other health professionals to poor provinces, to improve the distribution of such professionals among provinces. I am sure members will recall that when we published the Intergovernmental Fiscal Review last year, it had a table which showed the distribution of specialists across the provinces. What it clearly showed was that one of the greatest inequities that we have in South Africa is reflected in the shortage of medical specialists in some of the provinces.

Part of this money is therefore aimed at taking the first steps towards addressing that shortage of specialists in some of the provinces. The challenge facing our medical schools is to take advantage of the greater funding for new specialist posts in poor provinces. All provinces should increase their tertiary and training budgets in real terms over the medium term.

The substantial increase in the local government share also provides for all municipalities in need to receive their equitable share. The institutional grant is increased to enable municipalities with relatively weak capacity to receive funds to assist them with the cost of governance, that is councillors salaries and administration costs. The S-component grant will enable municipalities to extend basic services to the needy at a faster rate. These funds are additional to allocations to the Department of Water Affairs and Forestry and the Department of Minerals and Energy for the roll-out of water and electricity programmes. Municipalities must also prioritise their own revenue towards providing in these priorities. The equitable share allocation also includes a further allocation of R632 million over the next three years towards the 13 rural and 8 urban nodes prioritised by Government. These are the nodes for the Integrated Rural Development Strategy and Urban Renewal Strategy.

We shall be introducing greater certainty for fiscal transfers to the local sphere to assist them with developing more credible integrated development plans to guide their 2002-03 budgets. The Ministry for Provincial and Local Government will be completing its work on the powers and functions, and formulae, enabling the national Government to publish three-year allocations by municipality. We hope to do this shortly.

The information that accompanies this Bill goes beyond what is required by both the Constitution and the other relevant statutes. The objectives of the Bill are to enhance predictability, transparency and accountability in all spheres of government. As I said in my introduction, the Bill not only makes allocations to the provincial and local spheres, it also lays the basis for making these allocations per province and per municipality. More importantly, it further deepens co-operative governance in the budget allocation process. [Applause.]

Ms Q D MAHLANGU: Chairperson, hon members … [Interjections.] What is wrong with you? [Interjections.]

Special delegates, hon members of this esteemed House, it is always difficult not to speak in these debates because the select committee has only one female member - something which I think is not a good sign for this House - who happens to be the chair. If it were not for that, there would not be any woman in this committee who will be participating, so I am more or less all the time compelled to participate in these debates. I am sometimes complimented by my colleagues from provinces, by name of Comrade Sheila from the Northern Province and colleague Joan Fubbs from Gauteng. I hope that the NCOP is noting this issue, as I have been raising it for some time.

It is once again a privilege for me to present and lead the committee discussion on the Division of Revenue Bill for 2002-03. The Bill before the council has been intensely interrogated by the committee, both by permanent members representing their provinces and by special delegates from provinces, and also at the provincial level. The amendments that have been effected to the Bill therefore reflect the spirit that prevailed in the committee. The committee hosted public hearings, and seven of the departments which are receiving conditional grants to provinces and municipalities participated in the hearings.

The Bill before this house deals with the following key issues. Amongst other issues, the Bill deals with the equitable division of nationally raised revenue among the three spheres of government, which are national, provincial and local government. Secondly, it also deals with the conditional grants to provinces and also to local government, which are funds intended to perform national functions for both municipalities and provinces. Members will talk about those specifically later.

The Bill also deals with grants in kind. Those are grants which do not have any conditions. I just want to mention two of them. One of them is the Public Works grant, which refers to the Community-based Works programme. The purpose of this grant is to create assets and I think in the past and in the Intergovernmental Fiscal Review it was indicated that some of these programmes that are delivered through this grant are stand-alone entities and that no one is looking after them. They are not utilised, and there is no maintenance for those kinds of things. In the hearing, Salga raised these kinds of issues very sharply. I think I will deal with them at a later stage. The second grant in kind is in relation to the financial management grant to municipalities. As hon members know, municipalities have been restructured to be in line with the new demarcations. Therefore this grant aims to help them to be in line with the Medium-Term Expenditure Framework budgeting and all those kinds of things.

The Bill also deals with the allocation to rural nodal points, there being 13 of them, and in line with the objectives of the Integrated Rural Development Strategy. I think this allocation comes from the equitable share. This is an indication that Government not only talks, but also provides the funds that it has agreed broadly. The Bill deals with the allocation of funds from the equitable share, again, to the eight nodal points.

The Division of Revenue Bill that is before the House and all other Division of Revenue Bills that we have dealt with in the past, is the Government’s core means of achieving socioeconomic rights. As March is Human Rights month I want to talk about these socioeconomic rights in the way I understand them.

One of the things that the Division of Revenue Bill does is to allocate money in order to provide housing to people, and that is one of the rights enshrined in our Constitution: that people have the right to shelter. In terms of some of the judgments given by the Constitutional Court, for instance in Grootboom and others, I want Government to make sure that people are given the right to shelter. So, in my view, allocation of funds to this department and to the sector are a realisation of the socioeconomic right, which is fundamental to people. Obviously, in previous apartheid years, this right did not exist for black people.

The second right concerns the provision of education - that every child in South Africa has a right to education. The budget allocated to provinces in this regard, I think, goes towards meeting this right and making sure that even children who do not have any means of paying school fees are not denied the right to education. The third right is to a clean and safe environment. All these rights I am talking about are enshrined in our Constitution: Chapter 2, under the Bill of Rights. The Constitution provides for them in terms of some of the grants and amounts from the equitable share that are contained in the Bill.

The fourth right is the right to health, in that people should be given access to public hospitals, medicines and so forth. The Division of Revenue Bill clearly makes allocations to resources, whether at the municipal level or at the provincial level, and whether through conditional grants or through the equitable share. The Government is making sure that these rights are realised by poor people who are vulnerable and who do not have the means to access these kinds of services.

The other right is the right to clean and safe water, this week being Water Week. I think that amongst the grants that are in the Division of Revenue Bill, including conditional grants, there are grants from the Department of Water Affairs and Forestry, which department we happened to have a discussion with.

In my view, the Division of Revenue Bill is not just a by-the-way piece of legislation, but it is legislation which is at the core of our Constitution, which has at its core the objective of making sure that Government does indeed live up to the requirements of the Constitution, which are, in this regard, the socioeconomic rights in the form of the Bill of Rights and so forth. We interpret this to include all these other things.

I just want to emphasise a few key points - issues which were of concern to the committee. Earlier on I talked about the maintenance costs. Some assets that have been created by national departments, in particular the maintenance costs, are not built in when the planning is done. At a later stage these buildings are left alone and no one looks after them. Municipalities do not have the money to look after these buildings. I think this is something that the national Treasury should take up with the other departments concerned. I do not know who else, but other committees in the NCOP should try to make sure that their respective line departments do not continue to create these white elephants, because I do not think it is in the interests of our society to do so.

The report of the committee, which is in the ATC today, has recommended that Parliament’s programme be adjusted - the Deputy Minister has talked about that - to provide for the anticipated early tabling of the Division of Revenue Bill. We will leave this recommendation to our principals, to the Whippery and to the programming committee. This was just to indicate that the Bill was referred to us about two weeks ago, and the committee has had to finish this process in these two weeks. It is not because of our design as a committee, but because we are directed by the programme of Parliament.

But, over and above that, when the Bill is published in the Gazette, in December - it should rather be in November. All of us are in our constituencies at that particular time according to Parliament’s programme and we cannot do anything then. So we hope that when these discussions take place, all these factors will be taken into consideration.

Also, in line with Parliament wanting to be involved in the budget process, it is quite important and relevant that Parliament look into these issues in a broader sense without necessarily looking at whether people should be in their constituencies, with their families and children.

The third point is that there must be a clear framework guiding the division of functions between the B and the C municipalities at local government level. In the committee’s view, this process has taken too long and we been have very concerned, and at this point the IDPs are going to be finalised or are at the point of being finalised.

Municipalities, in particular category C municipalities do not know how much they are going to get, and also, because municipalities are just starting to restructure, they do not know in terms of the MTEF how much they are going to get. We think this is quite an urgent matter and both the PLD and the national Treasury, to some extent, must make sure that in these processes in the future people are given the certainty in order for them to plan in the longer term.

I also want to indicate that the committee welcomes the rationalisation of conditional grants, but believes there is still room for improvement, because in some of the grants, in particular the HIV/Aids grant, the transport grant and the housing grant, some of the money still continues not to be spent for reasons that, in our view are not necessarily reasons that would prevent the grants from being spent, because there are people who need the money. However, the money continues not being spent. It does not reflect well on Government if these grants are not forwarded to the people who need them. Something else which was indicated in the committee is that some of these moneys are only sent to provinces or local government about three months before the financial year ends. We do not think that contributes towards good planning and financial management. It is also important to point out that the early childhood development grant will cease to be a grant and will form part and parcel of the equitable share. This will not only contribute towards easing the system, but, I think, is in line with one of the RDP objectives in that the early childhood development grant should be part and parcel of mainstream education.

One of the RDP goals and objectives, amongst others, was to help eliminate poverty and general inequity. Here, I am talking about the uneven development in different parts of our country, created by apartheid, of course, and the market’s failure to meet basic needs.

I believe that the Bill before this House today, in terms of all the amendments and the discussions that have taken place in the committee, leads up to this aim or objective of the RDP. [Applause.]

Mr H T SOGONI: Chairperson, hon Minister, special delegates and Salga representatives, hon members, the Division of Revenue Bill, B5D of 2002, together with its amendments, to which all the provinces acceded, is fully supported by the Eastern Cape province.

We are satisfied that the necessary constitutional requirements for the passage of the Bill have been fulfilled. The Treasury complied with the requirement of taking into consideration any recommendations made to it by the FFC, as required by section 214(2) of the Constitution of the Republic of South Africa, as well as section 9 of the Intergovernmental Fiscal Relations Act of 1997, taking into account the 10 factors of section 214(2)(a) to (j) of the Constitution as reflected in part 2 of Annexure E of the Bill.

Similarly, sufficient consultation with the provinces and other stakeholders, through the NCOP and other intergovernmental channels, completed the process of interrogating the Bill to the best of our satisfaction as a province.

The body of amendments proposed and discussed during the committee stage of the Bill was designed to improve the quality of the Bill and to make it a better and more refined product than the existing Act.

Regarding part 1 of the Bill, we welcome the promotion of the principles of co-operative governance and accountability outlined in this section, as well as the mechanism to ensure that proper financial management systems are strictly adhered to.

The Government faces a huge task and constitutional obligations to redress past imbalances, and we need to safeguard all available resources against corruption, negligent and/or fruitless utilisation.

The Treasury has not reviewed the equitable share formula, as recommended by the FFC, but we welcome its undertaking to do so when the 2001 Census results are available, and also on the basis of changes in provinces’ fiscal capacity, owing to some taxation powers in the future. The Eastern Cape is also satisfied, therefore, that ongoing consultations will continue to improve the distribution of the equitable share of state revenue.

The FFC proposals on provinces’ own revenue is another interesting debate between the commission and Treasury. The Eastern Cape has a particular view that was expressed during public hearings in 2001 on this matter. On local government allocation of equitable share, the Eastern Cape refers to the submission by Salga of the need to review, and I quote: The assumption that local government covers up to 90% of its own revenue'', which, as a consequence, impacts on the allocation of equitable share to the municipalities''. Salga argues that this assumption is not correct, especially, and I quote again:… with regard to rural areas’’. It is interesting to note the response of the Treasury to this argument.

During the public hearings and the discussions at committee level we were made to understand the reasons as to why allocation figures for local government equitable share are still outstanding. We accepted the explanation that local government and Treasury still had to conclude consultations on the separation of functions between the B and C categories of municipalities. Treasury gave an undertaking that the figures would be finalised no later than April 2002.

Part 4 of this Bill also deserves comment. The provisions on the duties of accounting officers and treasuries indeed enhance oversight of the Budget. This becomes evident when we consider the responsibilities of the transferring and receiving officers at national and provincial governments, and to a certain extent at local government level.

The Eastern Cape wishes to express a concern by the majority of departments, including Treasury, during public hearings, that provinces and municipalities lack the capacity to spend allocated resources. This situation is partly due to a lack of or poor infrastructure on the ground, or some other factors. This shortcoming, in our view, impacts negatively on service delivery to the poorest of our communities.

Under such circumstances we therefore cannot realise, be it in the short or long term, the desired effect of revenue allocation. In fact, efforts to improve capacity to spend remain a top priority in our view. The Eastern Cape is, therefore, satisfied that the national Treasury has taken seriously the inputs from the province and all the applicable recommendations of the FFC. Likewise, the proposals for amendments by the office of the Auditor-General and provinces were also dealt with in a manner that promotes transparency and consultation in order to make this Bill an effective tool to distribute national revenue as the law requires.

In conclusion, once more, the Eastern Cape supports the Division of Revenue Bill with its amendments. [Applause.]

Mnr J L THERON: Agb Voorsitter en Adjunkminister, in die Wetsontwerp op die Verdeling van Inkomste gaan dit om die verdeling van die staat se inkomste op ‘n vertikale en horisontale basis. Vertikaal gaan dit om die verdeling van die inkomste tussen die drie sfere van regering, naamlik nasionaal, provinsiaal en plaaslik. Horisontaal is dit natuurlik die verdeling tussen die nege provinsiale regerings en op plaaslike vlak tussen die verskillende munisipaliteite.

Ek wil graag ook kyk na die hoofdoelwitte wat nagestreef word met die verdeling van inkomste en dit sluit die volgende in: Bespoediging van dienslewering en die verbetering van kwaliteit van die publieke sektor se dienslewering wat betref armoede, ongelykhede en kwesbaarheid van die publiek; die bystand van provinsiale en plaaslike regerings om ‘n groter rol te speel met hul sosiale programme, veral dié gerig op armoede en om ekonomiese groei en werkskepping te bevorder; die uitbreiding van die hulp om jong kinders se ontwikkeling te bevorder, toegang tot onderwys en spesiale hulp aan wiskunde- en wetenskaponderwys, investering in konstruksierehabilitasie en onderhoud van infrastruktuur, hoofsaaklik wat betref onderwys, gesondheid en vervoer; hulp aan munisipaliteite te verskaf om die munisipale infrastruktuur uit te bou en om hulpbronne doelgerig aan te wend in die benadeelde areas soos geïdentifiseer in die geïntegreerde, volhoubare landelike ontwikkelings- en stedelike vernuwingsprogramme. Die DA onderskryf natuurlik hierdie doelwitte wat nagestreef word ten volle en ons sal ons volle samewerking verleen, waar moontlik, in die uitvoering van dié programme om hierdie doelwitte te bereik.

Vervolgens konsentreer ek op die vertikale verdeling. Dié verdeling tussen die drie sfere van regering is uiters belangrik om te verseker dat die nodige fondse vloei na areas waar dit die noodsaaklikste is vir dienslewering aan die publiek. In die 2002-03 verdeling van inkomste word die inkomste só verdeel dat 40% na nasionaal gaan; 56% provinsiaal en 4% plaaslik. Dit beteken dat R96,1 miljard gaan na nasionale; R132 miljard na provinsiale en R8,5 miljard na plaaslike regering.

Die oordragte van provinsiale regering neem twee vorme aan, naamlik die gedeelte volgens die gelykstellingsformule en die gespesifiseerde toekenning, of conditional grants''. Hierdie gedeelte, volgens die gelykstellingsformule ofequitable share’’, maak 90% van die oordragte aan die provinsies uit en die gespesifiseerde toekennings die oorblywende 10%. Die oordragte na die plaaslike regering toon die grootste styging in die 2002-03-begroting waar dit styg met 18,3% oor die MTEF-tydperk. Hierdie groot stygings moet meehelp in die lewering van die basiese munisipale dienste, infrastruktuurontwikkeling en die hervorming van die plaaslike regeringstelsel. Van die 284 nuwe munisipaliteite wat gevorm is, maak 23 van hulle 80% van die plaaslike regeringsbegroting uit. Hierdie ontleding wys op die groot konsentrasie van ekonomiese bedrywighede in sekere dele van Suid-Afrika waaraan ernstig aandag verleen sal moet word indien gelyke verdelings verkry wil word.

Wat betref die horisontale verdeling, die verdeling tussen die nege provinsies word gedoen deur die gelykstellingsformule toe te pas. Hierdie formule doen die verdeling met inagname van die verskillende ekonomiese profiele, demografiese verskille en sosioekonomiese omstandighede van die verskillende provinsies. Volgens die formule is die verdeling tussen die provinsies soos volg: Oos-Kaap, 26%; Vrystaat, 12%; Gauteng, 13%; KwaZulu- Natal, 18%; Mpumalanga, 5%; Noordkaap, 4%; Noordelike Provinsie of Limpopo, 10%; Noordwes, 7%, en Weskaap, 5%.

Wat kapasiteitsuitbreiding betref, is die grootste enkele probleem wat met provinsiale en plaaslike regeringsfinansies ondervind word, dat die nodige fasiliteit nie bestaan om die oorgedraagde fondse effektief te kan aanwend nie. Groot ontwikkelings- en opleidingsbehoeftes ontstaan in die provinsies en op plaaslike vlak, wat aangespreek moet word. Daarom word daar ook in die Wetsontwerp op die Verdeling van Inkomste voorsiening gemaak vir spesifieke oordragte na die provinsies en die plaaslike vlak, om hierdie nodige kapasiteitsuitbreidings te kan doen.

So ontvang provinsies twee spesifieke toekennings om kapasiteit te help opbou, naamlik die plaaslike regeringsondersteuningstoekenning van R474 miljoen en die gekonsolideerde munisipale infrastruktuurprogram van R333 miljoen. Op plaaslike vlak word verskillende toekennings geamalgemeer in die munisipale stelsel vir ‘n verbetering in toekenning. As gevolg hiervan verhoog hierdie toekenning tot R93 miljoen vir 2002-03.

Die totale toekennings vir kapasiteitsuitbreiding en herstruktureringsprogramme op plaaslike vlak beloop R548 miljoen in 2002- 03, R577 miljoen vir 2003-04 en R624 miljoen vir 2004-05. Dit verteenwoordig ‘n gemiddelde jaarlikse verhoging van 4,7% oor dié periode.

Ek sluit af. Dit is so dat baie werk nog voorlê op provinsiale en plaaslike regeringsvlak wat doeltreffende bestuur van finansies betref. Baie vordering is reeds gemaak en ek wil die departement weer eens gelukwens met die werk wat gedoen word. Met hierdie wetsontwerp is dit weer duidelik dat vordering reeds gemaak is en dat die staatsfinansies onder goeie bestuur staan. Die DA steun daarom hierdie wetsontwerp met die tegniese amendemente wat aanbeveel is. (Translation of Afrikaans speech follows.)

[Mr J L THERON: Hon Chairperson and Deputy Minister, in the Division of Revenue Bill the issue is the division of the state’s revenue on a vertical and a horizontal basis. Vertically the issue is the division of revenue between the three spheres of government, namely national, provincial and local. Horizontally, of course, it is the division between the nine provincial governments and at local level between the various municipalities.

I would also like to look at the primary objectives which are pursued in the division of revenue, and these include the following: expediting service delivery and the improvement of the quality of the public sector’s service delivery as regards poverty, inequality and vulnerability of the public; the assisting of provincial and local governments to play a greater role in their social programmes, particularly those aimed at poverty and promoting economic growth and job creation; the expansion of assistance to promote the development of young children, access to education and special help for mathematics and science teaching, investing in construction rehabilitation and the maintenance of infrastructure, primarily with regard to education, health and transport; providing the assistance to municipalities to expand the municipal infrastructure and to utilise resources purposefully in the disadvantaged areas as identified in the Integrated Sustainable Rural Development and Urban Renewal Programmes. The DA naturally fully endorses these objectives which are pursued, and we will give our full co-operation where possible in the execution of these programmes to achieve these objectives.

