Home  »  Articles   »   Parliament Briefed on 2020 Division of Revenue Bill

Articles
Parliament Briefed on 2020 Division of Revenue Bill

March 17, 2020

National Treasury

Allowing metropolitan municipalities to be exempted from Built Environment Performance Plan requirements once planning reforms are institutionalized is one of the changes included in the 2020 Division of Revenue Bill.

National treasury confirmed this in a briefing on the bill to the standing committee on appropriations.

The bill was tabled on budget day in February 2020.

Other changes highlighted by treasury in the bill include provisions to regulate spending in areas affected by municipal boundary changes included in Section 38; formally provide for the creation of components within a conditional grant and allow for funds to be shifted from one component to another, after consulting the receiving officer and getting approval by treasury (Clause 17(2)); require national departments to set a timeline for when the province/municipality must respond if they disagree with the proposed withholding of funds (Clause 18(4)(iii)); provinces and municipalities have to report on what remedial actions they have taken to address the matters that resulted in withholding or stopping of transfers (Section 12) and require the financial statements of provincial departments to include information on the amounts from conditional grant funds that were transferred to municipalities or public entities (Clause 15(3)(b)).

Treasury also clarified that allocations in the 2020 Division of Revenue Bill do not include the R160.1 billion in proposed reductions to the public sector wage bill.

“Once negotiations with organized labour have been concluded, savings will be implemented in the 2020/21 adjustments budget and over the 2021 MTEF.”

During responses to recommendations, treasury declared that government supports the importance of improving the coordination of infrastructure delivery.

“The District Development Model launched by President Ramaphosa aims to develop and implement ‘One Plan’ for each district/metro area that coordinates the efforts of different stakeholders within the space of the respective municipality.”

Treasury also indicated that a review of the 2018 amended Municipal Regulations on Minimum Competency Levels will be undertaken in due course, a special Local Government Budget Forum lekgotla will be held in May or June 2020 and various reforms to supplement municipal revenue sources will be prioritized including enhancing revenue from development charges.

Meanwhile, last week, parliament gave the green light to the 2020 Fiscal Framework and Revenue Proposals tabled in parliament on 26 February 2020.

According to a statement, the Fiscal Framework and Revenue Proposals include “estimates for the next three years on all revenue (budgetary and extra-budgetary specified separately) to be collected; all expenditure (budgetary and extra-budgetary specified separately); borrowing, interest and debt-servicing charges; and an indication of the contingency reserve to respond to emergencies or other unforeseen needs.”

Parliament called for wastage and corruption to be significantly reduced and for more value for money spent.