Tariff increases 2011

http://www.pmg.org.za/node/29273

QUESTION 1203 / NW1339E

DATE OF PUBLICATION: Friday, 15 April 2011

INTERNAL QUESTION PAPER NO 11 of 2011
Mr M Mnqasela (DA) to ask the Minister of Home Affairs:



(1)        With reference to the tariff increases which are effective from 1 April 2011, (a) what are the details of the financial calculations used to determine the cost of each service or product for which there is a cost and (b) why did the budget presented to the Portfolio Committee on 15 March 2011 indicate a six percent increase in revenue that was generated through the sale of goods and services produced by her Department (details furnished) and not the actual increase implemented;



(2)        whether she has been informed of public reaction to the tariff increases; if so,



(3)        whether she intends to reconsider the tariff increases; if not, why not; if so, what are the relevant details?

NW1339E



REPLY:



(1)(a)     The tariffs of the Department of Home Affairs were revised, and determined utilising the “Activity Based Costing Model”, which was approved by the National Treasury.



(1)(b)     The Department projected a six percent (6%) revenue forecast, as part of its budget input in August 2010 for the Medium Term Expenditure Framework (MTEF) period for services rendered. This was considered, and recommended by the Ministers’ Committee on the Budget (MINCOMBUD), and approved by Cabinet on 24 November 2010 for allocation to the Home Affairs vote in the 2011 budget. From this process, the Department had to prepare an “Estimate of National Expenditure” chapter and database on the basis of the approved figures.



In terms of Treasury Regulation 7.3, the Accounting Officer of an institution must review, at least, annually, when finalising the budget, all fees, charges or the rates, scales of tariffs of fees, and charges which are not, or cannot be fixed by any law which relate to revenue accruing to a revenue fund. The Accounting Officer must obtain approval from the National Treasury for the proposed tariff structure. This process was finalised, during the last quarter of the 2010/11 financial year to facilitate the implementation of the revised tariffs. The outcome of these revised tariffs will be used as a basis for the completion of the 2011 budget process in conjunction with the National Treasury inflation, and revenue forecast.



Since the budget process, as outlined above, precedes the tariff approval, and implementation, it is in this context that the actual increase cannot be similar to the forecast on the budget, and the actual implemented tariffs.



(2)        I have interacted with lots of people on this matter, and I have explained it, even, in my radio Talkshows, interviews, etc.



(3)        No. The tariff increase was gazetted, and will remain in place. In this regard, the Honourable Member’s attention is drawn to the Budget Vote Debate that took place on 12 April 2011. The reasons for the increase, as well as, why it will remain in place was, clearly, indicated in my address to the National Assembly.