Premier: Limpopo Province v Speaker: Limpopo Provincial Legislature and Others (CCT 94/10) [2011] ZACC 25; 2011 (11) BCLR 1181 (CC); 2011 (6) SA 396 (CC) (11 August 2011)

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[2011] ZACC 25
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Premier: Limpopo Province v Speaker: Limpopo Provincial Legislature and Others (CCT 94/10) [2011] ZACC 25; 2011 (11) BCLR 1181 (CC); 2011 (6) SA 396 (CC) (11 August 2011)

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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 94/10
[2011] ZACC 25
In the matter between:
PREMIER: LIMPOPO PROVINCE
…................................................................
Applicant
and
SPEAKER: LIMPOPO PROVINCIAL LEGISLATURE
…...................
First
Respondent
SPEAKER OF THE NATIONAL ASSEMBLY
….............................
Second
Respondent
CHAIRPERSON OF THE NATIONAL
COUNCIL OF PROVINCES
…..............................................................
Third
Respondent
MINISTER FOR FINANCE
….............................................................
Fourth
Respondent
Heard on : 24 February 2011
Decided on : 11 August 2011
JUDGMENT
NGCOBO CJ:
Introduction
1. This
application, which has been referred to us by the Premier of the
Limpopo Province (Premier) pursuant to the provisions of
section 121
of the Constitution, concerns the authority of provincial
legislatures to pass legislation dealing with their own financial

management.
1
Provincial legislatures have authority to pass legislation with
regard to the functional areas listed in Schedule 4 and 5 to the

Constitution.
2
In addition to the functional areas listed in these Schedules, they
also have the power to pass legislation with regard to any
matter
“that is expressly assigned to [them] by national
legislation”,
3
or “any matter for which a provision of the Constitution
envisages the enactment of provincial legislation”.
4
2. The
question presented in these proceedings is whether the Provincial
Legislature of Limpopo (Provincial Legislature) has the
authority to
enact legislation dealing with its own financial management. It
arises out of the Financial Management of the Limpopo
Provincial
Legislature Bill, 2009
5
(Bill), which was passed by the Provincial Legislature, but which the
Premier has declined to assent to and sign.
Background
3. On 24 November 2009 the Provincial Legislature passed the Bill and
on 8 December 2009 submitted it to the Premier for his assent
and
signature. The Premier had reservations concerning the competence of
the Provincial Legislature to pass the Bill. On 8 January
2010 he
referred the Bill to the Provincial Legislature for reconsideration
in the light of his reservations.
6
On 25 February 2010, the Provincial Legislature referred the Bill
back to the Premier. It indicated that it had reconsidered the
Bill
in the light of the Premier’s reservations and was of the view
that the Bill was constitutional.
4. Acting under section 121(2)(b) of the Constitution, the Premier
referred the Bill to this Court for a decision on its
constitutionality.
Section 121 provides:
“
(1)
The Premier of a province must either assent to and sign a Bill
passed by the provincial legislature in terms of this Chapter
or, if
the Premier has reservations about the constitutionality of the Bill,
refer it back to the legislature for reconsideration.
(2) If, after reconsideration, a
Bill fully accommodates the Premier’s reservations, the Premier
must assent to and sign the
Bill; if not, the Premier must either—
(a) assent to and sign the Bill;
or
(b) refer it to the
Constitutional Court for a decision on its constitutionality.
(3) If the Constitutional Court
decides that the Bill is constitutional, the Premier must assent to
and sign it.”
5. The Speaker of the National Assembly, the Chairperson of the
National Council of Provinces (together referred to as Parliament)

and the Minister for Finance filed affidavits contending that the
Bill is unconstitutional.
7
They contend that the provisions of section 3 of the Financial
Management of Parliament Act
8
(FMPA), read with Schedule 1 thereto, do not expressly assign the
power to pass legislation dealing with the financial management
of
the provincial legislatures. They also submit that provincial
legislatures have no competence to pass legislation dealing with

their own financial management. The Speaker of the Limpopo Provincial
Legislature filed an affidavit maintaining that the Provincial

Legislature has the competence to regulate its own financial
management and that the Bill is therefore constitutional.
6. The affidavits filed on behalf of Parliament
9
and the Provincial Legislature
10
were late. Condonation is sought in each case. We consider that it is
in the interests of justice to grant condonation in respect
of each
application. In reaching this conclusion, we have had regard to: the
absence of prejudice to, and opposition by, other
parties; and the
minimal period of delay involved in each case as well as the
explanations therefor. More importantly, the questions
presented in
this case are of considerable importance to Parliament and the
Provincial Legislature and it is undesirable to consider
these
questions without their participation.
The
Bill
7. The stated purpose of the Bill, as set out in its long title, is—
“
[t]o
regulate the financial management of the legislature in a manner
consistent with its status in terms of the Constitution; to
ensure
that all revenue, expenditure, assets and liabilities of the
legislature are managed efficiently, effectively and transparently;

to provide for the responsibilities of persons entrusted with
financial management in the legislature; and to provide for matters

connected therewith.”
8. Save for a reference in the long title of the FMPA to “financial
management norms and standards for provincial legislatures”,
11
the purpose of the Bill is drafted in terms identical to that of the
FMPA, which regulates the financial management of Parliament.
In
addition, the substantive provisions of the Bill are drafted in terms
substantially similar to those contained in the FMPA.
It is therefore
plain from its declared purpose, as well as from its substantive
provisions, that the Bill regulates the financial
management of the
Provincial Legislature.
9. What
are the Premier’s reservations about the Bill?
The Premier’s reservations
10. The Premier’s reservations about the constitutionality of
the Bill are contained in his letter of 8 January 2010 referring
the
Bill to the Provincial Legislature for reconsideration. The letter
reads as follows:
“
1.
BACKGROUND
The Limpopo Provincial
Legislature referred the above-mentioned Bill to the Premier to
assent to and sign in terms of section 121
of the Constitution of the
Republic of South Africa, 1996 (hereinafter referred to as ‘the
Constitution’). The Premier
has reservations regarding the
constitutionality of the Bill, as explained in paragraph 2, and
therefore refers the Bill back to
the Legislature for reconsideration
in terms of section 121(1) of the Constitution.
2. LEGAL ANALYSIS
2.1 A Provincial legislature
derives its power to pass legislation from
section 104
of the
Constitution.
a. Section 104(1)(b) provides—
‘
The
legislative authority of a province is vested in its provincial
legislature and confers on the provincial legislature the power
—
. . . .
to pass legislation for its
province with regard to
—
(i) any matter within a
functional area listed in Schedule 4;
(ii) any matter within a
functional area listed in Schedule 5;
(iii) any matter outside
those functional areas and that is expressly assigned to the province
by national legislation;
(iv) any matter for which a
provision of the Constitution envisages the enactment of provincial
legislation; and
to assign any of its
legislative powers to a Municipal Council in that province.’
b. Section 104(5) provides—
‘
A
provincial legislature may recommend to the National Assembly
legislation concerning any matter outside the authority of that

legislature or in respect of which an Act of Parliament prevails over
a provincial law.’
2.2 A scrutiny of Schedules 4
and 5 of the Constitution reveals that neither of the Schedules
confers powers on a provincial legislature
to legislate in respect of
financial management of legislatures. In order to have the power to
legislate on financial matters that
power must be expressly assigned
to the province by national legislation or it must be a matter for
which a provision of the Constitution
envisages the enactment of
provincial legislation. The question arises whether section 3 of the
Financial Management of Parliament
Act, 2009 (Act No. 10 of 2009)
assigns the power in question to a provincial legislature. Section 3
provides that ‘
provincial legislatures must adhere to the
norms and standards for financial management set out in Schedule 1’
.
In our view the wording used in section 3 read with Schedule 1 which
provides ‘
Legislation enacted by a provincial legislature to
regulate its financial management must promote accountable,
transparent and sound
financial management . . .
’ the
Financial Management of Parliament Act, 2009
does not assign a power,
at best it can be argued that it is assumed in the wording that the
provinces have the relevant power.
2.3 Chapter 13, sections 213 to
222 of the Constitution provides for financial matters. This chapter
of the Constitution provides
for
national legislation
that
must be enacted by parliament to provide for measures to ensure both
transparency and expenditure control. It provides that
national
treasury must enforce compliance of the legislation.
2.4 National legislation that
provides for the measures outlined in the Constitution was passed in
the form of the Public Finance
Management Act, 1999 (Act No. 1 of
1999) [hereinafter referred to as ‘the PFMA’]. The
PFMA
is applicable to provincial legislatures
and this is confirmed in
section 3(1) of the Act that provides—
‘
(1)
(d)
This Act, to the extent indicated in the Act, applies to a provincial
legislature, subject to
subsection (2).
(2) To the extent that a
provision of this Act applies to a provincial legislature, any
controlling and supervisory functions of
the National Treasury and a
provincial treasury in terms of that provision are performed by the
Speaker of the provincial legislature.’
The PFMA subscribes to the
principle of separation of powers. Section 3 provides that any
controlling or supervisory powers in terms
of the provisions of the
Act are performed by the Speaker in respect of a provincial
legislature.
2.5 The Financial Management of
Parliament Act, 2009 (Act No. 10 of 2009) repealed sections in the
PFMA relevant to parliament but
did not repeal the provisions of the
PFMA applicable to provincial legislatures. The provincial
legislature does not have the legislative
competency to repeal the
sections of the PFMA applicable to provincial legislatures and
passing new provincial legislation dealing
with financial management
of the legislature will result in conflicting provincial and national
legislation.
3. CONCLUSION
In terms of section 121 of the
Constitution, we respectfully refer the Financial Management of the
Limpopo Legislature Bill, 2009
back to the legislature for
reconsideration.” (Emphasis original.)
11. As this letter indicates, the Premier’s reservations
concern the authority of the Provincial Legislature to pass
legislation
dealing with financial management. He contended that:
first, neither Schedule 4 nor Schedule 5 to the Constitution confers
powers
on a provincial legislature to legislate in respect of
financial management; second, section 3 of the FMPA, read with
Schedule
1 thereto, does not assign to the Provincial Legislature the
power to legislate in respect of financial management as contemplated

in section 104(1)(b)(iii); and third, Chapter 13 (sections 213-222)
of the Constitution that deals with financial matters requires
that
national legislation provide for measures ensuring transparency and
expenditure controls, but does not envisage the enactment
of
provincial legislation as contemplated in section 104(1)(b)(iv).
12. In the course of considering this judgment, a question arose as
to whether the provisions of section 104(1)(b)(iv) read with
sections
195, 215 and 216 formed part of the Premier’s reservations.
Further directions were issued calling upon the parties
to address
this issue, among others. Upon review of the Premier’s
reservations, we are satisfied that these provisions form
part of the
Premier’s reservations.
13. The Premier required the Provincial Legislature to reconsider the
Bill in the light of these reservations.
The contentions of the parties in this Court
14. Parliament and the Minister for Finance have joined the Premier
in challenging the constitutionality of the Bill. Like the
Premier,
they contend that financial management is a matter that falls outside
the functional areas listed in Schedules 4 and 5.
They also maintain
that financial management of provincial legislatures is not a matter
that has been expressly assigned to the
provinces by the FMPA in
terms of section 104(1)(b)(iii) of the Constitution.
15. For its part, the Provincial Legislature accepts that financial
management is a matter that falls outside the functional areas
listed
in Schedules 4 and 5. During oral argument, it also conceded that the
regulation of financial management of the provincial
legislatures is
not a matter that has been expressly assigned to the provinces under
section 104(1)(b)(iii). The Provincial Legislature,
nevertheless,
seeks to rely on the provisions of section 104(1)(b)(iv), read with
sections 195, 215 and 216 of the Constitution
as sources of the
authority to enact legislation dealing with financial management.
Section 104(1)(b)(iv) empowers a provincial
legislature to pass
legislation with regard to “any matter for which a provision of
the Constitution envisages the enactment
of provincial legislation”.
It is contended that sections 195, 215 and 216 are the provisions of
the Constitution that envisage
the enactment of provincial
legislation.
16. The Minister for Finance joined issue with the Provincial
Legislature on the provisions of section 104(1)(b)(iv) and contended

that none of the provisions of the Constitution relied upon by the
Provincial Legislature envisage the enactment of provincial

