Justice and Constitutional Development, Department of..
Constitution ofthe Republic of South &ca Second Amendment Bill, 2001, in the National Assembly. The Bills are hereby published for public comment in accordance with section 74(5)(a) of the Constitution of the Republic of South Africa, 1996 (Act 108 of 1996). Any person wishing to comment on the proposed amendments is invited to submit written comments to the Minister for Justice and Constitutional Development.
X 81, Pretoria 0001, by not later than 10 August 200 1.
Words in bold type in square indicate omissions from existing enactments Words underlinedwith a solidline indicate insertions in existing enactments.
to allow a municipal council to bind the municipality in the exerciseof its executive and legislative authority if this is necessary to secure loans or investments for the municipality; to enable the enactment the exercise of executive and of national legislation to provide for legislative authority on behalf of a municipality in certain circumstances;tomake provision for the head of the Constitutional Court to be the Chief Justice of South Africa; to make provision for the Ofices of the of Deputy Chief Justice, President SupremeCourt of Appeal and Deputy President Supreme of Appeal; to enable the Legislature of the Court to regulate the termof office and retirement ageof Constitutional Court judgesby means of an Act of Parliament; and to provide for matters connected therewith.
Amendment of section 51 of Act 108 of 1996 1.
Justice, but not more than 14 days after the election result has been declared.
Assembly may determine the time and duration ofits othersittings and its recess periods. 'I.
Amendment of section 52 of Act 108 of 1996 2.
"(2) The [President of the Constitutional Court] Chief Justice must preside over the election of a Speaker, or designate another judge to doso. The Speaker presides over the election of a Deputy Speaker.".
Amendment of section 64 of Act 108of 1996 3.
"(4) The [Presidentof the Constitutional Court]Chief Justice must preside over the election ofthe Chairperson, or designate anotherjudge to do so. The Chairperson presides over the election of the Deputy Chairpersons.".
Amend.ment of section 86 of Act 108of 1996 4.
(2) The [President of the Constitutional Court]Chief Justice must preside over the election of the President, or designate another judge to do so. The procedure set out in Part A of Schedule 3 applies to the election of the President.
An election to fill a vacancy in the office of President must be held at a time and 01a date determined by the [President of the Constitutional Court] Chief Justice, but not more than 30 days after the vacancy occurs.
Substitution of section 93of Act 108 of 1996 5.
nomore than two Deputv Ministers from outside the Assembly to assist the members of the Cabinet, and may dismiss them.
I Amendment of section 110 of Act 108 of 1996 6.
"(1) Mer an election, the first sitting of a provincial legislature must take place at a time and on a date determined by a judge designated by the [President of the Constitutional Court] Chief Justice, but not more than 14 days after the election result has been declared. A provincial legislature may determine the time and duration of its other sittings and its recess periods.".
Amendment of section 111 of Act 108 of 1996 7.
"(2) Ajudge designated by the President of the Constitutional Court)Chief Justice must preside over the election of a Speaker. The Speaker presides over the election of a Deputy Speaker.".
Amendment of section 128 of Act 108 of 1996 8.
(2) Ajudge designated by the [President of the Constitutional Court] Chief Justice must preside over the election of the Premier. The procedure set out in Part A of Schedule 3 applies to the election of the Premier.
An election to fill a vacancy in the office ofpremier must be held at a time and on a date determined by the [President of the Constitutional Court] Chief Justice, but not later than 30 days after the vacancy occurs.
Amendment of section 155 of Act 108 of 1996, as amended by section 1 of Act 87 of 1998 9.
to resolve a serious and persistent financial emergency in the municipalitv.
Amendment of section 156 of Act 108 of 1996 10.
"(6) The council of a municipalitv mav. within a framework prescribed bv national legislation, bind itself and a fbture, council in the exercise of its executive and lemslative authority if this is necessary to secure loansor investments for the municipalitv.".
Amendment of section 167 of Act 108 of 1996 11.
I(1) The Constitutional Court consists of [a President, a Deputy President] the Chief Justice of South Africa. the Deputv Chief Justice and nine other judges.
Amendment of section 168 of Act 108 of 1996 12.