I will now concentrate on the vertical division. This division between the three spheres of government is extremely important in order to ensure that the necessary funds flow to areas where they are most essential for service delivery to the public. In the 2002-03 division of revenue, the revenue is divided in such a way that 40% is allocated nationally; 56% provincially and 4% locally. That means that R96,1 billion goes to national government; R132 billion to provincial and R8,5 billion to local government.

The transfers of provincial government take two forms, namely the portion according to the equitable share formula and the specified allocation or conditional grants. This portion according to the equitable share constitutes 90% of the transfers to the provinces and the conditional grants constitute the remaining 10%. The transfers to local government show the greatest increase in the 2002-03 budget, where they increase by 18,3% over the MTEF period. These sharp increases must assist in the delivery of basic municipal services, infrastructure development and the reform of the local government system. Of the 284 new municipalities that have been formed, 23 constitute 80% of the local government budget. This analysis points out the great concentration of economic activities in certain parts of South Africa, to which serious attention will have to be paid if equitable distributions are to be obtained.

As regards the horizontal division, the division between the nine provinces is done by applying the equitable share formula. This formula effects the division taking into account the various economic profiles, demographic differences and socioeconomic conditions of the various provinces. According to the formula the division between the provinces is as follows: Eastern Cape, 26%; Free State, 12%; Gauteng, 13%; KwaZulu-Natal, 18%; Mpumalanga, 5%; Northern Cape, 4%; Northern Province or Limpopo, 10%; North West, 7%; and Western Cape, 5%.

As far as capacity expansion is concerned, the single biggest problem which is experienced with provincial and local government finances is that the necessary facility does not exist to be able effectively to utilise the transferred funds. Great development and training needs exist in the provinces and at the local level, which have to be addressed. Therefore, provision is also made in the Division of Revenue Bill for specific transfers to the provinces and the local level, to be able to carry out this necessary capacity expansion.

In this way provinces receive two specific allocations to help build capacity, namely the local government support allocation of R474 million and the consolidated municipal infrastructure programme of R333 million. At the local level various allocations are amalgamated in the municipal system for an improvement in allocation. As a result of this, this allocation is increased to R93 million for 2002-03.

The total allocations for capacity expansion and restructuring programmes at the local level amount to R548 million in 2002-03, R577 million for 2003- 04 and R624 million for 2004-05. This represents an average annual increase of 4,7% over the period.

I wish to conclude. It is true that a great deal of work still lies ahead at the provincial and local government level as far as efficient management of finances is concerned. A great deal of progress has already been made and I would once again like to congratulate the department on the work that has been done. With this Bill it is once again clear that progress has already been made and that government finances are under good management. The DA therefore supports this Bill with the technical amendments which have been recommended.]

Mr T RALANE: Chairperson, Deputy Minister, special delegates and members, it is an honour to address this august House on the Division of Revenue Bill of 2002.

My key focus will be on the housing grants. The Department of Housing administers two grants: the housing subsidy fund provides subsidies for low- income housing, and the Human Settlement Redevelopment grant funds urban pilot projects.

The housing allocation increases by R300 million in the financial year commencing 1 April 2002, and by a total of R12 billion over the three-year period. While this will enable the Department of Housing to accelerate housing delivery in urban areas, the focus will be on improving the quality of housing units through an increase in the subsidy level and through implementing the medium-density housing strategy. It is crucial to note that in the previous financial year 23,9% of the total value of provincial conditional grants was for the housing fund, although the spending on this grant is projected to reach 93% by the financial year ending 31 March 2002. This can be attributed to the following. From a slow start in 1995-96 the pace of housing delivery has increased substantially. Up to March 1998 Government contributed to the construction of over 500 000 houses. Delivery peaked in 1997-98 with over 322 638 houses. This may reflect a carrying over of projects from the previous two years after the initiation of the housing policy.

Between 1998 and March 2001 Government contributed to over 650 000 houses. Delivery in 2000-01 slowed down to about 170 000 houses, and this may be attributed mainly to delays in completion of projects by developers towards the end of the construction phase, to weak capacity and planning, to last year’s municipal elections and demarcation process, and to unfavourable weather patterns.

The variation in the pace of delivery is also evident in the extent of roll- overs in housing subsidy funds. Where provincial housing departments had roll-overs of over R2,2 billion or 71% of allocated housing subsidy funds in 1995-96, they had estimated roll-overs of R519 million or 15% in 2000-

1. It is clear from this that certain obstacles to sustainable delivery have been identified and Government continues to explore ways to speed up delivery and to contribute to the development of sustainable settlements.

Financial management in the sector has improved. Further steps are being taken to improve and streamline the funding arrangements for housing programmes. These include converting the housing subsidy grants into conditional grants, resulting in all funds received by provincial housing departments being deposited into the appropriate provincial revenue fund, improving accountability for such funds. Also, all expenditure incurred with respect to housing will be on budget and this includes expenditure incurred by the respective provincial housing funds. With regard to the implementation of the Public Finance Management Act, progress has been made. Steps have been taken to appoint chief financial officers in provincial departments responsible for housing, and this has led to the establishment of a CFO forum which will charter a way forward with further reforms in financial management. All provinces have audit committees and seven provinces have established internal audit committees.

Despite the major achievements, the low-income housing sector continues to be hamstrung by factors that include poor capacity, lack of finance - private and public - and inadequate planning and implementation. A more focused strategy is needed to address the challenges facing the housing sector, especially to ensure access for private funding, an integrated approach, emergency housing and rapid land release.

Sustainable low-cost housing delivery requires a joint effort between Government and the private sector. Government has initiated a number of strategies to encourage private-sector participation in low-cost housing finance. Through the establishment of Servcon Housing Solutions (Pty) Ltd in 1998 Government aimed to normalise the lending environment by managing nonperforming loans and properties repossessed by banks in areas in which the normal legal process had broken down.

In addition, the Masakhane campaign was launched to change the perceptions and attitude of individuals, communities and local governments towards their responsibilities. It encourages the payment of rates, services and bonds, and thus seeks to inculcate an overall culture of payment in affected communities.

Thubelisha Homes was established in 1998 as a finance vehicle to create rightsizing stock, and is linked to the Servcon programme. The National Urban Reconstruction and Housing Agency provides guarantees to banks to encourage them to make bridging finance loans available to emerging developers and contractors when banks are not prepared to approve such loans without additional security. Despite Government attempts to normalise the housing environment, private- sector participation in low-cost housing remains elusive. Mortgage lending in this sector is nonexistent. Further, Government recognises the need for an integrated strategy in housing delivery. Municipalities play a limited direct role in housing development, generally as developers and in the provision of internal bulk and connector infrastructure.

Co-ordination of initiatives at the local level is often weak, and grant spending is not optimised. Ways are currently being explored to have municipalities play a greater role in housing delivery, which should improve local programme co-ordination and speed up delivery. This may include transferring funds directly to municipalities.

Government also recognises that housing delivery requires not only bulk infrastructure and housing units, but properly integrated communities in the built environment. Many current housing projects do not take the total basic needs of communities into account. In many cases housing projects are not completed taking social and economic infrastructure into account, such as schools, roads, clinics and retail facilities. Businesses remain reluctant to invest in townships and new housing developments.

In general, following a difficult transition, the housing sector has emerged stronger and better equipped to deal with the challenges facing it. Policy has improved, management is more proactive and finances look sound. The successes gained can serve as a solid platform for further reforms in the housing delivery strategies.

With regard to the Free State, local government and housing will receive an additional allocation of R57,143 million in 2002-03, R40,980 million in 2003-04 and R64,470 million in 2004-05. My province will make concerted attempts to make affordable housing available to as many people as possible over the MTEF period through the effective and efficient utilisation of grants for housing, human settlement and local government support. A total amount of R317 million is budgeted for these functions in 2002-03, and will increase by 10,1% to R349,2 million in 2003-04, and by a further 16,2% to R405,78 million in 2004-05. During the public hearings we were informed that 26 088 houses were built in the Free State during the financial year 2000-01. This is roughly 15% of the total number of houses built in the country for the same period.

The Free State supports this Bill. [Applause.]

Dr E A CONROY: Chairperson, Deputy Minister of Finance and colleagues, the purpose of this Bill is, in a nutshell, mainly to make provision for the equitable division of nationally raised revenue among the three spheres of government and to promote co-operative governance in intergovernmental budgeting.

The principle of the Bill is informed by section 214(1) of the Constitution and by the Intergovernmental Fiscal Relations Act of 1997. The Bill is designed, in the first instance, to promote a whole series of financial management goals. These goals are co-operative governance in the Budget allocation and transport processes; better co-ordination between the policy formulation, planning, budget preparation and execution processes; predictability and certainty in respect of all allocations to provincial and local governments; and accountability for the use of public resources by ensuring that all transfers are reflected in the budgets of benefiting provincial and local governments and that they are subjected to audits. The Bill is also designed to ensure transparency and equity in all allocations and in the criteria used in the division thereof.

In the Bill being debated today all three spheres of government receive a real increase in their equitable shares over the medium-term period. Local government, in particular, experiences real growth of 14,7% over the same MTEF period. While real growth is lowest for the Western Cape, the provinces of Mpumalanga, KwaZulu-Natal and Gauteng, they have the largest real increases in their equitable shares. Gauteng has been allocated an equitable share amounting to R18,2 billion and a conditional grant amounting to R3,4 billion, with the total allocation from the national Treasury amounting to R21,7 billion.

The only change to the equitable formula is the increase in the welfare weighting by one, at the cost of economic weighting. It is hoped that by increasing the welfare share, provinces will manage to control the spending on these services.

On a national basis, health still receives the largest share of conditional grants, which are mainly earmarked for tertiary hospitals, training, rehabilitation and nutrition, while the central hospital and redistribution grants have been reconfigured into a consolidated national tertiary services grant to ensure that all South Africans have equitable access to a basic level of tertiary health care.

The Bill also provides for two new grants to provinces to support local government. The local government share rises rapidly by 18,3% from R6,5 billion in 2001-02, to R10,8 billion in 2004-05. This increase in share is attributable to smaller municipalities receiving larger shares. It also includes transfers to category C municipalities and municipal infrastructure development, in especially the poor nodal areas identified for rural development and urban renewal.

The capacity problems experienced at local government level in the administration and spending of the allocated conditional grants is the major challenge of this Bill. However, it takes a significant step towards promoting transparency and accountability of Government spending by implementing the requirements of the Public Finance Management Act.

Gauteng has taken cognisance of the reporting requirements by responsible parties such as the provincial treasury, by provincial departments and municipalities receiving transfers from the province, and specifically also that municipalities must submit reports to the relevant department within 10 days after the end of each month. The Bill also sets out specific obligations on the reporting of conditional grants to be included in the financial reports submitted for auditing purposes to the Auditor-General.

I am pleased to report that all the concerns raised by the Gauteng finance committee in the negotiating mandate were addressed. Our province welcomes the amendment of clauses 8, 18(2), 20, 27(3), 27(5) and 29(3). It furthermore welcomes the change made to clause 5(2), which ensures that category C municipalities are not excluded from the equitable share. The committee also took cognisance of the support expressed by the Gauteng member of the executive council for finance and is satisfied that the revenue allocated to Gauteng through the equitable share will enable our provincial government to meet its stated policy priorities.

In conclusion, Gauteng supports the principle and detail of the Division of Revenue Bill and will vote in favour of its adoption. [Interjections.] [Applause.]

Chairperson, exactly what I have said for Gauteng I say on behalf of the New NP, and we support the Bill. [Laughter.] [Applause.]

Mr L S GABELA (KwaZulu-Natal): Chairperson, hon Deputy Minister and hon members, I thank you for the opportunity to address this honourable House on the Division of Revenue Bill for 2002-03. From the outset, let me indicate that I have been mandated to focus on matters of local government, with particular reference to conditional grants.

Also, just in passing, I would like to indicate our appreciation for the work that is being done in relation to a matter that has been through the courts on the equitable share and the exclusion of category C municipalities. All that is being done in a bid to redress this situation is appreciated.

The Division of Revenue Bill, as we all know, aims at directly intervening in reducing poverty and vulnerability, and at contributing to social development. The improvement in the quality of life where our people live demands much of capacity on the part of local government in order to be in a position to deliver.

The newly demarcated municipalities require concerted effort in striving to address backlogs in basic municipal infrastructure and services. The point needs to be made that we still have municipalities, newly established ones, that still do not have a rate base and that have no income at all.

We would not want to suggest that therefore these municipalities must live only on hand-outs. We understand that through local economic development projects, these municipalities would have to be in a position in which they can sustain themselves.

We also want to make a point, as the hon chairperson of the Standing Committee on Finance has made, on the grants in kind. There needs to be improvement in communication in relation to community-based Public Works programmes. There is an abundance of community halls, in particular in our province, and other forms of infrastructure which are not being used by local communities, because there has not been consultation as to whether these forms of infrastructure met the requirements of local communities. I think it would be greatly appreciated if we could improve this situation.

In relation to conditional grants, we would also want to make the point that while national Government may have checks and balances as to what these moneys would be used for in terms of making sure that they are used for a desired purpose, provinces also have to be assisted in terms of capacity-building.

I here note the point made by the Deputy Minister earlier in relation to the distribution of specialists throughout provinces but the point here is that there has to be close monitoring. We need not have a situation where there is intervention only when things go wrong. In some instances things go wrong when it might have been possible to intervene in time.

We have skills shortages in local government and funds appropriated for certain purposes are not used for those purposes. Part of the problem is the exorbitant salaries of officials in local government. Some municipalities cannot afford councillor remuneration. There is failure even to produce IDPs, and we tend to have a problem as to how people approve their budgets if they are not even in a position to produce an operational plan.

This, I am told, is a concurrent responsibility, but national Government has a much bigger role to play in this regard. I am saying this unashamedly because we also have a similar problem in my own province, in that there is no legislation or policy that regulates municipal support services and capacity-building, for instance. This is an issue that needs to be addressed. Of course we also do have a problem with the abundance of staff. Just less than 400 of those who work for the so-called R293 townships, the majority have had to be placed on special leave because they are neither skilled nor trainable.

It is part of our history and it is something that we will have to contend with for some time, but these are the problems that we need to face. We are happy that there is a clear directive from national Treasury and the fact that it will work with provinces, municipalities and local government in improving towards achieving better delivery. Our emphasis on national overall supervision is informed by the fact that it is well known that there is no capacity. If there is no capacity then it is important that there is intervention in time.

Let me also take this opportunity to raise an issue in relation to the rural nodal points. It is well known that there are nodal points in KwaZulu- Natal, and I have no intention to politicise this matter, but we want to say that it would be appreciated if the national Government, particularly at the level of the two Ministers who are mandated by Cabinet to facilitate the speedy realisation of this programme, would do their level best to see to it that the desired goals are met. We know that there are problems, political problems, but if such problems could be attended to … [Time expired.] [Applause.]

Mr G A LUCAS: Chairperson, this is the first time I have spoken in this Chamber since we were chased away from the NCOP Chamber, so I am not used to this technology yet. [Interjections.] Yes, it is my maiden speech in this Chamber.

Chairperson, hon Deputy Minister of Finance, hon special and permanent delegates, our intergovernmental fiscal relations are on a sound footing. A strong foundation has been laid and one can proclaim without fear or hesitation that we are indeed moving in the right direction. Clearly these strong fiscal relations entrench and support our Constitution on the issue of better and efficient co-operative governance.

Today provinces and municipalities can plan their budgets and programmes under conditions of greater certainty and predictability, thanks to the MTEF cycle introduced by our central Government.

Our provincial government and the municipalities in the Northern Cape have begun to grapple with this effective and efficient way of budgeting and planning processes, and to a large degree we have begun to use this to meet our constitutional mandate.

The Division of Revenue Bill before this House clearly expresses the willingness and commitment of our Government to addressing poverty and underdevelopment in our society. I wish to qualify this expression of commitment by our Government by indicating that this Bill allocates to our province, the Northern Cape, an equitable share which amounts to a 9% increase. This is equivalent to a real increase of approximately 4% over and above inflation.

This clearly is a positive response on the part of our central Government to the continuous lobbying by our province for an increased allocation. Since 1998 our share has grown by over a billion rand. This has resulted in our per capita allocation being 20% above the national average. Now that clearly expresses the commitment of our central Government to assisting provinces in meeting their constitutional mandates.

The equitable share allocation, together with conditional grants and our own provincially collected revenue, amount to R3,238 billion for this financial year. This increased revenue base has created an opportunity for the province to aggressively fight against poverty and underdevelopment.

Therefore our budget in the province responds to this commitment by clearly balancing our social development obligations and the stimulation of our economy through growth and job creation. We would not have been able to achieve this without the support of our national Government, which acted in a caring and compassionate manner towards our plea.

For the next financial year we intend to use all the resources allocated to us through the conditional grants for their intended purpose. For instance, we plan to spent about R24 million on the rehabilitation and improvement of hospitals and clinics to ensure that our people receive better health care facilities.

We also intend to use the entire R75 million allocated to us for the construction of 4 000 new housing units for this financial year. I can report that our province is one those who perform best with regard to the provision of houses in that we have used about 90% of our allocation towards the building of houses in the past financial year.

We also intend to build three new schools in the province and rehabilitate other schools and colleges to ensure that we meet our President’s commitment to ensuring that in three years’ time no child will still be learning under a tree. We can say without fear that we will ensure that in the Northern Cape in three years’ time no child will learn under a tree.

In this financial year we intend to use about R33 million for the construction of new roads and the upgrading of the existing roads’ infrastructure in the province. This will largely benefit our rural people and our farming community. We are convinced that we would have done much less than intended if it had not been for the support of the national Government. These are just indications of our commitment to addressing the issue of our infrastructural backlog and building a competitive provincial economy that contributes positively to the national economy of our country.

Within the two nodal points identified by the hon the President, namely Galeshewe and Kgalagadi, work has begun. The people of these nodes have responded with enthusiasm and they themselves have taken overall leadership in ensuring the success of these programmes.

Again, thanks to the central Government for the additional allocations to these nodes. We have therefore projected that for the next MTEF cycle we will spend about R130 million and R110 million respectively in the Galeshewe and Kgalagadi nodes. People in these areas are convinced that after 2004 we will have made decisive strides in eradicating poverty and underdevelopment. Indeed, our people are confident that a better life for all, which is a vision of the national Government, is achievable.

Our municipal fiscal position in the province has improved and most municipalities are in a healthy state. It has also emerged that our municipalities have begun to use conditional grants effectively to deliver basic services.

We all know that last year we debated the issue of the Provincial Tax Regulation Process Act, which was passed by this national Government in 2001, and which effectively bestows on our province some taxing powers. However, as a province we need to take a cautious approach and balance the need to raise revenue without unduly increasing the tax burden of the citizens of our province.

Over the next financial year, we intend to thoroughly examine the options and the potential impact of this Act on the regional economy and on that of our province. Our MEC has appointed an advisory committee, which comprises a tax expert, a chartered accountant, an economist, a banker and a few state officials, to commence initial investigations into this matter of provincial taxation. We are confident and want to express our willingness that we need to make sure that this Act, which was passed by this House, does work and that the province’s own revenue is increased.

