ANC Caucus statement on the Adjustments Appropriation Bill (Supplementary Budget) to be tabled for debate on 29 July 2020

28 July 2020

The Supplementary Budget as tabled by the Minister of Finance on 24 June 2020 included an Adjustments Appropriation Bill. The Supplementary Budget and its Adjustments Appropriation Bill is government’s financial response to the impact upon the Economy and society by the Coronavirus pandemic.

The financial response by government takes into account the impact of the World Health Organisation approved globally applied risk adjusted strategy, that has economic consequences.

The Adjustments Appropriation Bill, amongst others, provides for the financing of the necessary infrastructure across sectors designed to flatten the curve of infections and prevent the further spread of the virus. It also allows for the Department of Health to prepare health facilities to accommodate those with serious infection, testing and tracking both in the public and private sector.

The impact of the Corona-virus on the economy and the social fabric of South Africans has not been experienced since the 1918-1920 pandemic euphemistically but wrongly referred to as "Spanish Flu".

The ANC Caucus and Parliamentary Committees have received comprehensive reports on the response of government to the pandemic. These have been ongoing and have included Ministerial Statement which have afforded all political parties to respond and clarify themselves.

In terms of the Supplementary Budget and its Adjustments Appropriation Bill, this has meant it supports the three phased approach of government to:

Preserve the economy through a set of immediate, targeted and temporary responses; Recover from the immediate effects of the pandemic by supporting investment and employment and positioning the economy for the faster growth needed to restore the country’s long-term prosperity.

A R500 billion economic support package, which is comprised of R200 billion loan guarantee scheme in partnership with the major banks, the National Treasury and the South African Reserve Bank. This will assist enterprises with operational costs, such as salaries, rent and the payment of suppliers. In the initial phase, companies with a turnover of less than R300 million a year will be eligible. It is expected that the scheme will support over 700,000 firms and more than 3 million workers. It includes R190 billion in main budget spending – of which R145 billion is allocated immediately – to protect lives and support livelihoods. Of this R130 billion are reprioritised funds. In addition, there is R70 billion in tax policy relief measures.

Over 18 million South Africans have received the Temporary COVID-19 Relief Fund grants, which – along with other interventions for vulnerable households – will cost R41 billion. The Reserve Bank has reduced interest rates and provided additional support to the bond market, financial-sector regulations have been eased to support the flow of credit to households and businesses, and commercial banks have introduced temporary payment holidays. R1.5 billion has been spent to support struggling informal businesses and spaza shops. The Unemployment Insurance Fund has dispensed R34 billion to 7,5 million workers.

Caucus, through its oversight work in Parliament, in Committees and its constituency work, will continue to seek to ensure that such funding reaches the intended group. In this context, Caucus needs to advise those who are manufacturing a narrative in the public that the R500 billion support measures to deal with Covid-19 are being plundered through corruption.

The facts in this statement clearly indicate how and to whom the support measures are being paid. The R130 billion that has been reprioritized across government departments has been subjected to a Multi-Agency Centre (SAPS, NPA, SIU, Financial Intelligence Centre and IPID) to investigate if there has been any corruption and will prosecute where evidence indicates corrupt activities. In addition, the National Corona Command Council has seized itself with the negative aspects of the procurement system which is vulnerable to corrupt individuals who in their name, bring discredit to a government response to the pandemic and whose actions build an uninformed perception that Covid Funds are for plundering. The Supplementary Budget is to redistribute resources to those in need of support in the time of this pandemic and corrupt individuals in government and the private sector must be charged.

Issued by the Office of the Chief Whip; Hon. Pemmy Majodina

For more information, contact:

Nomfanelo Kota
Acting Caucus Spokesperson
067 415 1089
nkota@parliament.gov.za
nomfanelok17@yahoo.com