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Competition watchdog cuts R62m budget shortfall by nearly half

Nov 20 2019 06:01
Lameez Omarjee

The Competition Commission has reduced its R62m budget deficit reported in the 2017/18 financial year by almost half to R36.8m.

The competition watchdog, which is one of three bodies that regulates competition in SA markets, on Tuesday briefed the portfolio committee on trade and industry on its performance in the past two quarters.

The Commission investigates complaints, assesses mergers and undertakes market inquiries with the aim of achieving "equity and efficiency" within the SA economy.

Its notable cases in 2019 included the Health Market Inquiry. Earlier in the year, it released its final report on a five-year-long inquiry into the private healthcare market. It found that the sector was dominated by concentrated funders and facilities, and that improving competition could translate into more affordable healthcare.

The Commission noted in its report to the committee that due to a lack of funding, it had to hold back on some investigations and other operations during the 2018/19 year, in order to reduce its cash deficit resulting from overspending its 2017/18 budget.  

In its report, the Commission added that it relied on surpluses from previous financial years to help fund its operations – but in 2016/17 its surplus was depleted. This resulted in the commission overspending its 2017/18 budget.

The Commission has set aside R18m to repay the deficit in the 2019/20 year. So far the deficit stands at R36.8m, down from R62m reported in 2017/18, the report read.

Targets met 

In terms of its operations for the 2019/20 year, the Commission has met 13 out of 16 of its targets for the first quarter and has met 16 out of its 20 targets for the second quarter.   

The Commission is contending with an increased volume of work, as well complexity in the investigation and prosecution of cases. That is to say, "longer time frames for litigation in courts and specialist skills and industry knowledge required for some investigations".

The Commission is working on three market inquiries, which it plans to complete in the current financial year. These are the grocery market inquiry, the data services market inquiry and the public passenger transport market inquiry.

Competition Act 

The Competition Tribunal, which acts as a court which makes decisions on cases referred to it by the commission, also briefed the committee on Tuesday. So far this year, the tribunal has heard 89 matters.

The Tribunal noted that changes to the competition act, signed into law by President Cyril Ramaphosa in February, will "substantially" increase the mandate of the Tribunal.

The amended act seeks to strengthen regulations to fight anti-competitive behaviour in markets industrial markets.

It will increase it case load and costs, according to the Tribunal's report to the committee. The Tribunal expects the budgetary impact to be R9m over the next three years.

The Tribunal already projects that it will need additional funding from government for the 2021/22 and the 2022/23 financial years.

competition commission  |  probe  |  competition  |  budget
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