(1) The Supreme Court of Appeal consists of a [Chief Justice, a Deputy Chief Justice] President. a Deputy President and the number of judges of appeal determined [by] in terms of an Act of Parliament.
A matter before the SupremeCourtof Appeal must be decided by the number ofjudges determined [by] in terms of an Act of Parliament.
Amendment of section 174 of Act 108 of 1996 13.
Chief Justice and the Deputv Chief Justice and, after consulting the Judicial Service Commission, appoints the [Chief Justice and Deputy Chief Justice] President and Deputy President of the Supreme Court of Appeal.
The Judicial Service Commission must supplement the list with hrther nominees and the President must. make the remaining appointments from the supplemented list.
Amendment of section 175 of Act 108 of 1996 14.
I(1) The President may appoint a woman or a man to be an acting judge of the Constitutional Court if there is a vacancy or if a judge is absent. The appointment must be made on therecommendation of theCabinet member responsible for the administration ofjustice acting with the concurrence ofthe [Presidentof the Constitutional Court and the] Chief Justice.
Substitution of section 176 of Act 108 of 1996 15.
A Constitutional. Courtjudge is appointed for a non-renewable term of 12 years, but must retireat the ageof 70.
Other judges Judges hold office: until they are discharged from active service in terms of an Act of Parliament.
~31o The salaries, allowances and benefits of judges may not be reduced.'I.
Amendment of section 178 of Act 108 of 1996, as amended by section 2 of Act 65 of 1998 16.
by the substitution for paragraph (k) of subsection (1) of the following paragraph: "(k) when considering matters [specifically] relating to a [provincial orlocal division of the] specific High Court, the Judge President of that division and the Premier of the province concerned, or an alternate designated by each of them."
by the substitution for subsection (7) of the following subsection: "(7) If the Chief Justice or the [President of the Constitutional Court] President of the Supreme Court of Appeal is temporarily unable to serve on the Commission, the Deputy Chief Justice or the Deputy President of the [Constitutional Court] Supreme Court of Appeal, as the case may be, acts as his or her alternate on the Commission.".
Amendment of section 239 of Act 108 of 1996 17. The following definition is hereby inserted in section 239 of the Constitution: " 'ChiefJustice' means the Chief Justice of South Afi-ica referred to in section 167(1);".
Substitution of Schedule 2 to Act108 of 1996, as amended by section 2 of Act 35of 1997 18.
The President or Acting President, before the [President of the Constitutional Court] Chief Justice, or another judge designated by the [President of the Constitutional Court] Chief Justice, must swear/af€irm as follows: In the presence of everyone assembled here, and in full realisation of the high calling I assume as President/Acting President of the Republic of South ffica, I, A.B.
promote all that will advance the Republic, and oppose all that may harm it;.
In the presence of everyone assembled here, and in full realisation of the high i calling I assume as Deputy President of the Republic of South Afiica, I, A.B.
Republic; and I solemnly and sincerely promise that I will always-. promote all that will advancetheRepublic, and oppose all that may harm it; !
dojustice to all; and devote myself to the well-being of the Republic and all of its people.
Each Minister and Deputy Minister, before the [President of the Constitutional Court] Chief Justice or another judge designated by the [President of the Constitutional Court] Chief Justice, must sweadaffinn as follows: I, A.B., swear/soiemnly affirmthat I will be faithhl to the Republic of South &ca and will obey, respect and uphold the Constitution and all other law of the i !
Republic; and I undertake to hold my office as MinisterDeputy Minister with i i honour and dignity; to be a true and faithfkl counsellor; not to divulge directly or indirectly any secret matter entrusted to me; and to perform the fbnctions of my office conscientiously and to the best of my ability.
Members of the National Assembly, permanent delegates to the National Council of Provinces and members of provincial legislatures, before the [President of the Constitutional Court] Chief Justice orajudge designated by the president of the Constitutional Court]ChiefJustice, must swear or affirmas fotlows: I, A.B., swear/solemnly affirm that I will be faitfil to the Republic of South Afiica and will obey, respect and uphold the Constitution and all other law of theRepublic;and I solemnly promise to perform my functions as amember ofthe National Assembly/ permanent delegate totheNationa1 Council of Provinces/member of the legislature of the province of C.D.to the best of my ability.