legislation.
Jurisdiction
17. In terms of section 167(4)(b)
12
of the Constitution, only this Court may decide on the
constitutionality of any provincial Bill, and it must do so only in
the
circumstances contemplated in section 121.
13
Section 121 requires a Premier first to refer the Bill to the
provincial legislature and articulate his or her reservations about

the constitutionality of the Bill. A Premier may refer a Bill to this
Court only after the provincial legislature has unavailingly

reconsidered it in the light of his or her reservations.
14
As we held in
Mpumalanga Petitions Bill
, the provision
envisages “consideration by this Court of a Bill that has gone
through a number of steps, which include communication
by the Premier
of his or her reservations to the legislature and its reconsideration
of the Bill in the light of those reservations.”
15
18. As the background to these proceedings makes plain, the Bill has
gone through the steps envisaged in section 121. None of the
parties
contended otherwise.
19. The Premier’s reservations and the parties’
contentions must therefore be evaluated and considered in the light

of the legislative authority of provincial legislatures, the
provisions of the Constitution dealing with financial management,
and
the national legislation that regulates financial management in the
national and provincial governments.
The legislative authority of provinces
20. The legislative authority of provinces is governed by section 104
of the Constitution. It provides:
“
(1)
The legislative authority of a province is vested in its provincial
legislature, and confers on the provincial legislature the
power—
(a) to pass a constitution for
its province or to amend any constitution passed by it in terms of
sections 142 and 143;
(b) to pass legislation for its
province with regard to—
(i) any matter within a
functional area listed in Schedule 4;
(ii) any matter within a
functional area listed in Schedule 5;
(iii) any matter outside those
functional areas, and that is expressly assigned to the province by
national legislation;
(iv) any matter for which a
provision of the Constitution envisages the enactment of provincial
legislation; and
(c) to assign any of its
legislative powers to a Municipal Council in that province.”
21. Unlike Parliament, which enjoys plenary legislative power within
the bounds of the Constitution, the legislative authority
of
provinces is circumscribed. Part A of Schedule 4 lists functional
areas with regard to which both Parliament and the provincial

legislatures have legislative competence.
16
Part A of Schedule 5 lists functional areas with regard to which
provincial legislatures have exclusive legislative competence.
17
Provinces have no power to legislate on a matter falling outside
Schedules 4 and 5 unless it is a matter “that is expressly

assigned to the province by national legislation”
18
or is a “matter for which a provision of the Constitution
envisages the enactment of provincial legislation”.
19
22. Parliament has plenary legislative powers outside the functional
areas that are exclusively reserved for provincial legislatures.

Parliament may legislate on “any matter”,
20
including a matter within the functional areas listed in Schedule 4
and, subject to certain specified circumstances,
21
a matter within the functional areas listed in Schedule 5. It follows
that any matter that falls outside those functional areas
with regard
to which the provinces have legislative competence falls within the
exclusive legislative competence of Parliament,
unless Parliament has
expressly assigned legislative power over such matter to provincial
legislatures or the Constitution envisages
provincial legislation
with respect to such matter.
23. In view of the plenary nature of the legislative powers of
Parliament, they are not listed in the Constitution. By contrast,
the
legislative powers of the provinces are limited and they are
therefore enumerated in Schedules 4 and 5. They are thus easily

identifiable because those that are not listed in Schedules 4 and 5
must either be “expressly assigned to the province by
national
legislation”
22
or a provision in the Constitution must envisage the enactment of
provincial legislation with regard to that matter.
23
This is intended to remove any doubt about the nature and the extent
of the powers of the provinces.
24. The defining feature of our constitutional scheme for the
allocation of legislative powers between Parliament and the provinces

is that the legislative powers of the provinces are enumerated and
clearly defined, while those of Parliament are not. The plenary
power
that resides in Parliament is therefore contrasted with the limited
powers that have been given to provincial legislatures.
Constitutional
provisions dealing with financial matters
25. Chapter 13 of the Constitution deals with general financial
matters in sections 213-219. Section 213 establishes the National

Revenue Fund; section 214 deals with, among other things, “the
equitable division of revenue raised nationally among the
national,
provincial and local spheres of government”; section 215 deals
with national, provincial and municipal budgets,
and requires
national legislation, among other things, to prescribe the form of
the budgets and when they should be tabled;
24
and section 216, which deals with treasury control, requires
legislation to “establish a national treasury and prescribe

measures to ensure both transparency and expenditure control in each
sphere of government” by introducing, among other things,

“generally recognised accounting practice” and “uniform
treasury norms and standards.”
25
Sections 217, 218 and 219 deal with procurement, government
guarantees and remuneration of persons holding public office,
respectively.
National
legislation dealing with financial management
26. The national legislation that deals with public finance is the
Public Finance Management Act
>
26
(PFMA). Its declared purpose is “[t]o regulate financial
management in the national government and provincial governments”.

It provides for the establishment of the National Treasury;
27
the National Revenue Fund;
28
provincial treasuries and provincial revenue funds;
29
and deals with national and provincial budgets
30
and other matters dealt with in Chapter 13 of the Constitution. To
the extent that the PFMA applies to a provincial legislature,

supervisory functions of the provincial treasury are performed by the
Speaker of the provincial legislature.
31
Until April 2009, the PFMA also applied to Parliament.
32
27. As its title indicates, the FMPA is the statute that regulates
the financial management of Parliament. Its purpose includes
ensuring
“that all revenue, expenditure, assets and liabilities of
Parliament are managed efficiently, effectively and transparently”.

As stated in the long title, it was also enacted “to provide
financial management norms and standards for provincial
legislatures”.
This is echoed in section 2(e) of the FMPA,
which states that one of its objects is “to establish norms and
standards for
managing the financial affairs of provincial
legislatures.”
28. Section 3 of the FMPA provides that “[p]rovincial
legislatures must adhere to the norms and standards for financial
management set out in Schedule 1.” Schedule 1 provides:
“
NORMS
AND STANDARDS FOR PROVINCIAL LEGISLATURES
Legislation enacted by a
provincial legislature to regulate its financial management must
promote accountable, transparent and sound
financial management and
to this end must—
(a) identify an individual or
body as the executive authority responsible for controlling the
revenue, expenditure, assets and liabilities
of the legislature;
(b) provide for the
accountability of that executive authority to the legislature;
(c) provide for an accounting
officer and set out the responsibilities of the accounting officer;
(d) provide for appropriate
measures to ensure that the legislature has adequate financial
management capacity;
(e) require budgetary and
financial planning processes to be co-ordinated with the processes of
the relevant executive organs of
state;
(f) stipulate arrangements
concerning the management of revenue, expenditure, assets and
liabilities;
(g) require the administration
of the legislature to put in place a supply chain management
framework which is fair, equitable,
transparent, competitive,
cost-effective;
(h) require the preparation of
annual financial statements in accordance with the norms and
standards prescribed in the
Public Finance Management Act;
(i
) establish internal control
and risk management arrangements including internal audit and an
independent audit committee;
(j) require the internal and
external auditing of financial statements;
(k) require financial statements
to be submitted to the legislature and made accessible to the public;
and
(l) require the legislature to
comply with the standards of generally recognized accounting
practice.”
29. It is within this constitutional scheme and legislative framework
that the reservations of the Premier must be understood and

evaluated, and the constitutionality of the Bill considered.
Issues
for determination
30. Financial management of provincial legislatures is a matter that
is listed neither in Schedule 4 nor in Schedule 5 to the
Constitution. It follows, therefore, that it is a matter that falls
within the legislative competence of Parliament unless it is
a matter
that has been expressly assigned to the provinces by national
legislation
33
or is a matter for which a provision in the Constitution envisages
provincial legislation.
34
31. As pointed out above, during oral argument, counsel for the
Provincial Legislature conceded that the provisions of section
3 of
the FMPA, read with Schedule 1 thereto, do not expressly assign the
power in question.
35
This issue is of considerable importance to the Provincial
Legislature and it is too important to be disposed of on the basis of

a concession made by counsel in argument. It is still necessary for
this Court to determine whether in fact the legislative authority

initially asserted by the Provincial Legislature has been expressly
assigned by section 3 of the FMPA, read with Schedule 1 thereto,
in
accordance with section 104(1)(b)(iii) of Constitution.
32. Accordingly, the following main issues fall to be determined in
these proceedings:
Whether
sections 2(e) and 3 of the FMPA, read with Schedule 1 thereto,
expressly assign to provincial legislatures the power
to regulate
their own financial management; and
Whether
financial management of provincial legislatures is a matter for
which the Constitution envisages the enactment of provincial

legislation.
Has the
power to regulate their financial management been expressly assigned
to provincial legislatures?
33. The question whether sections 2(e) and 3 of the FMPA, read with
Schedule 1 thereto, expressly assign to provincial legislatures
the
power to regulate their own financial management depends, in the
first place, on the proper meaning of the phrase “expressly

assigned” in section 104(1)(b)(iii), and, in the second place,
on the proper meaning of the provisions of sections 2(e) and
3 of the
FMPA, read with Schedule 1 thereto.
Meaning of “expressly assigned”
34. When the word “expressly” is used in legislation, it
is used in contrast to the word “implied”. Courts
have
previously considered the meaning of “expressly” in the
context of statutes and contracts. In
Commissioner for Inland
Revenue v Dunn
,
36
the Court observed, correctly in my view, that “[t]he words are
stringent, and there are many cases illustrating the strong
force of
the words ‘express’ and ‘expressly’.”
37
Equally true, as the court went on to observe, “there are cases
in which it has been held that ‘express’ does
not mean
‘by special reference’ or ‘in identical words’,
but only ‘with reasonable clearness’
or ‘as a
necessary consequence’.”
38
This nevertheless is stronger than implication.
35. While the meaning that courts have given to the words “expressly”
and “express” in other contexts provides
a useful guide,
the meaning that a word has in the Constitution or legislation is
generally coloured by the context in which it
occurs.
39
The word “expressly” occurs in the context of defining
the legislative authority of provinces. The constitutional scheme

shows that the legislative authority of the provinces must be
conveyed in clear terms. Provincial legislative powers are listed
in
Schedules 4 and 5, “expressly assigned” by legislation,
or are clearly envisaged by the Constitution.
40
What is common in all these sources of provincial legislative
authority is that they ensure that the legislative authority of the

provinces is clearly identifiable.
36. In the context of our Constitution, the word “expressly”
must be given a meaning that is consistent with this scheme.
The
assignment of legislative powers pursuant to section 104(1)(b)(iii)
must leave no doubt about the act of assigning and the
nature and the
scope of the powers assigned. It is a requirement of the rule of law,
one of the foundational values of our constitutional
democracy,
41
that when Parliament assigns its legislative powers to the provinces
it must do so in a manner that creates certainty about the
nature and
extent of the powers assigned. This will enable the provinces to
exercise those powers in accordance with, and within
the limits of,
the terms of assignment.
37. This approach is also consistent with the provisions of Chapter 3
of the Constitution, which requires institutions “not
[to]
assume any power or function except those conferred on them in terms
of the Constitution” and to “exercise their
powers and
perform their functions in a manner that does not encroach on the
geographical, functional or institutional integrity
of government in
another sphere”.
42
The public should be left with no doubt about which sphere of
government has legislative competence with regard to the matter
concerned. This is to preclude any dispute about whether the
provinces have legislative competence with regard to the matter
concerned.
38. It must be apparent from the empowering legislation and its
provisions that the purpose is to assign legislative authority
with
regard to a matter that falls outside the functional areas listed in
Schedules 4 and 5. The ideal way to achieve this, and
a method that
is generally followed by the legislature, is to declare, in the
preamble of the legislation, that its purpose is
to make an
assignment; or to say so in the provisions that set out the objects
of the legislation.
39. What is required is that the legislation conveys, in clear terms,
that a power with regard to a specified matter is being assigned
to
the provinces so as to render it unnecessary to imply the power from
the language used by the statute. For, it seems to me,
if the act of
assignment can be determined only by way of implication, it is not an
assignment contemplated by section 104(1)(b)(iii).
40. The Constitution makes a deliberate choice in the formulation of
section 104(1)(b)(iii). Instead of merely requiring that powers
be
“assigned”, it qualifies the assignment by specifying
that it must be “expressly” made. The deliberate
use of
the qualifier “expressly”, in section 104(1)(b)(iii),
stands in stark contrast to the absence of such qualifier,
in section
156(1), where the Constitution refers to matters over which
municipalities have executive and administrative authority.
43
Section 156(1)(a) provides that municipalities have executive
authority in respect of, and the right to administer, “the