In conclusion, as a province we are committed to the total eradication of poverty and underdevelopment. No rational thinking human being can sleep quietly and peacefully at night while there are people living in abject poverty, while our children learn under trees and while some of us are unemployed and without an income. Therefore, our struggle for the creation of a better life for all must be accelerated. As a province we support this Bill and approve the amendments that have been made. [Applause.]

Ms S SITHOLE (Northern Province): Chairperson, hon Deputy Minister and the House at large, I have been ordered by the committee on finance, economic affairs, environment and tourism of the Limpopo province to come and support this Bill. So the support is very clear. It is not something that I am coming to talk about, it is an order!

When the committee ordered me to do this, I had to ask them why they ordered me to do this, and whether it was because I am the only woman in the committee. But members of the committee substantiated their reasons for the order. They said that it had come to the notice of the committee that ever since the new democracy there has been a change in South Africa - a change in the manner in which funds are allocated and the manner in which resources are managed. That is the reason they support this Bill.

They said we should actually pause and ask ourselves where we come from. We come from a past where people of South Africa did not know anything about how and when moneys were allocated. There was no transparency. They are not sure whether there was accountability. That is the past we come from.

This House will remember that for the first time in 1997 or 1998 South Africa’s Government started to be serious about repaying the national debt, that is the debt we had incurred. And we all know here that for 10 years before then, moneys were borrowed and used without any repayment at all. So, this Government came with the sense of responsibility actually to encourage repayment of the national debt.

We also noted that the intention of the Division of Revenue Bill is to increase co-operative governance, which is key to actually making maximum use of the scarce resources that we have in this country. So we congratulate the Department of Finance on the steps taken in fostering accountability and promoting good governance, and on the desire to work together with provinces.

We have noted and this House has listened as the hon Deputy Minister stated the stages when the allocation of funds takes place, that there is involvement of all the provinces, including local government, and that everybody actually knows at the end of the day that one is getting this share because of one, two, three. Furthermore, the recommendations of the FFC have been taken on board by the Department of Finance. But, as a new democracy, we should remember that we are not a First World democracy. Some of the recommendations of the FFC will take some time completely to comply with, because of where we come from. So, it is important that, as a country, when we talk about financial management we actually understand ourselves, we understand the stage of our democracy and where we come from.

We must also understand that in the relationships between the FFC, Government, the public, legislatures and Parliament there are bound to be tensions, and that those are necessary tensions. What is important is how we deal with the tensions. They are healthy tensions because of the nature of our deployment to different stations.

We have also noted that regarding the division of revenue, Government is serious about accountability and transparency, especially the latter. We noted that there is a new section on skills development funding, which funds come from the private sector and are dedicated to the training of personnel.

We have also noted that there is now clarity on donor funding. We have noted, as the finance committee, that all that donor funding has been there all the time, but we did not actually see how it was spent. This Division of Revenue Bill makes it very clear to everybody how donor funding is received and spent.

We also noted that the Department of Finance is very serious about accountability. Regarding this issue, we did not want to believe it, but as a responsible committee on finance we set out in our own way of testing the ground. We actually spoke to all heads of department and asked them to give us all the reports, the early warning reports that they send to Treasury and the committee, and the financial statements which they send to the Auditor-General every three months. We asked them to make these available to the committee. Throughout the years, the fiscal year ending 31 March 2002 included, the committee has been receiving these reports and we have been engaging accounting officers, heads of department and their financial officers to actually come and appear before the committee and give us progress reports. I am pleased to report that the department has been doing exactly that and, as a committee, we are satisfied that they are really trying their best to acclimatise themselves with the requirements of the Public Finance Management Act.

I have also been mandated by the province to remind the hon the Deputy Minister that our province’s public works department has been doing its very best to spend the flood disaster allocation. We want to appeal that the period for transferring funds to that province should actually be looked at, because at times … [Time expired.]

Mr Z S KOLWENI: Chairperson, hon Deputy Minister, hon members of this House, special delegates, the executive mayor of my district council, who is here with the Salga mandate, and the officials from the department, it is a pleasure to address this House on an important debate such as that on the Division of Revenue Bill, which, in essence, constitutes the foundation of this House.

The Select Committee on Finance has been very active during the last few days. As members of this select committee, we attended the strategic planning workshop in the first week of March this year, and a series of public hearings on the Local Government: Municipal Finance Management Bill and the Division of Revenue Bill of 2002.

A constant subject emanating from the sessions, which has relevance for the Division of Revenue Bill at present before this House, is the need to resolve intergovernmental disputes. Although intergovernmental relations are still evolving in South Africa, many of the contentious matters facing them are quite universal. The absolute amounts allocated to the different spheres of government, as well as the control of the distribution of financial resources, are extremely contentious. There is no reason for South Africa to be exempted from universal contentions. Intergovernmental relations are dynamic and, inevitably, respond to challenges, challenging social, economic and political relations. Therefore, conflicts between different spheres of government are logical because they often compete for political hegemony and for a share of financial resources.

The challenge facing South Africa’s co-operative governance is how we should resolve conflict between and within the sphere of government without undermining the spirit of co-operative governance. One of the constitutional principles of intergovernmental relations is the obligation of the spheres of government to co-operate with one another in mutual trust and good faith. This entails avoiding legal proceedings against one another, which, in other words, means to settle intergovernmental disputes by nonjudicial means. Moreover, such an approach requires resolution on a political level instead of through costly litigation. We all know that litigation is rule-based, whereas political intervention is revolutionary and democratically informed. The recent conflict with regard to the nonallocation of equitable shares to district councils provides such an example. The Pietermaritzburg High Court ruled in favour of three IFP-led district municipalities which challenged as unconstitutional provisions in the Division of Revenue Act of 2001 which do not allocate money to district councils.

The Minister of Finance, in his reply to a question in the National Assembly on 6 March 2002 adheres to the ethic of a nonjudicial approach. The North West province encourages such approach in future in all our governmental disputes.

The North West province is of the view that no assessment of our provincial economy and developmental prospect can be marshalled successfully without acknowledging challenges placed before our local government sphere through IDPs. Indications from interim IDPs suggest that local municipalities in our province have identified a total of 1300 projects with an estimated value of R3 billion. The adoption and implementation of the final IDPs will clearly be a powerful instrument for the alleviation of poverty through local economic development and improved service delivery in our province.

Needless to mention, our province does have some vexing developmental challenges. Firstly, unemployment remains high, estimated at 43%. This is the third highest figure for the army of unemployed in our country.

The highlights of the financial year ending in March 2002 for the North West province are the formulation of an internal audit committee - the first annual report of the committee is expected in July 2002 - and the implementation of the Public Finance Management Act. The province commenced with phase 2 of the implementation of the PFMA. The registered successes were the finalisation of the appointment of chief financial officers and the monthly closure of account books to meet with the reporting requirements of the PFMA.

The increased equitable share in our province will go a long way towards improving service delivery across all disciplines, especially in benefiting the rural unemployed masses through social grants, child support grants, and grants for HIV-affected victims.

To elaborate on a few earmarked developmental undertakings by the province, an amount of R1,9 billion has been allocated to the economic development and infrastructure cluster. [Time expired.]

Mr K D S DURR: Chairperson, I will put forward the position of my party. We have the chairman of the provincial finance committee, Mr Van Rensburg, here with us today in his new capacity for the first time, and we welcome him.

It is interesting to note that when we look at the way our Constitution is constructed and at the way the NCOP is constructed, we can see what a consensus-seeking device the NCOP is. When one considers that we are dispensing here the lion’s share of the South African Budget, then one sees the degree of consensus that exists. This is quite remarkable in a parliament. This is a product of the Constitution.

May I also say that the Minister’s officials add to that smooth process consensus-seeking. They have been absolutely excellent. I have had the privilege of dealing with them. I phone them sometimes, phoning them and urgently asking them to phone back when they are in the meetings; they phone back on the cellphone and could not be more obliging, acting with humility, with preciseness and with a high degree of professionalism. I want to say that all of us in this House are grateful to them.

I am also heartened by the consensus achieved in the Western Cape as far as the policy objectives of the provincial government and the central Government are concerned. That also is heartening. In my considered opinion that is what we should be seeking in this particular budget allocation.

The position with regard to the Division of Revenue Bill this year has been much better than last year. The Minister would recall that last year the situation was a bit of a jumble, as was the year before. This year things have gone much more smoothly, partly because of the fact that the Minister published and gazetted the Bill on 6 December. That would account for the fact that the Minister had a record number of amendments. I think the quality of the amendments was very good, with many being accepted. I know all of the amendments of my province were accepted, after critical analysis, both by our committee and by the Minister’s Treasury officials.

As a result, I think the Bill was considerably improved by the fact that there was a record number of inputs from the provinces on improvements to the legislation. That was because the Bill was published early. The difficulty arose, which our chairman has raised here today, in that after the very good thing of early publishing, we left the hearings too late.

We support the Bill. [Time expired.] [Applause.]

Mnr H G VAN RENSBURG (Wes-Kaap): Voorsitter, Adjunkminister, kollegas, u is bewus dat daar sedert verlede jaar in Desember baie verwikkelinge op die politieke landskap in die Wes-Kaap was. Die twee grootste partye, naamlik die Nuwe NP en die ANC, regeer saam. [Tussenwerpsels.] Ek wil u die versekering gee dat dit goed gaan, en dat dit werk. [Tussenwerpsels.] Daar is min spanning, en ons kan aandag gee aan ons werk. (Translation of Afrikaans paragraph follows.)

[Mr H G VAN RENSBURG (Western Cape): Chairperson, Deputy Minister and colleagues, you are aware of the fact that since last year in December there have been many developments on the political front in the Western Cape. The two largest parties, namely the New NP and the ANC are governing together. [Interjections.] I want to give you the assurance that everything is going well and it is working. [Interjections]. There is little tension and we can devote our attention to our work.]

As a consequence, I was appointed chairperson of the standing committee on finance and economic development only in January of this year, by which time the consultative process on this Bill, as required by the Constitution, had already been concluded. One would therefore accept that I am at a distinct disadvantage, in comparison to my colleagues from the other provinces, who have been through such a process previously and have taken part in the present round.

However, after a detailed study and analysis of the Bill, I am confident in saying that the Division of Revenue Bill for the 2002-03 financial year is a more comprehensive, informative and transparent piece of legislation when compared to those of the past.

The explanatory notes attached to the Bill are especially informative and explain not only the technical aspects of the Bill, but also the division of revenue in the broader context for which I, in this regard, must give a compliment to the national Treasury. A fiscal framework that explains the different components of the equitable share formula is also included in the Bill and this ensures that all the Bill’s readers, researchers, laymen and other interested parties, are afforded the opportunity to better understand the total fiscal envelope on which the Bill is based. This, in essence, explains the implicit reason for the existence of the division of revenue between and within the different spheres of government. The early start to the legislative process this time around should also be commended.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Sorry, hon member, can you take your seat please.

Mr M I MAKOELA: Chairperson, on a point of order: Is it right that members converse so loudly while another member is giving his speech? [Interjections.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Thank you, Mr Makoela. I think responsible hon members have heard what Mr Makoela has said. If hon members could please give the member a chance to speak.

Mr H G VAN RENSBURG: The early start to the legislative process this time around should also be commended as provincial treasuries were allowed sufficient time to submit comments and proposals to the national Treasury. However, I would kindly suggest that sufficient time be allowed for the provincial standing committees and the NCOP to complete their work.

I must again express my appreciation to the national Treasury for accommodating the Western Cape’s comments and proposals submitted in respect of this Bill. If I may be allowed some critique, I would suggest that procedural provisions that specifically deal with annual reports, financial statements and fruitless and wasteful expenditure, as contained in clauses 18 and 31 of the Bill, in future only be taken up in relevant legislation, such as the Public Finance Management Act and in national Treasury regulations.

In general, the Western Cape Province and I support the Division of Revenue Bill. [Applause.]

Cllr M DIKOKO (Salga): Chairperson, the pronunciation of Dikoko should be as I have given it.

The DEPUTY CHAIRPERSON OF COMMITTEES: Thank you very much, sir. I am sure you can appreciate my problem.

Cllr M DIKOKO (Salga): No problem. I just wanted to differentiate myself from Eugene de Kock. [Laughter.]

Chairperson of the session, Madam Chairperson and Deputy Chairperson in absentia, Deputy Minister of Finance, hon members, including special delegates, allow me to bring greetings from our chairperson of Salga, Father Mkhatshwa.

Salga is grateful for the progress registered thus far towards the realisation of our mandate by the piece of legislation which we have been dealing with. We are not going to be amused, although the chairperson of the select committee was saying she was the only one. She was tasked to lead because of the beautiful lady she has brought called Dora.

Given the constitutional obligation of the new local government regime, it is of great necessity that sufficient resources are made available to local government if we are to achieve the objectives of local government as stated in the Constitution. Currently, and for the foreseeable future, the local government sector is characterised by huge disparities between metros with substantial pools of revenue and resources, and district and local councils with insufficient revenue.

The latest statistics show that 80% of our GDP is concentrated among six metros, whilst the rest, 20%, is concentrated among 278 municipalities. The balance of evidence questions the assertion of the national Treasury that 92% of local government revenue is from own streams. Ideally, the situation should be like that, but the prevailing material circumstances suggested, in the 2001 fiscal review, that the actual figure ranges between 37% and 60% of the nonmetropolitan metros.

Taking into cognisance the magnitude of the legacy of service backlogs that still face the country in general, and local government in particular, it is fair to assume that the resources of many municipalities are not sufficient to adequately address these backlogs, especially in rural and other formerly disadvantaged areas such as our townships. The process of urbanisation is also exacerbating the situation.

Of further concern is the unquantified effect that the electricity restructuring process will have on municipal finances. Initial figures indicate that up to 32% of municipal revenue is derived from the sale of electricity. The manner in which local government will be compensated for such potential losses still remains unclear.

Now I come to the equitable share of the Division of Revenue Bill. In principle, Salga supports the proposed increase to the local Government share, in terms of the MTEF. In the same breath, allow me to categorically state that this form of funding remains inadequate for the stated purposes, namely providing basic services to low-income households. In essence, this grant is aimed at stabilising the central administration and consolidating the financial and administrative systems of local government. The intention is to afford local government the capacity to respond to the call of its constitutional mandate by invoking the co-operative arrangements as contemplated in chapter 3.

It is therefore our contention that distinction should be made between the provision of free basic services and the indigent policies. Whilst the question of indigence is somehow addressed through the equitable share of the nationally collected revenue, the provision of free basic services is not addressed. This is the main cause of concern for local government, as it impacts heavily on the already stretched and scarce resources of our municipalities. It would, therefore, do a lot of justice to the local government if this issue could be revisited and thoroughly reviewed with the sole aim of improving the quality of services provided to our communities.

The Intergovernmental Fiscal Relations Act outlines the legislative procedures for national division of revenue, and also establishes an institutional structure to facilitate the sharing of national revenue collected. Salga is reiterating its view that given the prominence of local government in the delivery of key services to the full spectrum of the electorate, it must be represented in the key intergovernmental fiscal structure that the Act established, such as the Budget Council. It is therefore critical that there be one structure for all role-players across the three spheres of Government. This would facilitate the crucial alignment of processes, systems and procedures across the governance spectrum.

The issue of local government capacity has been a key focus of the deliberation of this Bill. Salga contends that the establishment of a national data base on local government finances is of paramount importance. It is clear that national and provincial departments have capacity-building strategies for local government. It is critically important that all capacity-building initiatives are co-ordinated so that there are concerted and concentrated efforts to build capacity in areas such as management, infrastructure development and administrative systems as envisaged at the presidential co-ordinating council, which Salga was part of, on 14 December. It is critical that one department spearheads such an initiative, and the consolidation of grants is a positive step in that direction.

With regard to the division of powers and functions between local and district councils, it is critical that the sustained and expanded delivery of services to all communities be a key determinant in this process. At the heart of the new local government dispensation is the philosophy of developmental local government that enjoins municipalities to be responsive to the basic needs of their communities. The new local Government legislative regime, which is about to be augmented by the Local Government: Municipal Finance Management Act, laid the foundation for developmental nodes.

The allocation of powers and functions between local and district councils must further the aims of developmental government, and, consequently, such allocations shall maximise the potential for local level redistribution. It is against this background that the division of these functions between these two spheres of Government must be understood.

Finally, let me reiterate the support and commitment of Salga to effective participation in this House and in all its committees. We will engage with the Chairperson’s office and all other relevant structures of Parliament on co-operative strategies, to further enhance our participation for the benefit of our democracy as a whole and for local government in particular. [Applause.]

Mr T B TAABE: Chairperson, hon Deputy Minister and hon members, it is honestly not my intention to take much time this afternoon precisely because, as hon members know, they have indeed covered the kind of work we needed to do this afternoon in much greater detail.

But, I think I will be failing in my duty if I do not raise, in the presence of the Deputy Minister, the kind of concerns that we have been raising as Mpumalanga for the past two years. One of the concerns, obviously, relates to the issue of the kind of statistics we have been using in determining the allocation of nationally collected revenue. The 1996 statistics, for instance, have actually adversely affected funds allocated to Mpumalanga.

The point I am raising relates to the influx of illegal immigrants from our neighbouring countries. This, as I have pointed out earlier on, has adversely affected the allocation of the said resources. The statistics used as a basis for allocations do not capture the movement of people across national boundaries into Mpumalanga. The end result obviously is that those people then apply for our housing subsidies, attend our schools, access pensions for the elderly, take advantage of the child support grants and access many other services, which our people from our province should be accessing. It would be appreciated if some relief for movement of people could be factored into the formula used to determine the allocation of nationally collected revenue.

With regard to our provincial budget for the financial year commencing on 1 April 2002, we as Mpumalanga are pleased to announce before this House this afternoon that a substantial chunk of the allocation for this year went to education, which was basically 41%. That is in line with the national commitment by Government to increase the learning opportunities of our youth. As a province we have taken our cue from national Government, and we have gone further to ensure that we are able to give priority to poverty alleviation programmes. We have announced in the province, in this regard, that we have allocated 23% of the total share of the province to social services in in order to begin to deal with the issues I raised earlier.

One of the issues we felt we needed to address as a matter of extreme urgency as a province relates to the issue of security for our communities

• the problem of people crossing our boundaries. Much more has also been allocated in the area of safety and security.

I think it is important to raise again a few issues that were raised very sharply by the FFC during the public hearings. I think the point about conditional grants being limited and that they should promote constitutional intentions with respect to decentralisation and the principle of good governance applicable to subnational governance, is a matter we should take to heart, all of us as legislatures.

An issue was also raised in relation to the element of accountability for conditional grants that are shared among national Government and its recipient governments in the sense that they remain part of the national equitable share for which national Government is accountable. In this respect, the Financial and Fiscal Commission again emphasised in the public hearings the need for Government to develop norms and standards of basic service delivery.

It was further argued that conditional grants represent the revenue for receiving provincial and local government and, as such, the receiving subnational governments are accountable for delivery on national priorities given the norms and standards where the equitable share is not achieving such priorities.

The area, again, which I feel I should talk about relates to the area of special allocation grants. These grants have been used to address national priority areas, such as poverty and the HIV/Aids epidemic. Initially allocations were decided outside of the Budget process with the result that funds were disbursed late, resulting in underspending. This matter was raised very sharply in the public hearings, and we hope that something practical is going to be done to address this area.

Other issues to which I feel the House’s attention has to be drawn relate to what the national Treasury has done, and what we propose it should consider doing in the foreseeable future. While strides have been made by the national Treasury in working with municipalities and provincial governments to meet their developmental goals as set out in the Constitution, we have agreed and still agree that enormous challenges still remain and ought to be tackled head on. These challenges include, inter alia, the completion of the process to fully transform local government as a sphere of government, and that we need a more supportive system for both provinces and local government to enhance their capacities to spend, manage and implement policies.

