After the rejection of a DA Bill in Parliament on transparency on government guarantees, Treasury tries to limit the damage

Issued by Alf Lees MP – DA Member of the Standing Committee on Public Accounts
05 Oct 2023 in News

The DA notes the issuance of National Treasury Instruction No. 1 of 2023/24 which requires that Cabinet Ministers report quarterly, during each financial year, on government guarantees, indemnities or securities that have been issued to entities that fall under their respective Departments. Treasury says this will improve transparency on the financial commitments incurred by the national executive and are binding to the National Revenue Fund.

While the instruction note may be seen by some as a step forward, unlike the DA Private Members Bill (PMB) which sought to address the same issue but was rejected by the ANC in Parliament, it is an executive decision that can be unilaterally withdrawn by the Minister of Finance at any time.

Even though it places a requirement to report quarterly on government guarantees, it has no deadline as to when – within what period, such quarterly reports must be submitted to the National Assembly. It is quite likely that cabinet ministers, such as Pravin Gordhan, will just ignore the practice note as they will be able to say that they will report when they are ready to do so just like they do with the requirement to produce annual reports.

Pravin Gordhan, the Minister of Public Enterprises, has not submitted an annual report for SAA since the 2018/19 year despite the legal deadline of 30 September every year. Such disdain for Parliament will make a farce of the National Treasury Instruction note and the risk associated with government guarantees, indemnities, and securities will continue unabated.

The DA’s PMB, Bill 41-2018, sought to amend the PFMA in order to ensure that all government guarantees, indemnities, and securities are reported on in detail and within 30 days to Parliament. Despite the Bill being non-partisan, the ANC in Parliament and National Treasury rejected it as undesirable.

The rejection of the PMB, during the sitting of the National Assembly on 7 September 2023, was roundly condemned by the majority of opposition parties. It seems that it was this very public and almost universal condemnation of the ANC and the National Treasury that finally galvanized Enoch Godongwana, the Minister of Finance, and the National Treasury to fulfill their commitment made on 15 June 2022 to produce an Instruction Note to supposedly deal with the mischief that the DA bill was targeting.

While we note the deficiencies of the Treasury Instruction note, The DA will monitor and do everything in its power to ensure that the first reports on government guarantees, indemnities, and securities for the fourth quarter of 2023 to the National Assembly by Cabinet Ministers are submitted in line with the new quarterly reporting requirement.

The implementation date for this practice note is 1 October 2023 and the reports must surely not only include government guarantees, indemnities, and securities issued after this date but all such government guarantees, indemnities, and securities already in place and used by or available to State departments and public entities.