local government matters listed in Part B of Schedule 4 and Part B of
Schedule 5”. Section 156(1)(b) further confers an executive

authority on municipalities to administer “any other matter
assigned to [them] by national or provincial legislation.”
41. The choice of language adopted by the Constitution in section
104(1)(b)(iii) must be given appropriate weight. It means that
the
assignment to provinces of a matter that is outside the functional
areas listed in the Schedules must be conveyed in clear
terms. It
follows that where the assignment is implied, it does not meet the
requirements of section 104(1)(b)(iii).
42. It now remains to consider whether sections 2(e) and 3 of the
FMPA, read with Schedule 1 thereto, clearly assign to provinces
the
legislative authority to pass legislation with regard to the
financial management of provincial legislatures.
Do
sections 2(e) and 3, read with Schedule 1, expressly assign the power
in question?
43. The starting point in construing the purpose of the FMPA is its
long title, which declares one of its purposes: “to provide

financial management norms and standards for provincial
legislatures”. It does not state, however, that one of its
objectives
is to assign legislative authority for this purpose. The
next provision to consider is section 2, which sets out the objects
of
the FMPA. One of the objects of the FMPA is “to establish
norms and standards for managing the financial affairs of provincial

legislatures.”
44
Section 3 requires provincial legislatures to “adhere to the
norms and standards for financial management” and directs
them
to Schedule 1, where these norms and standards are to be found.
Schedule 1 lists those norms and standards consistently with
the
purpose and object of the FMPA.
44. The heading of Schedule 1 suggests that its contents are keeping
the promise made in section 3, namely, to set out norms and
standards
foreshadowed in that section. It therefore appears to be disjointed
from the overall scheme of the statute when the opening
phrase of
Schedule 1 suddenly refers to “
[l]egislation enacted by a
provincial legislature
to regulate its financial management”.
(Emphasis added.) There is no prior reference to the power of
provinces to enact legislation
to regulate their financial
management. As counsel for the Minister for Finance correctly
submitted, it is only when this opening
phrase of Schedule 1 is read
in isolation that ambiguity as to the proper understanding of the
FMPA is introduced.
45. That the manifest purpose and object of the FMPA, in relation to
provincial legislatures, is to establish norms and standards
for
managing financial affairs of the provincial legislatures cannot be
gainsaid. This purpose and object is consistent with section

216(1)(c) of the Constitution, which requires national legislation to
establish uniform treasury norms and standards. The question
is how
we are to understand the opening phrase in Schedule 1. The phrase,
itself, is not free from ambiguity.
46. It is capable of at least three constructions, none of which
conveys an express assignment of financial management. The first

construction suggests that it is legislating in anticipation of a
power yet to be assigned. On this construction of the provision,

there is clearly no assignment and it can hardly be said to be
assigning any power. The second construction is one that assumes
that
the provincial legislatures already enjoy the power. This
construction simply begs the question, what is the source of that

power? But even on this construction of the phrase, it can hardly be
contended that there is an assignment. No prior legislation
assigning
the power in question has been drawn to our attention. The third
possible construction is that the Schedule, itself,
intends to assign
the legislative power to regulate financial management to the
provinces. This construction can only come about
by implication,
however, and would therefore fail to meet the requirement of express
assignment under section 104(1)(b)(iii).
47. There was some debate, in the course of the hearing, that focused
on a possible construction of Schedule 1 as an instruction
to
provincial legislatures to enact legislation on financial management.
This argument suffers from the same defect that the argument
relating
to an implied conferral of power suffers from. There is a gap between
the instruction to enact legislation and the legislative
act of
expressly assigning the power. For the existence of an assignment,
this argument must, of necessity, imply assignment from
the
instruction. Therein lies its difficulty. Once the power to legislate
exists by implication, then it is no longer the express
assignment
that is required by section 104(1)(b)(iii). Otherwise, the
instruction assumes that the power to legislate on financial

management exists. The problem, however, is that this assumes the
very legislative power that the Constitution requires to be expressly

assigned.
48. At any rate, it seems odd to convey the assignment for the first
time in a Schedule, without any prior reference to the purpose
of the
legislation being to assign the power in question. It is a marked
departure from the legislative practice of stating the
purpose of the
legislation in the preamble, or in the provisions dealing with the
objects of the legislation, or of stipulating
the provisions of the
Constitution under which the legislation is being enacted. All this
inevitably leads to the conclusion that
the provisions of sections
2(e) and 3 of the FMPA, read with Schedule 1 thereto, do not convey
with reasonable clarity the assignment
of the power to regulate
financial management of provincial legislatures to the provinces.
49. In the event, we conclude that sections 2(e) and 3 of the FMPA,
read with Schedule 1 thereto, do not expressly assign to the

provinces the power to legislate on financial management matters of
provincial legislatures within the meaning of section 104(1)(b)(iii).
50. It remains to consider the argument that the provisions of
sections 195, 215 and 216 of the Constitution envisage provincial

legislation that would empower provinces to pass legislation
regulating their financial management under section 104(1)(b)(iv).
Is financial management of provincial legislatures a matter for
which the Constitution envisages the enactment of provincial
legislation?
51. The contention that sections 195, 215 and 216 of the Constitution
envisage the enactment of provincial legislation relates
to section
104(1)(b)(iv). Section 104(1)(b)(iv) confers a power on the provinces
to pass legislation with regard to any matter
for which a provision
in the Constitution envisages the enactment of provincial
legislation. It must be understood in the context
of the broader
scheme for the allocation of powers between Parliament and the
provincial legislatures. As pointed out above, the
defining feature
of this scheme is that matters in respect of which provincial
legislatures have legislative powers must be enumerated
in Schedules
4 and 5, or be “expressly assigned”, or a provision in
the Constitution must envisage the enactment of
provincial
legislation in respect of those matters.
52. Consistent with this scheme, it seems to me that only those
provisions of the Constitution which, in clear terms, provide for
the
enactment of provincial legislation, must be held to fall under
section 104(1)(b)(iv). Our constitutional scheme does not permit

legislative powers of the provincial legislatures to be implied. Were
it to be otherwise, the constitutional scheme for the allocation
of
legislative power would be undermined. The careful delineation
between the legislative competence of Parliament and that of

provincial legislatures would be blurred. This may very well result
in uncertainty about the limits of the legislative powers of
the
provinces. In the light of the plenary legislative powers of
Parliament, it would result in the provinces having concurrent

legislative competence with Parliament in respect of many matters.
This is not what the drafters of our Constitution had in mind.
53. Happily, and consistent with the constitutional principle of
conveying in clear terms the legislative powers given to the
provinces, the Constitution furnishes us with examples where
provincial legislation is envisaged, and it is against these examples

that we can test the present argument relating to section
104(1)(b)(iv). One example that immediately comes to mind is section

155(5), which provides that “[p]rovincial legislation must
determine the different types of municipality to be established
in
the province.” Determining the different types of municipality
to be established is neither listed in Schedules 4 or 5,
nor is it a
matter with respect to which provinces have been expressly assigned
legislative authority in accordance with section
104(1)(b)(iii). It
is nevertheless a matter with respect to which the Constitution
envisages provinces enacting legislation, as
section 155(5) makes
clear.
54. Another example is section 120(3) of the Constitution, which
provides that “[a] provincial Act must provide for a procedure

by which the province’s legislature may amend a money Bill.”
As with section 155(5), legislative action at the provincial
level is
envisaged by section 120(3). In fact, it is not just envisaged –
it is required. There are also other examples.
45
These examples show that when the Constitution envisages the
enactment of provincial legislation, it does so in clear and
unmistakeable
terms.
55. In contending that section 195 envisages the enactment of
provincial legislation, reliance was placed on section 195(1)(b),

which requires “[e]fficient, economic and effective use of
resources”.
46
Section 195 sets out the democratic values and principles that should
govern public administration in all spheres of government.

Significantly, subsection (3) requires national legislation to be
enacted to “ensure the promotion of the values and principles

listed in subsection (1).” Nothing in the provision indicates
that it envisages that provincial legislation would be enacted
to
promote the values and principles set out in section 195(1). I should
have thought that this would be a matter for national
legislation, to
ensure uniformity in the values and principles that should govern
public administration at all levels.
56. The same is true for the provisions of sections 215 and 216. They
do not envisage the enactment of provincial legislation in
the manner
that the Constitution does when it envisages the enactment of
provincial legislation to regulate the matters referred
to above. On
the contrary, these provisions expressly envisage the enactment of
national legislation.
47
It is significant that the Constitution spells out what national
legislation, required by sections 215 and 216, must address. It
is
equally significant that no analogous reference to provincial
legislation is made in either section.
57. The difficulty confronting the argument that relies on sections
195, 215 and 216 as envisaging provincial legislation is that
these
provisions do not envisage provincial legislation in similarly clear
terms to those we have cited above. The argument must
therefore rely
on the proposition that these provisions envisage provincial
legislation by implication. But this proposition runs
afoul of the
scheme of the Constitution, which requires the matters in respect of
which the provincial legislatures have legislative
competence to be
conveyed in clear terms. On the argument based on sections 195, 215
and 216, legislative competence will have
to be implied.
58. If the legislative powers of the provincial legislatures are to
be implied beyond those expressly set out in the Constitution,
this
would, in my view, diminish, through an expansive reading of the
Constitution, the residual legislative powers of Parliament.
This
would be inconsistent with the scheme of the Constitution, by which
the provincial legislatures are given specific powers
under the
Constitution and Parliament is assigned the rest. In my view, the
plenary legislative powers granted to Parliament are
not to be
diminished by implying legislative powers of provincial legislatures
not expressly stated in the Constitution. The assignment
of powers to
the provinces must be expressed in clear and unequivocal language.
59. It follows that the argument based on section 104(1)(b)(iv)
cannot be upheld.
60. I conclude, therefore, that the Bill is unconstitutional because
the Provincial Legislature does not have the legislative authority
to
pass legislation with respect to its own financial management. But
that is not the end of the matter.
The fate of provincial statutes dealing with financial management
61. As noted above, there are five other provincial legislatures
which have passed legislation substantially similar in content
to the
Bill.
48
These provinces were invited to join in the proceedings, if they were
so inclined.
49
This was done in order to hear their views on the constitutionality
of the Bill and, in the event of a finding that the Bill is

unconstitutional, to hear them on the fate of their legislation. This
was also intended to avoid a second hearing that would involve
costs
and unnecessary expenditure of limited judicial resources. As it
turned out, none of these provincial legislatures responded
to the
invitation, not even to indicate that they had decided not to
intervene. This was unfortunate indeed.
62. The order of invalidity of the Bill will no doubt affect their
legislation. The question is whether we should reach these provincial

statutes.
Does this Court have the power to reach the other provincial
legislation?
63. This Court has the power to raise, on its own, the need to
determine the constitutional validity of statutes substantially

similar to legislation before it. This power is rooted in the
supremacy of the Constitution and the rule of law, as well as the

duty of this Court to uphold and protect the Constitution.
50
64. There is a further consideration that weighs in favour of this
Court reaching the other provincial statutes concerned. As I
have
pointed out above, their contents are substantially similar to the
Bill and their declared purpose is to regulate financial
management,
a matter with regard to which they have no legislative competence.
Unless we consider them, grave doubt about their
constitutional
validity will hang over them. This will place those who are subject
to these statutes in the invidious position
of having to choose
whether to contravene these statutes or risk engaging in conduct that
is unconstitutional. It is undesirable
to create a state of
uncertainty. In these circumstances, it is in the public interest
that we should reach them.
65. Despite the fact that the provincial legislatures that have
enacted legislation similar to the Bill were afforded the opportunity

to join the proceedings and chose not to, they must, nevertheless, be
afforded another opportunity to be heard. These statutes
regulate
rights and obligations that stand to be affected by an order of this
Court declaring these statutes unconstitutional.
In addition, the
views of the Speaker of the National Assembly and the Chairperson of
the National Council of Provinces cannot
be ignored. They have
indicated that Parliament’s view is that the provinces must
have the power to regulate their financial
management for them to
effectively exercise their oversight powers. If Parliament persists
in this view, and we were assured by
counsel at the hearing that it
does, then it may well be able to inform the Court what steps, if
any, it intends to take to give
effect to this view. And this may
well have an impact on the ultimate fate of the Bill and those
provincial statutes.
66. In all the circumstances, I consider that an order should be made
joining the Speakers of the provincial legislatures of the
Eastern
Cape, the Free State, Gauteng, Mpumalanga and the North West as
parties to these proceedings and calling upon the provincial

legislatures affected to show cause why their respective statutes
should not be declared unconstitutional. In addition, Parliament
and
the Minister for Finance should be required to file affidavits
dealing with the constitutionality of the provincial legislation

concerned.
67. This is not a case in which an order for costs should be made.
None of the parties contends otherwise.
The order
68. In the event, the following order is made:
It is
declared that the Financial Management of the Limpopo Provincial
Legislature Bill, 2009 [A06-2009] is unconstitutional.
The
constitutional validity of the following provincial statutes is set
down for hearing on Tuesday, 8 November 2011:
the
Financial Management of the Eastern Cape Provincial Legislature
Act 3 of 2009;
the
Financial Management of the Free State Provincial Legislature Act
6 of 2009;
the
Financial Management of the Gauteng Provincial Legislature Act 7
of 2009;
the
Financial Management of the Mpumalanga Provincial Legislature Act
3 of 2010; and
the
North West Provincial Legislature Management Act 3 of 2007.
The
Speakers of the following Provincial Legislatures are hereby joined
in these proceedings as the Fifth, Sixth, Seventh, Eighth
and Ninth
Respondents, respectively:
the
Eastern Cape Provincial Legislature;
the
Free State Provincial Legislature;
the
Gauteng Provincial Legislature;
the
Mpumalanga Provincial Legislature; and
the
North West Provincial Legislature.
The
Members of the Executive Council responsible for financial matters
in the following Provinces are joined as the Tenth, Eleventh,