We as Mpumalanga support this Bill. [Time expired.] [Applause.]

The DEPUTY MINISTER OF FINANCE: Chairperson, first and foremost I would like to thank all the members not only for their participation in the debate, but also for their overwhelming support for the Division of Revenue Bill. I think that says a lot about our evolving intergovernmental fiscal system in that we are able to have this degree of consensus, as the hon Kent Durr indicated in his own remarks.

I would like to thank the chairperson for raising issues particularly around socioeconomic rights, because I think our budgets count for nothing if they do not become relevant to the lives of our people. I think that at all times we must be able to measure what we do through, for example, our budgets, and also through other legislation that is contained in the Constitution and our policy as a Government. I really would like to thank the chairperson for raising socioeconomic rights, and especially that March is Human Rights month.

I would also like to thank the hon Theron from Gauteng, or from the DA rather … [Interjections.] The DEPUTY CHAIRPERSON OF COMMITTEES: Order, please!

The DEPUTY MINISTER: Will this argument, Chair, save some of my minutes? I would like to thank the hon Theron for the analysis that he gave of the Division of Revenue Bill. He raised quite a number of issues. The hon member from KwaZulu-Natal raised quite a number of issues, and I think, perhaps in response to those issues, I need to say that this is why one sees with this particular Budget that the largest increase is the increase that is being given to local government.

I would like to draw the attention of the member to page 167 of the Budget Review which actually details a lot of the grants that are aimed at local government and whose objective is to achieve precisely the issues that the member was indicating - issues around capacity-building, financial management and the restructuring process itself. So we have a very specific table in the review, Table 7.8, which details all of the transfers and grants that go to the local government. I would just like to say that many of them are really intended to support local government, so as to be able to do the things that the member was talking about.

On the issue of the Rural Development Programme and the Urban Renewal Strategy, it is important for members to recognise that this is a new culture in Government. This culture has never before existed. Departments have never pooled their resources, planned together and worked together. This is a culture, but, in addition to that, one of the things that became quite clear to us as Government, as we sought to move in this integrated fashion, was that there is a certain type of skill that was lacking in the Public Service, the kind of skill to manage cross-cutting programmes, the project management type of skill. But these are all issues that we are alive to and in a number of these nodes, rural and urban nodes, there is a lot of progress that has been made, as one of the members from the Northern Cape indicated.

On the R293 issue, I think a few years ago we did make a proposal on how to migrate from a situation in which we perpetually have people who are so- called R293 people, and how we would deal with that issue both in terms of provincial and local government. Perhaps it will be important to look at what the state of play is in that particular regard. However, what we have not sought to do is to foist the R293 stuff onto local governments that could not take over those responsibilities.

Indeed, viva Northern Cape, although the Gauteng people say there are only 1 000 people there, so they can build their houses quite quickly. [Laughter.] [Interjections.]

Again I would like to thank the member from Limpopo, who really has tried to show us just what the change has been since the advent of democracy, and we indeed appreciate that.

Regarding the comments made by the hon member Mr Durr on the service he received from the officials of the department, that is the kind of public service that we want our officials to render to the public. I think this is what Batho Pele should be about. It should be about the kind of service that our officials give. I do want to say that in many instances, we in the national Treasury in particular, are especially proud of the quality of people that we have, the quality of service that they render, and their professionalism, their dedication and commitment to the work.

With regard to the issue around the amendments reflecting the fact that we gazetted the draft Division of Revenue Bill in December and that the volume of the amendments probably reflects that, this goes back to the point that I made earlier on that perhaps Parliament does need to take note of that and make adjustments accordingly, because members must understand that we are engaged in a whole process. For example, we cannot publish the Medium- Term Budget Policy Statement earlier than we do, part of the reason being that we utilise some of the data that comes from the Reserve Bank, and this only comes with the third quarter’s bulletin, which comes out at the end of September. And so, it is important for us to utilise that data, because certain of the projections that we make are based on some of that information.

Therefore, this is a whole chain of interconnected events, because even for the Division of Revenue Bill to make sense we need to have made certain determinations in the Medium-Term Budget Policy Statement which must await the third quarterly bulletin of the SA Reserve Bank. I think Parliament does need to look at this issue and see how best it can engage with it, so that we can indeed avoid the situation that the member spoke about. I do accept, though, that Parliament has an important role to play in improving, through amendments, legislation that the executive has tabled for Parliament. I do accept that point.

An issue raised by a member here concerned ensuring that municipalities are advised well in advance of their financial year of the equitable share and other allocations. We recognise this, but we have decided to move fairly cautiously on this, bearing in mind that the transformation of the local sphere of government is an involved process in that we should, in determining each municipality’s share, take into account its fiscal capacity with a view to the prioritisation of the funding of municipalities for basic service delivery. The division per municipality is expected to be announced in the Gazette by 15 April.

With reference to the issues raised by the member from the Western Cape, we are indeed happy to hear that the coalition is working in the Western Cape. [Applause.] I think it confirms the old saying that there is always something new coming out of Africa, and I think this is one of them. [Interjections.] The comment the member made to the effect that provisions dealing with the financial management of allocations provided in the Division of Revenue Bill should be dealt with in legislation regulating public financial management is something we have taken note of and with which we agree. The Treasury is attending to the amendment of the PFMA in order to codify those sorts of issues, and we will take a similar approach with respect to local government when the Municipal Finance Management Act is in place. Finally, on issues raised by the representative from Salga, who criticised the viewpoint of national Treasury that 92% of revenue is raised at local government level and who contrasted that with the fact that a large percentage of the budgets of local government as a whole really reside in a few metros. That is a point that is well taken, but I think we must not counterpose the two, because the fact of a large portion of the expenditure being in a few metros does not automatically translate into smaller municipalities being unable to raise revenue. I just want to say on this point that there are a number of measures that we have to take in dealing with the issues of local government revenue.

Yes, from national Government’s side, we are rendering quite significant support to local authorities, particularly those that do not have fiscal capacity. But that is not all that has to be done. In other words, this is not only a case of pumping in money. There are other issues that need to be addressed. The issues around effective collection of revenue that is available at a particular municipality need to be addressed. There are issues of capacity-building that need to be attended to.

We have to approach these issues in that sort of holistic fashion and not think that the only issue is increasing the amount of resources that go to local government, while we do not attend to other issues that also need attention. Indeed, it may well be the case that we still need to beef up support with regard to certain municipalities. Let us take into consideration the whole variety of issues that need to be attended to.

On the point raised by the hon Taabe on statistics, firstly I would simply want to say that statistics do not become wrong simply because they disadvantage an allocation to a particular province. However, I do take the point that he is raising about the flow of people from neighbouring countries. I want the hon member to take note that if we were to take the census that was done in 2001, it did not discriminate between South Africans and non-South Africans. It was a general census that wanted to get a sense of the number of people in the country, because through that one is able to determine the level of services that need to be rendered.

The second point I would like to make is that in making decisions we have to base ourselves on something. And so the best information that was available to us was the 1996 census. By the way, that set of data that came up with that census is the best South Africa has had since the last proper census that was done in about 1969/1970. That was when a real national census was last done in South Africa, because thereafter, the country broke up into a whole number of entities. Therefore, we have to base ourselves on the best available information, and make judgments, of course in certain regards, as we make these sorts of decisions.

I really would like to thank all members for both their participation and their enthusiastic support for the Division of Revenue Bill. [Applause.]

Debate concluded.

Bill agreed to in accordance with section 65 of the Constitution.

              UNEMPLOYMENT INSURANCE CONTRIBUTIONS BILL

            (Consideration of Bill and of Report thereon)

Mr T B TAABE: Chairperson, Deputy Minister, hon members, ladies and gentlemen, as hon members of the House know, the Unemployment Insurance Contributions Bill of 2001 principally seeks to address the high level of employer default and noncompliance by proposing the introduction of tougher penalties and fines on those employers who fail to comply with the requirements of the Bill.

These measures are further strengthened by the proposals to bring the UIF collection regime under the ambit of the functions of the SA Revenue Service and its enabling legislation, the Income Tax Act, Act 58 of 1962. Further, the Bill proposes wide-ranging measures that fundamentally deal with aspects of noncompliance such as underdisclosure of employees’ earnings, nonpayment and misrepresentations. This will ensure that both employers and employees will not engage in fraudulent activities and will greatly enhance the capacity of the authorities to prosecute in this regard.

An electronic contributor database containing contribution records will, for the first time, be made available, thus obviating and effectively eliminating corruption-prone paper-based operations. It is further encouraging to note that the employers will be required by law, for the first time, to submit declarations listing those in their employ, their income and all other relevant information as may be required.

On the financial side, it is pleasing to note that the director-general is deemed to be the accounting authority of the fund for the purpose of this legislation in terms of the Public Finance Management Act.

Concerns have been raised about the possibility of a sharp increase relating to the Revenue Service’s staff. This will be addressed by transferring staff from the UIF who deal directly with contributions to the Revenue Service for that purpose.

As a committee we are acutely aware and quite happy that consultation on this legislation was indeed quite sufficient and very thorough. We accordingly support this Bill. [Applause.]

Debate concluded.

Bill agreed to in accordance with section 75 of the Constitution.

   COPYRIGHT AMENDMENT BILL PERFORMERS' PROTECTION AMENDMENT BILL

           (Consideration of Bills and of Reports thereon)

The CHAIRPERSON OF THE NCOP: Order! I have been informed that the Whippery have agreed that there should be one debate for the third and fourth Orders of the Day.

The MINISTER OF TRADE AND INDUSTRY: Chairperson, I must say I am very pleased that both the NA and NCOP will not earn needle time for the debates.

I think within the framework of Government policy on protecting intellectual property and complying with our international obligations, we are also achieving modernisation and introducing aspects to this important area which will benefit our people.

These two Bills and the amendments in them are essentially designed to introduce the concept that performers have certain rights and can accrue certain income from the playing of their performances subsequently. This is an important breakthrough. To do this, and precisely because there is an imbalance of power between performers, who are often individuals, and the more powerful institutions that use their performances, broadcasting stations and record companies, we are also establishing the idea of collecting societies, which is the coming together, or ability to come together, to ensure that these royalties can be collected. We are also introducing interesting ideas and correct ideas that traditional dancers also be regarded as performers.

Another aspect of this which I believe is important is that this is in a sense a further step towards empowering the micro enterprise and small income earner, because many performers are in essence that. It will help to empower people as our society changes. We are already seeing performances by black persons becoming more and more prominent, as our society becomes a more normal society. It is important that we regulate this process carefully. It does raise new and relatively difficult commercial transactions, so that the regulations that come out subsequent to these Bills becoming Acts will set up very clearly the collecting societies, will deal also with the obligations they have to report to the administering body, which is the Companies and Intellectual Property Office, and will ensure that mechanisms for dispute settlement are clearly spelt out. I believe, therefore, that these two amendments are very important new contributions to the whole arena of intellectual property and are establishing greater equity in the process by allowing performers certain income rights. I would like to thank the select committee for proposing further changes. These changes are, in essence, correct and hopefully will be supported by both Houses. I would urge the House to support these two amendments. I think it is an exciting new aspect of intellectual property law. [Applause.]

Mr M V MOOSA: Chairperson, I am being intimidated from all sides to be brief. You must protect me, Chairperson, because I think that something needs to be said today about the legislation that we are dealing with. When we pass laws in Parliament, usually what happens is that there is a human side which deals with the human spirit, the very essence of humanity - whether it is education, health or whatever else. There is also the legal side, the fact that we make laws to govern society. There is no Bill that better describes those two areas than the ones before us today. What these Bills do is to propose a whole lot of legal processes which protect the copyright, and so forth, of performers, who are in many ways the lifeblood of most societies. The Minister dealt with that legal side. I just want to tell the House a little bit about the human side, things that we all know about, but about which we have been wondering when something was going to be done. This Bill is doing something about those things that we all know about.

Hon members will remember the song from The Lion King, the one that kids and adults know, etc. [Interjections.] The person who wrote that song and the people who performed it are indigenous South Africans, people whose music and art became known all over the world. The lyrics of that song are on the lips and tongues of billions of people across the globe, young and old.

The person who composed that song died a pauper - a poor person. He died so poor that he could not even educate his own kids properly. Hon members will remember other people who were not acknowledged for the great things they did, such as Enoch Sontonga, who wrote the national anthem that we sing here in this country, which is, in fact, the national anthem of the African continent. The spirit of our continent, society and people has not been adequately recognised, mostly because, art, culture, etc, have to be married to a livelihood, so that one can have a plate of food on one’s table and so that one can think about one’s poetry, art, culture and music. Most of these performers have not been paid for the work they have done over the years, and still do not get paid for the work that they do.

This has been a bone of contention and has been raised with the Ministry of Trade and Industry many times, and the Minister, as he has indicated to hon members, has taken the matter seriously and has done something about it. He is responding to the call of our athletes and performers out there. We want to congratulate the Minister for having taken this step. It is a very big step towards lifting the spirit of our people, that which keeps the creativity in our society alive. This Bill is going to require that anybody who plays the music and communicates the creativity of any other person must pay for it. When one listens to the radio and hears a nice song, somebody must get paid for that song being played. It must not only be the rich fat cat who has bought the song from the poor performer and who keeps the poor artist and poor performer from producing these things that gets paid, but also those people who perform and write songs. That is what this Bill is about in simple terms.

This Bill is creating a regime in this country that is going to respect the copyright of people who have creativity. It is going to require, by law, that those people are paid when their creativity is used by others, whether in this country or anywhere else in the world. It is going to require that tribunals be set up and that other dispute resolution mechanisms and arbitrations, etc take place if performers do not get paid for their creativity and the work they do.

There are also obligations that come with passing a law like this. If we utilise the creativity of people in other countries, we will have to pay them, even if they are from across our borders. It is good, I am sure, because hon members know that now that South Africa has become a very big part of the continent of Africa, we are experiencing African music every day. If one is listening to the radio, one hears it. In fact, even this weekend in Cape Town there are going to be African artists from all over the world playing here - Khadja Nin and all sorts of people. Those people have to be paid royalties if their music is played on our radio stations. So, we have to pay some money to people outside our borders because of this law, but it is a good law. It is something that is necessary and something we had to do. We are proud of the Ministry and want to congratulate the Minister for having taken this step.

I want to call on this House to fully endorse and support this legislation. I think that it makes us a better country and a better society. [Applause.]

Mr J L THERON: Chairperson, I will be very brief.

Sedert 1995 het betrokkenes ernstig gedebatteer oor die tantieme of ``royalties’’ van uitvoerende kunstenaars. Dit is wyd gerapporteer dat kunstenaars nie hulle regverdige aandeel van die tantieme verkry nie. Die huidige situasie is dat die opnamemaatskappye se onderhandelingsposisie te sterk is in die huidige stelsel en sodoende kunstenaars benadeel. Dit is dus baie belangrik dat die regte van uitvoerende kunstenaars beter beskerm sal word deur wetgewing in Suid-Afrika.

Die doelwit van die amendemente op die Wysigingswetsontwerp op Kopiereg en die Wetsontwerp op die Beskerming van Kunstenaars is om ‘n begin te maak om die talle aspekte aan te spreek wat betref die insameling en verspreiding van tantieme en om ewewig te bring in die monetêre en magsongelykhede wat in die bedryf bestaan. Uit die besprekings wat plaasgevind het in die komitee is dit duidelik dat die staat ‘n rol het om te vervul. ‘n Raamwerk moet geskep word om die regte van al die betrokkenes te beskerm. Die huidige situasie is ongelyk en moet reggestel word.

Die toetrede van die Departement van Handel en Nywerheid sal help om die belange van die partye in die industrie op ‘n meer gelyke basis te beskerm. Meeste van die rolspelers in die industrie het hul steun uitgespreek vir die wetsontwerp in die voorleggings wat gemaak is. Die DA is daarvan oortuig dat hierdie wetsontwerpe ‘n positiewe bydrae tot die industrie sal maak en steun dus albei hierdie twee wetsontwerpe. [Applous.] (Translation of Afrikaans paragraphs follows.)

[Since 1995 stakeholders have been seriously debating about the percentage of royalties of performing artists. It was widely reported that artists did not receive their fair share of the royalties. The current situation is that recording companies have too strong a negotiation position in the present system and, in this way artists are prejudiced. Therefore, it is very important that the rights of performing artists are better protected by legislation in South Africa. The objective of the amendments to the Copyright Amendment Bill and the Performers’ Protection Amendment Bill is to start addressing all the aspects relating to the collection and distribution of royalties and to achieve a balance in the monetary and power inequalities that exist in the industry. From the discussions that took place in the committee it is clear that the state has a role to play. A framework must be created in order to protect the rights of all the stakeholders. The current situation is unequal and must be rectified.

The intervention of the Department of Trade and Industry will assist to protect the interests of the parties and the industry on a much more equal basis. Most of the role-players in the industry have expressed their support for the Bill in the submissions that were made. The DA is convinced that these Bills will make a positive contribution to the industry and, therefore, supports both these Bills. [Applause.]]

Dr E A CONROY: Chairperson, Minister Erwin and colleagues, any worker should be entitled to enjoy the fruit of their efforts. The Bible says that men and women shall eat their daily bread with the sweat of their daily toils on their brows. This does not only mean that a person should not expect to eat if he or she does not make an effort, but it also means that if one makes an honest effort, one should also be entitled to enjoy the fruit of one’s efforts.

These efforts may be in the form of the financial capital when one invests something, or the physical work one invests in or the intellectual capital or effort one invests. What one has invested belongs to one, unless one sells it to someone else. Intellectual capital is that which one produces and brings forth with one’s talent or intellectual capacity or mind when one designs, writes or composes something. One does not necessarily have to produce something physical or tangible with one’s hands to be productive.

If one produces a song with one’s voice or plays something on the piano or another musical instrument, that will be part of one’s intellectual or talent capital which one applies for one’s good to make a living.

Die huidige bedingingsmilieu sien nie voldoende om na die belange van kunstenaars nie, veral nie vir sover dit die persentasieverdeling vir inkomste tussen kunstenaars en die opnamemaatskappye betref nie. Hierdie is egter ‘n saak wat lank reeds ook in die publieke domein gedebatteer word. Gevalle is bekend waar veral swart kunstenaars oorlede is, sonder dat hulle ooit ‘n sent gesien het van die inkomste wat deur hulle intellektuele vermoëns voortgebring is.

In dié stadium dink ek kollega Moosa het tien teen een my toespraak te lese gekry voor die tyd. Daar word in hierdie opsig veral gedink aan die lied wat onlangs in die Disneyfilm The Lion King gebruik is en tot ‘n groot mate tot die wêreldwye loketsukses daarvan bygedra het. Die Suid-Afrikaanse skepper van die lied is egter lank reeds oorlede en nie eens sy nasate blyk enige inkomste uit sy intellektuele eiendom te verdien nie.

Daar word met hierdie onderling verbandhoudende wetsontwerpe wat hier gedebatteer word, gepoog om ‘n verskeidenheid onderwerpe oor die insameling en verdeling van tantieme aan te spreek en die vele wanbalanse in die bedryf reg te stel. Die algemene en oorhoofse doel van hierdie wysigingswetsontwerpe is om praktyke wat Suid-Afrikaanse kunstenaars uitbuit, te voorkom en ‘n gelyke speelveld vir alle deelnemers daar te stel

• en was lank reeds nodig. Die Nuwe NP steun albei wetsontwerpe. (Translation of Afrikaans paragraphs follows.)

