The issue of the transfer of funds from provincial departments to the R10.5 billion SAA business rescue fund loomed large when national Treasury briefed the Western Cape legislature’s budget committee. Picture: Henk Kruger/African News Agency (ANA)
The issue of the transfer of funds from provincial departments to the R10.5 billion SAA business rescue fund loomed large when national Treasury briefed the Western Cape legislature’s budget committee. Picture: Henk Kruger/African News Agency (ANA)

Impact of SAA bailout on Western Cape departments under scrutiny in legislature

By Mwangi Githathu Time of article published Nov 24, 2020

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Cape Town - The issue of the transfer of funds from provincial departments and the contingency reserve to the R10.5 billion SAA business rescue fund loomed large when national Treasury briefed the legislature’s budget committee on the Second Division of Revenue Amendment Bill.

Members of the committee questioned the chief director of intergovernmental policy and planning at the national Treasury, Wendy Fanoe, asking her to clarify whether R10bn was to be cut from the provincial budget, as claimed by Premier Alan Winde in his address to the legislature in October.

In his address on October 22, Winde said: “The Western Cape government’s budgets over the medium term are likely to be cut by the same amount or more than is now going to be funnelled into the black hole which is SAA.

“Let me be crystal clear: over R10bn is going to be taken out of the mouths of the poor to pay for our failed state airline.”

Responding to questions by the leader of the provincial opposition, the ANC’s Cameron Dugmore, and committee member Lulama Mvimbi of the ANC, Fanoe said: “After going through all the additions and reductions in the summary of changes to provincial allocations to cater for the SAA rescue plan, you will find the provincial allocation for the Western Cape is reduced by R1.5bn altogether and it is definitely not R10bn.”

On the same issue, acting committee chairperson Ricardo Mackenzie of the DA said: “Was there a technical argument ever made about whether we need SAA or not? We know about the political arguments for and against, but what were the technical issues raised?”

Fanoe replied: “National Treasury advised the department of the reductions that were required because what was needed in the decision that was made with regard to SAA, was that the fiscal framework will remain intact to fund the recovery plan.

“So that meant that reductions had to made to national as well as provincial departments. It was done on a proportional basis, largely to determine the amount of reductions required from departments.”

Meanwhile, there will be public hearings and submissions on the 2020 Second Adjustments Appropriation Bill, hosted by the budget committee at the provincial legislature in Wale Street on Friday, November 27.

The bill provides for increases or decreases in allocations set out in the main Appropriation Act, including shifts in the anticipated economic classification of this spending.

The chairperson of the budget committee, Deidré Baartman said in a public notice: “The purpose of the bill is to appropriate adjusted amounts of money from the provincial revenue fund, and interested parties should contact the budget committee’s procedural officer Waseemah Kamish- Achmat via email at [email protected] or at telephone number 021 487 1657, to request a schedule of the Microsoft Teams committee meetings as well as the YouTube link to the meetings.”

Cape Argus

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