Persons filling a vacancy in the National Assembly, a permanent delegation to the National Council of Provinces a or provincial legislature may swear or affirm in terms of subitem (1) before the presiding officer of the Assembly, Council or legislature,. as the casemay be.
I, A.B., swear/solemnly affirm that I will be faithfbl to the Republic of South Africa and will obey, respect and uphold the Constitution and all other law of the Republic; and I undertake to hold my office as PremiedActing Premier/ member of the Executive Council of the province of C.D. with honour and dignity; to be a true and faithfbl counsellor; not to divulge directly or indirectly any secret matter entrusted to me; and to perform the functions of my office conscientiously and to the best of my ability. (In the case of an oath: So help me God.
Each judge or acting judge, before the Chief Justice [of the Supreme Court of Appeal] or another judge designated by the Chief Justice, must swear or affirm as follows: I, AB., sweadsolemnly affirm that, as aJudgeofthe Constitutional CoudSupreme Court of AppeaVHigh Court/ E.F. Court, I will be faithfkl to the Republic of South Africa, will upholdand protect the Constitution and the human rights entrenched in it, and will administer justice to all persons alike without fear, favour or prejudice, in accordance with the Constitution and the law.
A person appointed to the office of Chief Justice [of the Supreme Court of Appeal] who is not already a judge at the time of that appointment must swearor affirm before the President of the[Constitutional Court] Republic of South Africa.
Judicialofficers, and acting judicial officers, other than judges, must swear/affirm in terms of national legislation.
Amendment of Schedule 3 to Act 108 of 1996, as amended by section 2 of Act 3 of 1999 19.
(d)the mannerinwhich voting is to be conducted.
(2)These rules must bemadeknownin the way that the [President of the Constitutional Court] Chief Justice determines.
Amendment of Schedule 6 to Act 108of 1996, as amended by section 3 of Act 35 of 1997 and section 5 of Act 65 of 1998 20.
(7) @ Anvone holding office; when the Constitution of the Republic of South Afiica Amendment Act, 2001.
the Deputv President of the Constitutional Court.
the Chief Justice.
the Deputv Chief Justice. becomes the Deputy President of the Supreme Court of Appeal as Contemplated in section 168(1)of the new Constitution.
All rules. regulations or directions made by the President of the Constitutional Court or the Chief Justice in force immediately before the commencement of the Constitution of theRepublic of South Africa Amendment Act. 2001.
(cJ Unlessinconsistentwith the context or clearly inapprouriate. a reference in anylaw or process to the Chief Justice or to the President of the Constitutional Court. must be construed as a reference to the ChiefJustice as contemplated in section 167(1) of the new Constitution.
The Bill amends the Constitution of the Republic of South Afnca, 1996 (Act No.
(the Constitution), in respect of the following three areas: The judiciary. The appointment of Deputy Ministers. Local governments.
Firstly, provision is made for the office of the President of the Constitutional Court to become that of the Chief Justice of South Afiica. (Clause 11.
& "Chief Justice" (of the Supreme Court of Appeal) to "President of the Supreme t "Deputy Chief Justice" to "Deputy President of the Supreme Court of Appeal".
Secondly, section 176of the Constitution is substituted in order to enable the Legislature to regulate the term of office and retirement age of Constitutional Court judges by means of an Act ofparliament. At present section 176provides that Constitutional Court judges hold office for anon-renewable term of 12years, and must retire at the age of 70, whereas other judges hold office until they are discharged fiom active service in terms of an Act of Parliament. (Clause 15.
In terms of section 91(3) of the Constitution, the President may select any number of Ministers fiom among the members of the National Assembly, and may select no more than two Ministers fiom outside the Assembly.
The effect of the requirement in section 93 that Deputy Ministers must be appointed from among the members of the National Assembly, is that, if the President appoints a Deputy Minister from a party that has very few members of Parliament, that party's effective participation in the ordinary business of Parliament mightbe compromised severely.