[The current bargaining environment does not pay sufficient attention to the interests of artists, in particular when it comes to the percentage split in earnings between artists and the recording companies. This is an issue, however, which has for some time been debated in the public domain as well. There are known cases where mainly black artists have passed away without ever having seen a cent of the earnings generated by their intellectual abilities.

At this stage I think that colleague Moosa has probably had insight into my speech before the time. In this regard one thinks especially about the song that was recently used in the Disney film The Lion King and which to a large extent contributed to its worldwide box-office success. The South African creator of this song has long since passed away and evidently not even his descendants have earned any income from his intellectual property.

The interrelated Bills now under discussion seek to address a range of issues regarding the netting and sharing of royalties and to remedy the many imbalances in the industry. The general and overall aim of these amending Bills is to prevent practices that exploit South African artists and to establish a level playing field for all participants - which has been necessary for a long time. The New NP supports both Bills.]

Mr M J BHENGU: Chairperson, I want to start by saying I think the hon Mr Moosa has actually described very clearly and very succinctly the nature of the amendments before this House. But I just want to take Mr Moosa’s point a bit further. These amendments herald a new beginning in the lives of performers in this country.

For the first time our performers will be protected from exploitation by the recording companies. They have been exploited for decades, and hon members will appreciate that the beauty of the African voices has enriched many of European singers, such as Elvis Presley and Paul Simon. For example, Elvis Presley’s song I can’t Help Falling in Love was enriched with the lyrics of a song by Solomon Cele, who was popularly known as Solomon Linda, from his ever famous song Imbube. They took the tune and wrote English lyrics to it and turned it into an immortal hit for Elvis Presley.

African voices have created millionaires in our music recording industry, but our performers have actually died in abject poverty. The song Imbube was recorded in 1939 and it was turned into a hit pop single recorded more than a hundred times by musicians the world over. It is estimated that overseas the song, which was rearranged and rerecorded in an English version as The Lion Sleeps Tonight made in excess of US $200 million and Solomon got - hon members can guess? - only R170 000, and he died a pauper.

Take, for instance, the example of Simon Nkabinde, who was popularly known as Mahlathini, the voice of the bull. He had an amazing, awe-inspiring voice that developed into full power and majesty. He sang with the Mahotella Queens. His famous song was Sengikhala ngiyabaleka. But what happened to him? He died a pauper. There are many others such as Margaret Singana, Zakes Nkosi, Thomas Ndaba, David Sello, Alpheus Nkosi, Selby Ntuli, West Nkosi, Marks Mankwane and Joseph Makwela. There are many others. They were all robbed by the recording companies - I nearly used another word - of their royalties, and they all died in abject poverty. Their lawyers tried in vain.

These are the reasons that compel us, today, in the spirit of what the hon Mr Moosa has said, to support and embrace these amendments before this House. [Applause.]

Mr K D S DURR: Madam Chair, there is no doubt that there is general agreement that the formation of regulated collecting societies will enhance the revenue stream of South African musicians and performers. The electronic revolution now makes it possible to collect revenue in small fractions and the software exists for this to happen. Previously this was impossible - technically it could not be done - but it can be done now, and it is good that we are doing it now.

The reality is that these measures do much to foster the performing arts as many who create music often find it difficult to capitalise or benefit from their creativity. The Copyright Amendment Bill focuses on the collection of fees and the Performers’ Protection Amendment Bill on the currently weak bargaining position of the performer. That is very important. This is done by introducing collective bargaining in order to equalise the disproportionate power relationships between performers and large TV stations and radio networks, thereby levelling the playing field between the consumers and producers and distributors.

We favour the Bill, as the ACDP, because it is an enabling Bill, and the private sector will create its own apparatus to self-regulate in order that individuals may receive their just rewards for artistic endeavour. The Bill brings us into line with practice in other jurisdictions. What we need is to seek reciprocity with other countries where they respect the rights of our artists, so that we then respect the rights of their artists. If we seek reciprocity, we will, in other words, honour the rights of artists from countries where they honour the rights of our artists. I think reciprocity is a basic tenet.

With that suggestion may I say that we not only support the Bill, but we acclaim it and we congratulate the Minister. [Applause.]

Mk M P THEMBA: Sihlalo, Ndvuna lehlon, malunga lahlon, manene nemanenekati, injongo yaletingucuko leti kutsi kulungiswe tindzaba tekubukwa kanye nekuniketelwa kwemivuzo - royalties - kubanikati ngalokulinganako, kanye nekwetama kucondzisa konkhe loko lokungakamiswa kahle kwacondza mayelana netimali, emalungelo, kanye nemagunya lakhona kwanyalo emtsetfweni kulemboni.

UmTsetfosivivinyo wekuGucula wemaLungelo alokuBhaliwe - Copyright Amendment Bill - ulungisa umTsetfo wakuCala - Principal Act - ngobe wona ushiya ngaphandle lokunyenti lokuphatselene nawo, nekutsi kusukela ngemnyaka wa- 1995 bekusolomane kunekuphikisana lokukhulu ngekutsi lemivuzo lesolo yancwabelana kanye nemalungelo ekuklomula kumbe ekucopha kwabochwephesha bebadlali kufanele kunikwe badlali.

Injongo yalomTsetfo wakuCala yona bekukubukelela kakhulu intsandvo yebadlali netinkampani tekucopha, futsi bewucindzetela kakhulu esikhatsini sekucopha emsakatweni, ungawaniki badlali onkhe lamanye emalungelo. Lokunyenti lebengitakusho sebakushito balingani bami, ngako-ke ngite sifiso sekona loko lokuhle lasebakushito. Ngitsandza kwesekela lemiTsetfosivivinyo lemibili. [Tandla.] (Translation of siSwati paragraphs follows.)

[Ms M P THEMBA: Chairperson, hon Minister, hon members, ladies and gentlemen, the intention of these amendments is to address the issues of conferring and paying of royalties to copyright owners in an equitable manner and to try and redress the financial and power imbalances that exist in the current legislation regarding the industry.

The Copyright Amendment Bill amends the principal Act which leaves out many aspects of the industry which it should deal with. Since 1995 there has been a huge debate as to whether the royalties accrued from recording rights of performing artists should be paid to performers.

The objective of the principal Act’s focus was mainly to look after the interests of recording companies, and it put more emphasis on the rights of broadcasters at the expense of the rights of performing artists.

My colleagues have already raised many of the issues I wanted to raise, therefore I do not wish to spoil their good work. I support the two amending Bills. [Applause.]]

UMPHATHISIHLALO WOMKHANDLU WEZIFUNDAZWE KAZWELONKE: Ngiyabonga kakhulu. Ngiyabona ukuthi ngoba awusakhulumi ulimi lwasekhaya, usulokhu uwa mawuthi uzama ukulukhuluma. Sizocela - ke ukuthi ulukhulume kakhulu, ukuze ungawi.

The MINISTER OF TRADE AND INDUSTRY: Thank you, Chairperson of the NCOP. I can see that you are no longer speaking your home language now. You always stumble when you try to speak it. We would ask you to speak loudly so that you will not stumble.]

Chairperson, you will be relieved to know that I will not use my full recording time. I would like to thank the members for their support. I think this is an exciting and important Bill. I am also quite prepared to arbitrate between Dr Conroy and Mr Moosa as to who actually had copyright to the story about the Lion King. I am pleased to see that the hon member Bhengu had a much wider repertoire of stories to tell, so I do not have to deal with a copyright dispute between three parties, but just one between two parties.

I really do think that this is an exciting day. One of the challenges that will face us in the Department of Trade in Industry, and we are working on it, is to make this right known to performers. What the hon member Bhengu spoke about was some of our real history. When we think of those persons, we realise that this was very much part of our culture, and it was lost. From now on, as we develop more and more performers of international quality, it will also help put income back into our communities in a way that will stabilise our society.

One of the great strengths of our society, of our country, is its cultural richness and its ability to translate that into the most wonderful performances of every type. As my colleague Mr Moosa said, this is an exciting day. We have been able to put together some very complicated technical laws in a way that will help people to be better people. [Applause.]

                         ANIMAL HEALTH BILL

            (Consideration of Bill and of Report thereon)

Rev P MOATSHE: Chairperson, hon members, this Bill comes before this House for the second time owing to the fact that it was referred to the National Assembly and there were minor changes.

The Bill seeks to provide for the control of animal diseases and parasites. We understand the importance this Bill holds for animals in ensuring that they will have the best protection against fatal diseases that could quite possibly eliminate them. We are also aware of the consumers’ need to be assured that the animal products they consume on a daily basis are safe from contamination. This Bill offers us this assurance.

We are very aware of the vast range of control measures that is needed to contain the outbreak of disease, such as foot-and-mouth disease. We have seen at first hand the effect the disease has had on the farmer, on the community, on the province and on our country. We all read with mounting concern every new report of an outbreak of the disease as it moved from farm to farm.

We watched anxiously as the Government department moved in to quarantine the area and restrict the movement of livestock, pedestrians and vehicles in their efforts to contain the disease. We felt the pain of those who watched while hundreds of herds of cattle and other livestock were removed and burned.

Today we realise that even after we brought the disease under control in provinces like KwaZulu-Natal, South African beef products still have not overcome some of the international scepticism since the disease first broke out. As a nation we need to demonstrate emphatically to the international community that we not only overcame our animal health problems quickly, but that we contained and limited the disease to the area where the outbreak was first reported. I believe that we did this more than adequately, but unfortunately the international community is not convinced.

This Bill demonstrates South Africa’s serious approach to animal health by incorporating all the lessons learned from current events to the events of the more distant past. The Bill incorporates public views and other stakeholders’ views on crucial issues such as compensation for those who stand to lose their livelihood because of steps taken by the Government to quarantine farms and destroy infected animals.

The Bill also retains vital components of the 1984 Animal Diseases Act, such as the continued incorporation of international norms and standards for disease-control measures and the establishment of quarantine stations, among other things. An important innovation contained in this new Bill is that the export of animals and animal products will now be controlled in order to protect the animal health status of the importing country. There are powers governing entry and investigations may be conducted without the authority of a warrant under certain circumstances. This especially enables officials who follow the trail of stock thieves to their destinations to catch them red- handed.

Finally, our committee has carefully examined the contents of this Bill and we are satisfied that it will demonstrate our seriousness in the promotion of animal health and of combating and controlling of animal diseases. We therefore endorse this Bill. [Applause.]

Debate concluded.

Bill agreed to in accordance with section 65 of the Constitution.

The Council adjourned at 19:08. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

                        FRIDAY, 1 MARCH 2002

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)     The  Minister  for  Justice  and   Constitutional   Development
     submitted the Wetsontwerp op die Internasionale Strafhof  [W  42  -
     2001]  (National  Assembly  -  sec  75)  to  the  Speaker  and  the
     Chairperson on 1 March 2002. This is the  official  translation  of
     the International Criminal Court  Bill  [B  42  -  2001]  (National
     Assembly - sec 75), which was introduced in the  National  Assembly
     by the Minister on 20 August 2001.

TABLINGS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 The Financial and Fiscal Commission's Strategic Plan for 2002-2003.

                        MONDAY, 4 MARCH 2002

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The Joint Tagging Mechanism (JTM) on 1 March 2002  in  terms  of
     Joint Rule 160(6), classified the following Bill as  a  section  75
     Bill:


     (i)     Reinstatement of Enrolment of Certain  Legal  Practitioners
          Bill [B 6 - 2002] (National Assembly - sec 75).

National Council of Provinces:

1. The Chairperson:

 The following paper tabled on 27 February 2002 is now referred  to  the
 Select Committee on Security and Constitutional Affairs:


 (1)    Report of the Auditor-General on the Financial Statements of the
     Office of the Public Protector for 1999-2000 [RP 09-2002].

                        TUESDAY, 5 MARCH 2002

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)     The  following  Bill  was  introduced  by   the   Minister   of
     Communications in  the  National  Assembly  on  5  March  2002  and
     referred to the Joint Tagging Mechanism  (JTM)  for  classification
     in terms of Joint Rule 160:


     (i)     Electronic Communications and  Transactions  Bill  [B  8  -
          2002] (National Assembly - sec 75) [Bill and prior  notice  of
          its introduction published in Government Gazette No 23195 of 1
          March 2002.]


     The  Bill  has  been  referred  to  the  Portfolio   Committee   on
     Communications of the National Assembly.


     In terms of Joint Rule 154 written views on the  classification  of
     the Bill may be submitted to the  JTM  within  three  parliamentary
     working days.


 (2)    On 5 March 2002 the Joint Tagging Mechanism (JTM), in  terms  of
     Joint  Rule  160,  classified  the  following   Bill,   which   was
     introduced as a section 76 Bill, as a section 75 Bill:


     (i)     Disestablishment of South  African  Housing  Trust  Limited
          Bill [B 3 - 2002].


          In terms of Joint Rule 160(4), the JTM finds that the Bill:


          (a) is not a section 76 Bill;


          (b) includes no provision to which the procedure prescribed in
              section 76 of the Constitution applies;


          (c) is in breach of section 73(3) of the Constitution in  that
              it was incorrectly introduced in the wrong House; and


          (d) is thus constitutionally out of order.


     In terms of Joint Rule 160(6) the Bill is constitutionally  out  of
     order. According to Joint Rule 162 the Bill may  not  be  proceeded
     with, but may be re-introduced in the correct House.


 (3)    The following Bill was introduced by the Minister of Housing  in
     the National Assembly on 5 March 2002:


     (i)     Disestablishment of South  African  Housing  Trust  Limited
          Bill [B 3 - 2002] (National Assembly -  sec  75)  [Explanatory
          summary of Bill and prior notice of its introduction published
          in Government Gazette No 22728 of  5 October 2001].


     The Bill has been referred to the Portfolio  Committee  on  Housing
     of the National Assembly.
          NOTE: On 14 February 2002, at the request of the  Minister  of
          Housing, this Bill was introduced as a section 76 Bill in  the
          National Council of  Provinces  by  the  Select  Committee  on
          Public Services. As the Bill has since been classified by  the
          Joint Tagging Mechanism (JTM) as a section 75 Bill (see p  166
          in the Announcements, Tablings and Committee Reports of today,
          5 March 2002), it cannot be proceeded  with  in  the  National
          Council of Provinces.


          As the Bill introduced today has not been printed  again,  the
          information relating to the House of introduction,  person  in
          charge and classification of the Bill,  as  reflected  on  its
          front page, is incorrect. The Bill is in  fact  a  section  75
          Bill introduced in the National Assembly by  the  Minister  of
          Housing.

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Finance:

 (1)    Proclamation No 6 of 2002 published in the Government Gazette No
     23078 dated 31 January 2002, Commencement of section 1,  Chapter  1
     sections 2 to 16, Chapter  2  sections  17  to  20  and  Chapter  5
     sections  72  to  82  exception  section  79   of   the   Financial
     Intelligence Centre Act, 2001, made in terms of section 82  of  the
     Financial Intelligence Centre Act, 2001 (Act No 38 of 2001).


 (2)    Government Notice No R.100 published in the  Government  Gazette
     No 23080 dated 1 February 2002, Amendment of prescribed fees,  made
     in terms of section 36 of the Pension Funds Act, 1956  (Act  No  24
     of 1956).


 (3)    Government Notice No 23105 published in the  Government  Gazette
     No 23105 dated 15 February 2002,  Amendment  of  regulations  under
     the Long-Term Insurance Act, 1998, made  in  terms  of  section  72
     read with section 49 of the Long-Term Insurance Act, 1998  (Act  No
     52 of 1998).

1. The Minister of Water Affairs and Forestry:

 Report and Financial Statements of the Namaqua Water  Board  for  2000-
 2001.

                       WEDNESDAY, 6 MARCH 2002

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Speaker and the Chairperson:

 Report of the Auditor-General on the Financial Statements of the Cross-
 Border Road Transport Agency for 1999-2000 [RP 89-2001].

                       THURSDAY, 7 MARCH 2002

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)     The  Minister  for  Justice  and   Constitutional   Development
     submitted the Molaotlhomo wa Pusetso ya  Kwadiso  ya  Babueledi  ba
     Semolao ba ba Rileng [M 6 - 2002] (National Assembly - sec  75)  to
     the Speaker and the Chairperson  on  7  March  2002.  This  is  the
     official translation of the Reinstatement of Enrolment  of  Certain
     Legal Practitioners Bill [B 6 -  2002]  (National  Assembly  -  sec
     75), which was introduced in the National Assembly by the  Minister
     on 20 February 2002.


 (2)    The Minister of Home  Affairs  submitted  the  umTsetfosivivinyo
     wetiFikinamtfwalo  [umTstetfosivivinyo   79   -   2001]   (National
     Assembly - sec 75) to the Speaker and the Chairperson  on  7  March
     2002. This is the official translation of the Immigration  Bill  [B
     79 - 2001] (National Assembly - sec 75), which  was  introduced  in
     the National Assembly by the Minister on 1 October 2001.

National Council of Provinces:

1. The Chairperson:

 The following paper tabled on 1 March  2002  is  now  referred  to  the
 Select Committee on Finance:


 The Financial and Fiscal Commission's Strategic Plan for 2002-2003. TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Education:

 Report and Financial Statements of the National Student  Financial  Aid
 Scheme for 2000-2001.

                        FRIDAY, 8 MARCH 2002

ANNOUNCEMENTS:

National Council of Provinces:

1. The Chairperson:

 The following papers have been tabled  and  are  now  referred  to  the
 relevant committees as mentioned below:


 (1)    The following paper is referred to the Select Committee on  Land
     and Environmental Affairs:


     Report and Financial Statements of  the  Namaqua  Water  Board  for
     2000-2001.


 (2)    The following papers are referred to  the  Select  Committee  on
     Finance:


     (a)     Proclamation No 6 of 2002 published in  Government  Gazette
          No 23078 dated 31 January 2002,  Commencement  of  section  1,
          Chapter 1 sections 2 to 16, Chapter 2 sections 17  to  20  and
          Chapter 5 sections 72  to  82  exception  section  79  of  the
          Financial Intelligence Centre Act,  2001,  made  in  terms  of
          section 82 of the Financial Intelligence Centre Act, 2001 (Act
          No 38 of 2001).


     (b)     Government Notice No R.100 published in Government  Gazette
          No 23080 dated 1 February 2002, Amendment of prescribed  fees,
          made in terms of section 36 of the  Pension  Funds  Act,  1956
          (Act No 24 of 1956).


     (c)     Government Notice No 23105 published in Government  Gazette
          No 23105 dated 15  February  2002,  Amendment  of  regulations
          under the Long-Term Insurance Act,  1998,  made  in  terms  of
          section 72 read with section 49  of  the  Long-Term  Insurance
          Act, 1998 (Act No 52 of 1998).


 (3)    The following paper is  referred  to  the  Select  Committee  on
     Public Services:


     Report of the Auditor-General on the Financial  Statements  of  the
     Cross-Border Road Transport Agency for 1999-2000 [RP 89-2001].

                        MONDAY, 11 MARCH 2002

ANNOUNCEMENTS: National Council of Provinces:

1. The Chairperson:

 (1)    The following statement  has  been  submitted  to  the  National
     Council of Provinces by the MEC for Housing  and  Local  Government
     in the Northern Cape under section 106(3) of the Local  Government:
     Municipal Systems Act, 2000 (Act No 32 of 2000):


     Committee  of  Inquiry  into  the  Affairs   of   the   Tsantsabane
     Municipality, Northern Cape


     The  Statement  is  referred  to  the  Select  Committee  on  Local
     Government and Administration.