Twelfth, Thirteenth and Fourteenth Respondents, respectively:
the
Eastern Cape;
the
Free State;
Gauteng;
Mpumalanga;
and
the
North West.
The
Fifth to Fourteenth Respondents must file affidavits, if any, not
later than Friday, 9 September 2011, setting out:
why
the provincial statutes enacted by the respective provincial
legislatures should not be declared unconstitutional; and
if
they are found to be unconstitutional, the appropriate remedy.
The
Speaker of the National Assembly, the Chairperson of the National
Council of Provinces and the Minister for Finance must file

affidavits, if any, not later than Friday, 16 September 2011,
dealing with the constitutional validity of this provincial
legislation
and the appropriate remedy if the provincial legislation
concerned is found to be unconstitutional
The
record, properly paginated and indexed, shall be prepared jointly by
the Fifth to Ninth Respondents.
The
record must consist, without duplication, only of the provincial
statutes referred to in paragraph 2(a)-(e) of this order
and the
affidavits referred to in paragraphs 5 and 6 above.
Written
argument, if any, must be lodged by:
the
Fifth to Fourteenth Respondents, on or before Friday, 30 September
2011; and
the
Second to Fourth Respondents, on or before Friday, 14 October 2011.
Directions
may be issued to regulate the further conduct of this matter.
Moseneke
DCJ, Froneman J, Jafta J, Khampepe J, Mogoeng J, Mthiyane AJ,
Nkabinde J and Van der Westhuizen J concur in the judgment
of Ngcobo
CJ.
YACOOB J:
Introduction
69. The important question to be answered in this case is whether
the Constitution read as a whole, empowers a provincial legislature

to pass a law to look after and control its own assets and
liabilities as well as expenditure.
70. The Premier of the Limpopo Province (Premier) had reservations
about whether the Constitution empowers provincial legislatures
to
legislate on the matters contained in the Financial Management of
the Limpopo Provincial Legislature Bill, 2009 (Bill). He
accordingly
refused to assent to the Bill and referred it to the provincial
legislature for reconsideration in the light of certain
expressed
reservations, but to no avail. After the Bill was returned without
amendment, the Premier referred it to this Court
for a decision on
its constitutionality in terms of section 121 of the Constitution.
71. The Premier’s reservations must be understood in the light
of section 104(1) of the Constitution which, to the extent
relevant,
reads:
“
The
legislative authority of a province is vested in its provincial
legislature, and confers on the provincial legislature the
power—
(a) . . . .
(b) to pass legislation for its
province with regard to—
(i) any matter within a
functional area listed in Schedule 4;
(ii) any matter within a
functional area listed in Schedule 5;
(iii) any matter outside those
functional areas, and that is expressly assigned to the province by
national legislation; and
(iv) any matter for which a
provision of the Constitution envisages the enactment of provincial
legislation”.
72. The letter containing the reservations says:
“
2.
LEGAL ANALYSIS
2.1 A Provincial legislature
derives its power to pass legislation from
section 104
of the
Constitution.
a. Section 104(1)(b) provides—
‘
The
legislative authority of a province is vested in its provincial
legislature and confers on the provincial legislature the
power
—
. . . .
to pass legislation for its
province with regard to
—
any matter within a
functional area listed in
Schedule 4;
any matter within a
functional area listed in Schedule 5;
any matter outside
those functional areas, and that is expressly assigned to the
province by national legislation;
any matter for which a
provision of the Constitution envisages the enactment of
provincial legislation; and
to assign any of its
legislative powers to a Municipal Council in that province.’
b. Section 104(5) provides—
‘
A
provincial legislature may recommend to the National Assembly
legislation concerning any matter outside the authority of that

legislature or in respect of which an Act of Parliament prevails
over a provincial law.’
2.2 A scrutiny of Schedules 4
and 5 of the Constitution reveals that neither of the Schedules
confers powers on a provincial legislature
to legislate in respect
of financial management of legislatures. In order to have the power
to legislate on financial matters
that power must be expressly
assigned to the province by national legislation or it must be a
matter for which a provision of
the Constitution envisages the
enactment of provincial legislation. The question arises whether
section 3 of the Financial Management
of Parliament Act, 2009 (Act
No. 10 of 2009) assigns the power in question to a provincial
legislature. Section 3 provides that
‘
provincial
legislatures must adhere to the norms and standards for financial
management set out in Schedule 1’
. In our view the wording
used in section 3 read with Schedule 1 which provides ‘
Legislation
enacted by a provincial legislature to regulate its financial
management must promote accountable, transparent and
sound financial
management . . .’
the
Financial Management of Parliament
Act, 2009
does not assign a power, at best it can be argued that it
is assumed in the wording that the province has the relevant power.
2.3 Chapter 13, sections 213 to
222 of the Constitution provides for financial matters. This chapter
of the Constitution provides
for
national legislation
that
must be enacted by parliament to provide for measures to ensure both
transparency and expenditure control. It provides that
national
treasury must enforce compliance of the legislation.
2.4 National legislation that
provides for the measures outlined in the Constitution was passed in
the form of the Public Finance
Management Act, 1999 (Act No. 1 of
1999) [hereinafter referred to as ‘the PFMA’]. The
PFMA
is applicable to provincial legislatures
and this is confirmed
in section 3(1) of the Act that provides—
‘
(1)
(d) This Act, to the extent indicated in the Act, applies to a
provincial
legislature, subject to
subsection (2).
(2) To the extent that a
provision of this Act applies to a provincial legislature, any
controlling and supervisory functions
of the National Treasury and a
provincial treasury in terms of that provision are performed by the
Speaker of the provincial
legislature.’
The PFMA subscribes to the
principle of separation of powers. Section 3 provides that any
controlling or supervisory powers in
terms of the provisions of the
Act are performed by the Speaker in respect of a provincial
legislature.
2.5 The Financial Management of
Parliament Act, 2009 (Act No. 10 of 2009) repealed sections in the
PFMA relevant to parliament
but did not repeal the provisions of the
PFMA applicable to provincial legislatures. The provincial
legislature does not have
the legislative competency to repeal the
sections of the PFMA applicable to provincial legislatures and
passing new provincial
legislation dealing with financial management
of the legislature will result in conflicting provincial and
national legislation.”
73. The assumption underlying the reservations of the Premier is
that the contents of the Bill fall into a functional area creatively

styled by him by reference to the title of the Bill as “the
financial management of legislatures”. On this hypothesis:
The
starting point of the argument is that the province can legislate
in relation to this so-called functional area if the
power to
legislate on the financial management of the provincial
legislature has been conferred on the legislature by Schedules
4
or 5, has been expressly assigned to the province by national
legislation or is concerned with a matter for which a provision
of
the Constitution envisages the enactment of provincial
legislation.
51
The
Premier then contends that the functional area of financial
management, created by him, was neither conferred on the
provincial legislature by Schedule 4 or 5,
52
nor was it expressly assigned to the provincial legislature
53
by the
Financial Management of Parliament Act.
54
Finally,
the Premier concludes with the proposition that chapter 13 of the
Constitution provides for national legislation
that must be
enacted by Parliament to provide for measures to ensure both
transparency and expenditure control,
55
that the
Public Finance Management Act
56
makes
provision for the financial management of the provincial
legislature and that the
Public Finance Management Act and
the
Bill conflict.
74. I have read the judgment of the Chief Justice (the main
judgment) with much interest. Subject to what is set out below

concerning functional areas,
57
I agree that the power to legislate on the matters that are the
subject of the Bill have not been conferred upon provincial
legislatures by Schedules 4 or 5, nor have they been expressly
assigned to these legislatures by the
Financial Management of
Parliament Act. I
conclude, unlike the main judgment, that chapter
13 of the Constitution envisages the exercise of the power to pass
the Bill.
75. This judgment is about:
the
correctness of the approach adopted by the Premier in the
reservations;
whether
chapter 13 of the Constitution read in its context envisages the
exercise by the provincial legislature of the power
to pass the
Bill; and
whether
the Bill and the
Public Finance Management Act conflict
.
The
approach of the Premier
76. The approach of the Premier is:
first
to create the functional area within which the power exercised by
the provincial legislature in enacting the Bill falls;
then
to assess if this functional area is one of those mentioned in
Schedules 4 or 5; and if not,
to
submit that the functional area concerned has not been expressly
assigned to the provincial legislature by the
Financial Management
of Parliament Act; and
to
contend that the power to legislate on this functional area has
been constitutionally allocated to and exercised by the
national
legislative arm.
77. I have some difficulty with this approach which appears to be
inconsistent with the overall constitutional scheme of the

allocation of power. It is true that the Constitution uses a design
that encapsulates functional areas as a convenient mechanism
through
which legislative powers are conferred on provincial legislatures in
Schedules 4 and 5. This does not mean that the Constitution
has
conferred the power on any other entity to invent functional areas
and give to these functional areas a name of their choice
for the
purpose of determining whether the functional area created by the
entity concerned is contained in Schedule 4 or 5 of
the
Constitution. And what is more, section 104 of the Constitution does
not require this.
78. It will have been noticed that section 104(1) refers to
functional areas only when it is concerned with Schedule 4
58
and Schedule 5.
59
The rest of section 104(1) does not concern itself with functional
areas except where it refers to matters falling outside the
Schedule
4 and 5 functional areas. The power of a provincial legislature to
legislate outside the functional areas listed in
Schedules 4 and 5
has nothing to do with functional areas. Thus section 104(1), to the
extent that it confers powers outside
Schedules 4 and 5 upon
provincial legislatures, confers on those legislatures the power “to
pass legislation for its province”
in two categories. The
first is “with regard to . . . any matter . . . that is
expressly assigned to the province by national
legislation”.
60
The second is “with regard to . . . any matter for which a
provision of the Constitution envisages the enactment of provincial

legislation”.
61
79. The question to be answered is therefore not whether the
functional area
within which the power falls is contained in
Schedule 4 or 5 and, if not, whether that functional area has been
expressly assigned
to the legislature or is envisaged in the
Constitution. Rather, the essential question to be asked is whether
the
power
to legislate on the matters with which the Bill is
concerned is covered by Schedule 4 or 5 and, if not, whether the
power to
pass legislation on those matters has been expressly
assigned to the provincial legislature and, if not, is envisaged in
the
Constitution.
80. Hence the qualification referred to earlier.
62
The correct approach, in my view, is not to engage in a functional
area comparison. We must look at the matters the Bill deals
with and
see whether the provincial legislature has the power to legislate on
those matters. And the power could arise by reason
of Schedule 4 or
5, or because the power has been expressly assigned to the
provincial legislatures by Parliament or, if not,
on account of the
fact that the power to legislate on these matters is envisaged. I
proceed with that evaluation.
81. A cursory glance at the Bill shows that the power to enact
legislation on the matters with which the Bill is concerned is