Clause 5 of the Bill is consequently aimed at bringing section 93 into line with section 91(3), by m&ng provision for the appointment of not more than two Deputy Ministers fiom outside the National Assembly.
The objectof clause 9 is to help municipalities to continue fbnctioning whilst experiencing serious problems, asthey restructure to resolvesuch problems. The Bill enables Parliament to enact legislation to allow for the exercise of executive and legislative authority on behalf of a municipality in circumstances where the council of a municipality for any reason cannot function or when this becomes vital to resolve a financial emergency in a municipality.
The objectof clause 10 is to empower iocal governments to borrow long-term hds. It seeks to empower municipalities to bind themselves in hture in the exercise of their executive and legislativepowers in order to borrow hnds for capital at a cheaper rate and over a longer term.
Both amendments giveeffect to the published "Policy Framework for Municipal Borrowing and Financial Emergencies" and the Municipal Finance Management Bill, both endorsed by Cabinet and published on 28 July 2000 in Government Gazette No. 21423, Notice 2738 of 2000.
The first part of the amendment to section 155 is self evident and relates to situations where a municipal council is unable to function and hence to provide governance in the municipality. The inability to govern may be due to various reasons, such as mass resignations in the council, the removal of councillors for misconduct, the dissolution of a council following an intervention in terms of section 100 or 139, etc. In such a case national legislation should provide caretaker arrangements for the governance of the municipality until a by-election can be held andallow, for instance, the appointment of an administrator.
The second part of the amendment to section 155is necessary to provide a missing piece in the Government's overall strategy for dealing with municipal financial problems. The published draft Municipal Financeand Management Bill contains comprehensive mechanisms, processes and procedures for municipal monitoring, reporting and auditing, including provisions to address financial problemsin municipalities and the restructuring of municipal finances where necessary. There is uncertainty as to whether the proposed financial restructuring provisions are constitutional where these provisions provide for the exercise of municipal executive and legislative authority on behalf of the municipality. The "Policy Framework for Municipal Borrowing and Financial Emergencies" envisions the creation of a Municipal Finance Emergency Authority, which could direct the financial structuring of a municipality when there is no alternative.
Financial emergencies can arise fiom many causes, sometimes including circumstances beyond the control of the council then in office. The restructuring process envisioned in the Policy Framework could be invoked by the municipality itself, if it seeks relief fiom unmanageable debt, by an MEC or Minister if necessary to supplement a national or provincial intervention in terms of section 100 or 139, or by a party to a contract if the municipality is in default of its contractual obligations. The underlying purpose of the policies outlinedin the Poiicy Framework is to restore themunicipality to financial health as soon aspossible. Safeguards will be included to ensure that all stakeholders have input into the formulation of a recovery plan and that essential services are continued during the restructuring process.
The amendment to section 156 aIlows a municipal council to bind the municipality as to how it will exercise its future discretion, ifthat is necessary, to make credit more available or affordable. In order to ensure a proper exercise of the powersgranted to municipalities through this amendment, the clause states explicitly that these powers May only be exercised within a framework prescribed by national legislation.
(h)Theproposed amendments to sections 155 and 156 together lay the foundation for national legislation to implement the Policy Framework for Municipal Borrowing and Financial Emergencies referred to above.
Words in bold in square brackets indicate omissions from existing enactments.
Amendment of section 73 of Act 108 of 1996 1.
regulates rates on propertv in terms of section 229 (2) (b).
"(3) A Bill referred to in section 76 (3), except a money Bill1 a Bill referred to in subsection (2) (a) or (b) of this section, may be introduced in the National Council of Provinces.".
Amendment of section 76 of Act 108 of 1996 2.
"(b) envisagedin Chapter 13 andwhich [affects] contains a Drovision affecting the financial interests of the provincial sphere of government. ".
Substitution of section 77 of Act 108 of 1996 3.
J abolishesor reduces. or grants exemptions from. any national taxes, levies.
authorises direct charges against the National Revenue Fund, except a Bill envisaged in section 214 authorisinn direct charges.