 (2)    The following statement  has  been  submitted  to  the  National
     Council of Provinces by the MEC for Housing  and  Local  Government
     in the Northern Cape under section 106(3) of the Local  Government:
     Municipal Systems Act, 2000 (Act No 32 of 2000):
     Committee  of  Inquiry  into   the   Affairs   of   the   Siyancuma
     Municipality, Northern Cape


     The  Statement  is  referred  to  the  Select  Committee  on  Local
     Government and Administration.


 Copies of the statements are available from the office of the Clerk  of
 the Papers.


 (3)    The following paper tabled on 7 March 2002 is  referred  to  the
     Select Committee on Education and Recreation:
     Report and Financial Statements of the National  Student  Financial
     Aid Scheme for 2000-2001.

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Finance:

 (1)    The Strategic Plan for the National Treasury for 2002-2005.


 (2)    Memorandum of Subsidiary Arrangement between the  Government  of
     the Republic of  South  Africa  and  the  Government  of  Australia
     concerning  Developing  Profitable  Beef   Business   Systems   for
     Previously Disadvantaged Farmers in South Africa, tabled  in  terms
     of section 231(3) of the Constitution, 1996.
 (3)    Memorandum  of  Understanding  between  the  Government  of  the
     Republic of South Africa and the Government  of  Canada  concerning
     the South Africa Teacher Development Project, tabled  in  terms  of
     section 231(3) of the Constitution, 1996.


 (4)    Rider No. 1 to Financing Agreement No. SA/B7-3200-99/26  between
     the Government of the Republic of South  Africa  and  the  European
     Union concerning the Support Programme for Social  Housing,  tabled
     in terms of section 231(3) of the Constitution, 1996.


 (5)    Rider No. 1 to Financing Agreement No.  SA7/-3200-96/14  between
     the Government of the Republic of South  Africa  and  the  European
     Union concerning the Trade and Industry Policy  Support  Programme,
     tabled in terms of section 231(3) of the Constitution, 1996.


 (6)     Rider  to  Financing  Agreements  for  programmes  between  the
     Government of the Republic of South Africa and the European  Union,
     tabled in terms of section 231(3) of the Constitution, 1996.


 (7)    Financing Agreement No. SA/73200/00/31 between the Government of
     the Republic of South Africa and the European Union concerning  the
     Economic Integration Support Programme to the BLNS Phase 1,  tabled
     in terms of section 231(3) of the Constitution, 1996.


 (8)    Rider No. 3 to Financing Agreement No. SA/B7-5070-95/009 between
     the Government of the Republic of South  Africa  and  the  European
     Union concerning the Library Books  and  Training  of  Historically
     Disadvantaged Institutions Programme, tabled in  terms  of  section
     231(3) of the Constitution, 1996.


 (9)    Rider No. 5 to Financing Agreement No. SA/97/3200/11 between the
     Government of the Republic of South Africa and the  European  Union
     concerning the Public Health Sectoral Support Programme, tabled  in
     terms of section 231(3) of the Constitution, 1996.


 (10)Rider No. 1 to Financing Agreement No. SA/73200-98/12  between  the
     Government of the Republic of South Africa and the  European  Union
     concerning the  Technical  Assistance  Team  to  Support  Planning,
     Implementation and Monitoring of RDP Projects, tabled in  terms  of
     section 231(3) of the Constitution, 1996.


 (11)Rider No. 2 to Financing Agreement  No.SA/73200-98/09  between  the
     Government of the Republic of South Africa and the  European  Union
     concerning Support for the SADC Finance  and  Investment  Protocol,
     tabled in terms of section 231(3) of the Constitution, 1996.


 (12)Rider No. 3 to Financing Agreement No. SA/95-75075-006 between  the
     Government of the Republic of South Africa and the  European  Union
     concerning the Private  Sector  Development  Programme,  tabled  in
     terms of section 231(3) of the Constitution, 1996.


 (13)Rider No. 1 to Financing Agreement No. SA/73200-98/03  between  the
     Government of the Republic of South Africa and the  European  Union
     concerning the Financial Management Improvement  Programme  (FMIP),
     tabled in terms of section 231(3) of the Constitution, 1996.


 (14)Rider No. 4 to Financing Agreement No. SA/96-73200-007 between  the
     Government of the Republic of South Africa and the  European  Union
     concerning Non-Grid Electrification of  Rural  Schools,  tabled  in
     terms of section 231(3) of the Constitution, 1996.


 (15)Rider No. 1 to Financing Agreement No. SA/73200-00/31  between  the
     Government of the Republic of South Africa and the  European  Union
     concerning the Economic Integration Support Programme to  the  BLNS
     Phase 1, tabled in terms of section  231(3)  of  the  Constitution,
     1996.


 (16)Agreement between the Government of the Republic  of  South  Africa
     and  the  Government  of  the  Republic  of  Finland   on   Finnish
     Assistance to the Northern Province  Rural  Development  Programme,
     tabled in terms of section 231(3) of the Constitution, 1996.


 (17)Agreement between the Government of the Republic  of  South  Africa
     and the Government of the Republic of  Finland  concerning  general
     terms and procedure for Development Co-operation, tabled  in  terms
     of section 231(3) of the Constitution, 1996.


 (18)Agreement between the Government of the Republic  of  South  Africa
     and  the  Government  of  the  Republic  of  Finland   on   Finnish
     Assistance  to  the  Support   to   Environment   and   Sustainable
     Development in the North West Province, tabled in terms of  section
     231(3) of the Constitution, 1996.


 (19)Memorandum of Understanding between the Government of the  Republic
     of South Africa and the Government of Flanders on  Development  Co-
     operation, tabled in terms of section 231(3) of  the  Constitution,
     1996.
 (20)Agreement between the Government of the Republic  of  South  Africa
     and the Government of the Republic of  France  on  Development  Co-
     operation, tabled in terms of section 231(3) of  the  Constitution,
     1996.


 (21)Exchange of Notes concerning the  Study  and  Expert  Fund  project
     between the Government of the Republic  of  South  Africa  and  the
     Federal Republic of Germany, tabled in terms of section  231(3)  of
     the Constitution, 1996.


 (22)Implementing agreement between the Government of  the  Republic  of
     South  Africa  and  the  Government  of  Sweden  concerning   Local
     Government Support to the Northern Cape Province, tabled  in  terms
     of section 231(3) of the Constitution, 1996.


 (23)Agreement between the Government of the Republic  of  South  Africa
     and the Government of Sweden on General Terms  and  Conditions  for
     Development Co-operation 1 September 2001-31 December 2005,  tabled
     in terms of section 231(3) of the Constitution, 1996.


 (24)Agreement between the Government of the Republic  of  South  Africa
     and the Government of Sweden on  a  Partnership  Programme  between
     Sweden and Buffalo City  within  the  area  of  Urban  Development,
     tabled in terms of section 231(3) of the Constitution, 1996.


 (25)Amendment No. 1  to  the  Bilateral  Agreement  No.  SO9AG-674-0326
     between the Government of the Republic  of  South  Africa  and  the
     United States of America concerning increased commercial  viability
     of existing small and  medium  Agribusiness  Programme,  tabled  in
     terms of section 231(3) of the Constitution, 1996.


 (26)Amendment No. 1 to the Bilateral Agreement No. SO2-674-0327 between
     the Government of the Republic  of  South  Africa  and  the  United
     States  of  America  concerning  Workforce  Development  Programme,
     tabled in terms of section 231(3) of the Constitution, 1996.


 (27)Amendment No. 1 to  the  Bilateral  Agreement  No.  SO6AG-674-0312D
     between the Government of the Republic  of  South  Africa  and  the
     United States of America  concerning  Fiscal  Management  of  Urban
     Environmental Infrastructure, tabled in terms of section 231(3)  of
     the Constitution, 1996.


 (28)Amendment No. 1  to  the  Bilateral  Agreement  No.  SO4AG-674-04A1
     between the Government of the Republic  of  South  Africa  and  the
     United States of America concerning  support  for  economic  growth
     and analysis and Mandela Economics Scholars  Programme,  tabled  in
     terms of section 231(3) of the Constitution, 1996.


 (29)Amendment No. 8 to the  Bilateral  Agreement  No.674-0320-G-00-5053
     between the Government of the Republic  of  South  Africa  and  the
     United States  of  America  concerning  the  Equity  in  Integrated
     Primary Health Care Project, tabled in terms of section  231(3)  of
     the Constitution, 1996.


 (30)Amendment No. 3 to  the  Bilateral  Agreement  No.  SO1AG-674-0322A
     between the Government of the Republic of  South   Africa  and  the
     United States of America concerning the  Local  Governance  Support
     Programme, tabled in terms of section 231(3) of  the  Constitution,
     1996.


 (31)Amendment No. 7 to the Bilateral Agreement No.  674-0301-G-00-4182-
     07 between the Government of the Republic of South Africa  and  the
     United  States  of  America   concerning   the   Criminal   Justice
     Strengthening Programme, tabled in terms of section 231(3)  of  the
     Constitution, 1996.


 (32)Amendment No. 6 to the Bilateral Agreement  No.  674-0314-G-00-5041
     between the Government of the Republic  of  South  Africa  and  the
     United States of America concerning the Primary  Education  Results
     Package, tabled in terms of section  231(3)  of  the  Constitution,
     1996.


 (33)Amendment No. 6 to the Bilateral Agreement  No.  674-0315-G-00-5042
     between the Government of the Republic  of  South  Africa  and  the
     United  States  of  America  concerning  the   Tertiary   Education
     Linkages  Project,  tabled  in  terms  of  section  231(3)  of  the
     Constitution, 1996.


 (34)Amendment No. 4 to the Bilateral  Agreement  No.  GA-674-0309-G-00-
     5048 between the Government of the Republic  of  South  Africa  and
     the United States of America concerning  the  Support  to  Tertiary
     Education Project,  tabled  in  terms  of  section  231(3)  of  the
     Constitution, 1996.


 (35)Exchange of Letters between the Government of the Republic of South
     Africa and the Government of the United Kingdom concerning  Support
     for the Economic Reform  Project  Phase  II,  tabled  in  terms  of
     section 231(3) of the Constitution, 1996.

1. The Minister for Safety and Security:

 The Strategic Plan for the South African Police Service for 2002-2005.

                       TUESDAY, 12 MARCH 2002

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The following Bills were introduced by the Minister  of  Finance
     in the National Assembly on 12  March  2002  and  referred  to  the
     Joint Tagging Mechanism (JTM) for classification in terms of  Joint
     Rule 160:


     (i)     Social Grants Appropriation Bill [B  9  -  2002]  (National
          Assembly - sec 77);


     (ii     Burundi Protection  Support  Appropriation  Bill  [B  10  -
          2002] (National Assembly - sec 77).


     The Bills have been referred to the Portfolio Committee on  Finance
     of the National Assembly.


     In terms of Joint Rule 154 written views on the  classification  of
     the Bills may be submitted to the  Joint  Tagging  Mechanism  (JTM)
     within three parliamentary working days.

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Finance:

 (1)    Explanatory Memorandum on the Social Grants Appropriation  Bill,
     2002 [B9-2002]


 (2)     Explanatory  Memorandum  on  the  Burundi  Protection   Support
     Appropriation Bill, 2002 [B10-2002]


 (3)    Resolutions of the Standing Committee  on  Public  Accounts  for
     2001 and replies thereto obtained by the National  Treasury:  Tenth
     and Fourteenth Reports, 2001.
 (4)    Strategic Plan for Statistics South Africa for 2002-2005.

1. The Minister for Environmental Affairs and Tourism:

 Strategic Plan for Environmental Affairs and Tourism 2002-2005.

1. The Minister for the Public Service and Administration:

 Medium Term Strategic Plan for the Public  Service  and  Administration
 for 2002-2005.

                      WEDNESDAY, 13 MARCH 2002

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The Minister of Social Development on 4 March 2002  submitted  a
     draft of the Probation Services Amendment Bill, 2002,  as  well  as
     the memorandum explaining the objects of the proposed  legislation,
     to the Speaker and the Chairperson in terms of Joint Rule 159.  The
     draft has been  referred  to  the  Portfolio  Committee  on  Social
     Development and the Select Committee  on  Social  Services  by  the
     Speaker and  the  Chairperson,  respectively,  in  accordance  with
     Joint Rule 159(2).

National Council of Provinces:

1. The Chairperson:

 The following papers have been tabled  and  are  now  referred  to  the
 relevant committees as mentioned below:


 (1)    The following papers are referred to  the  Select  Committee  on
     Finance:


     (a)     Strategic Plan of Statistics  South  Africa  for  2000-2003
            and 2004-2005.


     (b)     Strategic Plan of Statistics South Africa for 2002-2005.


     (c)     Explanatory Memorandum on the Social  Grants  Appropriation
            Bill, 2002 [B9-2002].


     (d)     Explanatory Memorandum on the  Burundi  Protection  Support
            Appropriation Bill, 2002 [B10-2002].


     (e)     The Strategic Plan for  the  National  Treasury  for  2002-
            2005.


     (f)      Memorandum   of   Subsidiary   Arrangement   between   the
            Government  of  the  Republic  of  South  Africa   and   the
            Government of  Australia  concerning  Developing  Profitable
            Beef Business Systems for Previously  Disadvantaged  Farmers
            in South Africa, tabled in terms of section  231(3)  of  the
            Constitution, 1996.


     (g)     Memorandum of Understanding between the Government  of  the
            Republic of  South  Africa  and  the  Government  of  Canada
            concerning the South  Africa  Teacher  Development  Project,
            tabled in terms of section 231(3) of the Constitution, 1996.
     (h)     Rider No. 1 to  Financing  Agreement  No.  SA/B7-3200-99/26
            between the Government of the Republic of South  Africa  and
            the European Union  concerning  the  Support  Programme  for
            Social Housing, tabled in terms of  section  231(3)  of  the
            Constitution, 1996.


     (i)     Rider No. 1  to  Financing  Agreement  No.  SA7/-3200-96/14
            between the Government of the Republic of South  Africa  and
            the European Union concerning the Trade and Industry  Policy
            Support Programme, tabled in terms of section 231(3) of  the
            Constitution, 1996.


     (j)     Rider to Financing Agreements for  programmes  between  the
            Government of the Republic of South Africa and the  European
            Union,  tabled  in  terms   of   section   231(3)   of   the
            Constitution, 1996.
     (k)      Financing  Agreement  No.   SA/73200/00/31   between   the
             Government of the Republic of South Africa and the European
             Union concerning the Economic Integration Support Programme
             to the BLNS Phase 1, tabled in terms of section  231(3)  of
             the Constitution, 1996.


     (l)     Rider No. 3 to Financing  Agreement  No.  SA/B7-5070-95/009
            between the Government of the Republic of South  Africa  and
            the European Union concerning the Library Books and Training
            of Historically Disadvantaged Institutions Programme, tabled
            in terms of section 231(3) of the Constitution, 1996.


     (m)     Rider  No.  5  to  Financing  Agreement  No.  SA/97/3200/11
            between the Government of the Republic of South  Africa  and
            the European Union concerning  the  Public  Health  Sectoral
            Support Programme, tabled in terms of section 231(3) of  the
            Constitution, 1996.


     (n)     Rider No.  1  to  Financing  Agreement  No.  SA/73200-98/12
            between the Government of the Republic of South  Africa  and
            the European Union concerning the Technical Assistance  Team
            to Support Planning, Implementation and  Monitoring  of  RDP
            Projects,  tabled  in  terms  of  section  231(3)   of   the
            Constitution, 1996.


     (o)      Rider  No.  2  to  Financing  Agreement  No.SA/73200-98/09
            between the Government of the Republic of South  Africa  and
            the European Union concerning Support for the  SADC  Finance
            and Investment Protocol, tabled in terms of  section  231(3)
            of the Constitution, 1996.


     (p)     Rider No. 3  to  Financing  Agreement  No.  SA/95-75075-006
            between the Government of the Republic of South  Africa  and
            the European Union concerning the Private Sector Development
            Programme,  tabled  in  terms  of  section  231(3)  of   the
            Constitution, 1996.


     (q)     Rider No.  1  to  Financing  Agreement  No.  SA/73200-98/03
            between the Government of the Republic of South  Africa  and
            the  European  Union  concerning  the  Financial  Management
            Improvement Programme (FMIP), tabled  in  terms  of  section
            231(3) of the Constitution, 1996.


     (r)     Rider No. 4  to  Financing  Agreement  No.  SA/96-73200-007
            between the Government of the Republic of South  Africa  and
            the European Union concerning  Non-Grid  Electrification  of
            Rural Schools, tabled in terms  of  section  231(3)  of  the
            Constitution, 1996.


     (s)     Rider No.  1  to  Financing  Agreement  No.  SA/73200-00/31
            between the Government of the Republic of South  Africa  and
            the  European  Union  concerning  the  Economic  Integration
            Support Programme to the BLNS Phase 1, tabled  in  terms  of
            section 231(3) of the Constitution, 1996.


     (t)     Agreement between the Government of the Republic  of  South
            Africa and the Government of  the  Republic  of  Finland  on
            Finnish  Assistance   to   the   Northern   Province   Rural
            Development Programme, tabled in terms of section 231(3)  of
            the Constitution, 1996.


     (u)     Agreement between the Government of the Republic  of  South
            Africa  and  the  Government  of  the  Republic  of  Finland
            concerning general terms and procedure for  Development  Co-
            operation,  tabled  in  terms  of  section  231(3)  of   the
            Constitution, 1996.


     (v)     Agreement between the Government of the Republic  of  South
            Africa and the Government of  the  Republic  of  Finland  on
            Finnish  Assistance  to  the  Support  to  Environment   and
            Sustainable Development in the North West  Province,  tabled
            in terms of section 231(3) of the Constitution, 1996.
     (w)     Memorandum of Understanding between the Government  of  the
            Republic of South Africa and the Government of  Flanders  on
            Development Co-operation, tabled in terms of section  231(3)
            of the Constitution, 1996.


     (x)     Agreement between the Government of the Republic  of  South
            Africa and the Government  of  the  Republic  of  France  on
            Development Co-operation, tabled in terms of section  231(3)
            of the Constitution, 1996.


     (y)     Exchange of Notes concerning  the  Study  and  Expert  Fund
            project between the Government  of  the  Republic  of  South
            Africa and the Federal Republic of Germany, tabled in  terms
            of section 231(3) of the Constitution, 1996.


     (z)      Implementing  agreement  between  the  Government  of  the
            Republic of  South  Africa  and  the  Government  of  Sweden
            concerning Local Government Support  to  the  Northern  Cape
            Province,  tabled  in  terms  of  section  231(3)   of   the
            Constitution, 1996.


     (aa)    Agreement between the Government of the Republic  of  South
            Africa and the Government of Sweden  on  General  Terms  and
            Conditions for Development Co-operation 1 September  2001-31
            December 2005, tabled in terms  of  section  231(3)  of  the
            Constitution, 1996.


     (bb)    Agreement between the Government of the Republic  of  South
            Africa  and  the  Government  of  Sweden  on  a  Partnership
            Programme between Sweden and Buffalo City within the area of
            Urban Development, tabled in terms of section 231(3) of  the
            Constitution, 1996.


     (cc)    Amendment No. 1 to the Bilateral Agreement  No.  SO9AG-674-
            0326 between the Government of the Republic of South  Africa
            and  the  United  States  of  America  concerning  increased
            commercial  viability   of   existing   small   and   medium
            Agribusiness Programme, tabled in terms of section 231(3) of
            the Constitution, 1996.


