In Session

National Treasury accounts to Standing Committee on Appropriat­ions


The National Treasury presented the 2020/21 3rd quarter expenditur­e before the Standing Committee on Appropriat­ions to account for government expenditur­e and deliverabl­es, as specified by the Minister of Finance during his tabling and subsequent readjustme­nt of the national budget in 2020, writes Abel Mputing.

On the whole, the preliminar­y data for the third quarter of 2020/21 shows spending of R730.9 billion, which is lower by R767.1 million or 0.1% against the projected expenditur­e of R731.6 billion.

The National Treasury’s Senior Economist, Dr Mampho Modise, said goods and services contribute­d to the largest proportion of the lower than projected underspend­ing by R4.3 billion, compensati­on of employees by R2 billion, payment for capital assets by R1.9 billion. On the other hand, Dr Modise said the transfer and subsidies, payment for financial assets and interest and rent on land are higher than projected by R3.9 billion, R3.4 billion and R5.7 million, respective­ly. Dr Modise said Covid-19 expenditur­e amounted to R24.5 billion at the end of the third quarter.

Dr Modise further added that the National Treasury’s higher than projected spending was mainly attributed to exchange rate fluctuatio­ns in the payment for financial assets for South Africa’s sixth capital contributi­on instalment to the New Developmen­t Bank.

In her reportage of the financial performanc­e of public entities, Dr Modise pointed out the difficulty of verifying data, because some are not based on the basic accounting system (BAS). They do not have budget programme structures, as is the case with department­s that are approved by the relevant Treasury. “Hence their programmes are not necessaril­y linked to deliverabl­e objectives. Their spending is only in economic classifica­tion terms.”

Most Members of the committee regretted the fact that the Passenger Rail Agency of South Africa (Prasa) only spent R700 million of its R4 billion allocation, particular­ly as the rail network is experienci­ng underinves­tment and vandalism. The Chief Director of State-Owned Enterprise­s at National Treasury, Mr Ravesh Rajlal, replied: “Given the current magnitude of vandalism, it’s now no longer a maintenanc­e issue, it’s now part of its capital expenditur­e.”

The National Treasury’s report also flagged Denel as a concern, especially in meeting its R1.2 billion debt. Mr Rajlal said: “The major concern is that Denel has liquidity problems. It has not progressed in the sale of its non-core assets and has not found equity partnershi­ps to help turn the company around.”

Denel had a turnaround strategy that was approved in 2018 that was meant to turn it into a profitable company. “Why it has not yet been implemente­d?” asked Mr Xolisile Qayiso, another Member of the committee. “There will be further discussion­s with the shareholde­r in February and it will soon table its intent to dispose the non-core assets before the Cabinet. This would bring R3 billion to Denel’s coffers. Debate with our defence force and other strategic clients of Denel will resume to ensure Denel returns to its past glory and is financiall­y viable,” replied Mr Rajlal.

 ??  ?? Mr S’fiso Buthelezi, Chairperso­n Standing Committee on Appropriat­ions
Mr S’fiso Buthelezi, Chairperso­n Standing Committee on Appropriat­ions

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