A moneyBillmaynotdeal with any other matter except a subordinate matter incidental to the appropriation of money, lor the imposition, abolition or reduction of, orthe granting of exemptions from, taxes, levies or duties or the authorisation of direct charges.
[(2)](3 All money Bills must be considered in accordance with the procedure established by section 75. An Act of Parliament must provide for a procedure to amend money Bills before Parliament.
Substitution of section 100 of Act 108 of 1996 4.
[(iv)] (v) prevent that province or municiDa1it-y from taking unreasonable action that is prejudicial to the interestsof another province or municioality or the country as a whole.
If the national executive intervenes in a province or municipality in terms of subsection (1) (b) -notice of the intervention must be [tabled in] submitted to the National Council of Provinces within 14 days [of its first sitting] after the intervention began; the intervention must end [unless it is approved by]if the Council [within 30 days of its first sitting after the intervention began] bv resolution requests the national executive to stop the intervention; and the Council [must] may review the intervention regularly and make any appropriate recommendations to the national executive.
National legislation -may regulate the process established by this section; and must co-ordinate the process established bv this section with the process established by section 139.
Substitution of section 120 of Ac+108 of 1996 5.
@J abolishes or reduces. or grants exemptions from. anv provincial taxes.
A moneyBillmay not deal with any other matterexcepta subordinate matter incidental to the appropriation of money, [or] the imposition, abolition or reduction of, orthegrantingof exemptions from, taxes, levies or duties or the authorisation of direct charges.
[(2)](3'J A provincialActmust provide for a procedure by which the province's legislature may amend a money Bill.
Substitution of section 139 of Act 108 of 1996 6.
(iii)] (1v) [to] maintaineconomic unity.
bv resolution requests the provincial executive to stou the intervention; and [(d)]@ the Council [must] may review the intervention regularly and make any ap, propriate recommendations to the provincial executive.
National legislation may regulate the prucess established by this section.
Amendment of section 159 of Act 108 of 1996, as amended by section 1 of Act 65 of 1998 7.
"(3) A Municipal Council, other. than a Council that has been dissolved following an intervention in terms of section 100 or 139, remains competent to function from the time it is dissolved or its term expires, until the newly elected Council has been declared elected.".
Amendment of section 163 of Act 108 of 1996 8.
designate representatives to participate in the National Council of Provinces.
Amendment of section 213 of Act 108 of 1996 9.
"(3) [A province's] The equitable share of revenue raised nationally which provinces and local government are entitled in terms of section 214 is a direct charge against the National Revenue Fund.".
Amendment of section 216of Act 108 of 1996 10.
"(2) [The national treasury, with the concurrence of the Cabinet member responsible for national financial matters, may stop the transfer of funds to an organ of state only for serious or persistent material breach of the measures established in terms of subsection (l)]The national treasury must enforce compliance with the measures established in terms of subsection (1). and may stop the transfer of funds to an organ of state if that organ of state commits a serious or Dersistent material breach of those measures."
"(3) A decision to stop the transfer offunds dueto a province in terms of section 214 (1) (b) may be taken only in terms afl the circumstances mentioned in subsection (2) and -".
Amendment of section 217 of Act 108of 1996 11.
"(3) National legislation must prescribe a framework within which the policy referred to in subsection (2) [may] must be implemented.".
Amendment of section 221 of Act 108 of 1996, as amended by section 2of Act 2 of 1999 12.
[nine] two other persons.
"(2) Members of the Commission must have [appropriate] expertise relevant to the fbnctions of the Commission."
Subsection (1) takes effect on 1 April 2002.
Amendment of section 226 of Act 108 of 1996 13.
revenue allocated through a province to local government in that urovince in terms of subsection (3) must be uaid to municipalities in the urovince.
Amendment of section 228 of Act 108 of 1996 14.
"(b) flat-rate surcharges on the tax bases ofJany tax, levy or duty that is imposed by national legislation, other than the tax bases ofl oncorporate income tax, value- added tax, rates on property or customs duties.".
Substitution of section 230 of Act 108 of 1996 15.
must be repaid within [twelve months] the same fiscal year. 2J The power of a province or a municipality to raise loans maybe remIated bv national legislation.