     (dd)    Amendment No. 1 to the  Bilateral  Agreement  No.  SO2-674-
            0327 between the Government of the Republic of South  Africa
            and  the  United  States  of  America  concerning  Workforce
            Development Programme, tabled in terms of section 231(3)  of
            the Constitution, 1996.


     (ee)    Amendment No. 1 to the Bilateral Agreement  No.  SO6AG-674-
            0312D between the Government of the Republic of South Africa
            and  the  United  States  of   America   concerning   Fiscal
            Management of Urban Environmental Infrastructure, tabled  in
            terms of section 231(3) of the Constitution, 1996.


     (ff)    Amendment No. 1 to the Bilateral Agreement  No.  SO4AG-674-
            04A1 between the Government of the Republic of South  Africa
            and the United States  of  America  concerning  support  for
            economic growth and analysis and Mandela Economics  Scholars
            Programme,  tabled  in  terms  of  section  231(3)  of   the
            Constitution, 1996.


     (gg)    Amendment No. 8 to the Bilateral  Agreement  No.674-0320-G-
            00-5053 between the Government  of  the  Republic  of  South
            Africa and the  United  States  of  America  concerning  the
            Equity in Integrated Primary Health Care Project, tabled  in
            terms of section 231(3) of the Constitution, 1996.
     (hh)    Amendment No. 3 to the Bilateral Agreement  No.  SO1AG-674-
            0322A between the Government of the Republic of South Africa
            and the  United  States  of  America  concerning  the  Local
            Governance Support Programme, tabled  in  terms  of  section
            231(3) of the Constitution, 1996.


     (ii)    Amendment No. 7 to the Bilateral Agreement No.  674-0301-G-
            00-4182-07 between the Government of the Republic  of  South
            Africa and the  United  States  of  America  concerning  the
            Criminal Justice Strengthening Programme, tabled in terms of
            section 231(3) of the Constitution, 1996.


     (jj)    Amendment No. 6 to the Bilateral Agreement No.  674-0314-G-
            00-5041 between the Government  of  the  Republic  of  South
            Africa and the  United  States  of  America  concerning  the
            Primary  Education  Results  Package,  tabled  in  terms  of
            section 231(3) of the Constitution, 1996.


     (kk)    Amendment No. 6 to the Bilateral Agreement No.  674-0315-G-
            00-5042 between the Government  of  the  Republic  of  South
            Africa and the  United  States  of  America  concerning  the
            Tertiary Education Linkages  Project,  tabled  in  terms  of
            section 231(3) of the Constitution, 1996.


     (ll)    Amendment No. 4 to the Bilateral Agreement No. GA-674-0309-
            G-00-5048  between the Government of the Republic  of  South
            Africa and the  United  States  of  America  concerning  the
            Support to Tertiary Education Project, tabled  in  terms  of
            section 231(3) of the Constitution, 1996.


     (mm)    Exchange of Letters between the Government of the  Republic
            of South Africa and the Government  of  the  United  Kingdom
            concerning Support for the Economic Reform Project Phase II,
            tabled in terms of section 231(3) of the Constitution, 1996.


 (2)    The following paper is referred to the Select Committee on  Land
     and Environmental Affairs:


     Strategic Plan for the  Department  of  Environmental  Affairs  and
     Tourism 2002-2005.


 (3)    The following papers are referred to  the  Select  Committee  on
     Labour and Public Enterprises:


     (a)     Convention concerning Tripartite Consultations  to  Promote
          the Implementation of  International  Labour  Standards,  1976
          (Convention No 144), tabled in terms of section 231(2) of  the
          Constitution, 1996.


     (b)     Convention concerning Occupational Safety  and  Health  and
          the Working Environment, 1983 (Convention No 155),  tabled  in
          terms of section 231(2) of the Constitution, 1996.


     (c)     Explanatory Memorandum to the Conventions.


 (4)    The following paper is  referred  to  the  Select  Committee  on
     Public Services:


     Medium  Term  Strategic   Plan   for   the   Public   Service   and
     Administration for 2002-2005.


 (5)    The following paper is  referred  to  the  Select  Committee  on
     Security and Constitutional Affairs:


     The Strategic Plan for the South African Police Service  for  2002-
     2005.

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Speaker and the Chairperson:

 Report of the Auditor-General on the Delays in the  tabling  of  Annual
 Reports as required by the Public Finance Management Act, 1999  (Act  1
 of 1999) [RP 45-2002].

1. The Minister of Social Development:

 Strategic Plan for Social Development for 2002-2005.

1. The Minister of Water Affairs and Forestry:

 Strategic Plan for Water Affairs and Forestry for 2002-2005.

                       THURSDAY, 14 MARCH 2002

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The Joint Tagging Mechanism (JTM) on 14 March 2002 in  terms  of
     Joint Rule 160(6), classified the following Bill as  a  section  75
     Bill:


     (i)     Electronic Communications and  Transactions  Bill  [B  8  -
          2002] (National Assembly - sec 75).


 (2)    The Joint Tagging Mechanism (JTM) on 14 March 2002 in  terms  of
     Joint Rule 160(6), classified the following Bills  as  money  Bills
     (section 77):


     (i)     Social Grants Appropriation Bill [B  9  -  2002]  (National
          Assembly - sec 77).


     (ii)Burundi Protection Support Appropriation Bill  [B  10  -  2002]
          (National Assembly - sec 77).

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Arts, Culture, Science and Technology:

 (a)    Annual Report of the South African  Geographical  Names  Council
     for 2000-2001 [RP 28-2002].


 (b)    Annual Report of the National Museum for 2000-2002.


 (c)    Strategic Plan for Arts, Culture,  Science  and  Technology  for
     2002-2005.

1. The Minister for Justice and Constitutional Development:

 (a)    The report regarding the suspension from office of Magistrate  R
     M Nongema, tabled in terms of section 13(3)(c) of  the  Magistrates
     Act, 1993 (Act No 90 of 1993).


 (b)    European Convention on Extradition, tabled in terms  of  section
     231(2) of the Constitution, 1996.


 (c)    Additional Protocol to the European Convention  on  Extradition,
     tabled in terms of section 231(2) of the Constitution, 1996.


 (d)    Second Additional Protocol to the European Convention, tabled in
     terms of section 231(2) of the Constitution, 1996.


 (e)    Explanatory  Memorandum  to  the  European  Convention  and  the
     Protocols.


 (f)    SADC Protocol Against Corruption, tabled  in  terms  of  section
     231(2) of the Constitution, 1996.


 (g)    Explanatory Memorandum to the Protocol.

1. The Minister for the Public Service and Administration:

 Strategic Plan for South African Management Development  Institute  for
 2001-2002 to 2003-2004.

COMMITTEE REPORTS:

National Council of Provinces:

1. Report of the Select Committee on Finance on the Unemployment Insurance Contributions Bill [B 85 - 2001] (National Assembly - sec 77), dated 13 March 2002:

   The Select Committee on Finance, having considered the subject of the Unemployment Insurance Contributions Bill [B 85 - 2001] (National Assembly - sec 77), referred to it, reports that it has agreed to the Bill.

2. Report of the Select Committee on Economic and Foreign Affairs on the Copyright Amendment Bill [B 73B - 2001] (National Assembly - sec 75), dated 13 March 2002:

   The Select Committee on Economic and Foreign Affairs, having considered the subject of the Copyright Amendment Bill [B 73B - 2001] (National Assembly - sec 75), referred to it, reports the Bill with proposed amendments, as follows:

   CLAUSE 3

   1. On page 3, in line 18, after “user” to insert “performer”.

   2. On page 3, after line 37, to add:

      (3) In the event of any right to a royalty being assigned to   any successor in title,  either  by  contractual  arrangement,   operation of law, testamentary disposition or  otherwise,  any   successor in title shall be entitled to enforce such right  to   a royalty against the person who in terms of this  section  is   obliged to pay or against his or her successor in title.
      

3. Report of the Select Committee on Economic and Foreign Affairs on the Performers’ Protection Amendment Bill [B 74B - 2001] (National Assembly - sec 75), dated 13 March 2002:

   The Select Committee on Economic and Foreign Affairs, having considered the subject of the Performers’ Protection Amendment Bill [B 74B - 2001] (National Assembly - sec 75), referred to it, reports the Bill with proposed amendments, as follows:

   CLAUSE 3

   1. On page 4, in line 1, to omit “or his or her successor in title”.

   2. On page 4, after line 14, to add:

      (6) In the event of any right to a royalty being assigned to   any successor in title,  either  by  contractual  arrangement,   operation of law, testamentary disposition or  otherwise,  any   successor in title shall be entitled to enforce such right  to   a royalty against the person who in terms of this  section  is   obliged to pay or against his or her successor in title.
      
                  FRIDAY, 15 MARCH 2002
      

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    Assent by the President  of  the  Republic  in  respect  of  the
     following Bill:


     (a)     Births and Deaths  Registration  Amendment  Bill  [B  53  -
              2001] - Act No 1  of  2002  (assented  to  and  signed  by
              President on 12 March 2002).


 (2)     The  following  Bill  was  introduced  by  the   Minister   for
     Agriculture and Land Affairs in the National Assembly on  15  March
     2002  and  referred  to  the  Joint  Tagging  Mechanism  (JTM)  for
     classification in terms of Joint Rule 160:


     (i)     Land and Agricultural Development Bank Bill [B 12  -  2002]
          (National Assembly - sec 75) [Explanatory summary of Bill  and
          prior notice  of  its  introduction  published  in  Government
          Gazette No 22647 of 4 September 2001.]
     The  Bill  has  been  referred  to  the  Portfolio   Committee   on
     Agriculture and Land Affairs of the National Assembly.


     In terms of Joint Rule 154 written views on the  classification  of
     the Bill may be submitted to  the  Joint  Tagging  Mechanism  (JTM)
     within three parliamentary working days.


 (3)    The Joint Tagging Mechanism (JTM) on 14 March 2002 in  terms  of
     Joint Rule 160(6), classified the following Bill as  a  section  76
     Bill:


     (i)     National  Railway  Safety  Regulator  Bill  [B  7  -  2002]
          (National Assembly - sec 76).


 (4)    The following Bill was introduced by the Minister of Finance  in
     the National Assembly on 15 March 2002 and referred  to  the  Joint
     Tagging Mechanism (JTM) for classification in terms of  Joint  Rule
     160:
     (i)     Private  Security  Industry  Levies  Bill  [B  11  -  2002]
          (National Assembly - sec 77).


     The Bill has, in accordance  with  a  resolution  by  the  National
     Assembly  on  15  March  2002,  been  referred  to  the   Portfolio
     Committee on Safety and Security of the National Assembly.


     In terms of Joint Rule 154 written views on the  classification  of
     the Bill may be submitted to  the  Joint  Tagging  Mechanism  (JTM)
     within three parliamentary working days.

National Council of Provinces:

1. The Chairperson:

 (1)    Message from National Assembly to National Council of Provinces:


     Bills passed by National Assembly on 15 March 2002 and  transmitted
     for concurrence:


       (i)   Social Grants Appropriation Bill [B  9  -  2002]  (National
           Assembly - sec 77);


     (ii)    Burundi Protection  Support  Appropriation  Bill  [B  10  -
           2002] (National Assembly - sec 77).


     The Bills have been referred to the Select Committee on Finance  of
     the National Council of Provinces.

1. The Chairperson:

 The following papers have been tabled  and  are  now  referred  to  the
 relevant committees as mentioned below:


 (1)    The following paper is  referred  to  the  Select  Committee  on
     Finance:


     Report of the Auditor-General on  the  Delays  in  the  tabling  of
     Annual Reports as required by the Public  Finance  Management  Act,
     1999 (Act 1 of 1999) [RP 45-2002].


 (2)    The following paper is  referred  to  the  Select  Committee  on
     Social Services:


     Strategic Plan for Social Development for 2002-2005.


 (3)    The following paper is referred to the Select Committee on  Land
     and Environmental Affairs:


     Strategic Plan for Water Affairs and Forestry for 2002-2005.

TABLINGS:

National Assembly and National Council of Provinces:

1. The Minister of Minerals and Energy:

 Strategic Plan for the Department of Minerals and Energy for 2002-2005.

COMMITTEE REPORTS:

National Council of Provinces:

1. Report of the Select Committee on Land and Environmental Affairs on the Animal Health Bill [B 64D - 2001] (National Council of Provinces - sec 76), dated 15 March 2002:

   The Select Committee on Land and Environmental Affairs, having considered the Animal Health Bill [B 64D - 2001] (National Council of Provinces - sec 76), amended by the National Assembly and referred to the Committee, reports that it has agreed to the Bill.

                     MONDAY, 18 MARCH 2002
   

ANNOUNCEMENTS: National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The  Minister  of  Finance  submitted  the  Wetsontwerp  op  die
     Verdeling van Inkomste [W 5 - 2002] (National Assembly  -  sec  76)
     to the Speaker and the Chairperson on 18 March 2002.  This  is  the
     official translation of the Division of Revenue Bill  [B 5 -  2002]
     (National Assembly - sec 76), which was introduced in the  National
     Assembly by the Minister on 20 February 2002.


 (2)    The Minister for Agriculture  and  Land  Affairs  submitted  the
     Wetsontwerp op Dieregesondheid [W 64 - 2001] (National  Council  of
     Provinces - sec 76) to the Speaker and the Chairperson on 18  March
     2002. This is the official translation of the  Animal  Health  Bill
     [B 64 - 2001] (National Council of Provinces - sec 76),  which  was
     introduced in the National  Council  of  Provinces  by  the  Select
     Committee on Land and Environmental Affairs at the request  of  the
     Minister on 5 September 2001.

National Council of Provinces:

1. The Chairperson:

   Message from National Assembly to National Council of Provinces:

   Bills passed by National Assembly on 18 March 2002 and transmitted for concurrence:

 (a)    Commission for the Promotion and Protection  of  the  Rights  of
      Cultural, Religious and Linguistic Communities Bill [B 62B - 2001]
      (National Assembly - sec 75).


     The Bill has  been  referred  to  the  Select  Committee  on  Local
     Government  and  Administration  of   the   National   Council   of
     Provinces.


    National Railway Safety Regulator Bill  [B  7B  -  2002]  (National
     Assembly - sec 76).


       The Bill has been referred to the  Select  Committee  on  Public
       Services of the National Council of Provinces. TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Speaker and the Chairperson:

   Report of the Auditor-General on the Financial Statements of the Pan South African Language Board for 2000-2001 [RP 38-2002].

2. The Minister of Finance: Report and Financial Statements of the South African Revenue Services for 2000-2001, including the Report of the Auditor-General on the Financial Statements for 2000-2001.

3. The Minister of Labour:

 Report and Financial  Statements  of  the  Health  and  Welfare  Sector
 Training Authority for 2000-2001, including the Report of the  Auditor-
 General on the Financial Statements for 2000-2001.

COMMITTEE REPORTS:

National Council of Provinces:

1. Report of the Select Committee on Finance on the Social Grants Appropriation Bill [B 9 - 2002] (National Assembly - sec 77), dated 18 March 2002:

   The Select Committee on Finance, having considered the subject of the Social Grants Appropriation Bill [B 9 - 2002] (National Assembly - sec 77), referred to it, reports that it has agreed to the Bill.

2. Report of the Select Committee on Finance on the Burundi Protection Support Appropriation Bill [B 10 - 2002] (National Assembly - sec 77), dated 18 March 2002:

   The Select Committee on Finance, having considered the subject of the Burundi Protection Support Appropriation Bill [B 10 - 2002] (National Assembly - sec 77), referred to it, reports that it has agreed to the Bill.

3. Report of the Select Committee on Land and Environmental Affairs on Winter Cereal Industry, dated 18 March 2002:

   The Select Committee on Land and Environmental Affairs, having considered the application by the National Agricultural Marketing Council for the continuation of the statutory measures in the Winter Cereal Industry, reports, in terms of section 15 of the Marketing of Agricultural Products Act, 1996, that it has approved the recommendations of the council.

4. Report of the Select Committee on Finance on the Division of Revenue Bill [B 5B - 2002] (National Assembly - sec 76), dated 18 March 2002:

   The Select Committee on Finance, having considered the subject of the Division of Revenue Bill [B 5B - 2002] (National Assembly - sec 76), referred to it, reports the Bill with amendments [B 5C - 2002].

   The Committee reports further, as follows:

   A. Introduction

   The Select Committee on Finance held hearings on the 2002-03 Division of Revenue Bill from 6 March 2002 to 8 March 2002. The Committee wishes to express its appreciation to all the participants for their submissions and contributions during the hearings. The Committee would also like to express its appreciation to the National Treasury, the chairperson of the Financial Fiscal Commission and their staff, SALGA, the Office of the Auditor-General, Directors-General, Deputy Directors-General and Chief Financial Officers from national departments for their submissions and contributions. Written presentations submitted form part of the records of the Committee Section.

 B.     Background information


     The Division  of  Revenue,  as  set  out  in  section  214  of  the
     Constitution, provides for the equitable  distribution  of  revenue
     raised nationally among the national, provincial and local  spheres
     of government to ensure that provinces and municipalities are  able
     to provide basic services and perform the  functions  allocated  to
     them. Additional revenue raised by provinces or municipalities  may
     not be deducted from their share of revenue  raised  nationally  or
     other allocations made to them out of national  government  revenue
     (section  227(2)  of  the  Constitution).   Provinces   and   local
     government may receive other allocations from  national  government
     revenue, either conditionally, unconditionally or in kind  (section
     227(1)(b) of the Constitution). Revenue shared  amongst  the  three
     spheres  of  government  includes  revenue  collected  at  national
     level, plus borrowing, but excludes funds  for  the  Reconstruction
     and Development Programme and social security funds.


     2. Overview of Division of Revenue Bill 2002-03


          The 2002-03 Division of Revenue Bill continues to focus on the
          broad policy priorities of the government,  with  emphasis  on
          public  spending  and  reduction  of  poverty   to   alleviate
          inequality and vulnerability. It shows strong increases in the
          equitable   share   allocations   to   both   provinces    and
          municipalities,  recognising  their  critical  role   in   the
          delivery of social development, basic household  services  and
          infrastructure.


          Rebuilding local government and meeting commitments to  ensure
          free basic  service  delivery  remains  the  government's  key
          priority, with municipal  infrastructure  financing  receiving
          substantial increases  in  allocations  over  the  next  three
          years. The Division of  Revenue  Bill  takes  account  of  the
          judgement passed by the KwaZulu-Natal High  Court  to  include
          equitable  share   allocations   for   district   category   C
          municipalities  in  the  additional   allocations   to   local
          government.
          Necessary steps are  taken  to  improve  financial  management
          capacity,  accountability  and  improved  quality  of   public
          service  delivery  across  all  spheres  of  government.   It,
          however,  became  clear  in  the  hearings  that  the  ongoing
          transformation of local government and proposed  new  policies
          and legislation have created some uncertainty in the municipal
          finance  environment.  These  include  the  Municipal  Finance
          Management Bill.


     3. National Treasury


          In its submission the National Treasury reported  real  growth
          in non-interest government spending of 4,1% a  year  over  the
          MTEF period. Additional allocations  for  government  spending
          excluding debt service costs and contingency reserve  increase
          by R13,4 billion in 2002-03 and by R17,9 billion in 2003-04.


