Debate on the 2019 Division of Revenue Bill by Cde Yvonne Phosa in the National Assembly

13 March 2019

Honourable Speaker / Chairperson;
Honourable President Cyril Ramaphosa;
Honourable Deputy President David Mabuza;
Honourable Ministers and Deputy Ministers;
Honourable Members;
Distinguished guests;
Ladies and gentlemen;
Fellow South Africans;
Comrades and Friends,

The ANC supports the Division of Revenue Bill. It is my honour and privilege to make a few remarks as I table before this House of Parliament, a report on the 2019/20 Division of Revenue Bill [B5-2019] on behalf of the Standing Committee on Appropriations.

Honourable Speaker / Chairperson, the 2019/20 budget ushers our country into another phase of our ongoing transition from apartheid, colonialism to a national democratic society; that is truly united, non-racial, non-sexist, democratic and prosperous.

Let me remind the House that in the 2019 State of the Nation Address, our President set out an ambitious agenda for our nation. It is an agenda that speaks to the South Africa that we can be. It is a task list for all of us. It lays out a series of interventions that will put South Africa on a bold new path. As the State of the Nation Address noted, faster growth is needed to expand employment and raise the revenues needed to support social development. While progress is being made on various short-term initiatives, South Africa needs to implement a range of reforms that will bolster confidence, investment and economic growth. The state’s capacity to implement policy also needs to be strengthened.

Honourable Speaker / Chairperson, we fully agree with the Minister of Finance when he says:

            “This is a budget that plants a seed for renewal and growth…”

It is a bold and decisive budget for the present and the future and with everything else as pointed out by Minister Tito Mboweni when he said:

“…like the “iconic South African plant, the aloe ferox…we must take the bitter with the sweet…”

On the 20th of February 2019 the Minister also tabled the 2019 Division of Revenue Bill against the backdrop of a tough economic environment. Regardless of the tough times confronting us, the African National Congress (ANC) Government has demonstrated its unshakable commitment to a responsive and a redistributive Division of Revenue, for a better life for all, and a better future for all.

Subsequent to comprehensive consultations with stakeholders and submissions, that include National Treasury, the Financial and Fiscal Commission, South African Local Government Association, Western Cape Forum for Intellectual Disability; Equal Education; Budget Justice Coalition; Rural Health Advocacy Project; Mr KE Matlala; and Mr MG Buthelezi. Also, after deliberations on the 2019 Division of Revenue Bill, the Committee concluded, that this Bill strikes a fine balance between fiscal sustainability, social protection and South Africa’s developmental agenda. The 2019 Division of Revenue Bill reflects the equitable division of nationally raised revenue between:

  • National Departments being allocated 47.9% at 1.4% annual average growth.
  • The nine Provinces being allocated 43% at 1.5 annual average growth.
  • And 257 municipalities allocated 9.1% at 2.9% annual average growth.

The Budget is aligned with the National Development Plan and Government priorities. Honourable Speaker, the bulk of government spending is allocated to:

  • Learning and culture, being R 386.4 billion.
  • Social Development, being R 278.4 billion.
  • Health, being R 222.6 billion.
  • Community Development, being R 208.5 billion.

The ANC led government is serious about poverty eradication. The 2019 budget is pro-poor, enabling National Departments, Provinces and Local Government to provide water, sanitation, electricity, roads, housing, informal settlement upgrade, and title deeds. A Human Settlement Development Grant to the value of R 7.4 billion has been allocated over the Medium Term Expenditure Framework (MTEF); as well as a Municipal Emergency Housing grant.  Cushioning the poor with free basic services. This is not a wish list but rather it is happening as reflected in the allocations as empirical evidence. In addition, during this fight against poverty eradication, the ANC government has allocated R 567 billion for social grant payments, with:

  • R80.00 increase for the old age, disability war veterans and care dependency grants.
  • R40.00 increase for foster care grant.
  • The child support grant will increase to R420 in April and R430 in October.

This is important in the eradication of poverty.

The good thing about this 2019 Division of Revenue is that it reflects a budget that is redistributive, with taxes raised in wealthier areas to fund poorer Provinces and Municipalities. It remains strongly, redistributive with 68% of the consolidated expenditure going toward education, health, social grants and basic services. For example, over the past 10 years’ residents of other provinces have paid less than 4 per cent of national income tax, yet the province received an average of 12.2 per cent of provincial equitable share allocations over the same period. This is justice and redress. The ANC government is ensuring all citizens receive the same quality service.

Over the MTEF the contingency reserves and provisional allocations, R 1.44 trillion, R 1.54 trillion and R 1.65 trillion are shared across government over each MTEF period. Transfers to local government have grown significantly providing municipalities with greater resources to deliver basic services. Of course, this is in addition to local government’s substantial own revenue raising powers.

Indeed, as Tata Madiba said:

“Our daily deeds as ordinary South Africans must produce an actual South African reality that will reinforce humanity’s belief in justice, strengthen its confidence in the nobility of the human soul, and sustain all our hopes for a glorious life for all.

I reiterate, the ANC government has a plan, and not a wish list. The division of revenue, empirical evidence, shows that the 2019 budget positively responds to the need for accelerated inclusive growth. The ANC government has contributed R 100 billion to a blended finance, infrastructure fund over the next ten years. This is highly commended as it will benefit businesses, citizens and including the poor which will also promote and increase inclusive growth and investment, again benefitting businesses, citizens and including the poor.     

An additional R 165 million is allocated to the Presidential Infrastructure Coordinating Commission to improve capacity to prepare infrastructure projects. The economic development function increase by 7% in the MTEF, to improve access to loans for small business intermediaries, to provide industrial business incentives, accelerating land reforms and infrastructure development.

Job creation is governments priority! The Committee commends government for allocating R 61.4 billion to public employment programmes over the MTEF. We are pleased to report to this House of Parliament that since 2009, government has created over 4 million jobs and aims to create another 2 million jobs by the end of 2021.

On the wage bill which is above inflation, we commend National Treasury for introducing measures expected to reduce compensation by R 27 billion over the next three years. The list is long….

Honourable Speaker, fellow South Africans, this budget plan by the ANC government is about your fellow South African, batho bahetso, black and white, young and old, women and people with disabilities, as well as rural and urban.

I must thank the Parliamentary Budget Office, the Financial and Fiscal Commission, and the South African Local Government Association for their input. I also thank the support staff for their hard work.