[(2)]& National legislation referred to in subsection [(l)](2)may be enacted oniy afier any recommendations of the Financial and Fiscal Commission have been considered.
This Act is called the Constitution of the Republic of South Afnca Second Amendment Act,2001, and comes into operation on a date fixed by the President by proclamation in the Gazette.
The broad object of the Bill is to address a range of practical diffculties that were encountered in implementing the Constitution, especially the financial regime established by the Constitution. As these difficulties are diverse and mostly unrelated, the object of each proposed amendment contained in the Bill can best be explained under a discussion of the sections that are affected.
Section 73 Section 73 (2) establishes the principle that only a Cabinetmember, a Deputy Minister or a member or committee of the National Assembly may introduce draft legislation in the National Assembly, but that only the Cabinet member responsible for national financial matters, i.e. the Minister of Finance, may introduce a money Bill in the Assembly.
deals with the remuneration of persons ho1din.
regulates rates on property in terms of section 229 (2) (b).
The effect of this amendment is that only the Minister of Finance would be constitutionally competent to introduce in the Assembly money Bills and generally most other financial legislation which gives effect to Chapter 13. The financial legislation that would be affected by the amendment relates exclusively to typical financial matters that impact on macro-economic policy and the financial administration of the state. Normally this legislation would fall within the line fhction of the National Treasury, and the aim of the amendment, therefore, is to ensure that the National Treasury assesses such draft legislation and the impact it may have on macro-economic policy and the financial administration of the state before such legislation is introduced.
The proposed amendment of this section is aimed at avoiding the splitting of draft financial legislation into section 75 and 76 Bills where some provisions of the legislation affect the provinces and others do not. It is accordingly proposed that a Bill envisaged in Chapter 13 of the Constitution in fbture be dealt with in the parliamentary proceedings in terms of section 76 (1) if it contains a provision affecting the financial interests of the provincial sphere of government; in other words in terms of the procedure which requires the Bill to be passed by the National Council ofProvinces as well. This amendment would not affect the parliamentary proceedings on money Bills which in terms of sections 77 (2) and 76 (6) of the Constitution must be dealt with in accordance with the section 75 procedure.
Section 77 This section defines a money Bill. The proposed amendment extends this definition to include Bills abolishing or reducing, or granting exemptions from, any national taxes, levies, duties or surcharges, or authorising direct charges against a Revenue Fund. Read with section 73, the implication of this proposed amendment is that only the Minister of Finance would be competent to introduce legislation which abolishes or reduces, or grants exemptions from, any national taxes, levies, duties or surcharges or which authorises the withdrawal of money from the National Revenue Fund as direct charges against the Fund.
Sections 100 and 139 Section 100of the Constitution empowers the national executive to intervene in a province if the province fails to fulfil an executive obligation imposed on the province in terms of legislation or the Constitution. If the national executive intervenes in terms of this section, it may either direct the province to take steps to meet its obligations or otherwise assume responsibility for the relevant obligation ifthat is necessary to maintain national standards, to meet established minimum standards for the rendering of a service, to maintain economic unity, to maintain national security or to prevent unreasonable action from the province. A similar provision is found in section 139 which provides for a province to intervene in a municipality if the municipality fails to fulfil an executive obligation imposed in terms of legislation. The Constitution does not provide for the national executive to intervene in a municipality directly. Such interventions are restricted to a province as the Constitution currently reads.
This regime created by sections 100 and 139 in terms of which the national government may intervene in a defaulting province and only a province may intervene in a defaulting municipality, is out of line with the other provisions of the Constitution which depicts government as three distinctive, inter-dependent and inter-related spheres. To the extent then that the constitutional relationships between the three spheres are generally direct and not hierarchical, sections 100and 139 must be seen as a constitutional anomali that should be corrected by extending the power to intervene in municipahties to the national government as well.
Another reason why these sections should be corrected is the fact that provinces have very little capacity in some functional areas, such as water and electricity supply systems. If a municipality defaults on its obligations in this regard, there is very little a province can do by way of an intervention apart from facilitating national institutions to assume the responsibility.
