Inyathelo in the Headlines

Lotteries bill gives minister wider powers - 13 Aug 2013 - Business Report (Star)

By Ann Crotty

THE NATIONAL Lotteries Bill, which is the subject of public hearings before the portfolio committee on trade and industry tomorrow and Friday, has the potential to fundamentally change the structure of civil society in South Africa, according to representatives of civil society organisations.

The potential for fundamental change stems from the controversial proposal that the minister be allowed to appoint an "organ of state" to conduct the National Lottery.

Section 13A of the bill states: "...The [trade and industry] minister [Rob Davies] may, after consultation with the board, license or authorise an organ of state to conduct the National Lottery for a period not exceeding two years, on such terms and conditions as the minister deems appropriate."

In addition to being allowed to appoint an organ of state to run the National Lottery, a memo to the Lotteries Bill appears to outline a new set of objectives for the lottery funds.

"The fundamental policy principle approved by government on the National Lottery was that the National Lottery will be utilised as a source for generating substantial revenue that will be used to fund projects of national interest in respect of which there was insufficient funding from state expenditure," the memo states.

Shelagh Gastrow, the executive director of Inyathelo, which is a member of the Funding Practice Alliance (FPA), said the primary concern was that the bill opened the door for a state-run lottery rather than one run by an independent entity with an independent board.

"Although it is not clear what the ramifications of this would be, it could eventually evolve into a fully fledged income-generating exercise for the government, where billions of rands of funds will go into government coffers to be distributed only to welfare and service delivery organisations that are aligned with the government's national objectives," Gastrow said.

FPA co-ordinator Janine Ogle said that the bill granted the minister considerable power to influence funding decisions that would be made by the permanent distribution agency that was to be set up in terms of the bill.

Ogle said it was also a concern that the bill proposed that organisations could receive funds without submitting an application. "This is bad practice and could lead to fund leakage and abuse."

Centralising the administration of the National Lottery into an organ of state could have implications for the provinces. The current National Lottery Act ensures that each province receives a minimum allocation from the distribution agents.

The National Council of Provinces will process the bill after the National Assembly.