neither covered by Schedule 4 or 5 nor has authority been expressly
assigned to provincial legislatures by the
Financial Management of
Parliament Act. As
I show later, the Bill represents an effort to
ensure compliance with the norms and standards mandated by the
Financial Management of Parliament Act. The
Bill has no external
effect and is concerned only with the provincial legislature and
only with its very own business. It deals
with:
the
oversight committee;
63
the
responsibilities of the accounting officer in relation to the
money of the provincial legislature;
64
planning
and budgeting in relation to the provincial legislature’s
own business;
65
the
way in which cash belonging to the legislature is managed and
invested;
66
the
way in which the assets and liabilities of the legislature, its
revenue, debtors and expenditure are to be managed;
67
supply
chain management in relation to acquisition by the provincial
legislature itself;
68
internal
reporting and auditing functions of the legislature;
69
and
how
to deal with the financial misconduct of its own employees.
70
Is the Bill inconsistent with the Constitution?
82. In support of the proposition that the Bill is inconsistent with
the Constitution, the Premier contends that:
chapter
13 of the Constitution provides for national legislation that must
be enacted by Parliament, not legislation enacted
by a province,
to provide for measures to ensure both transparency and
expenditure control;
71
and
the
Public Finance Management Act makes
provision for the financial
management of provincial legislatures and the Bill is in conflict
with this legislation.
72
Although
the word “envisages”
73
is not used in the Premier’s reservations, the proposition
that the Constitution “provides for
national legislation
”
to prescribe “measures to ensure both transparency and
expenditure control” must mean that the Constitution
envisages
that Parliament should legislate on these matters. And if the
Constitution envisages that Parliament must legislate
on these
subjects, it must follow that the Constitution does not and cannot
envisage that provincial legislatures pass laws on
the same matters.
83. The Premier also contends in effect that this power has been
expressly conferred upon Parliament and that Parliament has
indeed
exercised the power to provide for expenditure control within
provincial legislatures in the
Public Finance Management Act. It
is
therefore necessary to determine whether these reservations of the
Premier justify scrutiny and whether they would result
in the
unconstitutionality of the Bill. In particular, in my view—
chapter
13 of the Constitution envisages the exercise by a provincial
legislature of detailed powers on expenditure control;
the
national legislature, on a proper understanding of the
Constitution provides norms and standards for the exercise of
these powers in the
Financial Management of Parliament Act; and
the
Public Finance Management Act does
not provide in any detail for
expenditure control by a provincial legislature concerning its
very own resources and there
is therefore no conflict between the
Bill and the
Public Finance Management Act.
The
meaning of “envisages”
84. The first question with which we must grapple is the meaning of
the word “envisages” as contained in the Constitution.
74
This term must be distinguished from the term “expressly
assigned”, used to define the way in which Parliament can

confer a power to legislate on matters outside the functional areas
listed in Schedules 4 and 5.
75
Simply put the Constitution must “envisage”
the power to legislate on matters outside Schedules 4 and 5.
The
fact that the Constitution expressly and deliberately deploys two
distinct and separate standards, one for Parliament and
one for the
Constitution itself, means that the Constitution could not have
contemplated that the different phrases, used so
close together,
should have an identical meaning. Otherwise exactly the same term
would have been used twice. Nor can it be said
that the use of
differing terminology shows an inclination to engage in linguistic
variety.
85. The word “envisages” means something different from
“expressly assigned”. In my view, “envisages”

means something less, but not much less. It must appear that the
relevant provisions of the Constitution read in context lead
to no
conclusion but that the Constitution contemplates the exercise of
the power by the provincial legislature and that the
Constitution
could mean nothing else. The question whether the Constitution
envisages the power for provincial legislatures within
the meaning
given to this term here must be considered. Before doing so,
however, it must be pointed out that the examples in
the main
judgment
76
presuppose that the Constitution must in express terms either
require or authorise provincial legislation. This is to stretch
the
meaning of the word “envisage” too far. Indeed, the
constitutional provisions cited as examples can readily be
seen to
have expressly assigned the powers concerned.
What does the Constitution envisage?
86. We determine what the Constitution envisages by looking at the
provisions relating to budgetary processes, transparency and

expenditure control and supply chain management. The Premier’s
answer to the question whether chapter 13 of the Constitution

envisages the passing of the Bill is in the negative. Indeed, the
Premier expressly says that chapter 13 “provides for

[envisages] national legislation that must be enacted by Parliament
to provide for measures to ensure both transparency and expenditure

control.” Is this statement a correct reflection of chapter
13?
Budgetary
processes
87. Section 215(1) of the Constitution requires provincial budgetary
processes to promote transparency, accountability and effective

financial management of the economy, debt and the public sector.
77
The section then provides that national legislation must prescribe
certain pre-requisites that must be complied with by provincial

entities
78
and prescribes what budgets in each sphere of government should
contain.
79
It cannot be gainsaid that a provincial legislature is a public
entity within the province that spends public funds. In other
words,
that it is an organ of state within the provincial sphere of
government that spends money. Its members must be paid; equipment,

goods and services acquired; and its staff employed. The provincial
legislature, like every other public entity must have a budget
and
it is obliged in budgeting for its expenditure to have budgetary
processes. The question is whether a provincial legislature
has the
power to determine its own budgetary processes. The answer to this
must be yes.
88. Any suggestion that the provincial executive should determine
the budgetary processes by which the provincial legislature
produces
its budget cannot be justified. There are three reasons for this. In
the first place, the doctrine of the separation
of powers would
militate against this. Moreover the powers of the provincial
executive set out in the Constitution do not include
the power to
determine budgetary processes for provincial legislatures.
80
Finally, the budgetary processes adopted by the provincial
legislature concern its internal arrangements, proceedings and
procedures,
which the provincial legislature is expressly empowered
by the Constitution to “determine and control”.
81
89. It cannot be suggested that the provincial legislature would not
be empowered to make rules by which its budgetary procedures
must be
determined. Nor can it be contended that this power could be
exercised by a provincial legislature only by making and

administering rules. The relevant provision of the Constitution
82
provides that a “provincial legislature may (a) determine and
control its internal arrangements, proceedings and procedures;
and
(b) make rules and orders concerning its business,” having
regard to certain precepts. It is evident that the power
to
determine and control its own internal arrangements is a power
separate and distinct from the power to make rules. The Constitution

therefore requires all provincial entities of government that spend
money, including provincial legislatures, to have budgetary

processes in compliance with the Constitution and the
Public Finance
Management Act. The
Constitution furthermore envisages that these
processes can be decided by provincial legislatures in any way they
choose: by
provincial legislation or rules.
90. The budgetary process powers are exercised by the provincial
legislature under the chapter of the Bill named “Planning
and
budgeting”.
83
It deals with the preparation of strategic plans, annual performance
plans and budgets,
84
the annual budget,
85
annual appropriations and approvals
86
and similar matters. The Constitution could not conceivably envisage
the exercise of these powers and the performance of these

constitutional duties to be determined by any entity other than the
provincial legislature itself. Nor does the Constitution
insist that
the provincial legislature must do so by rules alone. It follows
that the Constitution envisages that the power and
duty to determine
budgetary processes that comply with the relevant national
legislation are that of the provincial legislature
alone. Whether
this power is exercised by rules or by legislation is for the
provincial legislature to decide and, in any event,
of no moment in
the circumstances of this case.
Transparency and expenditure control
91. An investigation as to whether a provincial legislature has the
power and duty to control its own expenditure must start
on the
basis that it is the national legislature that is given the power
and duty to “prescribe measures to ensure both
transparency
and expenditure control” in the province,
“
by
introducing—
(a) generally recognised
accounting practice;
(b) uniform expenditure
classifications; and
(c) uniform treasury norms and
standards.”
87
92. It must be understood that the powers of the national
legislature here are limited indeed. National legislation cannot

determine the minutiae of control or the system of control. The
details are left to the provincial entity concerned. The power
of
the national legislature is simply to introduce the matters referred
to in paragraphs (a), (b) and (c) of section 216(1) and
no more. The
Premier is incorrect that the “Constitution provides for
national legislation
” to prescribe “measures to
ensure both transparency and expenditure control.” The
statement implies that the
national legislation must prescribe all
the measures to the exclusion of the provincial legislature, yet the
powers of Parliament
to legislate are limited to introducing three,
and only three elements: generally recognised accounting practice,
uniform expenditure
classifications and uniform treasury norms and
standards.
93. It follows that every organ of state in every sphere of
government including the provincial legislature is obliged to comply

with nationally legislated measures concerned with the three aspects
mentioned earlier, and the treasury is obliged to “enforce

compliance with [these] measures”.
88
In this regard I agree with the main judgment:
“
That
the manifest purpose and object of the FMPA, in relation to
provincial legislatures, is to establish norms and standards
for
managing financial affairs of the provincial legislatures cannot be
gainsaid. This purpose and object is consistent with
section
216(1)(c) of the Constitution, which requires national legislation
to establish uniform treasury norms and standards.”
89
94. It was unnecessary for national legislation to expressly confer
any duty or power to comply with the norms and standards
it set. The
Constitution envisages that the provincial legislature has the power
and duty to engage in expenditure control transparently
and in
accordance with the norms and standards prescribed by it. And
Parliament was correct in interpreting the Constitution
in this way.
Indeed, the Constitution goes further and creates a dire penalty if
a province does not comply with these norms
and standards: a
decision to stop the transfer of funds due to a province may be
taken in the event of non-compliance.
90
95. The provincial legislature is an organ of state within the
provincial sphere of government. It is obliged by the Constitution

to ensure expenditure control in relation to the money it spends. In
other words, the provincial legislature is obliged to ensure
that it
complies with the norms and standards set by national legislation in
compliance with the Constitution. Now the same question
that arose
in relation to budgetary processes arises here. Does the legislature
have the power to determine its own methods of
expenditure control
and its own methods of complying with the norms and standards set in
the
Financial Management of Parliament Act, or
is the provincial
executive empowered to do so? The same reasoning is therefore
applicable in answer to this question. The Constitution
could never
have contemplated that the provincial executive perform this
function; the provincial legislature could without doubt
have made
rules to comply. Nothing precludes the provincial legislature from
ensuring compliance by passing legislation that
has the same binding
effect as rules.
Supply
chain management
96. I have already pointed out that the part of the Bill concerned
with supply chain management is justified on the basis of
the
obligations of the provincial legislature to comply with norms and
standards. But the Constitution also concerns itself with

procurement.
91
It obliges a provincial legislature (an organ of state in the
provincial sphere of government) to contract for goods and services

according to a fair, equitable, transparent and cost-effective
system. The provincial legislature is obliged to comply with this

requirement. It has chosen, as it is entitled to do, to effect
compliance by passing legislation binding on those responsible
for
acquiring goods and services in the provincial legislature.
97. I therefore conclude that the Constitution envisages the power
to pass the Bill.
Does
the Bill comply with treasury norms and standards?
98. We must now look at the Bill to see whether any of its
provisions is an effort to ensure compliance with the norms and

standards set by the
Financial Management of Parliament Act as
required by the Constitution. They undoubtedly are. The norms and
standards are reproduced here once again for convenience:
“
NORMS
AND STANDARDS FOR PROVINCIAL LEGISLATURES
Legislation enacted by a
provincial legislature to regulate its financial management must
promote accountable, transparent and
sound financial management and
to this end must—
(a) identify an individual or
body as the executive authority responsible for controlling the
revenue, expenditure, assets and
liabilities of the legislature;
(b) provide for the
accountability of that executive authority to the legislature;
(c) provide for an accounting
officer and set out the responsibilities of the accounting officer;
(d) provide for appropriate
measures to ensure that the legislature has adequate financial
management capacity;
(e) require budgetary and
financial planning processes to be co-ordinated with the processes
of the relevant executive organs
of state;
(f) stipulate arrangements
concerning the management of revenue, expenditure, assets and
liabilities;
(g) require the administration
of the legislature to put in place a supply chain management
framework which is fair, equitable,
transparent, competitive,
cost-effective;
(h) require the preparation of
annual financial statements in accordance with the norms and
standards prescribed in the
Public Finance Management Act;
(i
) establish internal control
and risk management arrangements including internal audit and an
independent audit committee;
(j) require the internal and
external auditing of financial statements;
(k) require financial
statements to be submitted to the legislature and made accessible to
the public; and
(l) require the legislature to
comply with the standards of generally recogni[s]ed accounting
practice.”
92
99. The Bill is concerned with administration, the appointment,
powers, duties and other matters relating to accounting officers,
93
cash and financial management,
94
supply chain management,
95
internal audits and an independent audit committee,
96
and the consequences of financial misconduct in provincial
legislatures.
97
100. To sum up on this issue, the Constitution requires national
legislation to prescribe uniform treasury norms and standards.