          Positive real growth in all three  spheres  of  government  is
          reported (an inflation rate of around 6,5%  is  assumed).  The
          national allocation increasing to R6,6 billion (nominal terms)
          in 2002-03 and R8,5 billion (nominal terms) in 2003-04,  while
          provincial allocation shares increase to R5,3 million (nominal
          terms) and R7 billion (nominal  terms)  and  local  government
          share increase  by  R1,6  million  (nominal  terms)  and  R2,4
          billion (nominal terms) over the  same  period.  The  Treasury
          reported  a  marked  improvement   in   provincial   financial
          management and improved  spending  on  social  infrastructure.
          Certain departments have shown steady progress in meeting  the
          requirements  of  the  Public  Finance  Management  Act,  1999
          (PFMA). There was  strong  support  from  the  Office  of  the
          Auditor-General for the  government's  endeavours  to  improve
          financial management measures.
          The table below shows the revised and  medium  term  estimates
          percentage shares in the vertical division of revenue  amongst
          the three spheres of government.


          VERTICAL DIVISION OF REVENUE - 2002 BUDGET
          ---------------------------------------------------------------
          ---------------------------------------------------------------
          ---------------
          R  billion       2000/01  2001/2/012002/03   2003/04   2004/05
          Outcome Budget Revised Medium-term estimates
          ---------------------------------------------------------------
          ---------------------------------------------------------------
          ---------------
          National  allocation  73,142  84,286  87,317  96,106   103,307
          109,911
          Provincial  allocation  108,904    117,387   121,206   132,420
          142,844 152,363
          ---------------------------------------------------------------
          ---------------------------------------------------------------
          ---------------
          Equitable share 98,398 106,260107,460 119,452 128,466 137,089
          Conditional grants 10,506 11,127 13,745 12,967 14,378 15,274
          ---------------------------------------------------------------
          ---------------------------------------------------------------
          ---------------
          Local  government  allocation   5,576       6,506        6,552
          8,580    10,235      10,854
          ---------------------------------------------------------------
          ---------------------------------------------------------------
          ---------------
          Equitable  share  2,315      2,618  2,618   3,852        5,021
          5,461
          Conditional  grants  3,261   3,888  3,934   4,728        5,213
          5,393
          ---------------------------------------------------------------
          ---------------------------------------------------------------
          ---------------
          Allocated expenditure 187,622   208,179    215,075    237,106
          256,386  273,128
          ---------------------------------------------------------------
          ---------------------------------------------------------------
          ---------------
          Percentage shares
          National 39,0% 40,5%      40,6%      40,5% 40,3%      40,2%
          Provinces      58,0% 56,4%      56,4% 55,8%55,7% 55,8%
          Local government     3,0% 3,1%  3,0%3,6%   4,0%  4,0%
          ---------------------------------------------------------------
          ---------------------------------------------------------------
          ---------------


          The national share remains stable  from  40,6%  of  nationally
          collected revenue after the top slice in 2001-02 to  40,5%  in
          2002-03 to 40,2% in  2004-05.  The  provincial  share  remains
          static over the MTEF period, it grows by 7,9% a year over  the
          medium-term expenditure framework. For 2001-02,  2002-03,  the
          provincial share decreases from 56,4% to 55,8%. This is partly
          due to the one-off R2 billion for social security grants,  the
          provincial supplementary grant administered  by  the  National
          Treasury being phased out.


          Two changes have been made in  the  equitable  share  formula.
          Firstly, the welfare weighting has increased by 1% at  a  cost
          of economic weighting, to take  account  of  the  increase  of
          welfare  spending  in  provincial   budgets.   Secondly,   the
          education  enrolment  data  has  been   updated.   The   seven
          components of the equitable share formula as commented upon by
          the FFC and recommended by the government include:


          Education share      41%
          Health care    19%
          Social security share     18%
          Basic share     7%
          Backlog component     3%
          Economic component    7%
          Institutional component    5%
          A  comparison  of  the  2001  actual  spending  share  to  the
          equitable share formula shows that the education share  is  2%
          less than the formula; the health  care  share  5%  more  than
          formula (tertiary services funded from conditional grants  and
          19% share in formula higher than share for provinces  with  no
          academic hospitals), and the social security share is 1%  more
          than formula.


          In  2002-03  local  government   has   the   fastest   growing
          allocations from the pool of nationally collected revenue. The
          2% budgeted share  for  2000-01  is  doubled  in  the  2002-03
          Division of Revenue Bill. Assistance for municipalities  grows
          by 18,3% a year in nominal terms. Local government  allocation
          includes support for water  and  sanitation,  electrification,
          free basic services and  local  economic  development.  Though
          static over the MTEF period, local share increases  to  4%  in
          2002-03 from 3,6% in 2001-02.


          Reform of municipal finances  is  under  way.  Among  the  key
          elements  of  the  local  government  transformation  is   the
          Municipal   Finance   Management   Bill   (MFMB),   three-year
          budgeting, the codifying of municipal accounting practices,  a
          framework for municipal borrowing and new financial  reporting
          standards.
          Priorities in the 2002-03 Division of Revenue Bill include the
          following:


          *   Extension of basic municipal services


          *   Higher  social  grants  and  increased  take-up  of  child
            support grant
          *   Social, municipal, housing and economic infrastructure


          *   Bolster health system against the impact of HIV/AIDS
          *   Extending tertiary health services and training of medical
            personnel


          *   Early childhood education programme


          The 2002-03 national priorities include the  restructuring  of
          the SA Post Office,  the  restructuring  of  the  Unemployment
          Insurance Fund, currency depreciation and fight against crime.
          Provincial  priorities   include   social   security   grants,
          education,   capital   investment   and   maintenance.   Local
          government priorities  include  infrastructure  and  capacity-
          building.


          Future changes to fiscal framework include the following:
          *   The Provincial Tax Regulation Process Act, 2001, that will
            take effect in the 2003-04  Budget  to  improve  the  fiscal
            capacity of provinces


          *   The evolution of a borrowing framework for  provinces  and
            local governments, subject  to  further  discussion  by  the
            Budget Council


          *   The transformation process for local government  is  still
            in progress


          *   The  completion  of  merging  municipalities  for  2003-04
            municipal budgets


          *   The finalisation of  the  division  of  functions  between
            category B and C municipalities


     4. Conditional grants


          (a) Overview
              The general purpose of conditional grants is to  fund  the
              provision  of  national  priority  programmes,  compliance
              with norms and  standards  as  set  out  by  the  national
              government  and  cross-border  spill-overs.  The  criteria
              used  for  each  grant  is  different,  depending  on  the
              purpose of the grant.


              Overall spending  in  conditional  grants  geared  towards
              operating activities has improved. While  there  seems  to
              be  improvements  in  spending   on   conditional   grants
              designed for infrastructure, underspending or no  spending
              is still reported in respect of certain grants, (e.g.  the
              HIV/Aids grant and the Primary School Nutrition  grant  in
              certain provinces). The  decline  in  the  Primary  School
              Nutrition grant from -6,19% in 2001-02 to -6,10% in  2002-
              03 reflects  previous  underspending  and  poor  delivery.
              Poor planning and implementation of projects seems  to  be
              the major problem. Changes in priorities,  delays  in  the
              development of business plans and  long  tender  processes
              seem to be the factors contributing  to  low  expenditure.
              Further delays are reported  in  the  transfers  of  funds
              between   the   national   government    and    provincial
              governments.


              During  2001-02  spending  did  not   occur   in   certain
              provinces in the Early Childhood Development  grant  as  a
              result of delays in tender processes, the  setting  up  of
              the necessary system and the delays  in  the  transfer  of
              funds to the sites as bank accounts have not  been  opened
              yet. Many national departments have measures in  place  to
              monitor and evaluate the  performance  of  projects.  Most
              departments hope to  overcome  these  bottlenecks  in  the
              near future.


              The HIV/AIDS grant to  the  three  departments  -  Health,
              Education and Social Development - have been  enhanced  to
              strengthen  the  HIV/AIDS  strategic   plan.   The   Early
              Childhood Development grant that was introduced  in  2001-
              02, is be phased into the equitable share in 2003-04.  The
              roll-out of the grant, which is to be phased  in  over  10
              years,  will  mainly  be  funded   from   the   provincial
              equitable share. Most  grants  in  the  Health  Department
              have been  renamed.  The  provincial  supplementary  grant
              administered by the  National  Treasury  has  been  phased
              out, the  funds  will  be  transferred  to  the  equitable
              share.
          (b) Financial and Fiscal Commission (FFC)


              The FFC notes the importance of conditional grants  as  an
              instrument for  speeding  up  access  to  basic  services,
              given national  norms  and  standards,  as  some  national
              departments have no clearly defined  norms  and  standards
              that would facilitate the efficient monitoring of how  far
              provinces  are  delivering  on  national  priorities.  The
              FFC's position on the use of conditional  grants  is  that
              they should be limited and should  promote  constitutional
              intentions  with  respect  to  decentralisation  and   the
              principles of good governance  applicable  to  subnational
              governments.  It   is   the   view   of   the   FFC   that
              accountability for conditional  grants  should  be  shared
              between  the  national  government   and   the   recipient
              government in the sense  that  they  remain  part  of  the
              national  equitable  share,   for   which   the   national
              government is accountable.
              The FFC further reported improved  compliance  in  respect
              of the PFMA reporting  and  disclosure  requirements  with
              regard to Provincial Conditional Grants. It  is  estimated
              that the proportion of conditional grant  value  accounted
              for has increased from 63% to 98% to reveal the extent  of
              underspending. Over the past two  years  underspending  on
              Provincial Conditional Grants has  increased  from  5%  to
              16%. This may according to the FFC reflect  management  or
              systems inefficiencies. Underspending is high  in  respect
              of infrastructure  grants  and  transitional  and  special
              allocation grants, but has declined in the social  sector.
              Slight overspending for all  health  and  welfare  grants,
              except for HIV/AIDS, is predicted.


          (c) SALGA
              SALGA welcomed the invitation to address the Committee  on
              some of the difficulties they experience. SALGA's view  is
              that despite the transition and  transformation  of  local
              government many are not and will  not  be  sustainable  in
              fiscal and financial terms.  A  number  of  municipalities
              are still faced with financial  problems  associated  with
              inefficient service delivery patterns and high  levels  of
              poverty amongst their communities. Others  suffer  because
              of   ineffective   management   systems   and   lack    of
              administrative  capacities,   coupled   with   inefficient
              budget systems.
              SALGA's contention is that  the  Intergovernmental  Fiscal
              Relations Act, 1997, be reviewed with a  view  to  include
              organised local government in the Budget Council  in  view
              of the consolidation of grants  to  local  government  and
              the  increasingly  critical  role  that  local  government
              plays in the improvement of the quality of  lives  of  the
              poor. SALGA recommended that they  be  given  a  practical
              role to play  in  the  fiscal  framework  associated  with
              conditional grants design and  management  of  conditional
              grants by various line  departments.  The  non-payment  of
              services still plays a major role in  hampering  effective
              financial sustainability.


              SALGA called on for a distinction to be made  between  the
              indigent policy and the provision of free basic  services.
              They further echoed their support of  the  recommendations
              of the FFC of 2001-02.


          (d) Other cross-cutting issues


              (i)   Lack  of  capacity-building  and  section   154   of
                     Constitution


                     Section 154 of the Constitution requires  that  the
                     national  government  and  provincial   governments
                     support   and   strengthen    the    capacity    of
                     municipalities to  manage  their  own  affairs,  to
                     exercise  their  powers  and   to   perform   their
                     functions. A  strong  point  was  made  that  local
                     government should be seen as a sphere of government
                     that is responsible for key services  impacting  on
                     the lives of all South Africans.  Submissions  from
                     SALGA  suggested  that  funds  from  the   national
                     government should be directly transferred to  local
                     government  rather  than  via  provinces,  or  else
                     provincial governments  must  clearly  indicate  in
                     their budgets how much provision has been made  for
                     local government capacity-building.


                     Most departments  raised  concerns  over  capacity-
                     building in the newly  established  municipalities,
                     after the 5  December  2000  elections.  A  serious
                     problem with conditional grants  seems  to  be  the
                     lack of capacity at provincial and municipal  level
                     to administer and monitor them.


              (ii) Division of Revenue Framework


                     There is concern over the volume of regulation  and
                     legislation  with   which   the   under-capacitated
                     municipalities have to comply. The perceived  over-
                     detailed  nature  of  these  regulations  and   the
                     unrealistically  short   compliance   periods   are
                     perceived as problematic.


              (iii)      Lack of intergovernmental co-ordination


                     Departments called for better co-ordination between
                     different departments. The  transfer  of  functions
                     between national  and  provincial  departments  and
                     local government needs to be properly  communicated
                     as  they   have   financial   implications.   Funds
                     transferred must include service and administration
                     costs. A clear provision needs to be made  for  the
                     maintenance of the  infrastructure  that  is  being
                     transferred.   For   example,    the    electricity
                     restructuring from the national government to local
                     government may have huge implications for the local
                     government, as it might lower municipal revenue and
                     adversely impact on fiscal capacity. Regarding  the
                     Municipal Infrastructure Conditional  grant  (MIC),
                     the Department of Water Affairs and Forestry raised
                     concerns on the clarity of responsibilities between
                     the national department  of  local  government  and
                     other provincial departments.


              (iv) Elimination of small grants


                     A suggestion was made that small conditional grants
                     must be eliminated or converted to grants in  kind.
                     Conditional grants that will eventually  be  phased
                     out, should be included in the equitable  share  to
                     provinces or local  government.  Small  grants  are
                     said to be disproportionate administrative burdens.


              (v)  Compliance


                     Most   departments   that   appeared   before   the
                     committee, have measures in place  to  ensure  that
                     they fully comply  with  the  requirements  of  the
                     PFMA. Reduction in the number of  grants  to  lower
                     administrative burden while streamlining  decision-
                     making and consultation is important.


              (vi) Allocation of powers and  functions  for  category  B
                     and C municipalities


                     The shifting of powers and functions between  these
                     two categories of  non-metropolitan  municipalities
                     is a significant challenge for  the  Department  of
                     Provincial and Local Government. The division could
                     have  wide-ranging  fiscal,  service  delivery  and
                     personnel implications. The view of SALGA  is  that
                     powers and  functions  must  be  allocated  to  the
                     category  of  municipality  where  they   will   be
                     administered    effectively.    Nonetheless,    the
                     department, in conjunction with  key  stakeholders,
                     are doing  all  in  their  power  to  determine  an
                     appropriate  allocation  of   functions   in   each
                     category. The  department  hopes  to  finalise  the
                     powers and functions for these categories by  April
                     2002.


 5.     Conclusion


     While initiatives made by the National  Treasury  on  working  with
     municipalities   and   provincial   governments   to   meet   their
     developmental  goals,  as  set  out  in  the   Constitution,   were
     acknowledged in the hearings, a lot  of  pressures  and  challenges
     still remain.


     Challenges   that   still   need   to   be   addressed    in    the
     intergovernmental system of South Africa, include:


     *   The  transition  and  transformation  process  in   the   local
          government sphere


     *  A more supportive system to both provinces and local  government
          to enhance their  capacity  to  spend,  manage  and  implement
          projects


     *  An improved revenue capacity and sound financial management  for
          provinces and local government


     *  The impact of  restructuring  of  the  electricity  distribution
          industry on the structure of local government finances
     *  Finalising  the  powers  and  functions  of  category  B  and  C
          municipalities


     *   A  need  to  strengthen  accountability  and  transparency  and
          increased efforts to improve reporting


     *  Introduction of tight measures to  deal  with  departments  that
          have not implemented the PFMA


     *  Improving the quality, quantity and reliability  of  information
          used in the division of nationally raised revenue


     *  Better co-ordination between various national departments


     *  Clear grant policy framework


     *  A more predictable and stable fiscal environment that will  make
          municipalities  more  attractive  to   private   lenders   and
          investors.
                       TUESDAY, 19 MARCH 2002

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The following Bill was introduced by the Minister of Finance  in
     the National Assembly on 19 March 2002 and referred  to  the  Joint
     Tagging Mechanism (JTM) for classification in terms of  Joint  Rule
     160:


     (i)      Financial  Services  Ombudschemes  Bill  [B  13  -   2002]
          (National Assembly - sec 75) [Bill and  prior  notice  of  its
          introduction published in Government Gazette No  23122  of  19
          March 2002.]


     The Bill has been referred to the Portfolio  Committee  on  Finance
     of the National Assembly.
     In terms of Joint Rule 154 written views on the  classification  of
     the Bill may be submitted to  the  Joint  Tagging  Mechanism  (JTM)
     within three parliamentary working days.

1. The Speaker and the Chairperson:

 The following papers have been tabled  and  are  now  referred  to  the
 relevant committees as mentioned below:


 (1)    The following papers are referred to the Portfolio Committee  on
     Arts, Culture, Science and Technology and to the  Select  Committee
     on Education and Recreation:


     (a)     Annual Report  of  the  South  African  Geographical  Names
          Council for 2000-2001 [RP 28-2002].


     (b)     Annual Report of the National Museum for 2000-2002.


     (c)     Strategic Plan for Arts, Culture,  Science  and  Technology
          for 2002-2005.


 (2)    The following papers are referred to the Portfolio Committee  on
     Justice  and  Constitutional  Development  for  consideration   and
     report. The reports are also referred to the  Select  Committee  on
     Security and Constitutional Affairs for consideration and report:


     (a)      The  report  regarding  the  suspension  from  office   of
          Magistrate R M Nongema, tabled in terms of section 13(3)(c) of
          the Magistrates Act, 1993 (Act No 90 of 1993).


     (b)     European Convention on  Extradition,  tabled  in  terms  of
          section 231(2) of the Constitution, 1996.


     (c)      Additional  Protocol  to  the   European   Convention   on
          Extradition,  tabled  in  terms  of  section  231(2)  of   the
          Constitution, 1996.


     (d)     Second Additional  Protocol  to  the  European  Convention,
          tabled in terms of section 231(2) of the Constitution, 1996.


     (e)     Explanatory Memorandum to the European Convention  and  the
          Protocols.


     (f)     SADC  Protocol  Against  Corruption,  tabled  in  terms  of
          section 231(2) of the Constitution, 1996.


     (g)     Explanatory Memorandum to the Protocol.

National Council of Provinces:

1. The Chairperson:

 (1)    Bills passed by National Council of Provinces on 19 March  2002:
     To be submitted to President of the Republic for assent:
     (i)     Unemployment Insurance Contributions Bill  [B  85  -  2001]
             (National Assembly - sec 77).


     (ii)    Animal Health Bill [B 64D  -  2001]  (National  Council  of
             Provinces - sec 76).

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister for Justice and Constitutional Development:

 Documents in terms of section 9(1) of the Promotion of  National  Unity
 and Reconciliation Act, 1995, regarding  the  Remuneration,  Allowances
 and  other  employment  Benefits  of  the  Staff  of  the   Truth   and
 Reconciliation Commission.

National Council of Provinces:

1. The Chairperson:

 Constitution of the Republic  of  South  Africa  Amendment  Bill,  2002
 (submitted by the Minister for Justice and  Constitutional  Development
 to the Chairperson in terms of section 74(5)(c) of the Constitution for
 a public debate in the Council).


 The Bill has been referred to the  Select  Committee  on  Security  and
 Constitutional Affairs for consideration and report.

COMMITTEE REPORTS:

National Council of Provinces:

1. Report of the Select Committee on Security and Constitutional Affairs on Legal Aid Guide, 2001, dated 19 March 2002:

   The Select Committee on Security and Constitutional Affairs, having considered the ratification of the Legal Aid Guide, 2001, referred to it, recommends that the Council, in terms of section 3A(2) of the Legal Aid Act, 1969 (Act No. 22 of 1969), ratify the said Guide.

 Report to be considered.