The Bill consequently proposes amendments to both sections. It is suggested that section 100 be amended to give the national executive the same power to intervene in a non-complying municipality as section 139 confers on provinces. The section 139 power of a province to intervene will not be affected by the amendment, but will remain and becomea concurrent power. As such there would appear to be a need for coordination of the processes established by the two sections. It is proposed that such coordination be provided by national legislation, and a provision to this effect is accordingly inserted in section 100 (3).
The adjective "executive" before the word "obligation" is deleted as the Constitution and certain legislation such as the Local Government: Municipal Systems Act, 2000, place certain obligations of a legislative nature on municipalities, e.g. the annual passing of a budget. Legislative obligations of provinces are specifically excluded as the national executive cannot pass provincial laws by way of an intervention.
100(l)(b)(i) separate subparagraphs to maintenance of essential national standards fiom the words "for the rendering of a service". These words should apply to the second part of the sentence only, viz. to established minimum standards. See in this connection section 44(2) (c) and (d) where the distinction is properly drawn. . Section 100(2)(b) is changed to give the National Council of Provinces a direct veto over national interventions instead of the current process requiring the Council's approval within 30 days as a precondition for the survival of the intervention.
The current burden on the NCOP in terms of section 100(2) (c) to review the intervention regularly and to make appropriate recommendations to the national executive, is removed and replaced by a discretionary power. This means that the NCOP may review an intervention at any time and make recommendations if it so chooses.
The proposed amendments to section 139 are confined to technical changes similar to those suggested for section 100. (See bullets above.
This section defines the provincial equivalent of a money Bill. The definition of provincial money Bills is amended along similar linesas proposed for national money Bills and includes Bills which abolish or reduce, or grant exemptions from, any provincial taxes, levies, duties or surcharges, or which authorise direct charges against the Provincial Revenue Funds. As section 119 currently states that only the member of the Executive Council responsible for financial matters in the province may introduce a money Bill in the provincial legislature, the effect of the amendment is that only the MEC for finance in a province is competent to introduce legislation abolishing or reducing, or granting exemptions from, any provincial taxes, levies, duties or surcharges, or authorising the withdrawal of money from a Provincial Revenue Fund as direct charges against the Fund. This amendment is necessary to ensure integration and coherence, and also financial discipline, in the provincial budget process.
This is consequential to the amendment of section 100, which extends the national intervention power to municipalities. Subsection (3) of section 159 refers to a municipal council which has been dissolved following an intervention in terms of a provincial intervention under section 139. This amendment adds a reference to section 100 as a dissolution of a municipal council will also be possible in terms of an intervention under section 100.
It is proposed that this section be amended to delete the current obligation on Parliament to provide in an Act of Parliament for the determination of a procedure in terms of which local government may nominate persons for appointment to the Financial and Fiscal Commission. This amendment is consequential to the proposed amendment of section 221 concerning the composition of the Commission.
Section 213 In terms of section 213 money can be withdrawn from the National Revenue Fund either in terms of an appropriation by an Act of Parliament or as a direct charge authorised by the Constitution or an Act ofparliament. The section currently provides that provinces' equitable share of revenue raised nationally must be paid to provinces as a direct charge against the Revenue Fund but is silent on how local government's equitable share must be withdrawn from the Fund. The Bill proposes to extend this principle to local government's equitable share.
The proposed change is based on practical considerations and on the current need for two separate Acts of Parliament to authorise the same transfer. Currently the annual Division of Revenue Act contemplated in section 214which, like the budget, is passed annually, mustprovide for the division of revenue raised nationally among the spheres and for additional allocations to provinces and 'municipalitiesfkom the national share. The Division of Revenue Act is not an appropriation Act and its revenue division provisions cannot be understood as authorising the withdrawal of funds fkom the Revenue Fund. This necessitates the inclusion in the budget as ordinary appropriations of those transfers that are not direct charges, such as local government's equitable share and any additional allocations to provinces and municipalities.
The proposed amendments to section 216 are merely technical in nature and clarifi certain ambiguities in the section without affecting the constitutional principles embodied in the section. These principles remain unaltered.