National legislation does so, and obliges provincial legislatures to
comply with them. The Bill in fact does so.
101. That, however, is not the end of the matter. As indicated
earlier,
98
the Premier also relied on the ground that a conflict between the
Public Finance Management Act and
the Bill was an additional reason
for its unconstitutionality. In addition it will be recalled that
the Premier pointed out that
the
Financial Management of Parliament
Act repealed
sections of the
Public Finance Management Act relevant
to Parliament but did not repeal those applicable to the provincial
legislatures. Since provincial legislatures do not have the
power to
repeal the national legislation, he concluded that they do not have
the power to pass provincial legislation dealing
with financial
management of the legislature.
102. The issues that must be determined in this part of the judgment
are whether:
the
Public Finance Management Act provides
for measures relating to
expenditure control that are applicable to provincial
legislatures, in other words whether there
is any conflict between
the
Public Finance Management Act and
the Bill; and
there
is any significance in the fact that the
Financial Management of
Parliament Act, while
removing Parliament from the ambit of the
Public Finance Management Act, left
the applicability of the Act
last mentioned to provincial legislatures.
Is there a conflict between the
Public Finance Management Act and
the Bill?
103. The Premier submits in effect that the
Public Finance
Management Act provides
for measures relating to expenditure control
that are applicable to provincial legislatures. The Premier relies
for this on the
circumstance that this legislation is expressly
rendered applicable to the provincial legislatures.
99
It is also submitted that the
Financial Management of Parliament Act
effectively
amended the
Public Finance Management Act to
render that
Act inapplicable to Parliament and deliberately left in place its
applicability to the provincial legislatures.
100
This results, so the reservations contend, in “provincial
legislation dealing with financial management of the legislature
. .
. [and in] conflicting provincial and national legislation.”
101
The
Financial Management of Parliament Act did
amend the
Public
Finance Management Act so
as to exclude Parliament and did indeed
leave the situation where the provisions of the latter Act were
applicable to provincial
legislatures unchanged.
102
Does the
Public Finance Management Act prescribe
expenditure
control measures for provincial legislatures?
104. The
Public Finance Management Act does
indeed provide detailed
measures applicable to departments and constitutional institutions,
103
public entities,
104
and executive authorities.
105
None of these entities includes provincial legislatures. This is
quite apart from provisions concerning the provincial treasuries
and
provincial revenue funds
106
and provincial budgets
107
which I discuss later.
105. Departments and constitutional institutions do not include
provincial legislatures as is apparent from the definitions below:
A
department is defined as “a national or provincial
department or a national or provincial government component”.
108
A
department can be national or provincial.
109
A
national department is defined as:
“
a
department listed in Schedule 1 to the Public Service Act, 1994
(Proclamation No. 103 of 1994), but excluding the Office of
a
Premier”.
110
A
provincial department is:
“
(a)
the Office of a Premier listed in Schedule 1 to the Public Service
Act, 1994;
(b) a provincial department
listed in Schedule 2 to the Public Service Act, 1994.”
111
A
constitutional institution is:
“
an
institution listed in Schedule 1”.
112
None of
these include provincial legislatures.
A provincial legislature is neither a public entity
113
nor an Executive Authority.
114
A public entity is “a national or provincial public
entity”.
115
A national public entity is:
“
(a) a
national government business enterprise; or
(b) a board, commission,
company, corporation, fund or other entity (other than a national
government business enterprise) which
is—
(i) established in terms of
national legislation;
(ii) fully or substantially
funded either from the National Revenue Fund, or by way of a tax,
levy or other money imposed in terms
of national legislation; and
(iii) accountable to
Parliament”.
A
provincial public entity is:
“
(a) a
provincial government business enterprise; or
(b) a board, commission,
company, corporation, fund or other entity (other than a provincial
government business enterprise) which
is—
(i) established in terms of
legislation or a provincial constitution;
(ii) fully or substantially
funded either from a Provincial Revenue Fund or by way of a tax,
levy or other money imposed in terms
of legislation; and
(iii) accountable to a
provincial legislature”.
106. This does not mean, however, that the
Public Finance Management
Act does
not place obligations on the provincial legislature. It
does, but in a limited way concerning the preparation and submission

of provincial annual consolidated financial statements
116
and provincial budgets.
117
Provincial annual consolidated financial statements must be
presented to the provincial legislature while provincial budgets

must ultimately be approved by the provincial legislature. It is of
importance, however, that none of the provisions of the
Public
Finance Management Act refers
to the annual financial statements of
the provincial legislature (as distinct from the provincial annual
consolidated financial
statements, or the budgets of the provincial
legislatures themselves as distinct from provincial budgets).
107. The Bill concerns, amongst other things, the annual financial
statements
118
and budgets
119
of the provincial legislature alone. Quite obviously, the annual
financial statement of the provincial legislature will be part
of
the provincial annual consolidated financial statement while the
budget of the provincial legislature will become part of
the budget
of the province overall. And the provisions of the Bill in relation
to the annual financial statement and budget of
the provincial
legislature dovetail completely with the provisions in the
Public
Finance Management Act concerning
the provincial annual consolidated
financial statements and the provincial budgets.
108. The provision in the
Public Finance Management Act concerning
provincial annual consolidated financial statements
120
is that these—
must
be prepared by the provincial treasury;
121
must
include the financial statements concerning the provincial
legislature in the province;
122
must
be submitted to the Auditor-General within three months after
financial year-end;
123
must
be audited by the Auditor-General who must submit an audit report
on them to the provincial treasury concerned within
three months
of their receipt;
124
and
must
be submitted together with the report for tabling in the
provincial legislature by the provincial MEC for Finance within

one month of their receipt.
125
109. The Bill speaks to the preparation and submission of financial
statements in respect of the provincial legislature,
126
not consolidated financial statements for the province as a whole.
These statements—
must
be prepared by the accounting officer of the provincial
legislature;
127
and
must
be submitted to the Auditor-General for auditing and to the
provincial treasury for inclusion in the provincial annual

consolidated statements within two months of the financial
year-end.
128
110. The coalescence is apparent. The accounting officer of the
provincial legislature prepares a financial statement in relation
to
the expenditure of that legislature and submits it to the provincial
treasury within two months of the financial year-end.
This
presumably to facilitate inclusion of these financial statements
into the annual consolidated financial statements of the
province
within one month of their receipt.
111. The Bill and the
Public Finance Management Act do
not conflict.
They coalesce. More than this, the Bill ensures compliance with an
obligation necessarily implied by the
Public Finance Management Act.
The
provision
129
requires that financial statements of the provincial legislature
must be included in the provincial annual consolidated financial

statements. The financial statements of the provincial legislature
cannot be included in the provincial annual consolidated financial

statements unless the provincial legislature or some other entity
prepares them. There is no justification for any finding that
an
entity like the executive should prepare the financial statements of
the provincial legislature. In any event, a provision
that the
executive should prepare the financial statements of the provincial
legislature would be a breach of the separation
of powers and would
imperil practicality. The only inference that can be drawn is that
the provincial legislature is obliged
to ensure preparation of its
own annual financial statements. And this is precisely what the Bill
does.
130
112. The same applies to the
Public Finance Management Act and
those
provisions of the Bill concerning provincial budgets. The
Public
Finance Management Act requires
the MEC for Finance in a province
ordinarily to table the provincial annual budget for a financial
year in the provincial legislature
within two weeks of the tabling
of the national annual budget.
131
I emphasise that while the expenditure of the provincial legislature
must be included in the provincial budget, the
Public Finance
Management Act says
nothing about the preparation of a budget for
the provincial legislature for inclusion in the budget of the
province as a whole.
This gap is covered by the Bill.
132
The accounting officer of the province must prepare a draft budget
133
and present it to the Executive Authority (the Speaker) at least ten
months before the start of the financial year to which that
draft
relates.
134
The Speaker is required to table the draft budget in the provincial
legislature at least one month before the draft budget for
the
province as a whole is to be submitted to the provincial treasury.
135
There is nothing inconsistent between the provisions of the
Public
Finance Management Act and
those of the Bill.
113. It is unnecessary to take this comparison any further because
the Premier has failed to refer us to specific conflicts between
the
Bill and the legislation. Suffice it to say that the Bill is
concerned with matters not dealt with in the
Public Finance
Management Act and
I have not been able to find any conflict.
114. I may point out however that money appropriated by the
provincial legislature, in terms of an appropriation act, in respect

of its own expenditure may be withdrawn by the legislature from the
Provincial Revenue Fund.
136
There is in addition a provision which exempts the provincial
legislature from depositing money received by it into the Provincial

Revenue Fund.
137
This means that the provincial legislature will have money on hand
and it is necessary for the control of this money to make
provision
for management and control of accounting officers, banking accounts
and such things. This is because neither the
Public Finance
Management Act nor any
other law that I have been able to discover
is concerned with these vital aspects.
115. The inevitable conclusion is that the
Public Finance Management
Act does
not concern itself with the matters dealt with in the Bill.
There is neither overlap nor conflict.
The
significance of the
Public Finance Management Act continuing
to
apply to provincial legislatures and not to Parliament
116. It follows from this analysis that there is no significance in
the fact that the
Public Finance Management Act was
amended so as to
exclude its application to Parliament by the
Financial Management of
Parliament Act which
retained the applicability of the
Public
Finance Management Act to
the provincial legislature. The Act
applies to the legislature only to the extent that it does. The Bill
does not trespass on
these provisions in the least.
117. For these reasons, I am satisfied that the Bill is
constitutional and would hold accordingly.
Cameron J
concurs in the judgment of Yacoob J.
CAMERON J:
118. In view of the difference between the main judgment and the
dissenting judgment of my colleague Yacoob J, I add a few paragraphs

to explain why I concur in the latter.
119. My starting point is that I agree with the dissenting judgment
that “expressly assigned by legislation” and
“the
Constitution envisages” in section 104(1)(b) of the
Constitution
138
cannot and should not be equated. “Envisages” means
something less than, albeit not much less than, “expressly

assigned”.
139
120. That there is a difference comes from the Constitution itself,
which creates a plain contrast between the two ways in which

provincial legislative power may be conferred. Hence, to say that
the constitutional scheme requires the removal of “any
doubt”
140
regarding provincial legislative competence, and that only those
constitutional provisions that provide in the clearest terms
for
enactment of provincial legislation can be said to “envisage”
legislation,
141
is in my respectful view to assume the premise in dispute. The
question is whether “envisages” imports a different

standard of power-conferral, and that question cannot be answered by
presuming the premise that only the clearest provisions
meet it.
121. That there are unmistakably clear instances of constitutional
conferral of provincial legislative power
142
does not help to show that less clear instances are not also
envisaged. Indeed, the goal of complete clarity may be a chimera,
as
our judgments on the scheduled powers show.
143
The supposition that it can be attained should not therefore
dominate our approach to “expressly assigned” versus

“envisages”.
122. It
is the Constitution itself that creates the difference. It should in
my view be given effect. And it is a difference that
has a sound
basis. When Parliament assigns provincial legislative power, its
assignment should be, for the reasons the main judgment
gives,
express.
144
There should be no lack of clarity.
123. It is different when the Constitution itself is the source of
the legislative competence. It is the founding source of all
power,
legislative and otherwise. It is quite proper to conclude that it
can itself confer provincial legislative power in ways
that are less
express than it authorises Parliament to do through legislation. For
this reason, I agree with the approach of
Yacoob J that one must
start by inquiring, free from preconception, whether the legislative
power is accorded in the Schedules,
is expressly assigned by
legislation, or is envisaged by the Constitution.
145
124. Second, as a matter of fundamental outlook, it would seem to me
surprising if the Constitution did not envisage that provinces
may
legislate for the financial management of their own legislatures.
This is the premise that informs the dissent, and it seems
correct
to me.
125. So approached, the conclusion that the Constitution envisages
legislation by the provinces to regulate the financial dealings
of
their own legislatures is persuasive. In particular, and in addition
to the reasoning set out in the dissent, this conclusion
seems to me
to flow from section 116(1)
146
of the Constitution. That provision empowers a provincial
legislature to “
determine and control
its internal arrangements
”. This in my view envisages
legislation by the provinces to regulate the financial management of
their legislatures.
126. Section 116(2)
147
in addition obliges provincial legislatures to adopt rules regarding
committees, opposition parties and the like. The express

constitutional imprimatur for provincial legislative rules does not
detract from the inference that subsection (1) envisages
provincial
legislation on internal financial arrangements.
127. For these reasons, I concur in the dissent.
FRONEMAN
J:
I
agree with the reasoning o
f Yacoob J that chapter 13 of the
Constitution envisages that provincial legislatures should have
their own budgetary processes.
I am less sure that section 116 of
the Constitution envisages that this must be done by way of
legislation.
148
128. Whatever the correct standard conveyed by the different
formulations in the Constitution is for the competence of provincial

legislatures to pass legislation, it seems to me that it must be a
necessary consequence of each of the formulations that provincial

legislation is allowed. Yacoob J concedes that the internal
budgetary processes, transparency and expenditure control, and

supply chain management may be done by rules and procedures under
section 116 of the Constitution, as well as by way of legislation.

Once section 116 expressly allows these processes by means other
than legislation, I do not consider it to be a necessary consequence

that the provincial legislature may also pass legislation for that
purpose.
For these
reasons I concur in the outcome and order set out in the judgment of
Ngcobo CJ.
For the Applicant: Advocate BR Tokota SC and Advocate ZZ Matebese,
instructed by Mogaswa Attorneys.
For the First Respondent: Advocate SM Lebala SC, Advocate LA Mmusi
and Advocate EM Mere, instructed by Lokwe Leburu Attorneys.
For the Second and Third Respondents: Advocate JC Heunis SC and
Advocate GA Oliver, instructed by the State Attorney.
For the Fourth Respondent: Advocate G Marcus SC and Advocate N
Rajab-Budlender, instructed by the State Attorney.
1
The
provisions of section 121 are set out in [4] below.
2
The
relevant parts of Schedules 4 and 5 are set out in n 16 and n 17
below.
3
Section
104(1)(b)(iii) of the Constitution. The relevant provisions of
section 104 are set out in [20] below.
4
Section
104(1)(b)(iv) of the Constitution.
5
[A06-2009].
6
The
Premier’s reservations are set out in [10] below.
7
On
3 November 2010, directions were issued by this Court setting the
matter down for hearing and, among other things, calling
upon the
Speaker of the Limpopo Provincial Legislature, the Speaker of the
National Assembly, the Chairperson of the National
Council of
Provinces and the Minister for Finance to show cause why they should
not be joined as parties to these proceedings.
They all responded,
indicating that they had no objection to an order to this effect. An
order joining them as the First, Second,
Third and Fourth
Respondents, respectively, was accordingly made and they were
directed to file affidavits dealing with the constitutionality
of
the Bill.
On 3 November 2010, the Registrar of this Court was
directed to serve the directions on the Speakers of each provincial
legislature,
other than the Limpopo Provincial Legislature, and each
Speaker was invited to apply to be joined, if so advised. This did
not
evoke any response from the Speakers, notwithstanding that some
of the provincial legislatures had already enacted legislation

