The Standing Committee on Appropriations was yesterday briefed by National Treasury on the 2021 Appropriations Bill and the Special Appropriations Bill. The committee's processing of the bills follows on the budget tabled by the Minister of Finance in February and the subsequent passing of the Division of Revenue Bill.
During the briefing, the committee heard about severe budget reductions across government departments, implemented by National Treasury as part of an initiative to raise a R300 billion shortfall. While the committee acknowledged that the 2021 Appropriations Bill came at a very trying time for the country, Chairperson Mr Sfiso Buthelezi said "our panacea will come from economic growth. We will cut and cut until we cannot cut anymore. Our problems will be solved when we get our economy back to growing," he said.
The committee asked about the impact of the reduced budget allocations on achieving the envisaged economic growth and recovery. The National Treasury team, led by the Deputy Director-General for Public Finance, Dr Mampho Modise, replied by telling the committee that one of the biggest implications of the budget reduction was at the transport department. This will affect the Passenger Rail Agency of South Africa and the South African National Roads Agency Limited's maintenance budget, which might affect its ability to manage the country's deteriorating road network, with a serious impact on the cost of doing business.
Mr Buthelezi also raised concern about the reduced allocation to Statistics South Africa, which he said could negatively impact the quality of statistics and data, a very critical component in formulating strategies and policy by government. "Are you not worried about the impact of having unreliable statistics and data? For an example, how will you budget for education if data is not available or unreliable?" he asked.
Responding to the committee's concern, Dr Modise said it was not possible to exclude certain departments; all departments will be affected. "We are aware of the consequences of budget reductions. We have no doubt that some of the surveys at Stats SA will be affected," he told the committee.
The committee also heard that the decrease in the Department of International Relations and Cooperation's budget will possibly impact on membership subscription payments to several multinational bodies. In addition, most government departments will struggle to fill vacant posts and operations will be affected, requiring the reprioritisation of programmes.
The Appropriation Bill provides for the appropriation of money by Parliament from the National Revenue Fund in terms of section 213 of the Constitution, 1996 and section 26 of the Public Finance Management Act. The Special Appropriations Bill deals with the funding of the Covid vaccine (Health), the grant for distressed people due to Covid (Social Development) as well as the recapitalisation of the South African Airways and its subsidiaries (Public Enterprises).
In the coming weeks, the committee will conduct public hearings on the Appropriations Bill.