Subsection (2) as presently formulated is particularly ambiguous and on a literal reading has certain consequences that could never have been intended. To facilitate a better understanding of the trueintention and to avoid misinterpretations and misunderstandings between affected parties, it is proposed that the whole subsection be redrafted as proposed in the Bill. The redraft firstly avoids the words in the current subsection that the National Treasury may stop the transfer of funds to an organ of state only with the concurrence of the Cabinet member responsible for nationalfinancial matters. These words obscure the content of the "national treasury" and do not recognise the fact that the Cabinet member responsible for national financial matters is the head of the national treasury and in fact the institution in which the power and authority of the national treasury vest. To suggest, as the current formulation implies, that the National Treasury and the Cabinet member responsible for national financial matters are different institutions, is artificial and practically untenable. Secondly, the current formulation implies that the only circumstances in which the stopping of funds to an organ of state is allowed, is when the organ of state commits a serious or persistent material breach of the norms and standards prescribed in terms of section 216 (1). This interpretation obscures the whole practice of transfer payments, but especially the enforcement of theconditions on which conditional grants are given to provinces and municipalities in terms of section 114 (1) (c). Obviously, the idea of a conditional grant is that if the conditions are not met, the grant may be stopped. The question whether a province or a municipality has committed a serious or persistent material breach of the treasury norms and standards should have no bearing on a decision to stop transfers of a conditional grant when conditions are not met, and section 216 (2) should not come into play when transfers are stopped because of non-compliance with the conditions of a grant.
The redraft of section 216 (2) now makes it clear that the stopping of fhds is a mechanism to enforce the treasury norms and standards prescribed in terms of subsection (l), but a mechanism that may be used only where there is a serious or persistent material breach of these norms and standards. It avoids the implication of the current formulation that the only instance where the stopping of fbnds is allowed is when a serious or persistent material breach of the norms and standards has been committed.
For the samereason, the proposed amendment to section 216 (3) brings the section into line with its true intention, and conlines its application to the stopping of a province's equitable share.
217 This section provides that when organs of state and certain other institutions procure goods and services they must do so in accordance with a system that is fair, equitable, transparent, competitive and cost-effective. It hrther allows organs of state and institutions to implement a procurement policy providing preferences for persons disadvantaged by unfair discrimination. The proposed amendment to this section makes it mandatory for organs of state and institutions to implement their preferential procurement policies within a framework set out in national legislation.
The proposed amendment to this section alters the composition of the Financial and Fiscal Commission by reducing the number of members from 22 to 8 persons. Currently each of the provinces is entitled to nominate one person, whilst the President may.appoint nine additional members to balance the nine provincial members. In terms of the amendment the President will appoint two members after consulting the provinces and two additional members. The two local governmentmembers are retained but willin hture be appointed by the President after consultation with organised local government. A previous amendment to the Constitution removed the need for the chairperson and deputy chairperson to be fill-time members of the Commission.
may authorise direct charges against their Revenue Funds; and mustpay revenue allocated through a province to local government in that province to municipalities in the province.
Framework legislation is necessary to achieve proper and uniform budgetary processes in the provinces and also to ensure that direct charges are treated by all provinces as an exceptional form of authorising expenditure. There is alsoa need in the context of section 226 to ensure that the allocation of money to local government through a province is divided among municipalities in the province in akcordance with national government's criteria.
In termsof the existing provision provinces are empowered to impose flat rate surcharges on the "tax bases" of any levy or duty other than the taxbases of corporate income tax, value-added tax, rates on property or customs duty. The reference to "tax bases" is deleted as' these words have no definite meaning in the context they appear in the section.
The proposed amendment deletes the requirement that a province or municipality may raise loans for capital or current expenditure only "in accordance with reasonable conditions determined by national legislation" and replaces it with the same controlling mechanisms that apply in the case of provincial and municipal fiscal powers. See sections 228 (2) and 229 (2).
The State Law Advisers and the Department of Justice and Constitutional Development are of the opinion that the proposed amendmentsfallwithin the ambit of section 74(3)(b) of the Constitution and consequently require the approval of both the National Assemblyand the National Council of Provinces.