substantially similar in content to the Bill.
These
Acts are the
Financial Management of the
Eastern Cape Provincial Legislature Act 3 of 2009; the Financial
Management of the Free State Provincial
Legislature Act 6 of 2009;
the Financial Management of the Gauteng Provincial Legislature Act 7
of 2009; the Financial Management
of the Mpumalanga Provincial
Legislature Act 3 of 2010; and the North West Provincial Legislature
Management Act 3 of 2007. Subsequent
to the hearing, the Court
issued directions inviting the political parties in the Provincial
Legislature to submit written argument
on whether the political
parties represented in the Provincial Legislature should be afforded
the opportunity to make written
submissions on the constitutionality
of the Bill in the light of rule 14(3) of the rules of this Court.
None of the political
parties represented in the Provincial
Legislature submitted written submissions.
8
Act
10 of 2009.
9
The
affidavits on behalf of Parliament were filed two days late. The
Speaker of the National Assembly has provided the Court with
a full
explanation for the delay. The delay was caused largely by the fact
that he was out of the country on parliamentary business
and, upon
his return, had to consult with the Chairperson of the National
Council of Provinces and the parliamentary legal advisors
on the
position to be taken on the Bill. The explanation for the delay is
satisfactory.
10
The
affidavit on behalf of the Provincial Legislature was late by some
six days. The explanation for the delay is the late briefing
of
counsel and the unavailability of counsel. The period of delay has
not been fully explained and the explanation that has been
tendered
is not entirely satisfactory. However, the period of delay is
minimal and the questions presented in these proceedings
are of
considerable importance to the Provincial Legislature.
11
Sections
2(e) and 3 of the FMPA are set out, in relevant part, below at [27]
and [28].
12
Section
167(4)(b) of the Constitution provides:
“
Only the Constitutional Court
may—
. . . .
(b) decide on the constitutionality of any
parliamentary or provincial Bill, but may do so only in the
circumstances anticipated
in section 79 or 121”.
13
See
Ex parte President
of the Republic of South Africa In re: Constitutionality of the
Liquor Bill
[1999]
ZACC 15
;
2000 (1) SA 732
(CC);
2000 (1) BCLR 1
(CC) (
Liquor
Bill
) at para 12
(dealing with section 79 of the Constitution, which applies to
Parliamentary Bills). See also
Doctors
for Life International v Speaker of the National Assembly and Others
[2006] ZACC 11
;
2006 (6) SA 416
(CC)
at
para 43;
2006 (12) BCLR 1399
(CC) at 1419A-C.
14
In
re Constitutionality of the Mpumalanga Petitions Bill, 2000
[2001] ZACC 10
;
2002
(1) SA 447
(CC);
2001 (11) BCLR 1126
(CC) (
Mpumalanga
Petitions Bill
)
at para 9 and
Liquor
Bill
above
n 13 at para 19.
15
Mpumalanga
Petitions Bill
above n 14 at para
9.
16
Part
A of Schedule 4 of the Constitution provides:
“
FUNCTIONAL AREAS OF
CONCURRENT NATIONAL AND PROVINCIAL LEGISLATIVE COMPETENCE
PART A
Administration of indigenous forests
Agriculture
Airports other than international and national airports
Animal control and diseases
Casinos, racing, gambling and wagering, excluding
lotteries and sports pools
Consumer protection
Cultural matters
Disaster management
Education at all levels, excluding tertiary education
Environment
Health services
Housing
Indigenous law and customary law, subject to Chapter 12
of the Constitution
Industrial promotion
Language policy and the regulation of official
languages to the extent that the provisions of section 6 of the
Constitution expressly
confer upon the provincial legislatures
legislative competence
Media services directly controlled or provided by the
provincial government, subject to section 192
Nature conservation, excluding national parks, national
botanical gardens and marine resources
Police to the extent that the provisions of Chapter 11
of the Constitution confer upon the provincial legislatures
legislative
competence
Pollution control
Population development
Property transfer fees
Provincial public enterprises in respect of the
functional areas in this Schedule and Schedule 5
Public transport
Public works only in respect of the needs of provincial
government departments in the discharge of their responsibilities to
administer
functions specifically assigned to them in terms of the
Constitution or any other law
Regional planning and development
Road traffic regulation
Soil conservation
Tourism
Trade
Traditional leadership, subject to Chapter 12 of the
Constitution
Urban and rural development
Vehicle licensing
Welfare services”.
17
Part
A of Schedule 5 of the Constitution provides:
“
FUNCTIONAL AREAS OF EXCLUSIVE
PROVINCIAL LEGISLATIVE COMPETENCE
PART A
Abattoirs
Ambulance services
Archives other than national archives
Libraries other than national libraries
Liquor licences
Museums other than national museums
Provincial planning
Provincial cultural matters
Provincial recreation and amenities
Provincial sport
Provincial roads and traffic
Veterinary services, excluding regulation of the
profession”.
18
Section
104(1)(b)(iii) of the Constitution.
19
Section
104(1)(b)(iv) of the Constitution.
20
Section
44(1)(a) and (b) of the Constitution provides:
“
The national legislative
authority as vested in Parliament—
(a) confers on the National Assembly the power—
(i) to amend the Constitution;
(ii) to pass legislation with regard to any matter,
including a matter within a functional area listed in Schedule 4,
but excluding,
subject to subsection (2), a matter within a
functional area listed in Schedule 5; and
(iii) to assign any of its legislative powers, except
the power to amend the Constitution, to any legislative body in
another
sphere of government; and
(b) confers on the National Council of Provinces the
power—
(i) to participate in amending the Constitution in
accordance with section 74;
(ii) to pass, in accordance with section 76,
legislation with regard to any matter within a functional area
listed in Schedule
4 and any other matter required by the
Constitution to be passed in accordance with section 76; and
(iii) to consider, in accordance with section 75, any
other legislation passed by the National Assembly.”
21
Section
44(2) of the Constitution provides:
“
Parliament may intervene, by
passing legislation in accordance with section 76(1), with regard to
a matter falling within a functional
area listed in Schedule 5, when
it is necessary—
(a) to maintain national security;
(b) to maintain economic unity;
(c) to maintain essential national standards;
(d) to establish minimum standards required for the
rendering of services; or
(e) to prevent unreasonable action taken by a province
which is prejudicial to the interests of another province or to the
country
as a whole.”
22
Section
104(1)(b)(iii) of the Constitution.
23
Section
104(1)(b)(iv) of the Constitution.
24
Section
215 of the Constitution provides:
“
(1) National, provincial and
municipal budgets and budgetary processes must promote transparency,
accountability and the effective
financial management of the
economy, debt and the public sector.
(2) National legislation must prescribe—
(a) the form of national, provincial and municipal
budgets;
(b) when national and provincial budgets must be
tabled; and
(c) that budgets in each sphere of government must show
the sources of revenue and the way in which proposed expenditure
will
comply with national legislation.
(3) Budgets in each sphere of government must contain—
(a) estimates of revenue and expenditure,
differentiating between capital and current expenditure;
(b) proposals for financing any anticipated deficit for
the period to which they apply; and
(c) an indication of intentions regarding borrowing and
other forms of public liability that will increase public debt
during
the ensuing year.”
25
Section
216(1) and (2) of the Constitution provides:
“
(1) National legislation must
establish a national treasury and prescribe measures to ensure both
transparency and expenditure
control in each sphere of government,
by introducing—
(a) generally recognised accounting practice;
(b) uniform expenditure classifications; and
(c) uniform treasury norms and standards.
(2) 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 persistent material breach of those measures.”
26
Act
1 of 1999.
27
Sections
5-10 of the PFMA.
28
Sections
11-16 of the PFMA.
29
Chapter
3 of the PFMA.
30
Chapter
4 of the PFMA.
31
Section
3(2)(b) of the PFMA.
32
Section
72(b) of the FMPA.
33
Section
104(1)(b)(iii) of the Constitution.
34
Section
104(1)(b)(iv) of the Constitution.
35
See
[15] above.
36
1928
EDL 184.
37
Id
at 195.
38
Id.
39
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Others
[2004] ZACC 15
;
2004 (4) SA 490
(CC);
2004 (7) BCLR 687
(CC) at paras 90-2.
40
See
[53]-[54] below.
41
Section
1 of the Constitution.
42
Section
41(1)(f) and (g) of the Constitution.
43
Section
156(1) provides:
“
A municipality has executive
authority in respect of, and has the right to administer—
(a) the local government matters listed in Part B of
Schedule 4 and Part B of Schedule 5; and
(b) any other matter assigned to it by national or
provincial legislation.”
44
Section
2(e) of the FMPA.
45
Other
examples in the Constitution are:
Section
115(c), which provides:
“
A provincial legislature or
any of its committees may—
. . .
(c) compel, in terms of provincial legislation or the
rules and orders, any person or institution to comply with a summons
or
requirement in terms of paragraph (a) or (b)”.
Section
140(4), which provides:
“
Provincial legislation may
specify the manner in which, and the extent to which, instruments
mentioned in subsection (3) must
be—
(a) tabled in the provincial legislature; and
(b) approved by the provincial legislature.”
Section
154(2), which provides:
“
Draft national or provincial
legislation that affects the status, institutions, powers or
functions of local government must be
published for public comment
before it is introduced in Parliament or a provincial legislature,
in a manner that allows organised
local government, municipalities
and other interested persons an opportunity to make representations
with regard to the draft
legislation.”
Section
155(6), which provides:
“
Each provincial government
must establish municipalities in its province in a manner consistent
with the legislation enacted in
terms of subsections (2) and (3)
and, by legislative or other measures, must—
(a) provide for the monitoring and support of local
government in the province; and
(b) promote the development of local government
capacity to enable municipalities to perform their functions and
manage their
own affairs.”
46
Section
195 provides, in relevant part:
“
(1) Public administration
must be governed by the democratic values and principles enshrined
in the Constitution, including the
following principles:
(a) A high standard of professional ethics must be
promoted and maintained.
(b) Efficient, economic and effective use of resources
must be promoted.
(c) Public administration must be development-oriented.
(d) Services must be provided impartially, fairly,
equitably and without bias.
(e) People’s needs must be responded to, and the
public must be encouraged to participate in policy-making.
(f) Public administration must be accountable.
(g) Transparency must be fostered by providing the
public with timely, accessible and accurate information.
(h) Good human-resource management and
career-development practices, to maximise human potential, must be
cultivated.
(i) Public administration must be broadly
representative of the South African people, with employment and
personnel management
practices based on ability, objectivity,
fairness, and the need to redress the imbalances of the past to
achieve broad representation.
(2) The above principles apply to—
(a) administration in every sphere of government”.
47
See
above n 24 and n 25.
48
See
above n 7.
49
Id.
50
See
Matatiele
Municipality and Others v President of the RSA and Others
[2006]
ZACC 2
;
2006 (5) SA 47
(CC);
2006 (5) BCLR 622
(CC)
at
para 68;
Director
of Public Prosecutions, Transvaal v Minister of Justice and
Constitutional Development, and Others
[2009]
ZACC 8
;
2009 (4) SA 222
(CC);
2009 (7) BCLR 637
(CC) at paras 33-43;
and
S
v Thunzi and Another (Minister for Justice and Constitutional
Development, joined)
[2010]
ZACC 12
;
2011 (3) BCLR 281
(CC) at paras 68-70.
51
[72]
above at reservation 2.1.
52
Schedules
4 and 5 are provided in n 16 and n 17 of the main judgment,
respectively.
53
[72]
above at reservation 2.2.
54
Act
10 of 2009.
55
[72]
above at reservation 2.3.
56
Act
1 of 1999.
57
[77]
to [80] below.
58
Section
104(1)(b)(i) of the Constitution.
59
Section
104(1)(b)(ii) of the Constitution.
60
Section
104(1)(b)(iii) of the Constitution.
61
Section
104(1)(b)(iv) of the Constitution.
62
[74]
above.
63
Section
3 of the Bill.
64
Sections
5 to 11 of the Bill.
65
Chapter
3 of the Bill.
66
Chapter
4 of the Bill.
67
Chapter
5 of the Bill.
68
Chapter
6 of the Bill.
69
Chapters
7 and 8 of the Bill.
70
Chapter
10 of the Bill.
71
[72]
above at reservation 2.
3.
72
Id
at reservation 2.4.
73
Except
when section 104(1)(b) is directly referred to.
74
Section
104(1)(b)(iv) of the Constitution.
75
Section
104(1)(b)(iii) of the Constitution.
76
[53]
to [54] of the main judgment.
77
Section
215(1) of the Constitution provides:
“
National, provincial and
municipal budgets and budgetary processes must promote transparency,
accountability and the effective
financial management of the
economy, debt and the public sector.”
78
Section
215(2) provides:
“
National legislation must
prescribe—
the form of national, provincial and municipal
budgets;
when national and provincial budgets must be tabled;
and
that budgets in each sphere of government must show
the sources of revenue and the way in which proposed expenditure
will comply
with national legislation.”
79
Section
215(3) provides:
“
Budgets in each sphere of
government must contain—
(a) estimates of revenue and expenditure,
differentiating between capital and current expenditure;
(b) proposals for financing any anticipated deficit for
the period to which they apply; and
(c) an indication of intentions regarding borrowing and
other forms of public liability that will increase public debt
during
the ensuing year.”
80
Section
125(2) provides:
“
The Premier exercises the
executive authority, together with the other members of
the Executive Council, by—
(a) implementing provincial legislation in the
province;
(b) implementing all national legislation within the
functional areas listed in Schedule 4 or 5 except where the
Constitution
or an Act of Parliament provides otherwise;
(c) administering in the province, national legislation
outside the functional areas listed in Schedules 4 and 5
,
the
administration of which has been assigned to the provincial
executive in terms of an Act of Parliament;
(d) developing and implementing provincial policy;
(e) co-ordinating the functions of the provincial
administration and its departments;
(f) preparing and initiating provincial legislation;
and
(g) performing any other function assigned to the
provincial executive in terms of the Constitution or an Act of
Parliament.”
81
Section
116 provides:
“
(1) A provincial legislature
may—
determine and control its internal arrangements,
proceedings and procedures; and
make rules and orders concerning its business, with
due regard to representative and participatory democracy,
accountability,
transparency and public involvement.
(2) The rules and orders of a provincial legislature
must provide for—
the establishment, composition, powers, functions,
procedures and duration of its committees;
the participation in the proceedings of the
legislature and its committees of minority parties represented in
the legislature,
in a manner consistent with democracy;
financial and administrative assistance to each party
represented in the legislature, in proportion to its
representation, to
enable the party and its leader to perform their
functions in the legislature effectively; and
the recognition of the leader of the largest
opposition party in the legislature, as the Leader of the
Opposition.”
82
Id.
83
Chapter
3 of the Bill.
84
Sections
12 to 14 of the Bill.
85
Sections
15 and 16 of the Bill.
86
Section
17 of the Bill.
87
Section
216(1) of the Constitution.
88
Section
216(2) of the Constitution.
89
[45]
above of the main judgment.
90
Sections
216(2) and (3) of the Constitution.
91
Section
217(1) provides:
“
When an organ of state in the
national, provincial or local sphere of government, or any other
institution identified in national
legislation, contracts for goods
or services, it must do so in accordance with a system which is
fair, equitable, transparent,
competitive and cost-effective.”
92
Schedule
1 of the
Financial Management of Parliament Act.
93
Sections
5 to 11 of the Bill which are an effort to comply with Item (c) of
Schedule 1.
94
Chapters
4 and 5 of the Bill in compliance with Item (f) of Schedule 1.
95
Chapter
6 of the Bill which complies with Item (g) of Schedule 1.
96
Chapters
7 and 8 of the Bill seek to obey Items (i) and (j) of Schedule 1.
97
Chapter
10 of the Bill.
98
[73]
above.
99
[72]
above at reservation 2.4.
100
Section
72
of the
Financial Management of Parliament Act.
101
[72
]
above at reservation 2.5.
102
Section
3
of the
Financial Management of Parliament Act.
103
Chapter
5 of the
Public Finance Management Act.
104
Chapter
6
of the
Public Finance Management Act.
105
Chapter
7 of the
Public Finance Management Act.
106
Chapter
3 of the
Public Finance Management Act.
>
107
Chapter
4
of the
Public Finance Management Act.
108
Section
1
of the
Public Finance Management Act.
109
Id
.
110
Id.
111
Id.
112
Id.
113
Chapter
6 of the
Public Finance Management Act.
114
Chapter
1 of the
Public Finance Management Act.
115
Section
1 of the
Public Finance Management Act.
116
Section
19
of the
Public Finance Management Act
>.
Quoted in full at n 70 below.
117
Sections
27(2)
and (3) of the
Public Finance Management Act.
118
Section
55 of the Bill.
119
Section
15
of the Bill.
120
Section
19
provides:
“
(1) A provincial treasury
must—
(a) prepare consolidated financial statements, in
accordance with generally recognised accounting practice, for each
financial
year in respect of—
(i) provincial departments in the province;
(ii) public entities under the ownership control of the
provincial executive of the province; and
(iii) the provincial legislature in the province; and
(b) submit those statements to the Auditor-General
within three months after the end of that financial year.
(2) The Auditor-General must audit the consolidated
financial statements and submit an audit report on the statements to
the provincial
treasury of the province concerned within three
months of receipt of the statements.
(3) The MEC for finance in a province must submit the
consolidated financial statements and the audit report, within one
month
of receiving the report from the Auditor-General, to the
provincial legislature for tabling in the legislature.
(4) The consolidated financial statements must be made
public when submitted to the provincial legislature.
(5) If the MEC for finance fails to submit the
consolidated financial statements and the Auditor-General’s
audit report
on those statements to the provincial legislature
within seven months after the end of the financial year to which
those statements
relate—
(a) the MEC must submit to the legislature a written
explanation setting out the reasons why they were not submitted;
and
(b) the Auditor-General may issue a special report on
the delay.”
121
Section
19(1)(a)
of the
Public Finance Management Act.
122
Section
19(1)(a)(iii)
of the
Public Finance Management
Act.
123
Section
19(1)(b) of the
Public Finance Management Act.
124
Section
19(2) of the
Public Finance Management Act.
>
125
Section
19(3)
of the
Public Finance Management Act.
126
Sections
55 and 56 of the Bill.
127
Section
55(1)
of the Bill provides:
“
T
he
accounting officer must, for each financial year, prepare annual
financial statements in accordance with the standards of general

recogni[s]ed accounting practice and, in the absence of an
applicable standard, in accordance with standards prescribed by the

Executive Authority for the purpose of maintaining consistency with
other organs of state.”
128
Section
56(1)
of the Bill.
129
Section
19(1)(a)(iii)
of the
Public Finance Management Act.
130
[110
]
above.
131
Section
27(2)
provides:
“
The MEC for finance in a
province must table the provincial annual budget for a financial
year in the provincial legislature not
later than two weeks after
the tabling of the national annual budget, but the Minister may
approve an extension of time for the
tabling of a provincial
budget.”
132
Sections
15
and
16
of the Bill.
133
Containing
the details prescribed in
section 15(2)
of the Bill.
134
Section
15(1)
of the Bill.
135
Section
16(1)(a)
of the Bill.
136
Section
21(1)(b)(i)
of the
Public Finance Management Act.
137
Section
22(1)(a)
of the
Public Finance Management Act.
138
The
relevant provisions of
section 104
are set out in [20] of the main
judgment.
139
See
dissenting judgment (per Yacoob J) at [84]-[85].
140
See
main judgment at [23].
141
Id
at [52].
142
Id
at [53]-[56].
143
See
City of Johannesburg Metropolitan Municipality
v Gauteng Development Tribunal and Others
[2010]
ZACC 11
;
2010 (6) SA 182
(CC);
2010 (9) BCLR 859
(CC);
Tongoane and Others v National Minister for
Agriculture and Land Affairs and Others
[2010]
ZACC 10
;
2010 (6) SA 214
(CC);
2010 (8) BCLR 741
(CC); and
Ex
parte President of the Republic of South Africa In re:
Constitutionality of the Liquor Bill
[1999]
ZACC 15
;
2000 (1) SA 732
(CC);
2000 (1) BCLR 1
(CC).
144
See
main judgment at [34]-[41].
145
See
dissenting judgment at [79].
146
Section
116(1)
provides:
“
A provincial legislature may—
determine and control its internal arrangements,
proceedings and procedures; and
(b) make rules and orders concerning its business, with
due regard to representative and participatory democracy,
accountability,
transparency and public involvement.”
147
Section
116(2)
provides:
“
The rules and orders of a
provincial legislature must provide for—
(a) the establishment, composition, powers, functions,
procedures and duration of its committees;
(b) the participation in the proceedings of the
legislature and its committees of minority parties represented in
the legislature,
in a manner consistent with democracy;
(c) financial and administrative assistance to each
party represented in the legislature, in proportion to its
representation,
to enable the party and its leader to perform their
functions in the legislature effectively; and
(d) the recognition of the leader of the largest
opposition party in the legislature,
as the Leader of the Opposition.”
148
See
dissenting judgment (per Cameron J) at [125].