SUBMISSION TO PARLIAMENT (Energy Chapter)

Much of the content of this document was submitted to the Standing Committee on Appropriations, as part of the OUTA comprehensive Submission to Parliament. This submission is provided to assist Parliament in their deliberations into the post Covid19 budgetary adjustment process.

4 June 2020 For further information contact:

Liz McDaid (082 7315643) Liz.mcdaid@outa.co.za

Introduction

Sector Specific Reforms

OUTA responded to the call to make written submissions to the Standing Committee on Appropriations about the 2020 Appropriation Bill, which was tabled with the 2020/2021 Budget by the Minister of Finance in February 2020. The context in which this submission is made is that events related to the Covid-19 pandemic have impacted upon the budget process, necessitating a Supplementary Budget published in response to the unforeseen expenses demanded by the ripple effects of the pandemic.

OUTA’s submission is informed by this context and therefore focuses on the Appropriations Bill and the impacts that the Supplementary Budget announcement has for public spending. The need for disruption and inclusive economic change is clear. However, political barriers must be overcome by open discussion and constructive debate that builds consensus and solidarity between taxpayers, consumers and public officials. Inclusive policy reforms must be the cornerstone of post-Covid19 budgets. Repeated promises to bring about radical and inclusive economic transformation are made constantly, yet public engagements on how money should be spent in the public sector are few and far between.

The government-centric monopoly in key industries like energy, water and transport has failed to provide efficient reliable services for reasons that include the systematic contravention of the Public Finance Management Act and other legislation governing how tax revenue may be spent. OUTA agrees that energy is one of those crucial sectors for innovation and inclusive growth that can facilitate bottom-up economic transformation. Unfortunately, these were all sectors targeted by organised state-capture networks, due to their capital-intensive value chains. The effects of this structural challenge – and the entrenched criminal networks which may continue to exploit it – cannot be overlooked and must be addressed before Parliament approves the allocations of more money to these sectors.

Here is the full document: