National Assembly - 13 November 2001
TUESDAY, 13 NOVEMBER 2001 __
PROCEEDINGS OF THE NATIONAL ASSEMBLY
____
The House met at 14:01.
The Chairperson of Committees took the Chair and requested members to observe a moment of silence for prayers or meditation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS - see col 000.
NOTICES OF MOTION
Ms M C LOBE: Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
That the House -
(1) notes a report that a 13-year-old girl was raped by her father in Mpumalanga, and that her mother and the victim are afraid to lay charges against the father who has threatened to leave them penniless;
(2) notes that a three-year-old girl was butchered and stuffed in a bucket in Alexandra;
(3) believes that child abuse, child rape and violence against women and children is barbaric behaviour which must be uprooted in our society; and
(4) calls on all communities to work with the police to fight this evil and to ensure that perpetrators of these cowardly acts are brought to book.
[Applause.]
Mr M L DA CAMARA: Chairperson, I hereby give notice that on the next sitting day of the House I shall move:
That the House -
(1) notes the words of former NP leader F W de Klerk, on 3 June 1996, col 2011 in Hansard, on his party’s withdrawal from the previous Government of National Unity:
Continued participation would be equivalent to detention on a kind
of political death row. The survival of multiparty democracy,
which depends on the existence of a strong and credible
opposition, was being threatened by our continued participation in
the Government of National Unity.
(2) further notes that Marthinus van Schalkwyk now believes that opposition to the Government can only come from within the suffocating embrace of the ANC; and
(3) calls on Mr Van Schalkwyk to explain why.
[Interjections.]
Mr V B NDLOVU: Chairperson …
The CHAIRPERSON OF COMMITTEES: Order! Can all members who are standing now take their seats!
Mr V B NDLOVU: Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the IFP:
That the House -
(1) congratulates the SAPS in KwaZulu-Natal on their good work and excellent success in apprehending 294 criminals within a period of three months;
(2) acknowledges the shocking conditions that members of the police force are often faced with, battling against brutality in crime in which the police themselves often have to pay with their lives; and
(3) encourages the police to participate in more and more of these targeted campaigns to root out crime in our communities.
Ms N E NGALEKA: Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
That the House -
(1) notes that -
(a) schoolchildren from Meadowlands delivered food and clothes in
Ingwavuma, KwaZulu-Natal; and
(b) these children made huge sacrifices by saving money to deliver
clothes for Aids orphans;
(2) believes that this act of solidarity is significant in reviving the spirit of ubuntu amongst our people;
(3) commends the schoolchildren from Meadowlands for this heroic act; and
(4) calls on all people, young and old, to emulate this example.
[Applause.] Dr R T RHODA: Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the New NP:
That the House -
(1) notes the fast and effective action taken by the New NP MEC for Social Services and Poverty Relief in the Western Cape, David Malatsi, and his department in the light of the following:
(a) five armed men robbed a pension paypoint in Khayelitsha
yesterday morning, stealing an estimated R250 000; and
(b) despite the robbery, MEC Malatsi's department managed to pay out
the remaining pensioners two hours later; and
(2) congratulates MEC Malatsi and his department on their commitment to serving the senior citizens of the Western Cape, and further urges the SAPS to leave no stone unturned in finding the perpetrators.
[Applause.]
Prof L M MBADI: Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the UDM:
That the House -
(1) notes that there have already been several matric examination leaks this year;
(2) further notes that the Director-General of Education is reported to have said that the Department of Education is operating on the assumption that leaks have occurred in all five national papers;
(3) expresses its disgust that despite promises to the contrary, security measures have failed, and that belated decisions to improve security amount to closing the stable doors after the horses have bolted; and
(4) strongly disputes the director-general’s assertion that the leaks have not had a negative impact on the examination as a whole.
Mr B MTHEMBU: Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
That the House -
(1) notes that the Deputy Minister of Minerals and Energy, Susan Shabangu, announced that 5 932 houses, 15 schools and 5 clinics were connected to electricity in Gapungula, Northern Province;
(2) believes that this splendid achievement is a further advancement in the provision of a better life for all and the uplifting of the standard of living of our people in the rural areas;
(3) commends the Ministry and the Department of Minerals and Energy for making electricity available to the people of Gapungula; and
(4) welcomes this ground-breaking achievement and sees it as a positive outcome of the Integrated Rural Development Strategy of the ANC-led Government.
[Applause.]
Rev K R J MESHOE: Chairperson …
The CHAIRPERSON OF COMMITTEES: Order! Hon members, can you please lower your voices! I have no problem with the fact that people are excited about something else, but please, let us lower our voices.
Rev K R J MESHOE: Chairperson, I hereby give notice that on the next sitting day of the House I shall move:
That the House -
(1) congratulates the Concerned Communities for Education on organising the peaceful march to Parliament this morning;
(2) commends all those Christian parents, leaders and young people who chose to use their constitutional right to demonstrate, to picket and to present petitions;
(3) notes with great concern another unjustified attack by the Minister of Education, Prof Kader Asmal, on concerned Christian parents when he called them fundamentalists;
(4) further notes that the same Prof Asmal viciously attacked an interdenominational gathering of Christians who were gathered at the Newlands Stadium for prayer and celebration, calling them a ``sectarian body’’;
(5) notes that it was only after he was rebuked by Dr Allan Boesak in a letter from prison, that he expressed regret for the intolerant remarks he made about people who chose to celebrate Human Rights Day differently;
(6) calls on Prof Asmal to stop his unnecessary and unjustified attacks on Christians who differ with him; and
(7) advises all Bible-believing Christians not to allow Prof Kader Asmal to intimidate them into silence.
[Applause.]
Dr S E M PHEKO: Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the PAC:
That the House -
(1) notes that the Swiss media has revealed that there was collaboration between the Swiss secret service chief, Peter Regli, and Wouter Basson on biological and chemical weapons during the apartheid era;
(2) that Chris Thirion, a former South African secret service general, has confirmed the existence of the agreement;
(3) that the PAC demands a comprehensive investigation with access to all relevant Swiss and South African archives, including the archives of financial institutions that propped up apartheid, so that the extent of the support by Swiss institutions can be determined; and
(4) notes that -
(a) in this regard the PAC reiterates its call for the cancellation
of the apartheid debt and demands reparations for the victims of
apartheid in this country from all institutions which financed
apartheid; and
(b) the PAC fully supports the Jubilee South Africa Campaign on the
apartheid debt and reparations.
Mr M T GONIWE: Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
That the House -
(1) notes the statement made by the Leader of the Opposition, the hon Tony Leon, that ``more babies will die of HIV/Aids in the Western Cape’’ when the ANC becomes part of government in the province; (2) believes that the statement by the hon Tony Leon smacks of racism and flows from his erroneous understanding of the HIV/Aids pandemic as a black African issue, and that his speech is designed to demonise the ANC in the eyes of his conservative white followers;
(3) further believes that it is irresponsible for a public representative like the hon Tony Leon to make statements that perpetuate racial stereotypes and that his assertion amounts to hate speech;
(4) condemns the statement made by the hon Tony Leon; and
(5) calls on him to withdraw this irresponsible and reactionary statement.
Mrs G M BORMAN: Chairperson, I hereby give notice that on the next sitting day of the House I shall move:
That the House -
(1) notes that President Mbeki continues to attract unfavourable publicity in influential newspapers and journals around the world because of his unusual views concerning HIV/Aids;
(2) further notes that South Africa’s good name and reputation suffer because of ill-advised pronouncements by the President; and
(3) resolves that President Mbeki should be requested to refrain from making any further comment about HIV/Aids and the causes of Aids other than to promote programmes aimed at saving South Africa’s young people from this scourge.
[Interjections.] [Applause.]
Mr M A MZIZI: Chairperson, I hereby give notice that on the next sitting day of the House I will move on behalf of the IFP:
That the House -
(1) notes that the Department of Justice and Constitutional Development is currently investigating more than 114 cases of theft, fraud, corruption and other offences allegedly committed by its officials;
(2) further notes that the department is also investigating a further 74 such cases flowing from its newly-established Anti-Corruption and Fraud Hotline;
(3) calls on the department to conduct these investigations with the utmost vigour and determination to root out fraud and corruption at all levels of the department; and
(4) further calls on the Minister for Justice and Constitutional Development to keep the House informed of the progress with the investigation.
Mr J D ARENDSE: Chairperson, I hereby give notice that on the next sitting day of the House I shall move:
That the House -
(1) notes with approval and appreciation the generous donation of 65 hectares of land for housing 12 families by Mr Roger Romah, a farmer from Hartebeespoort;
(2) further notes that low-cost houses have already been completed and eight more will be completed soon;
(3) believes that -
(a) Mr Roger Romah's actions are an example of the new patriotism
needed to reconstruct and heal our country; and
(b) to deal with poverty, hunger and deprivation, South Africans
must rally to the call by our President for unity in action for
change; and
(4) congratulates Mr Roger Romah for his good act and calls on all South Africans to emulate this example.
[Applause.]
Mrs A VAN WYK: Chairperson, I hereby give notice that on the next sitting day of the House I shall move:
That the House, despite the commendable smooth running of the matric examinations in most provinces -
(1) notes with concern that the nationally-set matric examination papers have been leaked, especially in view of the fact that this will have a negative impact on the credibility of the benchmarking process;
(2) furthermore expresses its concern about the fact that pupils in KwaZulu-Natal and Gauteng wrote a back-up paper, thereby effectively negating the claim that there was a uniform examination in five subjects; and
(3) therefore urges the Minister of Education and the provincial departments to tighten security, especially with regard to the transportation of papers.
Mr J T MASEKA: Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the UDM:
That the House - (1) notes that the United Nations estimates that more than 10 000 new cases of HIV/Aids are diagnosed on the African continent every day;
(2) further notes with alarm that the United Nations is predicting that there may be 13 million Aids orphans in Africa by the end of the year; and
(3) calls on President Mbeki and other leaders of Africa to make the fight against HIV/Aids a major priority in their efforts to uplift the continent with the New Africa Initiative, realising that no upliftment programme will succeed if we endow this continent with millions of HIV/Aids orphans.
[Applause.]
GOOD WISHES TO HINDUS FOR FESTIVAL OF DIWALI AND TO MUSLIMS FOR RAMADAN
(Draft Resolution)
The ACTING CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I hereby move without notice: That the House -
(1) notes that tomorrow, Wednesday 14 November, is the Hindu festival of Diwali;
(2) wishes all those celebrating it a happy Diwali and a day filled with joy and light;
(3) further notes that the end of this week sees the beginning of the Muslim holy month of Ramadan;
(4) wishes all Muslims well during the fast and “Eid Mubarak”; and
(5) calls on all South Africans, whatever their religion, to work for peace, unity and solidarity among South Africans and all the peoples and religions of the world.
Agreed to.
AIRCRAFT CRASH IN NEW YORK CITY
(Draft Resolution) Mrs S A SEATON: Chairperson, I hereby move without notice:
That the House -
(1) notes that an American Airlines passenger aircraft crashed shortly after take-off from JFK International Airport in New York City, killing all passengers and the crew;
(2) further notes the traumatic nature of this incident to the American people, and particularly New Yorkers, so shortly after the terrorist attacks on 11 September;
(3) expresses the hope that the tragic crash is not in any way related to terrorist activities or the war against terrorism; and
(4) extends its sincerest sympathies and condolences to the families and loved ones of the victims of the crash.
Agreed to.
GOOD WISHES TO SCHOOLCHILDREN ON WRITING EXAMINATIONS
(Draft Resolution)
Miss S RAJBALLY: Chairperson, I hereby move without notice:
That the House -
(1) notes that this time of the year all schoolchildren in our country are writing examinations;
(2) wishes them well and every success, particularly the 2001 matriculants; and
(3) expresses the hope that they will all have a safe and happy holiday.
Agreed to.
EXTENSION OF TRIAL-RUN PERIOD OF QUESTIONS FOR ORAL REPLY
(Draft Resolution)
The ACTING CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I move the motion printed in my name on the Order Paper, as follows:
That, with reference to the resolution adopted by the House on 26 June 2001, the period for the trial run of questions for oral reply be further extended until 20 March 2002.
Question put: That the motion be agreed to.
Division demanded.
The House divided:
AYES - 264: Abram, S; Ainslie, A R; Arendse, J D; Aucamp, C; Bakker, D M; Balfour, B M N; Baloyi, M R; Baloyi, O; Bekker, H J; Benjamin, J; Beukman, F; Bhengu, F; Bhengu, G B; Biyela, B P; Blaas, A; Bloem, D V; Bogopane, H I; Booi, M S; Buthelezi, M N; Cachalia, I M; Carrim, Y I; Cassim, M F; Chalmers, J; Chauke, H P; Chiba, L; Chikane, M M; Chiwayo, L L; Chohan-Kota, F I; Cindi, N V; Coetzee-Kasper, M P; Cronin, J P; Cwele, S C; De Lille, P; Dhlamini, B W; Diale, L N; Dithebe, S L; Ditshetelo, P H K; Dlali, D M; Doidge, G Q M; Douglas, B M; Dowry, J J; Dudley, C; Durand, J; Du Toit, D C; Dyani, M M Z; Ebrahim, E I; Fankomo, F C; Fazzie, M H; Ferreira, E T; Fihla, N B; Fraser-Moleketi, G J; Frolick, C T; Gaum, A H; Gcina, C I; George, M E; Gerber, P A; Gomomo, P J; Goniwe, M T; Goosen, A D; Gous, S J; Govender, P; Green, L M; Greyling, C H F; Gumede, D M; Gxowa, N B; Hajaig, F; Hanekom, D A; Hangana, N E; Hendrickse, P A C; Hlancki, C J M; Hlangwana, N L; Hlengwa, M W; Hogan, B A; Holomisa, S P; Jassat, E E; Jeffery, J H; Joemat, R R; Jordan, Z P; Kalako, M U; Kannemeyer, B W; Kasienyane, O R; Kati, J Z; Kgarimetsa, J J; Kgauwe, Q J; Kgwele, L M; Komphela, B M; Koornhof, G W; Kota, Z A; Kotwal, Z; Lamani, N E; Landers, L T; Lekota, M G P; Le Roux, J W; Lishivha, T E; Lobe, M C; Lockey, D; Louw, J T; Louw, S K; Lucas, E J; Luthuli, A N; Lyle, A G; Mabe, L; Mabena, D C; Mabeta, M E; Mabudafhasi, T R; Mabuza, D D; Madasa, Z L; Maduna, P M; Magubane, N E; Mahlawe, N; Mahomed, F; Maimane, D S; Maine, M S; Makanda, W G; Makasi, X C; Malebana, H F; Maloney, L; Malumise, M M; Manie, M S; Manuel, T A; Maphalala, M A; Maphoto, L I; Mapisa-Nqakula, N N; Mars, I; Martins, B A D; Masala, M M; Maseka, J T; Maserumule, F T; Mashimbye, J N; Masithela, N H; Maunye, M M; Mayatula, S M; Maziya, A M; Mbadi, L M; Mbombo, N D; Mbulawa-Hans, B G; Mbuyazi, L R; Meshoe, K R J; Mfundisi, I S; Mguni, B A; Middleton, N S; Mkono, D G; Mlambo-Ngcuka, P G; Mnandi, P N; Mndende, O N; Mnumzana, S K; Modisenyane, L J; Moeketse, K M; Mohamed, I J; Mohlala, R J B; Mokoena, D A; Molebatsi, M A; Molewa, B G; Moloto, K A; Mongwaketse, S J; Montsitsi, S D; Moonsamy, K; Moosa, M V; Morkel, C M; Morobi, D M; Moropa, R M; Morwamoche, K W; Moss, M I; Mothiba, L C; Motubatse, S D; Mpahlwa, M; Mpaka, H M; Mshudulu, S A; Mthembu, B; Mudau, N W; Mzizi, M A; Mzondeki, M J G; Nair, B; Nash, J H; Ncube, B; Ndlovu, V B; Ndzanga, R A; Nel, A C; Nel, A H; Nene, N M; Newhoudt-Druchen, W S; Ngaleka, N E; Ngcengwane, N D; Ngculu, L V J; Ngubane, B S; Ngwenya, M L; Nhleko, N P; Nhlengethwa, D G; Niemann, J J; Njobe, M A A; Nkomo, A S; Nobunga, B J; Nqodi, S B; Ntombela, S H; Ntshulana-Bhengu, N R; Ntuli, B M; Ntuli, S B; Odendaal, W A; Olifant, D A A; Oliphant, G G; Omar, A M; Oosthuizen, G C; Pahad, A G H; Phala, M J; Pheko, S E M; Phohlela, S; Pieterse, R D; Rabie, P J; Rabinowitz, R; Radebe, B A; Radebe, J T; Rajbally, S; Ramgobin, M; Ramotsamai, C M P; Rasmeni, S M; Rhoda, R T; Ripinga, S S; Saloojee, E; Schippers, J; Schneeman, G D; Schoeman, E A; Scott, M I; Seaton, S A; September, R K; Serote, M W; Shope, N R; Sibiya, M S M; Sigcau, S N; Sigcawu, A N; Sigwela, E M; Sikakane, M R; Simmons, S; Sithole, D J; Skhosana, W M; Skosana, M B; Smit, H A; Smith, P F; Smith, V G; Solo, B M; Solomon, G; Sonjica, B P; Sosibo, J E; Sotyu, M M; Southgate, R M; Swart, S N; Thabethe, E; Tinto, B; Tolo, L J; Tshivhase, T J; Tshwete, S V; Turok, B; Vadi, I; Van den Heever, R P Z; Van der Merwe, A S; Van der Merwe, J H; Van Deventer, F J; Van Jaarsveld, A Z A; Van Wyk, A (Anna); Van Wyk, J F; Van Wyk, N; Xingwana, L M T; Zita, L; Zondo, R P; Zuma, J G.
NOES - 33: Andrew, K M; Bell, B G; Blanché J P I; Borman, G M; Botha, A J; Bruce, N S; Clelland, N J; Cupido, P W; Da Camara, M L; Davidson, I O; Delport, J T; Eglin, C W; Ellis, M J; Farrow, S B; Gibson, D H M; Grobler, G A J; Heine, R J; Jankielsohn, R; Lee, T D; Maluleke, D K; Moorcroft, E K; Ntuli, R S; Opperman, S E; Schalkwyk, P J; Schmidt, H C; Selfe, J; Semple, J A; Seremane, W J; Smuts, M; Sono, B N; Swart, P S; Taljaard, R; Waters, M.
Motion accordingly agreed to.
ORDER OF PRECEDENCE: QUESTIONS
(Draft Resolution) The ACTING CHIEF WHIP OF THE MAJORITY PARTY: Mr Chairperson, I move the draft resolution printed in my name on the Order Paper, as follows:
That, notwithstanding the provisions of Rule 29(8), Questions shall not have precedence on Wednesday, 14 November 2001.
Agreed to.
MEDIUM-TERM BUDGET POLICY STATEMENT
(Subject for Discussion)
Ms N L HLANGWANA: Chairperson, comrades, hon members, Minister of Finance, Comrade Trevor, I want to thank the Minister and the Deputy Minister of Finance for their support during the past two weeks, and also the members of the Joint Budget Committee for their commitment and hard work during the time of trial.
I am also honoured to be taking part in this debate on the Medium-Term Budget Policy Statement of 2001, as a Joint Budget Committee member, for the first time in the history of this Parliament. We are very proud to say that we have embarked on a new course of action which gives Parliament more insight into the budgeting cycle; ensures that our Budget reflects the needs of our people and that the spending of Government is in line with the policy priorities of the departments; and ensures that we hold the executive accountable in accordance with the Public Finance Management Act whilst we give them the ability to perform their functions.
Whilst we cannot effect any changes in the allocations of the current Budget, we can significantly influence allocations over the Medium-Term Expenditure Framework. It is also important to note that, in future, this Parliament will have the opportunity to engage at the early stages of drafting the Budget. Despite the teething problems and challenges that we faced as a new committee in the earlier part of our work, our deliberations over the past two weeks have reinforced the need for the existence of the Budget committee.
Having engaged with various departments and civil society in our deliberations, we would like to reinforce the following: Firstly, we applaud the broad Budget theme of alleviating poverty and reducing vulnerability as this can only help to reverse the inequalities among those who are economically deprived. Here, we are talking about the poorest of the poor, especially those in the rural areas.
Secondly, we are finally reaping ``the sweet fruit of liberty’’, that the Minister referred to in February 2001, of the five years of discipline in the form of a stable macroeconomic foundation to enable service delivery in accordance with spending priorities that were identified in the Medium-Term Budget Policy Statement.
Thirdly, our export figures are positive and thus improve the balance of payments. Inflation projections are in line with the Reserve Bank’s target. Interest rates are lower than they were two years ago and the impact of the reduction of income tax to lower and middle income earners will help to stimulate spending and saving which will result in the growth of our economy.
The only cloud on the horizon is the continued depreciation of the rand. But, given that our currency is grouped with the other emerging economies, many of which are experiencing even deeper depreciations, we are in better shape than other similar economies because of the low inflation rate. A positive spin-off to the weak rand is the expansion of our exports which will also contribute to positive growth figures.
The integrated and co-ordinated spending of departments in their priorities in cluster form, should be able to help us towards achieving reduction in poverty levels. In this way, we can directly target the plight of the poorest of our people. In the social services sector, in particular, co- ordination between social development, education and health will certainly address the prevention and cure of HIV/Aids and provide relief to those infected and affected by the disease. We welcome the increase in the child support grant as children are amongst the most vulnerable members of our society. Enabling free delivery of services by municipalities should further assist in alleviating poverty levels. The restructuring of the local government should help to build capacity in order to fulfil that spending priority.
The emphasis on investment and maintenance in infrastructure is an important priority of Government that will not only enable more efficient and effective service delivery, but will also contribute to employment creation and growth. This objective is an improvement on the past policies.
We were particularly pleased with the positive comments from organisations like Idasa, FFC, Sacob, Cosatu and an economist from Standard Bank. Broadly speaking, they all praised the macroeconomic achievements in the face of a projected economic slowdown.
Now that the scene has been set, we should progress further towards delivery of services. That is the area where the oversight role of Parliament is important. The presentations on the MTBPS were very informative and helped to assist us to perform our constitutional mandate and oversight function.
In conclusion, I would like to indicate that it is very important that we should note that the work that we went through and the whole process were very progressive. There was a lot of co-operation from all the members, even during the hearings. I must indicate that we appreciate the response of Ministers and their departments whom we requested to come and give us information so that we would be able to perform our duties. We appreciate their willingness to talk to us. We commend all the civil servants and everybody who came and gave us information that helped us to finalise this work. [Applause.]
The CHAIRPERSON OF COMMITTEES: Order! Just before I call the next speaker, may I indicate to members of the House that this is a very important debate
- a debate that is taking place in this House for the first time since we started in 1994. It is quite crucial that members should give those who participate in the debate today a chance to be heard. I appreciate the fact that you want to have some little meetings in the House, but if you intend doing so, could you please do it very softly and allow members to be heard. I would like to ask all the Chief Whips please to assist the Chair in getting the noise under control.
Mr K M ANDREW: Chairperson, I - along, I imagine, with the hon the Minister and most South Africans - experience mixed feelings when reviewing the Medium-Term Budget Policy Statement: pleasure and a sense of achievement that we have macroeconomic stability - let us not underrate either the importance of that or the difficulty in achieving it - of which we can all be satisfied and proud. Pleasure and a sense of achievement that, thanks to that stability, South Africa is better placed to weather the current global economic slowdown and turbulence than most other countries. Yet, at the same time, one has a sense of frustration that despite the macroeconomic stability, the fixed investment and economic growth at the levels that we need in order to reduce unemployment and poverty, remain elusive.
As long ago as February 1995, President Mandela highlighted the importance of growth and investment when opening Parliament, and I quote:
The Government considers it a matter of critical importance that everything should be done to encourage a climate conducive to sustained and high levels of economic growth. We are therefore ready to deal, and have been dealing with all matters that are relevant to this goal, in particular to ensure the creation of an investor-friendly climate. Everything must be done to encourage a significant upward movement in the rate of investment …
In August of this year, President Mbeki’s economic adviser, Prof Wiseman Nkuhlu, was more frank than most when he addressed a seminar. In a report in the Business Day of 31 August 2001, he said that there were serious shortcomings in economic policy and its implementation.
He further said South Africa had maintained macroeconomic stability, but now needed better incentives to attract investment and job creation. Lack of incentive to invest could be due to price levels, labour laws, skills and other factors. In making decisions on policy, Government had to deal with what was in the minds of investors. He continued:
The reality is that they control the purse and you have to do something to address their concerns.
He said the fact of the matter was that our domestic investors and foreigners were not investing in the country. The lack of success of small businesses in creating jobs showed that this sector also lacked sufficient incentives. He said:
In many countries this sector is the engine of job creation and this is not happening. This is a serious shortcoming.
He concluded that we should face that reality, bite the bullet and admit that there were, possibly, things they did not like and if we did not change them, we would just continue being poor and would not improve. He said:
You cannot just question the problem, and say that you are dealing with the problem.
This raises the difficulty I have in budget and other economic debates in this House. There is very little said about what the South African Government should and should not be doing. It is much easier to point at external factors beyond our control - and this is often very valid - which make our lives more difficult and to ignore problems of our own making. When opposition members offer criticism and make suggestions, they are more often than not treated with disdain and contempt, and the opportunity is frequently used to unleash personal invective.
Let me illustrate this with an example. Two weeks ago, speaking at a dinner, the Minister is quoted as saying that South Africa could no longer afford to produce thousands of graduates for the international labour market. Thousands of skilled people left the country each year resulting in the importation of scarce skills at high cost to the economy and the country to fill the vacuum created by those leaving.
In the Budget debate in March, I drew attention to the problem of a loss of skills through emigration and raised the question of what the causes were and what we could do about them. In his reply, the Minister, rather than responding to the issues raised, simply became personally insulting and suggested that we must forget about our European past. [Interjections.]
Ironically, he then suggested that the invocation by the hon Feinstein to our patriotic activism, should become our lodestar with this budget. Perhaps we should pause for a moment to ask whether Feinstein’s patriotic activism protected him when he refused to go along with an attempted cover- up by the ANC of the arms deal corruption. If so, why was he made to feel so uncomfortable and isolated that he resigned from Parliament? [Interjections.]
We welcome the Medium-Term Budget Policy Statement as a useful contribution to forward planning, sound budgeting and as a basis for debate. But we would remind the Government of President Mandela’s assurance that, and I quote:
… everything should be done to encourage … economic growth.
[Applause.]
Mr L ZITA: Chairperson and Deputy President, during the two weeks in which we were involved in this Joint Budget Committee, the hon Andrew was present. What was most alarming was that for the whole two weeks in which we were there, he was quiet. He did not say a word for the whole two weeks. It is interesting that today, in front of the whole country, he talks about proposals. [Interjections.]
On the question of emigration, it would be useful if the DP could issue a statement, as the head of the Jewish community did, encouraging the white youth in particular not to leave the country. That would be a welcome contribution. [Interjections.]
An HON MEMBER: We are doing that!
Mr L ZITA: You are not doing enough!
South Africa is a developing country. Any developing country has to address the challenge of development, improve the capacity and efficiency of its economy and move, as smoothly as possible, from an agricultural society to a predominantly urban society. In most of the developing countries, modernisation was not an organic process led by indigenous people. It was primarily in the interest of the dominant colonial classes, with total disregard for the interest of the oppressed people.
Though our colonisers stayed within the same borders as us, they were equally as callous about our fate as their European-based counterparts. Now that we are the captains of the ship, we must ensure that development is fundamentally informed by the interests of the people. We have to combine economic development and redistribution.
This challenge assumes particular difficulties in the context of globalisation. The interdependence of economies results in them being influenced by the developments in other countries. This does not cancel out the role of the state, but limits its possibilities. Therefore the state has to be both strategic and flexible.
Through this budget statement, we as the ANC can say that we are consolidating our capacity to use the state. This budget statement can do this, because a number of fundamental changes have occurred in our fiscal management and in the restructuring of the economy.
In 1996 we embarked on a prudent fiscal stance to protect our currency. As the ANC, we were also quite aware that we had to keep inflation down. We now have an inflation rate that is in decline, which means that prices overall are going down. Therefore, more money is being put back into the pockets of poor people. At the same time, we have the capacity to expand our spending in real terms. Therefore, there is an emerging expansionary orientation that is necessary for growth.
In 1994 we assumed responsibility of a very inefficient and protected economy. The relaxation of the tariff regime intensified competition and forced many of our industries to restructure, bring in new technologies and look beyond the confines of our domestic markets. Improved levels of productivity and the depreciation of the rand have increased our competitiveness. The depreciation can, of course, make it difficult for us to import technology, which has to be bought in dollars. But the challenge of translating these improvements into jobs still has to be fulfilled.
Despite these shortcomings, we project in the Medium-Term Budget Policy Statement that we are likely to survive the present global recession better than many other emerging economies. In the short to medium term, our economy can even register a reasonable growth. Taxation reinforces this expansionary approach. Tax cuts for the middle and working classes stimulate consumer demands and enhance the fairness of the tax system.
At the opening of Parliament this year, President Mbeki announced that more attention should go to the micro economy, to complement the consolidation of the macroeconomic achievements. This has to be done so that gains in the structure of the economy can be constantly strengthened. To achieve this, spending on economic infrastructure continues to grow. This is done through greater spending in the maintenance of water and road infrastructure, as well as additional spending of R350 million in the electrification programme.
As part of reducing costs in the economy, this budget seeks to improve the public transport system. Key initiatives in this regard are the rehabilitation of our national roads, new road networks and the refurbishment of the stock of the SA Rail Commuter Corporation.
Land reform initiatives also receive further funding. This is designed to give a boost to the land restitution programme, as well as to strengthen agricultural infrastructure such as communal dipping tanks and small irrigation schemes. In the same vein, this Medium-Term Budget Policy Statement complements municipal initiatives through supporting the delivery of a basic level of essential municipal services.
Though these are specific initiatives that are designed to improve the competition of our manufacturing base and seek to draw in the private sector in job creation initiatives, this takes the form of the rehabilitation and extension of road and rail networks such as the Lubombo SDI and the Skuifraam Dam here in the Western Cape. The flexibility in the state is also reinforced by the institutional innovations we are introducing, such as the integrated development plans for local government. These will further improve the state’s capacity to respond to the local needs of the people.
The Joint Budget Committee is pleased with the direction in which our budget is going. But, as a committee, we are aware of the levels of destitution that many in our country experience. It is in this light that we, as a committee, express support for and anticipate with keen interest the results of the Taylor Commission on the comprehensive overhaul of our social security system.
In the light of this intelligent, flexible, and yet strategic framework, it is not surprising that all stakeholders who appeared before us were, if not excited about, comfortable with the Medium-Term Budget Policy Statement. Indeed a ray of hope is shining on the horizon. [Applause.]
The MINISTER OF ARTS, CULTURE, SCIENCE AND TECHNOLOGY: Mr Chairperson, I am happy to participate in this ground-breaking debate, as it concerns the management of our budgets, policy options and the imperatives facing our country, from the fiscal perspective.
The Adjustments Appropriation Bill and the Medium-Term Budget Policy Statement are two very important documents that are being put out to the public and to the nation today. They are important to everyone in South Africa and, in the words of our Minister of Finance, Mr Trevor Manuel:
The 2001 Medium-Term Budget Policy Statement outlines matters that will shape the next years of our medium-term expenditure framework.
As a policy statement this debate becomes very important, not only for the National Assembly but for every Government department, be it national, provincial or local. Organised labour, civil society and commercial entities ought to concern themselves deeply about this 2001 Medium-Term Budget Policy Statement because, more than anything else we have debated in this Chamber, it determines whether or not we will be on a rising trajectory in the year 2002-03, and even possibly beyond. The Public Finance Management Act sets strict limits to the kinds of spending for which additional funds may be appropriated, and roll-overs and virements allowed.
Therefore, there is much to welcome in the new medium-term budget framework. It has the hallmarks of modern fiscal discipline, a stronger governance framework underpinned by the Public Finance Management Act, the advantages of better collection of revenue by Sars and, most importantly, a focus on addressing the needs of the most disadvantaged and excluded in our society. There are considerable advantages in having a clear long-term framework which gives our global partners the assurance that South Africa is going to stick to its fiscal guns, so to speak.
However, I would like to say that this debate must not just end here in this Parliament. It has to reach out into every household, into every factory, into every community, because it is these policies that shape the situation of benefits, the situation of advantage for all communities. We are happy that the Department Of Finance is allowing this possibility that the people’s representatives can participate directly in establishing the basis on which expenditure will be structured in this economy.
However, there are more cogent reasons why I support this debate. We are now living in a globalising world. This world is insisting on sustainable development in terms of social responsibility on the part of factories and employers, as well as environmental sustainability in terms of how we grow our crops, through integrated personnel management, so that there are no traces of dangerous residues in our vegetables and products, how we manufacture our garments, what type of substances and chemicals are used in leather tanning, for example. All these issues are now impinging on the new world culture in terms of sustainable development.
Countries in the South, which have enjoyed certain advantages such as cheap labour, will soon find that lower costs are not enough as a competitive advantage. It is also about being responsible people, about responsibility for the environment. This creates competitive advantage and we need to factor this into our budget planning, because unless we give attention to institutions of higher learning, to creating human resources that can create new technologies for our industries, technologies that will make it possible for us to have access to the markets of the industrialised countries of the West, we are not going to maintain our competitive advantage. For instance, even in the area of energy our low-cost, cheap coal-burning for electricity will very soon stop having a competitive advantage, because investors are now even insisting on clean energy.
So the whole tide is changing. It is no longer the comfortable zone where one could pay low wages and make huge profits. Countries like Bangladesh have learned, very painfully, that this path, this trajectory of progress and economic development, is very short-sighted.
I welcome this debate, because it gives us an opportunity besides punting our own departments in terms of the budget committee of Ministers, trying to get extra money. We are being forced to look at the policy imperatives that are underpinning thinking and development in our new democracy. [Applause.]
Dr P J RABIE: Mr Chairperson, hon Deputy President, hon Minister and hon members, a significant aspect of this statement is that the Government is not deviating from the policy of an inflation target which currently falls within the range of 3% to 3,6%. This must also be seen against the global economic slowdown and the continuing weakness of the rand against the US dollar. The depreciating rand raises the cost of important capital goods, but the fact remains that the Cabinet has decided that the target will remain at an annual 3% to 3,6% and this is, in fact, commendable.
The South African economy can be broadly categorised as an emerging commodity-driven economy. The weakening of the rand over the past twelve months has increased exports and revenue derived from secondary tax on companies and tax profits in the mining sector. Especially platinum mines have contributed to total revenue earnings. The increase of our GDP is expected to rise from 2,6% in 2001 to an average of 3,3% over the next three years. There is also relief for lower and middle-income taxpayers.
Allow me to mention that two fundamental changes occurred in our tax structure, namely the change from a source-based to a residence-based income tax, and capital gains tax. A prerequisite for sustained economic growth is foreign direct investment. Tax stability coupled with attractive, competitive tax structures, are also of critical importance in attracting foreign economic investment.
The announcement by the hon the Minister of Finance of a holistic review of the current tax regime for retirement savings is welcomed and long overdue. The proviso that the taxation of public benefit organisations to which taxpayers may make deductible donations was widened will alleviate the financial position of a number of NGOs that deal with the wellbeing of the less materially privileged members of our society.
A number of concessions relating to the recently introduced capital gains tax will allow a number of companies to reorganise themselves. This is basically aimed at ensuring the efficient allocation of capital, and will have to be implemented in this fiscal year. Whether it will have the desired effect to ease the burden to comply with this very technical and complex tax is rather questionable.
One of the key spending areas in this Medium-Term Budget Policy Statement is the social services cluster. It is extremely important - especially with regard to the increases. Allow me to mention that protection goes up by 6,8%, economic services by 8,5% and administration services by 7,6%. Grants to tackle HIV/Aids through community-based care and life skills will amount to R110 million in 2001. It will increase to R320 million in 2002/2003, R420 million in 2003/2004 and R546 million in 2004/2005.
To conclude, the Medium-Term Budget Policy Statement is a representative document that covers the policies that relate to national, provincial and municipal government, as well as NGOs and private companies. Allow me to congratulate the hon the Minister and his officials on this excellent, user- friendly document. The New NP supports the statement. [Applause.]
Dr G W KOORNHOF: Chairperson and hon members, may I first express a word of appreciation on the establishment of the budget committee which has reviewed the Medium-Term Budget Policy Statement during the last couple of days through hearings.
This engagement of a parliamentary committee on the Medium-Term Budget Policy Statement leads this country and this Parliament into a new era of evaluating and making inputs to improve the budget process. It will result in better accountability and oversight, and bodes well for a budget that bears the signature of general voters. It is a vast improvement on the secretive non-transparent method of budgeting that this country was subjected to under the previous regime.
One of the greatest challenges arising from the Medium-Term Budget Policy Statement is that of insufficient capacity, especially at provincial and local government levels, to spend the allocated funds on earmarked programmes. During the hearings of the budget committee, Idasa pointed out, for example, that up to September 2001 provinces had on aggregate, only managed to spend approximately 29% of their capital budgets. In contrast, current spending by provinces at the same time seemed to be on track with 47% of the aggregate budget. The same picture emerged with regard to the spending of provincial conditional grants, where only 16,8% of these grants had been spent by September 2001.
In order to succeed in the implementation of successful economic policies, we will have to find ways to improve the capacity to deliver, and also to create the necessary skills. There is a sense of urgency required. When one looks at trend lines over the next three years, we would suggest that attention be given to the following three issues.
Firstly, the need to reduce the current high levels of unemployment and the need to create jobs for new entrants to the labour market requires innovative measures to be introduced. We believe that it is especially the public sector that has an important role to play in this regard, and we would like to have the opportunity to discuss workable and viable options in this regard with the Government.
Secondly, small business development remains the engine of growth for the economy. It is specially this sector, if handled correctly, that can stimulate domestic growth. It will not only empower people, but also help to create jobs.
Lastly, capital expenditure by national Government has become a major priority. It is crucial that even more resources be devoted to infrastructure development. This trend line can be strengthened. Again, we will be able to put positive proposals on the table for discussion. The final test will be that money will reach the target that it is earmarked for. [Applause.]
The CHAIRPERSON OF COMMITTEES: Order! Hon members, just before the following speaker takes the podium, I wish to recognise our elders who have visited Parliament today from an area of Gauteng province called Benoni. They are seated in the public gallery. We welcome you to come and listen to discussions. [Applause.]
Ms B P SONJICA: Chairperson, firstly, I would like to acknowledge and commend the role and work of a group of masters students in economics from the University of the Western Cape led by a lady called Lesley who, through this process, had an opportunity to gain exposure to, participate in and contribute to matters of budgeting and public policy. Hopefully, this experience will serve to widen their scope in making choices about shaping their careers.
The theme of this budget, as already been expressed, is ``Reducing poverty, inequality and vulnerability’’. This is an expression of Government’s commitment to better the lives of poor people, a commitment that it has sought to stick to by increasing social spending in recent years.
I will be speaking about the allocations for provincial and local governments respectively, which will be getting a major share from the additional funds of the 2002 budget. On the Medium-Term Budget Policy Statement, the Government commits itself to an increase of R4 billion and R5,4 billion for the provinces over the medium term, while local governments’ baseline budgets will rise by 20,2% and 19,4% over the term.
Both provincial and local governments are key in realising the Government’s objective of eradicating poverty through an integrated approach in the delivery of services. For this integrated approach to succeed, co- ordination and co-operation are needed between departments and spheres of Government in line with the integrated rural development strategy. This strategy marks a departure from the way in which Government has been doing things, and enhances better co-ordination of existing resources for a greater impact on growth and development.
Spending will therefore be aimed at investing in infrastructure, maintenance and rehabilitation of existing infrastructure, and enhancement of South Africa’s economic growth. All these, it is hoped, will contribute to job creation.
Ikhona ke nenkxaso-mali ejongene namaphandle. Siyayivuyela yayesiyixhasa. Siyayivuyela nemali eyongezelelweyo ejongene nemihlaba, ukuvuselela iidiphu zempahla efuywayo, iindlela zasezilalini kunye nokuxhasa amafama asakhulayo. Yonke le nto ibonisa ukuba lo Rhulumente uzikhathalele iimeko zabantu abahlelelekileyo, eyihlonipha nendlela abantu abaphila ngayo ngokuthi aphucule iinkonzo kwezo ndawo bahlala kuzo.
Kwakhona uPhulumente uzibophelela ekubeni uyakuthi chatha kwimali yokusa amanzi, iinkonzo zangasese kunye nombane kubantu abangenazo ezi nkonzo. Ooceba kufuneka ukuba baqale kwangoku ukudibanisa izicelo zabo ukuze bangalibazisi xa kufika ixesha lokuzifaka. KwaXhosa kuthiwa ``Evuka mva idliwa zizagweba’’. (Translation of isiXhosa paragraphs follows)
[Funding is also available for the development of rural areas. We are happy about it and also welcome it. We also welcome the increased allocation for land, the reintroduction of animal dips, the development of rural roads and the provision of support to emerging farmers. All this shows that the Government cares about the plight of the poor. By providing services in the areas where people live, the Government also shows that it respects the way of life of the people.
Furthermore, the Government has committed itself to increasing the allocation for the delivery of water, toilet facilities and electricity to those who do not enjoy these services. Councillors must start consolidating their requests now so that there are no delays when these have to be submitted. The Xhosas have a saying that goes: Procrastination is the thief of time.]
The Medium-Term Budget Policy Statement projects an allocation of R2,8 billion for provincial infrastructure grants which will enhance faster delivery over the long term, which we also appreciate. We also welcome the initiatives of the provinces to enter into partnerships with the private sector. At this point I wish to take this opportunity to acknowledge with appreciation the involvement of the private sector in development, as we all know the programme that Madiba is running. However, we hope that such partnerships will ensure transfer of skills from skilled to unskilled South Africans, as this will have positive results on our economy in the long term.
We welcome the move towards institutional and legislative reform to improve the capacity of provincial governments and accelerate the pace at which projects are rolled out. The Medium-Term Budget Policy Statement acknowledges the transformational challenges that are faced by local governments. These, to a certain extent, affected the smooth transfer of funds, thus slowing down the process of delivery of much-needed services to the people.
To meet these challenges, the Medium-Term Budget Policy Statement projects a faster growth on local government allocations, more than national and provincial governments respectively. However, it would be prudent to ensure that the capacity- building programme, especially for local government, is implemented as soon as possible, so as to avoid committing the same mistakes that were committed before.
The introduction of the new budget format’s improved reporting requirements that will ensure that municipalities report regularly on income and expenditure as well as on the outputs of this programme is the right step towards ensuring sound management. It is also necessary to establish proper accounting mechanisms in situations where there is no concurrent functioning.
Municipal infrastructure grants will grow by 17% per year over the next three years, thus contributing to the provision of services. The equitable share is projected to increase by 13,9% a year to R5,7 billion by 2004-05. The equitable share formula is adjusted to take account of free basic services to equalise salaries across amalgamated municipalities. Most importantly, a portion of the share targets physically weak municipalities. However, the objective is that these municipalities should be strengthened and capacitated through institutional reform so that they are able to generate their own revenue in future.
In conclusion, the participation of people in all these processes cannot be over-emphasised. I see the light is flickering, but I want to conclude by quoting the President when he said:
We are on course. Steadily the dark clouds of despair are lifting, giving way to our season of hope.
We support the Medium-Term Budget Policy Statement. [Applause.]
Mr L M GREEN: Chairperson, Deputy President, Ministers and members, the ACDP welcomes the medium-term expenditure framework. The South African economy has been performing admirably in weathering the negative economic fall-outs since the 11 September attack on America.
Our sound fiscal policies are leading this country into an attractive emerging market in terms of future investment. We, of course, cannot wait too patiently for a better future for our nation. We must aggressively market this country more effectively. We have successfully played to the tune of foreign imperatives, but have not been equally successful and aggressive in selling the potential benefits this country has to offer the world. There is much room for improvement.
Inasmuch as we are achieving macroeconomic success, we lag desperately behind in meeting our microeconomic objectives. It is no small indictment to admit that South Africa’s poor people are becoming poorer. Room for improvement starts here. It is not enough to measure poverty in terms of social delivery standards only, even if there has been certain limited improvement in this regard. We must also measure poverty in relation to a nation’s perception of how well the country is governed. South Africa’s foreign debt amounts to 19,7% of the GDP. We welcome this and we encourage the Minister of Finance to further reduce the foreign debt.
The ACDP also welcomes the decline in interest rates. The prime rate has fallen to 13%. I would like to say to Minister Manuel we are looking forward to a future of a single digit interest rate and we hope that this will be achievable. We welcome the inflation target band of 3% to 6% and we hope that we will stay closer to 3% than to 6%. The ACDP is heartened by the possibility that we can establish ourselves as a great nation at the southern-most tip of Africa. Therefore, the ACDP supports this Medium-Term Budget Policy Statement.
Mnr P J GROENEWALD: Mnr die Voorsitter, ten aanvang wil ek vir die agb Minister sê die VF steun hierdie mediumtermynbegrotingsbeleid. Die werklikheid is dat hierdie mediumtermynbegrotingsbeleid ook goed is vir die makro-ekonomiese sfeer. Met my beperkte tyd wil ek my egter toespits op Hoofstuk 5, wat spesifiek oor die mediumtermynbestedingsraamwerk handel wat vir al die nasionale en provinsiale sfere van regering geld. Met betrekking tot die beleidsprioriteite en die begrotings soos gestel in die dokument word daar prioriteite gevestig ten opsigte van werkskepping en die heropbou van plaaslike regering deur gratis basiese dienste.
Ek wil vir die agb Minister sê dit is een ding om ‘n goeie raamwerk en ‘n goeie beleid op ‘n makrovlak te hê, maar die probleme ontstaan wanneer dit kom by die plaaslike vlak waar dit uitgevoer moet word. Met betrekking tot werkskepping kan ons maar vir mekaar sê dat daar ‘n werkloosheidversekeringsfonds is waaraan werknemers 1% en die werkgewer ‘n verdere 1% bydra. Ons kan baie fondse daarstel, maar op die ou einde is die vraag steeds: hoe gaan ons sorg dat ons mense, wat meer en meer werkloos raak, werk kan kry?
Wat betref die aspek van plaaslike regering help dit nie ons sê ons kan gratis dienste lewer, net om dan eenvoudig die finansiële verantwoordelikheid van die plaaslike regering na die sentrale Regering te probeer verskuif deur te sê daar moet verdere fondse van sentrale vlak af voorsien word vir gratis basiese dienste nie. Nee, wat die VF betref, sal die Regering dringend aandag moet gee aan die betaling, deur dié mense wat kan betaal, vir dienste op plaaslike regeringsvlak. Die uitstaande skuld verskuldig aan plaaslike regerings beloop tans volgens antwoorde op vrae in hierdie Huis al meer as R12 miljard. ‘n Mens kan nie dienste verwag as jy nie daarvoor betaal nie. [Tyd verstreke.] (Translation of Afrikaans speech follows.)
[Mr P J GROENEWALD: Mr Chairperson, at the outset I would like to tell the hon the Minister that the FF supports this medium-term budget policy. The reality is that this medium-term budget policy is also good for the microeconomic sphere.
However, in my limited time I would like to focus on Chapter 5, which deals specifically with the medium-term expenditure framework which applies to all the national and provincial spheres of government. With regard to the policy priorities and the budgets as set out in the document, priorities are established with regard to job creation and the reconstruction of local government by way of free basic services. I want to say to the hon the Minister that it is one thing to have a good framework and a good policy at the macro level, but problems arise when it comes to the local level where they have to be implemented. With regard to job creation we can tell one another that there is an unemployment insurance fund to which employees contribute 1% and the employer contributes a further 1%. We can establish many funds, but in the end the question remains: How are we going to ensure that our people, who are becoming unemployed to an increasing extent, can get work?
As regards the aspect of local government, it does not help for us to say that we can deliver free services, and then to simply try to shift the financial responsibility of local government to central Government by saying that further funding must be provided from the central level for free basic services. No, as far as the FF is concerned, the Government will have to give urgent attention to the payment, by those people who can pay, for services at local government level. The outstanding debt owed to local governments currently amounts to more than R12 billion, according to replies to questions in this House. One cannot expect services if one does not pay for them. [Time expired.]] Mr I S MFUNDISI: Chairperson and hon members, the Medium-Term Budget Policy Statement provides an update on economic and fiscal developments since the February Budget and sets out proposals for the 2002 MTEF. In a church situation one would compare it to the reading of the banns. Those against such proposals should speak right away or forever hold their peace.
Despite the 11 September terrorist incidents in the United States and the raging war in Afghanistan, which saw the international economic trend deteriorating, South Africa’s trade performance has remained impressive in the first nine months of 2001. However, it has become evident that spending patterns of departments and provincial administrations have to improve.
The National Treasury, in their presentation to the committee, brought to light that most departments and provincial administrations continue to spend less than they have been allocated. This practice results in roll- overs which are not welcomed. Our advice to them is that if they fail to plan, they plan to fail. Failure to plan is evident in that some departments justify their roll-overs by saying that it took time to get consultants to assume their duty or that they did not have personnel to do the work, hence the delay in starting. And delays in anything are tantamount to denial of services.
Notwithstanding all that, there are plusses that we can add to our economic performance, among them growth of 10% in merchandise export volumes in the first half of the year compared to the same period in 2000. Service exports grew by 15% over the same period and the consumer price index increased by 5,8% within the target range for next year. For 2002-03 we look forward to a budget that will make poverty, inequality and vulnerability things of the past. Spending will have to be concentrated on education, health, municipal and welfare services, as well as the security and criminal justice departments. Let us get down to work and give affordable services to the people. The UCDP supports the Medium-Term Budget Policy Statement.
Dr S E M PHEKO: Chairperson, the PAC’s response to the Medium-Term Budget Policy Statement by the hon the Minister of Finance is that it gives this country the opportunity to reflect on the R48 billion spent on servicing the apartheid debt. Money saved from servicing this debt could be used to increase expenditure on social development. This is why the PAC continues to call for the cancellation of the apartheid debt. That debt was incurred to fight the barbaric system of apartheid and colonialism which was declared a crime against humanity by the United Nations.
The PAC is calling for a dual rate system. The structure and operation exchange markets have changed fundamentally and the dual exchange system is the best option for protecting the rand in markets which are run like a global casino. Early this year the rand was undervalued by 50% against the American dollar. This shows that speculative traders determine the value of the rand rather than the quality of goods and services that we sell. This means that South Africa’s assets in industry, commerce and agriculture are available to foreign investors at well below their true value and the country loses.
We support this Medium-Term Budget Policy Statement.
Dr S C CWELE: Chairperson, my input will focus on the impact of the Medium- Term Budget Policy Statement on the social services cluster, because social spending is the core of addressing poverty and vulnerability. We welcome the expansionary budget because it releases more resources for social spending in real terms. This translates to R5,6 billion next year, and a further R7,5 billion the following year. On average this means an increase of 8,7% for welfare and 8,2% for health.
More significantly, the ANC welcomes the increase in nonpersonnel spending in this cluster, releasing further resources for programmes to benefit the poor, such as more classrooms, textbooks, equipment, learning support material for education, hospital maintenance, better distribution and availability of medicine at primary health care level and increasing the capacity of the Department of Health to cope with the impact of HIV/Aids.
The increase in infrastructure spending will also benefit Health and Education. The ``sweet fruits of liberty’’ will come in the form of water, roads and electricity roll-outs, which will result in a better quality of services in poor areas. The bulk of social spending is implemented at provincial level. The development of national norms and standards by the National Government ensures equitable provision of services across provinces. For example, this means that a child in the rural Northern Province will receive the same public education as a child in urban suburbs, in the long-term.
Much has been said about the lack of capacity for social spending on the ground. We welcome the programmes to empower the managers to turn these resources into actual programmes to benefit the poor and the vulnerable. Secondly, the MTEF also offers the opportunity for better planning for spending. The programme managers will know in advance the minimum amounts which will be available for the next three years. The Budget committee recommends that the portfolio committees of Parliament and civil society monitor and evaluate both the quality and pattern of spending throughout the year.
This Government is demonstrating its commitment to dealing with the impact of HIV/Aids, by committing more resources in the medium-term. This financial year alone, the provinces are spending about R4 million in treating the sick. Nationally, close to R1 billion is spent on prevention. A total of R110 million, rising to R420 million in the medium-term is allocated for life skills programmes and home-based care. We are also expanding the roll-out for the mother-to-child transmission programme. In short, these programmes are directed at prevention and improving the quality of life of those infected and affected by the epidemic because no one has the cure.
The other specific positive development in the social services Cluster is the rationalisation of health grants. This ensures easier access and utilisation of these grants. Some of these grants, for instance, will be used to ensure better distribution of specialists through the development of postgraduate training capacity in all of our provinces. Secondly, we will be improving the quality of education productivity through the rolling out of the early childhood development programme (preschooling) over the next 10 years.
Ngamafushane, siwushayela ihlombe umgomo nezilokotho zikaHulumeni zokusiza izingane ezihluphekayo ngokuzilolonga futhi azilungiselele ukuqala ukufunda. Uma sibheka kwezenhlalakahle, uHulumeni uzoqhubeka ukuxhasa abahluphekayo ngezimpesheni, ikakhulukazi izingane. (Translation of Zulu paragraph follows.)
[In short, we applaud the Government policy and good intentions to assist poor children by training them so that they may be ready to start school. As far as welfare is concerned, the Government will continue helping poor people with pensions, especially the children.]
We encourage the Government to continue with the developmental social welfare approach targeting the poor and the vulnerable. We shall be awaiting, with eagerness, the Government’s report, produced by the Commission on Comprehensive Social Security.
In conclusion, as the ANC we are proud to recommend that Parliament adopts the Medium-Term Budget Policy Statement. We are on the right track with regard to reducing poverty and vulnerability. [Applause.]
Miss S RAJBALLY: Chairperson, the Deputy President and Ministers, the long cumbersome hours put into drawing up these budgets cannot go unnoticed. The many departments, personnel and all those thanked by the Minister in his statement on 30 October 2001, are thanked by the MF as well. We note that it is not just about allocating money, it involves a lot of strategy, planning, communication, dedication, hours of brain work and many difficult negotiation sessions to reach this statement and its undertaking.
The MF supports the aim of the Budget to target poverty and vulnerability, issues that continue to hinder the development of our community. Further, the large allocation made for social services is supported, especially in the light of the aim to target more resources and services that directly influence living conditions in the community.
Although transparency allows for the citizenry to view the progress made by the Government in delivering, the changes resulting from the improvements made by the Government show that the citizenry actually experiences these through education, health care, social grants, welfare services and housing. These are areas crying out for sustainable development. These improvements would certainly boost economic development and reduce the vulnerability of communities.
The growth of 6,7% over the MTEF period for justice, protection and security services is applauded. The allocation to health care grants appears in order, and the increase in the number of hospitals in the nine provinces is applauded.
Having viewed the allocations made, there are no objections. But it is hoped that departments will make use of their allocated budgets to the best of their ability so as to attain the ends that their budgets so precisely aim to attain. The MF supports the Medium-Term Budget Policy Statement. [Time expired.] [Applause.]
Mr C AUCAMP: Chairperson, I can advise hon Ministers that they can enjoy a cup of tea because it is the NCOP that is on today and not us. The AEB supports this Medium-Term Budget Policy Statement. Allow me to make a few remarks, though. It is official now that the growth rate this year will not be the expected 3,5% of the February Budget, but 2,6% instead, with the expectation that the rate of 3,7% will only be reached in 2004. This is not enough to cater for the basic needs of the country, especially in the critical field of job creation.
It is the opinion of the AEB that this slower growth rate is not the result of the Minister’s Budget, but rather of other policies of the Government that affect investor confidence. Possibly the most important are the reluctance of the Government to distance itself clearly and officially from the Mugabe tyranny in Zimbabwe, the President’s viewpoint on Aids, the Government’s inability to address the so-called ``unforeseen consequences’’ of our labour laws, as well as the consequences of affirmative action. This Medium-Term Expenditure Framework is, indeed, a wake-up call for the Government to alter these policies sooner rather than later.
Die AEB glo dat die belastingverligting wat die Minister in die vooruitsig gestel het, sowel as die verhoogde besteding aan veral infrastruktuur, wel daartoe sal bydra dat ekonomiese groei gestimuleer word. Groot onsekerheid heers egter by pensioenarisse in afwagting op die resultate van die ondersoek na die belasbaarheid van aftreegeld.
Die verhoogde besteding van 15% op plaaslike regeringsvlak moet ook verwelkom word. (Translation of Afrikaans paragraph follows.)
[The AEB believes that the tax relief which the Minister held out the prospect of, as well as the increased expenditure on especially infrastructure, will indeed contribute to the stimulation of economic growth. However, there is great uncertainty amongst pensioners in expectation of the results of the investigation into the taxability of retirement money.
The increased expenditure of 15% at local government level should also be welcomed.]
We cannot have a situation of ``what Trevor gives, the mayor takes’’.
‘n Positiewe aspek is die dalende inflasiesyfer wat vir die volgende jaar op 5,5% en vir 2004 op 4,5% voorsien word. In dié verband verdien die Minister krediet vir effektiewe fiskale beheer.
Kortom, om mee af te sluit, die AEB glo dat die Minister en sy departement goeie werk doen, deursigtig optree en deur die beleid van ‘n drie-jaar beplanning baie doen om beplanning te vergemaklik en ekonomiese vertroue te versterk. Dit is hoog tyd dat sy kollegas hul kant bring met beleid en optrede wat vertroue, groei en ekonomiese stabiliteit kan verseker. [Tyd verstreke.] (Translation of Afrikaans paragraph follows.) [A positive aspect is the falling inflation rate which is projected at 5,5% for next year and at 4,5% for 2004. In this regard the Minister deserves credit for effective fiscal control.
In brief, to conclude, the AEB believes that the Minister and his department are doing good work, are acting transparently and through the policy of a three-year plan are doing a lot to make planning easier and to strengthen economic confidence. It is high time that his colleagues play their part with policy and action which would ensure confidence, growth and economic stability. [Time expired.]]
Ms R TALJAARD: Chairperson, hon Minister of Finance and hon members, one of the cornerstones of a constitutional democracy is the principle of transparency and accountability. This principle is indeed enshrined in the founding provisions of our Constitution. Unfortunately, both the track record of the Treasury as well as the principle that is enshrined in the Constitution have been breached in this year’s Medium-Term Budget Policy Statement.
As the depreciation of the rand continues, seemingly unabated, the rest of the impact of exchange rate volatility on the cost of the strategic defence procurement realises a thick crimson cloak that has increasingly been drawn over the expenditure as well as the financing figures. Unfortunately, the limited reach of the oversight role of our new Joint Budget Committee was clear when the Department of Defence failed to appear before it. We trust that this will not be repeated in the future and that the oversight deficit this committee already suffers from in its infancy will be addressed.
Instead of having the figures clearly stated in order to show the impact of the depreciation of the rand on the cost of the strategic defence procurement, we have the following blind statement in the Medium-Term Expenditure Framework:
Proposed allocations to defence increase over the medium-term to accommodate the impact of higher than expected depreciation of the rand on the cost of this strategic arms package and to provide for the enhanced role of the SANDF in regional peacekeeping activities.
I am certain that the Warburg Dillon Reed model has produced a number of interesting updates after the rollercoaster ride of the rand and the substantial post-September-11 depreciation, as well as the possible inflation and lower growth rate scenarios that become inevitable as global recession looms in the context of a potentially protracted war.
In fact, a number of fundamental risk factors of this very risky procurement which engaged the affordability team are materialising with very far-reaching cost implications and possible guidance-of-payment implications. Firstly, an unsuccessful defence budget restructuring is not making the transition from a personnel-skewed budget to a capital expenditure-skewed budget that is required for this procurement. Secondly, the adverse exchange rate movements that I have highlighted earlier, including an exchange rate depreciation in excess of 20%, lower underlined economic growth. We have already seen a downward revision for this year and the global environment does not look promising in terms of increased economic growth.
It has been disconcerting to witness members of the executive hiding behind exemptions of the Promotion of Access to Information Act instead of abiding by the vision of open and accountable governance entrenched in our Constitution. We need to remind members of the executive that the Promotion of Access to Information Act is not a shield for Ministers; it is a sword in the hands of those who seek accountability and transparency, be it in our constituencies, in civil societies, on the benches of opposition or in the media. The Minister of Finance will have to answer questions relating to this procurement for years to come. Let us hope that these answers will be honest and forthcoming. [Time expired.] [Applause.]
Mr D A HANEKOM: Chairperson, this is my maiden speech and I hope members will listen carefully. This new Joint Budget Committee is an important initiative. It is the Budget that makes everything happen in our country, or not happen as the case may be. It is the single most important policy instrument the Government has to achieve its objectives. It affects all our lives quite fundamentally. One can have the best laws in the country, the best laws in the world, the best constitution, the best policies and the best programmes, but the bottom line is that if one does not have the money to pay for them, one does not get them. And the bottom line is that if one pays for everything out of borrowed money one will not be able to do very much the following year, and finally one will be bankrupt.
The budget affects every citizen of our country, making this short debate arguably one of the most important debates of this House. Even as we speak, hon members here are working out how they are going to pay their bills at the end of this month. If one plans carefully, one may be able to buy that TV set next year or that new pair of shoes that one wants to buy for one’s child. But one has to budget and plan and stick to one’s plan. And so it is with Government. The budget and everything that goes along with taxes - debt reduction, infrastructure spending, spending on health, spending on education, spending on pensions - affect every one of our citizens in a very real way.
Minister Manuel has managed to pull some rabbits out of the hat along with his team. He will have to explain to us how he manages to do that. Taxes have come down. That is good news! Revenue has gone up. That is remarkable! Taxes have come down but there is more money to spend, and indeed more money has been allocated to social programmes. Inflation is coming down steadily. Interest rates are also coming down steadily. The Minister will have to explain that. There must be some bodies!
How about our reserves? Gross reserves are improved. What about the foreign debt? There is an improvement in the foreign debt situation as well. In 1999 it was 9,6% of the total export earnings, and in 2000 it was down to 6,2%. Gross Government dissaving is declining. The economists are telling us that this is good news. But surely, this must be at the expense of something - like gross domestic fixed investment, for example? Not so. Gross domestic fixed investment has gone up, and Government’s contribution is growing. This is quite a remarkable achievement. One day Trevor Manuel must tell us the secrets because we need to know.
But of course, as every South African will know, we still have a long, long way to go. We still have challenges of unemployment in our country on a very large scale; poverty levels are alarmingly high and crime is something that affects every one of us very badly.
The good news is that the 2002 Budget will focus on poverty as no other budget has ever done. The challenge, however, remains to eradicate poverty altogether, and we are going to have to look at innovative ways of doing so. We have a very significant proportion of our population that is not covered by any social grants. Elderly people receive old age pensions, disabled people receive disability grants, single mothers receive child support grants, but what about millions of other people that have nothing? That is a huge challenge facing us and we will have to deal with it in an innovative way.
But on the protection services, as they are called - justice, police and correctional services - we have to say that we welcome the fact that this Budget has increased the spending on crime and protection services by 8,9%. Economic growth will mean very little to people for as long as many children in our society are being raped and abused. One can have an excellent state housing programme but as long as one is not secure in that house we have a problem. The ANC really welcomes this additional spending on protection services. [Applause.]
We were actually amazed in this very important committee to hear from the DP this morning that they would abstain from voting in favour of this Medium-Term Budget Policy Statement. All parties on this committee other than the DP indicated that they would support the Medium-Term Budget Policy Statement. Civil society has broadly welcomed the direction this policy statement takes us - that includes trade unions, NGOs and many others. Business has welcomed it, but not the DP. I truly think the DP seems to have become completely moribund, and has nothing constructive to offer this country.
May Trevor keep up the good work! And may Maria keep up the good work! We still have huge challenges ahead. The ANC supports this Medium-Term Budget Policy Statement enthusiastically. [Applause.]
The MINISTER OF FINANCE: Madam Speaker, hon members, it is the fifth time that we have tabled the Medium-Term Budget Policy Statement, but it is the first time that it has been debated like this in this House, as a consequence of this very detailed process that the Budget committee undertook.
I want to emphasise that this is neither the Budget, nor, as in the press have coined it, the ``mini budget’’. It is, as the name suggests, a very important statement within the cycle, that gives a clear indication of what is to come in February. But perhaps more importantly, Parliament, with the help of the Chair of Committees, constructed this Budget committee, thereby clearly strengthening both the insight that Parliament has into budget- making and its oversight function in the period ahead.
In respect of the debate itself, perhaps I would like to just thank the hon Louis Green for his comments, because I think it cut right to the heart of what this is about. The key question is: What do we do in respect of the choices we exercise, both in terms of policy and spending, to ensure that we do, indeed, become the great nation that our people deserve to be part of? And that, I think is the spirit that drives us all. It is sad that some would continue to seek the dark side of the moon. I think we will just move past them.
In the spirit of so many of the contributors to this debate, let me express appreciation and ask that we march on to the greatness that will give our people the quality of life that they deserve. [Applause.]
Debate concluded.
ADJUSTMENTS APPROPRIATION BILL
(First Reading debate)
Mrs R R JOEMAT: Madam Speaker, hon members, the Budget of the financial year ending 31 March 2002 was dubbed ``Manuel’s sweet fruit budget’’, and now the Bill before us is asking hon members to consider adding more fruit to this bowl.
When it comes to preparing a budget, departments estimate their expenditure and submit draft expenditure applications. National and provincial departments go through strategic sessions to identify the departmental goals and prepare an initial three year budget estimate. They need to try and keep in line with the three-year allocations determined in the Medium- Term Expenditure Framework cycle.
Each department works out an estimated budget without knowing what eventually will be allocated to it. It is almost like projecting one’s personal budget for the following year without knowing what one’s income or increase will be, because one will only receive that increase at the end of the following year. So, therefore, if an Adjustments Appropriation Bill needs to be passed, it generally means that there was a shortfall in the original Budget to meet the obligations of the Government.
In terms of the Public Finance Management Act, chapter 4 section 30, adjustments to the Budget are allowed only under certain narrow and specific conditions, the major ones being unforeseeable and unavoidable expenditure that could not have reasonably been predicted.
We are allocating these extra funds to departments. We note in the Auditor- General’s report that 24% of the total amount of the adjustments estimate for the 2000-01 financial year was not utilised. There is a need to determine if the amounts not utilised are unexpended funds or real savings generated by reprioritising activities.
Budgetary controls and sound financial controls must be vigorously applied and actual results must be continually subjected to scrutiny. I want to focus only on certain unforeseeable and unavoidable expenditure in specific programmes of certain Votes.
As far as communications is concerned, an amount of R600 million has been allocated as compensation for the operational losses of the SA Post Office for two years, ending 31 March 2002. That means an average of R300 million each year was needed. If we track the budget ending March 2000 and the one ending March 2001, we note that the decrease in these budgets is mainly attributed to the decrease in the SABC subsidy and the termination of the Post Office subsidy.
The hon Minister’s vision was the elimination of the subsidy to the SA Post Office in the 2000-01 financial year, but this could not be realised. One of the reasons for this was mismanagement of resources in the Post Office. We want to commend the hon the Minister for the good work that is being done to root out corruption, and urge her to continue with the investigation into the operations of the SA Post Office to ensure that money allocated is well-spent.
We must be proud of our achievements in the fight against corruption in the short existence of a democratic order in this country. The Post Office is a familiar institution and is essential to the majority of the people in the country, especially in the rural areas. Access to its services is a basic right.
Broadcasting services were allocated R10 million. Additional funding was needed for the Independent Communications Authority of South Africa to finance the telecommunications market initiative, that is the licensing of the second telecommunications operator. The expenditure was unavoidable because the Independent Communications Authority had to put in place structures that are critical to Telkom’s initial public offering. The full potential of Telkom’s IPO would not be realised if these structures were not in place.
The adjustments estimate in the social insurance programme of the Labour Vote, commonly known as the UIF, is R605 million. The hon the Minister of Labour, in the speech on his Vote, said, and I quote:
The Minister of Finance will be delighted to know that we are not asking for more money to implement this programme. Instead we will decentralise resources from head office to labour centres where officials of the department will interface directly with our clients. The hon the Minister of Labour needs this additional allocation subject to certain conditions. And we encourage the hon the Minister to continue implementing these conditions.
The people in this country take it for granted that their remuneration will be deposited into their banking accounts. At UIF paypoints we find families in long queues that overflow into the streets outside these buildings. They wait for long hours for the money that is sometimes the household’s only income to buy food. Therefore, we agree with the conditions that the hon the Minister has outlined, namely that the funds must be monitored so as to ensure that they reach the poorest of the poor, and reach them on time, etc.
Finally, the Finance Committee wants to express its appreciation to the national Treasury for the simplification and improved layout of the adjustments estimate information that was provided. It was easy to read and each Vote was clearly outlined, displaying the amounts for roll-overs, unforeseeable and unavoidable expenditure, virement and other adjustments, with explanatory notes justifying these. The ANC supports the Adjustments Appropriation Bill. [Applause.]
Mr K M ANDREW: Madam Speaker, in my remarks on this Bill, I have two compliments, one comment and two concerns. Other colleagues from the DA will raise some other matters during the discussion on the Votes and schedule.
Firstly, I would like to compliment the national Treasury on the new format of the additional appropriation estimates and their consolidation into the very useful book that we received this year. In the past one could forgive hon members for not understanding what was going on in respect of additional appropriations and the adjustments estimates. But now, I believe that the format is such that any person who wishes to find out what is going on can do so without having to do a five-year degree in accounting.
Secondly, I would like to compliment the hon the Minister and the national Treasury on the good control that they have exercised in respect of preventing overexpenditure. The additional amounts involved, if one excludes the contingency reserve in the initial budget, still remain less than 2% higher than the March Budget. I think that that is a very good performance.
I would like to remind the hon the Minister and departments that, in terms of the Public Finance Management Act - as set out quite clearly in the document - expenditure, in order to qualify in these estimates, must be unforeseeable and unavoidable. As the document correctly says, ``unforeseeable’’ is expenditure that could not be anticipated. It is not the same as unforeseen expenditure, which is expenditure which was not anticipated. Last year, we had a serious problem with this because we felt that many items were, perhaps, unforeseen but were not unforeseeable. This year, there remain some borderline cases but there is a great improvement on last year.
To turn to our first concern, I would like to say that it is good to keep within the Budget and quite clearly, that is so. But, when underspending results in nondelivery, that is no cause for accolades. Unfortunately, this is a widespread problem.
The hon the Minister gets flak inside and outside of Parliament for insisting on fiscal discipline, often most vociferously from his party’s political allies. We in the DA support the Minister when he asserts that, more often than not, it is the underspending, inefficiency or corruption which hampers delivery rather than a lack of funds. What is needed is a more stringent calling to account of those responsible for nondelivery rather than simply throwing more funds at inefficient officials or Ministers.
Our second concern relates to Census 2001. I am dealing with this issue at some length now because of the very limited time available to the DA during the consideration of the Votes and Schedule. The basic field work was due to be completed on 7 November after one week extension was granted by the Minister.
The first problem is that it is quite clear that many people have not been counted. For example, in the studios of a local radio station only 12 out of 20 people had been called on by the evening of 7 November 2001. That is not a scientific or statistically valid sample, but against the background of the shambles associated with the 1996 census, it is imperative that people have confidence in the census. It is of critical importance to every South African and to all three spheres of government. Relying on postenumeration surveys is not an acceptable alternative to a comprehensive and accurate count, to start with.
What is worrying is that, having been assured earlier this year that everything was on track for a successful census, Parliament is now asked to increase the census budget by R140 million or 29% to enable Statistics South Africa to complete the job. What is even more worrying is that only one month before the census was due to begin, the final assessment of the pilot census ``confirmed a worst-case scenario on the quality of Census 2001’’, and revealed a net undercount with respect to the true population of 39%.
I would like to quote from the Adjusted Estimates of National Expenditure document:
Because census management had identified some of the likely weaknesses prefigured by the pilot, and taken drastic and proactive steps to address these in the period between April and September 2001, a full-blown crisis in Census 2001 was avoided.
Given the experiences of and the lessons that should have been learnt from the 1996 census, it is alarming that the pilot census was so far off the mark. Furthermore, when Statistics South Africa appeared before the Portfolio Committee on Finance in May this year, no mention was made of any significant problems being encountered. Therefore, it is of great concern that we are now informed that a full-blown crisis was looming. I look forward to the hon the Minister’s response with regard to these matters.
However, as I have said, this Bill confirms the good fiscal discipline exercised, and the DA will therefore be supporting this Bill. [Applause.]
Mr H J BEKKER: Madam Speaker, for any government in the world it is essential to make adjustments to the original, approved budget. South Africa is no different, and with the vastness of the Budget, it is logical that there will be certain areas of overrunning and sometimes even underspending in some departments. Unexpected developments after the production make adjustments inevitable towards the latter part of the financial year.
The question that should be asked is whether the proposed amendments are reasonable and acceptable. The increased estimates of expenditure must also be measured against the revenue gains or tax overruns for this fiscal year. The IFP believes that the adjustment estimates for 2001-2002, measured against the actual gains of tax revenue, are within the prescribed levels of overruns.
Now that the Public Finance Management Act is in operation and we can measure expenditure estimates over a period of several years, a much clearer picture emerges. Under the circumstances and explanations given to us, we are satisfied with the adjustment estimates.
Within the direct ambit of the Minister of Finance, we are looking at the national Treasury and Statistics South Africa. A substantial proportionate adjustment is being effected in the population census where R274 million is additionally appropriated. An accurate population census is absolutely essential and the IFP does not have a problem with the increased financial spending. However, we trust that the country will receive value for this money and that we will have a more accurate census than the previous one and that the count will be substantially accurate. Personally, I am concerned about several reports of cases where people have not been counted. I understand the logistical problems but when easily accessible semi-urban areas have not yet been visited, the alarm bells start ringing.
To the credit of the Minister and the Governor of the Reserve Bank, we refer to the fiscal controls and particularly the success and achievements of the inflation target levels. Another positive aspect is the improved and better than expected revenue of the Sars. Higher than expected revenue enabled us to increase essential social and security spending. Further positive overruns can be expected from Sars.
We have sympathy with the Minister with regard to the weakening of the rand. The benefit to exporters is being outstripped by the negative aspects of the increased prices of imported goods. Of greater concern is the escalating rand value of our international debt without receiving any benefits for it.
I can remember at a time when our rand had been referred to as the 4-7-11 rand - meaning that, originally in the 90s, it was quoted at R4 against the US dollar. Then, at the beginning of the year, it weakened to such an extent that it was quoted at R7 against the dollar and R11 against the pound.
Nowadays, that scenario sounds like music to the ears with the present situation at almost R10 to the dollar and R14 against the pound. Earlier, the rand, measured against the basket of international currencies, did not look so bad. But these days, we have lost ground overall and urgent attention is definitely required, particularly when looking at Botswana and several of these other Southern African countries.
The IFP will, nevertheless, support and vote for the Adjustments Appropriation Bill. [Applause.]
Dr P J RABIE: Madam Speaker, hon Minister and hon members, the main purpose of this Bill is to appropriate adjusted amounts of money for the requirements of the state in respect of the financial year ending on 31 March 2002. It is important to note that the vertical transfer of funds from national to provincial and local governments is stipulated in this particular piece of legislation. The spending priorities regarding provincial governments relate to social services such as education and health and the provision of basic services to local government such as the delivery of free basic services. During the past two weeks the Joint Budget Committee of Parliament had extensive hearings on the Medium-Term Economic Framework and the Division of Revenue Bill. What was clear, however, was that more information must be provided to national Treasury on spending measures of relevant departments.
Accounting officers of all respective Government institutions need to be held accountable for nondelivery of services to people. Provinces received about 95% of their income through national transfers, equitable share formulae and some grants. Municipalities, however, generate up to 90% of their own revenue. Local government was restructured in 2000 by creating 284 local municipalities, with the aim of delivering more efficient services to communities lacking infrastructure and service delivery.
What is of concern, however, is that there is a tendency at some municipalities to be unable to spend their funds. It seems that in some cases the only way to solve underspending is for the national Government and provinces to intervene to address this lack of service delivery.
Poverty has reached alarming proportions, especially in rural areas, where financial services are often absent. Public-private partnerships could help to solve this problem whereby the public departments join together to increase the capacity and skills transfer to explore the necessary opportunities in order to improve the infrastructure.
It is noted that this Bill also furnishes adjusted figures for police, justice, correctional services and defence. A key factor to attain positive economic growth is to stabilise the unacceptably high level of crime. It is, therefore, welcome that the safety and security sector’s future budgetary allocation will grow by 7% over the medium term.
The operational losses incurred by the Post Office are a reason for grave concern. Inefficient financial management is not acceptable. The Post Bank, in rural areas, is often the only financial institution available and it is accepted that the South African Post Office has a social responsibility. But, the aim should be for the Post Office to restructure itself, and I think that that is in the national interest.
The New NP supports the Adjustments Appropriation Bill.
Dr G W KOORNHOF: Madam Speaker and hon members, one of the major challenges flowing from the Adjustments Appropriation Bill for the future is to reduce roll-over funds from the previous year which, this year, amount to R2,16 billion; and to address underspending in all three tiers of Government, which this year amounts to R1,95 billion. It provides us with an opportunity to build capacity in provinces and, at local government level, create the necessary skills which will assist in capacity-building and improving project management.
Related to the capacity problem that currently exists, are additional transfers to provinces, provided for in the Adjustments Appropriation Bill. Of particular importance, is a supplementary allocation of R500 million for infrastructure spending to provinces. It begs the serious question that, if provinces are currently not able to spend their capital budgets, where will they find the capacity to spend this additional R500 million, which is much- needed, on infrastructure development? Surely we cannot budget more money every year for conditional grants only to find that lack of capacity prevented those monies from reaching the intended targets.
The Bill provides for a subsidy, to the Post Office, of R300 million per year over the next two-year period. This announced R600 million subsidy for operational losses in the Post Office can only be justified if it is intended that postal services in South Africa will become self-sustainable and will not rely only on fiscal transfers. We will appreciate it if the Minister can confirm this intention.
In conclusion, there are two questions on lesser but important allocations in the Adjustments Appropriation Bill. A few weeks ago we passed a very important Bill in this House to combat money-laundering in South Africa. Why did the Minister not foresee the additional R10 million for the Financial Intelligence Centre that he now seeks in this Bill?
The Public Finance Management Act is one of the most important Acts that this Parliament has passed since 1999. Hon members know that it aims to promote good financial management with effective service delivery. National Treasury has an important role to play, especially with regard to the implementation of the PFMA. But in this Bill, national Treasury reports a saving on the implementatiom of the PFMA amounting to R34,8 million. How do we justify a saving on implementation when provinces struggle to comply with the provisions of the PFMA?
With these few comments, the UDM proudly supports the Adjustments Appropriation Bill.
Mr F C FANKOMO: Madam Speaker and hon members of Parliament, let me follow in the footsteps of those hon members who have deliberated before me.
On 21 February 2001, the Minister of Finance presented the Budget for the financial year 2001-02 for spending in the current year. The objective of the Budget, as always, is finding a balance between several broad objectives. Among those objectives are: to provide for social and development expenditure, overcome poverty, provide safety and security, enhance investment in infrastucture, maintain Government capital stock, reduce the overall burden of tax so as to lower the costs of investment, job creation and to release household spending powers. Thus, the main Budget provided for the year 2001-02 amounted to expenditure of R258,3 billion.
According to the Adjustments Appropriation Bill, an amount of R8,5 billion is recommended by the Treasury Committee to be added to the main appropriation Budget for 2001-02. This shows the commitment of the ruling Government of the ANC to be ready to provide for the needs and demands of communities. This is the signal for a Government of the people for the people.
This additional amount will assist in the realisation of the promises made by the ANC in the election manifesto. One out of the many promises is the issue of bringing the Government closer to the people.
The Constitution obliged the Government to redraw municipal boundaries. New local authorities were constructed, leading to the local government elections of 2000. This led to a new momentum in delivery of basic services to lower-income communities.
After the redemarcation of municipalities, a need existed for funding these new structures. Thus, the Treasury Committee recommended that R328 million should be added to local government. Thus, the adjustments appropriation provided R108 million as a once-off subsidy for remuneration of councillors, and an additional R200 million to supplement free basic delivery.
The Public Finance Management Act sets strict limits to the chain of spending, but allows additional funding to be appropriated. This is as a result of unspent moneys from previous years. For example, an amount of R2,2 billion was not spent in the previous year and has to be rolled over to the following year for spending. Factors causing roll-overs are a lack of capacity in the administration of contracts, lack of submission of reports to effect payments, late completion of projects, projects extended to the next financial year and a lack of data processing.
I want to ask the Minister if these factors that I have mentioned above contribute to the roll-overs, as I have suggested. If they do, what corrective measures can be taken to address this? The overspending of any department results in the application of virement. This means that funds can be moved from one programme to the other as long it falls within the same division. However, the question remains that, as a budget is a plain document for the year and used to direct and control the use of funds, why are there cases of overspending and roll-overs? Do departments lack financial management capacity? If so, are there any arrangements being made by the Treasury to correct such pitfalls?
However, I am well pleased to notice that most departments have been allocated sufficient amounts of money for retraining and human development of public personnel. This retraining should be focused more on project management. All public managers should be provided with financial management knowledge as finance is the core factor that governs service delivery in many departmental sectors. Surely the retraining of public personnel will improve service delivery by Government institutions. Thus the use of virement should be applied in a minimal way and strict financial processes should be pursued.
I welcome and support this Adjustments Appropriation Bill. [Applause.]
Mr L M GREEN: Madam Speaker, Ministers and hon members, the ACDP would also like to commend the Minister on the new glossy format of this year’s adjustments. The document is quite easy to use and it is a research reference document that we will be using for future comments on adjustments.
One of the main problems in achieving Government objectives is the capacity of our departments to effectively spend their allocated funds. Roll-overs have been a consistent capability test for our departments over the past years. The Minister has recently stated his disappointment at the inability of state institutions to effectively process financial resources. The Department of Housing, for instance, has rolled over money amounting to R82,375 million. This is a great concern in the face of our nation’s demand for good housing. Why must R75 million that was allocated to the Presidential Job Summits project be rolled over because the national rental housing company has not yet been established?
The Department of Arts, Culture, Science and Technology has a roll-over amounting to R21,47 million because programme 5 could not be completed due to contracts that could not be signed before 31 March. Unless imminent improvements are forthcoming, we will lose the fight against important issues such as crime prevention, HIV/Aids, poverty alleviation and other equally essential service delivery programmes.
We are glad that the Department of Safety and Security will receive funds to rectify outstanding claims for promotions and other benefits. The morale, especially of our Police Service, leaves a lot to be desired. Since the attacks on America, the world has become a less secure place to live in. Therefore, our priority as a nation is to beef up our national security on all fronts. In doing so, we will minimise the potential risk of opening up our safety and security personnel to bribery and corruption, thus laying bare the vulnerability of our country.
The ACDP supports the Adjustments Appropriation Bill.
Mr I S MFUNDISI: Madam Speaker and members of Parliament, the Adjustments Appropriation Bill seeks to open a window into what has to be spent and where to spend it during the forthcoming medium term. Without detracting from the good work that is being done by the national Treasury and having listened to the presentations by some departments, I realise that there is a need to attend to some of the specific requests made by such departments.
A look at the Department of Provincial and Local Government reveals that some substantial amounts could be added to assist the department in realising its task, which is the development of the 13 rural and eight urban nodal points. The development is an ongoing exercise, but it has to be expedited in order that we may break the back of inequality, poverty and vulnerability.
The wall-to-wall municipal system which has been introduced as a last phase of democratising South Africa requires human, financial and material resources. Rural municipalities are the most vulnerable, as they cannot raise their own funds. They need to be nurtured into being fully grown and self-sufficient to a certain degree. It is gratifying, however, to note that there are increases in all divisions of revenue among the spheres of government. The gradual tilt of allocating more resources to provinces as against the national Government is highly appreciated because things happen in the provinces. They have to deliver.
A request for some R50 million by the Department of Agriculture and Land Affairs to facilitate restitution could be granted to ensure that people are no longer landless. This would bring an end to homelessness. We note that it is difficult to meet the needs of all in one budget. The financial cake is small in size and slicing it up will reduce it to crumbs. Rather give a slice to one department and give to the others in the future.
We are grateful for this visionary Bill on the appropriation of the fiscus. The UCDP supports this Adjustments Appropriation Bill.
Dr S E M PHEKO: Madam Speaker, the PAC has noted that the largest portions of the budget adjustments are going to five national departments, namely Foreign Affairs, Statistics South Africa, Defence, Safety and Security, and Public Enterprises. Education remains the largest category of spending. This is commendable. But more of this budget should be spent in the rural areas or African townships where there is so much need. Several schools in the neediest areas have no laboratories or libraries. In this country of gold, diamonds, uranium and platinum, many African schoolchildren learn under trees or in corrugated buildings which are cold when it is cold, and hot when it is hot, making it difficult for students to concentrate on their lessons.
Provisions for poverty alleviation in this budget are appreciated, but it is not the kind which will alleviate poverty. Many people in this country need training, technical skills and land to alleviate their poverty.
The largest adjustments have gone to several departments but not to Health, a critical department in view of the state of affairs in health institutions such as Baragwanath Hospital.
The PAC nevertheless supports this Bill, but not with reference to public enterprises. The PAC has long stated that the privatisation of state assets will lead to the loss of thousands of jobs without creating new jobs. This has happened. Unless the Government rethinks its policy on the sale of assets, the rich will get richer, while the African majority becomes poorer and poorer.
Miss S RAJBALLY: Madam Speaker, the adjustments appropriation appears to have a major impact on a variety of departments, and we trust that these adjustments are based on a thorough investigation into their validity.
The increases appear to be well allocated. The almost 50% of the adjustment allocated to the Safety and Security Budget Vote for crime prevention is certainly a good move and, hopefully, the activation of this will be used efficiently and effectively.
The adjustments appropriation allocated by the labour budget for the Social Insurance Programme, to be transferred to the Unemployment Insurance Fund, is supported, although the concern is that more funds need to be allocated elsewhere within the programme.
Further increases elsewhere are supported without reservation. Concern is expressed, though, with regard to the budget cuts to Votes 4, 20, 22 and
- The cut experienced by, firstly, the Department of Home Affairs in relation to migration is harsh, in view of the pressure and extent of the department’s administration. Secondly, the cut in respect of landward defence under the Defence Vote is questionable. One wonders whether this is a wise move, since vulnerability should be prevented. Thirdly, the budget cut in the Department of Justice and Constitutional Development with regard to the administration of the courts should be seen in a serious light and the importance thereof cannot be overemphasised. Why then a cut? Fourthly, a budget cut in Trade and Industry with respect to enterprise organisation, in the light of our poor economic performance over the past period, would increase nonviability.
However, we trust that there is an explanation for these decreases in the adjustments appropriation, and that they are in line with the department’s policy. Our aim is to introduce a good budget that would promote sustainable development, advancement and betterment. I trust that these adjustments are targeted at the same. The MF supports the Adjustments Appropriation Bill. [Applause.]
Mnr C AUCAMP: Mev die Speaker, die AEB ondersteun ook die Aansuiweringsbegrotingswetsontwerp, en ons meen dit spreek van goeie fiskale beheer. Ons is veral bly om te sien dat die bedrag onbestede geld aansienlik afgeneem het en dat daar ook ‘n beter bestedingsvermoë by die departemente is. Ons steun veral die aanpassing in die bedrae wat op veiligheid bestee word. Ons glo dat as ons die misdaadsituasie in Suid- Afrika onder beheer kan kry, dit ook ander aspekte sal stimuleer en meer inkomste beskikbaar sal stel.
Die verhoging in besteding aan plaaslike regering moet ook verwelkom word. Dit sal niks help as ons op die derde regeringsvlak ‘n impotensie het nie, waar dit die naaste aan ons mense se lewens kom. Die verhoging in die besteding op Vigs en die bestryding daarvan word ook gesteun. Ons spreek die vertroue uit dat dit gepaard sal gaan met die uitstraal van ‘n beter beeld van die bestryding van Vigs in hierdie krisistyd.
Ons wil die begrotingsdebat ondersteun en die Minister bedank vir goeie fiskale beheer, en dan ook hoop uitspreek met betrekking tot die verwagte inkomste uit privatisering, wat dalk minder kan wees, veral omdat die privatisering van Eskom nie gerealiseer het nie. Daarvoor moet ook voorsiening gemaak word en die nodige aanpassings gedoen word om op te maak daarvoor. Die AEB steun die wetsontwerp soos deur die Minister voorgehou. (Translation of Afrikaans speech follows.)
[Mr C AUCAMP: Madam Speaker, the AEB also supports the Adjustments Appropriation Bill and we consider it to attest to good financial control. We are particularly glad to see that the amount of unspent funds has decreased substantially and that the departments are displaying a better expenditure capacity. We particularly support the adjustment to the figures that are being spent on security. We believe that if we can gain control over the crime situation in South Africa this will also stimulate other aspects and make more revenue available.
The increase in the expenditure on local government should also be welcomed. It will do no good if we have an inability at the third tier of government, where it comes closest to the lives of our people. The increased expenditure on Aids and the combating thereof is also supported. We express the confidence that this will be occasioned by the projection of a better image as regards the combating of Aids in this time of crisis.
We want to support this budget debate and thank the Minister for good fiscal control, and then also express hope regarding the expected revenue from privatisation, which may be less, especially because the privatisation of Eskom did not materialise. Provisions must also be made for this and the necessary adjustments must be made to make up for it. The AEB supports the Bill as proposed by the Minister.]
Mr B A MNGUNI: Madam Speaker and hon members, we have not reneged on our commitment that, together with the people we represent here, together with all other communities living in South Africa, we will fight for change for a better life for all. This is a duty we cannot afford to postpone.
Although the total roll-overs amount to just over 1% of the total budget from the main appropriation, the capital expenditures, which is worth R220 million, were not effected last year. We, as the majority party, say that the majority of the people living on farms and in the rural areas basically derive their income from and live on agricultural activities, and in order to do that they need land. It is therefore a very unhealthy situation that 16,4% or R139,6 million of Vote 28 is rolled over. However, there were constraints. That is why there is such a roll-over. Time constraints, delays in processing of payment for services rendered and delays of invoices themselves appear to be the main causes of these roll- overs. I do not think that this situation is acceptable to our constituencies. They expect us to deliver and to deliver on time. However, an additional R50 million for land restitution is greatly welcomed because it indicates that a call for help has been heeded. On the other hand, this does not mean that section 39(2) of the Public Finance Management Act should be overlooked.
Delays or roll-overs are not going to delay delivery. As I said, only 1,7% of the total budget for economic services and infrastructure is rolled-over funds, compared to the billions of rands that we have. This is quite negligible amount. What we have is actually, in my view, healthy.
We are committed to five years of working for a better Africa and a better world. Our success in Africa depends on the success of our continent. The shifting of R777 000 by the Department of Trade and Industry to the President’s Office to set up a secretariat for the New Africa Initiative will ensure that our continent claims its rightful place in the world’s economy.
However, the question that we should ask ourselves is: As we approve these funds, do we have the means and capacity to spend them? We say our Government is a Government for the people. Our Government is sensitive to the needs of the people. Departments have shown great improvement in implementing Government policy according to the funds appropriated to them. However, there is still room for improvement and there is a need for departments to invest heavily in human resource development and, especially, project management for effective and efficient delivery.
Although there were some departments with roll-overs there was a budget shortfall in the IT management programme, and this does not exonerate us from the responsibility of providing land to the people. We should therefore strive further to speed up departmental procurements in order to avoid a chain reaction of events emanating from delays.
An additional R20,298 million is provided for provinces to support the pilot project of preventing mother-to-child transmission of HIV/Aids. This allocation forms part of an enlarged conditional grant to provinces for an integrated HIV/Aids strategy. This is a key initiative which will be funded from savings elsewhere on the subprogramme HIV/Aids and tuberculosis. This confirms our unwavering commitment to fight diseases, especially among the poor.
A further R25 million from the central allocation for poverty relief is allocated to the Government’s partnership with the Kaizer Family Foundation under the Love Life Programme. This partnership focuses on accessibility of clinics to the youth, training and funding community mobilisers to raise youth awareness on HIV/Aids, and supports the Love Life games which are aimed at providing the youth with a positive message around HIV/Aids. This programme is managed by the Health Trust on behalf of the Government.
South Africa’s postal services are rendered obsolete by the development of IT in South Africa. Hon members will agree with me that they prefer sending SMS messages to writing letters and posting them and waiting for five or seven days for them to be delivered. Therefore, the South African postal services have stiff competition, as hon members will be sending SMS messages to their loved ones instead of Christmas cards over the festive season. We have to think about whether we should support the Post Office by writing more letters and sending more postcards in order that the department to be self-sufficient.
These adjustments are actually addressing the needs of the poor and the majority of the masses. [Applause.]
The MINISTER OF FINANCE: Chairperson and hon members, may I express appreciation to all the parties that have supported this reading of the adjustment estimate. I am worried about the hon Andrew. He advised that there would be other members of what he called the Democratic Alliance who would speak after him. I did not count one other … [Interjections.] Oh! I see.
Let me deal with some of the issues raised here. The first relates to the concerns about Census 2001. The pilot study was undertaken in March 2001, as the report says. The results were late in coming through. We had worked on a framework that was adjusted for inflation from the 1996 Census. When the results came up, there were certain changes that were necessary, and amongst those was the change in ratio of enumerators to supervisors from 1:10 to 1:5 to improve on the management.
The Geographic Information System has kicked in. There have been difficulties but the main centre in Census 2001 advised us that they have been able to zero this down, and there are still forms that are being collected as part of a mop-up operation and in the last few days there have been some six thousand callers who logged calls indicating that they still had forms or wanted to be counted. The Statistician-General is less concerned about it, but we had to take these measures in order to avert a crisis.
In respect to the issues raised by the hon Koornhof on the Financial Intelligence Centre, all that we were doing was to augment savings that were there. Work on the FIC was a bit uncertain, but now that the legislation is through, proper provisioning would be available in the next budget. Similarly we have the savings of R34,867 million on the procurement rise from overproviding, but at the same time we are trying to bring systems in line with the PFMA, and, clearly, it would overstretch the provision on that side.
A number of speakers raised matters around roll-overs, unspent moneys and so on. Let me address myself particularly to the comments of the hon Fankomo. I think that it is a bit of an overstatement. I think that too much is made of the fact that roll-overs are provided. I want to remind members of this House that roll-overs are applied for. They do not arise automatically. They are applied for, because one’s planning can never happen exactly within the fiscal frame of 12 months. One cannot say that what we are planning to spend will all be spent by 31 March 2002. There are all manner of issues, and this document will tell members where there are invoices that arrived late, etc, and what needs to be provided for in the next fiscal year.
Similarly, as regards infrastructure, this year we provided, for the first time, a huge chunk of money for infrastructure spending that arose primarily from savings, especially on debt service costs. Again, in providing that, one would have deferments in payments over the years.
In respect of the issues raised by the hon Fankomo, I want to give him the assurance that with the Institute of Public Finance and Accountancy training is an ongoing issue. It is not something that happens once. It is an ongoing issue. A very detailed survey of training needs has been undertaken and the work that has been done will cover all 36 000 public servants involved in the chain of decision-making in public finance, from people capturing information for the IT system all the way through to the directors-general. It is ongoing. There will, certainly, be periodic reports to the Portfolio Committee on Finance.
I am sure that everybody is waiting to get their teeth into the questions, so let me not detain the House any further. I am primarily here to express appreciation for the support for the First Reading. [Applause.]
Debate concluded.
Bill read a first time.
ADJUSTMENTS APPROPRIATION BILL
(Consideration of Votes and Schedule)
The SPEAKER: Order! Hon members the proceedings will, as usual, take the form of a question-and-answer session. I shall put each Vote in turn, whereupon members will have the opportunity to pose questions to the relevant Ministers.
Hon members, would you please wait until I recognise you before putting your questions. I shall begin and now put Vote 1. Please note that the Minister in the Presidency will answer the questions on this Vote.
Vote No 1 - The Presidency:
Mr C AUCAMP: Madam Speaker, I just want to ask this one question. We have a budget for the Presidency, but there is quite a lot of …
Nee, ek kan met die agb Minister Afrikaans praat. Daar is baie uitgawes wat tog aan die Presidensie verbonde is, wat nie by die Presidensiebegroting ingereken is nie. Ons dink aan die kwessie van die vliegtuig en die beskerming by die lughawe en ons dink aan die kwessie van sekuriteit by die Presidentswoning in Kaapstad. Kan die agb Minister vir ons ‘n aanduiding gee van watter bedrae wat om die Presidensie wentel, in ander begrotingsposte soos Verdediging en dies meer verskuil is? (Translation of Afrikaans paragraph follows.) [No, I may speak Afrikaans to the hon the Minister. There are many expenses that are related to the Presidency which are not taken into account in its budget. We are thinking of the matter of the aircraft and security at the airport, and we are thinking of the matter of security at the Presidential residence in Cape Town. Can the hon the Minister give us an indication as to which amounts relating to the Presidency are in fact hidden in other Votes such as Defence and so on?]
The MINISTER IN THE PRESIDENCY: Madam Speaker, the Minister of Finance tells me that members can ask me anything.
The SPEAKER: Order! And make comments, hon Minister.
The MINISTER: Madam Speaker, this is the adjustments appropriation debate, in which the total amount that was given was R20 million. Perhaps Mr Aucamp could just repeat his question, because I received the translation late.
Mr C AUCAMP: Mev die Speaker, ek het net gevra of die agb Minister vir ons ‘n aanduiding kan gee van die bedrae … [Madam Speaker, I merely asked the hon the Minister whether he could give us an indication of the amounts … An HON MEMBER: Praat Engels. [Tussenwerpsels.] Speak English. [Interjections.]]
Mr C AUCAMP: OK! I will speak English. Could the hon the Minister give us an indication of the amounts that have something to do with financing the Presidency. It is actually budgeted for under other Votes, such as Defence, with regard to the issue of aircraft or Foreign Affairs - those types of things. I do not think that we have the whole picture of the expenditure on the Presidency by only looking at the President’s Vote. There are a lot of other expenses. Is there an indication of what those amounts are?
The MINISTER: Madam Speaker, may I suggest that when the Vote for the Minister of Defence comes up, Mr Aucamp asks him about the plane, because that falls under his budget. What falls under the budget of the Presidency are those items that are dealt with directly by the Presidency.
Foreign Affairs is a separate department and its budget falls under the Foreign Affairs Vote, it does not fall under the Presidency. What has happened with regard to the appropriation budget, as members will notice, is that additional funds were made available to the Presidency to cater for the visits that are made by the President and the Deputy President, since the Department of Foreign Affairs will only pay for a limited number of support staff to accompany the President and the Deputy President. Any additional staff that accompany the two principals would then have to come out of the Vote of the Presidency. Next year I am going to sing a song for Cassie, but not today.
Mr C AUCAMP: Madam Speaker, I have heard what the Minister said, but I suggest that it would be appropriate that there should be some interaction and a system that would ensure that at the end of the day we have the whole picture of what it costs South Africa.
The MINISTER: Madam Speaker, well I might be in a position to give the whole picture if I knew what the member wanted in terms of the whole picture. It seems to me that I have to respond to the Vote of the Presidency. Where other departments may or may not impact upon the Presidency, it would seem to me appropriate to refer those questions to those particular sections, so that they can answer for moneys that are allocated to them.
Mr L M GREEN: Madam Speaker, with regard to unforeseeable and unavoidable expenditure under programme 3, it states here that state and foreign visits by the President and the Deputy President have placed an additional burden on limited resources in the Presidency. If the resources are limited, should state and foreign visits not also be limited according to the resources?
The MINISTER: Madam Speaker, I can tell Mr Green that the visits that the President and the Deputy President make obviously depend on a number of other factors and not just on whether or not the resources are available. But obviously the member is correct in the sense that one cannot engage in activities which go so much beyond the budget that there is not enough money to pay for them. As the member will notice from the appropriation budget, only an additional amount of R13 million had to be made available to cover those expenses.
The SPEAKER: Order! I take it that the Minister’s offer to sing a song was not a private arrangement, and I am asking the staff to note it for next year’s adjustments estimate.
The MINISTER OF EDUCATION: Madam Speaker, on a point of order: There are provisions in the Constitution which are very serious and this House must take them seriously. There should be no meting out of cruel and unusual punishment in this House. [Laughter.]
The SPEAKER: Order! I think perhaps we will have comment after we have been entertained or otherwise, Minister Asmal.
Ms H I BOGOPANE: Madam Speaker, we need to congratulate the Presidency on actually increasing the budget for the Office on Rights of the Child. That is very commendable given the realities of what children are going through. However, from the adjustment we learned that the Presidency had made a decision that the accounting systems for the Youth Commission would be separate from that of the Presidency. Would the Minister just indicate whether the Presidency is going to have monitoring mechanisms that would ensure that the Youth Commission handles the money appropriately?
The MINISTER IN THE PRESIDENCY: Madam Speaker, I assume Minister Asmal was speaking of himself. [Laughter.] And I agree with him that he should not sing at all. With regard to the moneys that have been made available to the National Youth Commission, this commission is a statutory body and basically I cannot wait for the money to go from the Treasury via the Presidency to the National Youth Commission. In terms of the Public Finance Management Act, the CEO of the Youth Commission is responsible for the accounting of the spending of that money. But we do not have in the Presidency an internal audit committee, that will then sit with the Youth Commission and also look at their books and check that the moneys that have been appropriated to them are correctly spent.
Vote No 2 - Parliament:
The SPEAKER: Order! Are there any questions? [Interjections.] Not even a motion from the floor to increase the budget? [Interjections.] I am really disappointed, hon members. [Laughter.]
Vote No 3 - Foreign Affairs:
Mr L M GREEN: Madam Speaker, with regard to unforeseeable and unavoidable expenditure on page 23 of Vote 3, there have been exchange losses amounting to R79 million. Of course we read that the national Treasury has allocated an amount of R110 million to Foreign Affairs. But surely the value of the rand has been declining steadily against the US dollar and the British pound over a period of the last few years. Surely the exchange rate losses could have been more accurately predicted, or is that unreasonable?
The DEPUTY MINISTER OF FOREIGN AFFAIRS: Madam Speaker, probably if we had the connections that Mr Green has with higher beings, we might have been able to predict it better. The volatility of the currency and the international economic terrain is such that one cannot predict what is going to happen to the currency.
Dr P W A MULDER: Madam Speaker, my question is more or less the same regarding programme 2 under foreign relations, about the whole problem of the devaluation of the rand against the dollar. I understand the problem of embassies abroad and how to finance them. I understand the Minister’s problems as well, but is there some percentage that they work on when they make these calculations to predict more or less the percentage? I suppose they will have to do something to be able to predict for the future what that percentage will be. The DEPUTY MINISTER: Madam Speaker, we have attempted to do this, and in fact we are in constant discussion with Treasury to see how we can minimise the impact of the volatility of the currency, but as I said earlier, it has been very difficult to predict what is impacting on our currency. Our macroeconomic strategy is regarded, even by the IMF and the World Bank, to be one of the best of emerging economies. We are doing everything right, but given the new globalised financial architectural system, we still have not found a mechanism to control the movement of capital as it is taking place at the moment. We hope that the transformation of the international financial architectural system will allow us to really control speculators who are dealing with currencies all over the place.
Vote No 4 - Home Affairs:
Mr F BEUKMAN: Madam Speaker, we refer to page 28 of the adjusted estimates, where it says that funds for IT-related equipment would be allocated to the various programmes. It is not clear whether the upgrade of a movement control system would be a priority. So the question is whether that would be a priority. On the other hand, the department is allocating an additional R7 million for the printing of passports, due to the fact the Government printing works failed to warn that there is not enough money to fill the posts at refugee receiving offices. It is also not clear whether the allocated R315 000 for the implementation of the basic accounting system will be sufficient. And then the additional R2 million for legal costs due to inadequate capacity to speed up the harmonisation of the various Acts with the Constitution could have been avoided with better planning and the retaining of experienced staff. It would be appreciated if this question could be addressed.
The MINISTER OF HOME AFFAIRS: Madam Speaker, I am rather amazed because the hon member who asked the question is a member of the Portfolio Committee on Home Affairs and I think that the committee itself did something unprecedented when it raised with the Treasury the whole issue of the underfunding in my department. When the hon member talks about whether there should have been proper planning, I do not know what he means in that context. He is a member of the committee that took the unprecedented step of taking the matter of underfunding to the Treasury. [Interjections.]
Mr L M GREEN: Madam Speaker, just to follow up on the reply given by the hon the Minister, I want to refer to page 27, with regard to the printing of passports. There has been an additional R7 million for the printing of passports, an increase from R10 to R20 per blank document, which is an increase of 100%. How is it possible that the Government printing works could increase the price of printing a passport from R10 to R20 without a warning to a state department, in so doing causing unforeseeable and unavoidable expenditure?
The MINISTER: Madam Speaker, we all appeared before the Ministers’ Budget Committee and, in fact, asked for more money. But the budget committee has the last word on these things. So the question is out of place in that context, because I do not see how the hon member can now ask me that question when we have to make do with what is actually given to us by the budget committee. We have to literally cut our coat according to our cloth. [Laughter.]
Mr C AUCAMP: Madam Speaker, we often read that Home Affairs is the one department which is underbudgeted. Can I ask the hon the Minister to inform this House whether he is satisfied that he will be able to perform his duties as Minister with the budget he has for the rest of the year?
The SPEAKER: Hon Minister, I am sure that this is an opportunity you do not want to miss. [Laughter.]
The MINISTER: Madam Speaker, of course, I do not think that there is a single Minister amongst my colleagues who is ever satisfied with what he or she is given. I challenge any single Minister who is satisfied. [Laughter.] As hon members can see, the hand that went up was that of our Minister of Finance, whose distinction is parsimony. [Laughter.]
The SPEAKER: Order! Let the record show that the only Minister who raised his hand was the Minister of Finance. Please note that the Deputy Minister will be answering the questions on Vote No 5.
Vote No 5 - Provincial and Local Government:
Mrs G M BORMAN: Madam Speaker, since the elections in December 2000, the number of councillors has decreased by some 30%, ostensibly to save money. However, the wage bill for councillors has gone from R418 million to R756 million, an overall increase of 55%. In addition, the recently announced increases will push the bill up even more.
The Minister has allocated R108 million to municipalities which do need assistance, and my question is: Will these municipalities get the upper limit and will the department conduct an audit before handing over the money so that it is satisfied that the municipalities are functioning in a responsible and accountable manner in the collection of rates and service charges?
The SPEAKER: Order! I apologise. I believe the Minister of Finance is responding to that.
The MINISTER OF FINANCE: Madam Speaker, it is important to draw attention to the fact that councillors need to be remunerated in the same way as we are as public office-bearers. The remuneration has now become the responsibility of the Commission on the Remuneration of Public Office- bearers, which is chaired by Justice Goldstone.
I do not think that any department can hold public office-bearers to ransom on performance. There is a series of other issues, including general transfers. One should bear in mind that the Constitution does not in any way allow us to minimise equitable share transfers to other spheres of Government, except in severe circumstances. That applies both to provinces and local government, and we cannot just behave with gay abandon in respect of this. In fact, if that was the case, we might have to deal with the issue of some councils paying certain managers probably thrice what Cabinet Ministers are paid and so on. We would have to deal with those kinds of issues and we cannot. We need systems that would be a lot more responsive.
Part of the changes and the transitional funds are about ensuring that the underpinnings are there to improve on efficiencies generally. The pressure on local authorities to collect what is due, and not to create a moral hazard are in place, and we will continue with that. Project liquidity, which provides an ongoing flow of information to the national Department of Provincial and Local Government is, in fact, the one test we have to ensure that moneys that are due to local authorities are being collected.
Dr C P MULDER: Madam Speaker, hon Minister, an additional amount of R458 million is being budgeted for this department. Of this amount, R333 million, that is 72%, is classified as unforeseeable or unavoidable. Of this amount, R108 million is for an increase in salaries for councillors, R200 million for free basic services, R20 million for additional grants and only R5 million for disaster relief in the Western Cape due to the floods.
The question I would like to ask is: Is it not true that of the 72% of the total amount allocated, only R5 million is really unforeseeable or unavoidable? Was it not foreseeable that the other amounts would be budgeted for during the financial year?
The MINISTER: Madam Speaker, the establishment of councils on the 6th of December last year happened at a time when the Budget was already close to finalisation. What has also remained in question has been the fiscal base of the newly demarcated local authorities, because one cannot just take the old and draw lines around them, because of the bases of shifting. And I think it is taking these issues into account. The first issue that has arisen has been adequate remuneration of councillors. Thus the first R108 million takes account of that.
In respect of the free basic services, it is a new issue. We tried to ensure that local authorities in the main will be able to provide the free basic services. The horizontal division between local authorities of the equitable share is, in fact, based on a formula that takes into account the number of poor people that live in that local authority. As capacity constraints have risen, we have had to provide adequately for that.
What also arose in the demarcations is that there are local authorities, especially district councils, where there is no revenue base at all. We cannot have councils that cannot even perform the most elementary of functions. There was an instance in Tugela in Kwazulu-Natal where they litigated against the Minister of Finance on the issue of the availability of an equitable share. So the R20 million tries to take account of that.
I just ask that colleagues here understand that when we got up to address this House on the Budget on 23 February this year, we said that the introduction of the new system of local government would require a fair amount of nurturing. Nurturing and spoiling are not the same thing. But what we are seeing in terms of this R330 million, in the main, is the kind of nurturing where we are trying to assist local authorities to get on their own feet, not in the sense that we will always be there, but to ensure that we can deal with many of the transitional issues that have arisen.
Mrs R M SOUTHGATE: Madam Speaker, hon Minister, my question is: Regarding the R3,3 million that has been allocated as savings, this is mainly due to the delays in the filling of vacant posts. Why is there delay, and when will these vacancies be filled, because this has been going on for a long time?
The second question relates to the roll-over of the R81 million. Which projects referred to in Programme 2 under the heading ``Governance and Development’’ were delayed and which were funded by the Consolidated Municipal Infrastructure Programme and the Local Economic Development Fund? We are sorry that we have to ask these questions in the absence of the Minister.
The MINISTER: Madam Speaker, the first one is always the difficult one. Part of the general administration - the Minister for the Public Service and Administration will be able to advise on that - is that we are moving away from an approach that fixed on an establishment that one needs to fill vacancies and then a series of funded posts.
But I think in trying to design appropriate structures for the department we all run into the situation where we identify certain needs that we are trying to provide for. One does not always find the requisite skill. Every weekend there are numerous advertisements placed in newspapers to try to attract staff, but we would be better advised not always to fill vacancies unless we have appropriate skills. So, that is on the administration side.
In respect of the Consolidated Municipal Infrastructure Programme and the Local Economic Development Fund, what we saw, as the elections approached last year, were two trends. One trend was that some local authorities wanted to spend money that was not there to try to catch votes, and in other instances the uncertainties arising from demarcation of municipal areas resulted in a slowdown of expenditure. In respect of infrastructure, I would hazard that, as I am speaking, the slowdown is still in evidence. It is also there for instance in the call on funding from the Development Bank of Southern Africa. Local authorities have not been able to get their infrastructure planning up to speed, and so the roll-overs arise in these circumstances. If the money is not all spent by 31 March, we must recognise the responsibility to try ensure that local authorities are in fact able to make a call on the available infrastructure spending. These are the kinds of issues that arise also in provinces, but they are quite pronounced in respect of national Government.
Mr G SOLOMON: Madam Speaker, there has been a projected increase over the next three years for the equitable share for local government and a 36% increase for municipal capacity-building. There has been an increase in municipal infrastructure and in general there is a projected allocation for local government that far exceeds that of provincial and national government. Will the Minister comment on the view that this is the most significant increase for local government yet in terms of the budget, and will he promise that if local government delivers he will allocate yet more money to it?
The MINISTER: Madam Speaker, the Minister of Minerals and Energy says that this is not an Indian bazaar. [Interjections.] We are not going to haggle here. I do not want to stand up and make promises. But I think the trend is an important one. The recognition of the importance of local government as the first line of government in the everyday lives of people is an important one. Hitherto we have had the kind of rule that required local authorities to raise about 95% of their own needs. I would like to believe that we can return to that situation. But in order to get there we will have to strengthen the capacity. Part of that capacity will be addressed in the Municipal Finance Management Act, when it comes through Parliament, in support of shared services between local authorities such as spatial planning capabilities and so on. Part of it will also be ensuring that the funds for infrastructure are spent, because if the infrastructure is rolled out, the response of people to paying services may be significantly improved.
I think the other issue where we should make a big change is with ensuring that we have free basic services in all 284 local authorities that are in a position to deliver free basic services. The step change from the first tier of service is not that great and places many working families outside the bounds of service affordability.
These are the challenges, and I think I should come back to the term I used in respect of the question raised by the hon Mulder earlier, and that is the nurturing role we play and the responsibility that we have in respect of local authorities. So, that is not about promises, but about recognition of the role of local authorities and trying to assist that they can be in the best position to deliver the best quality services to our people.
Vote No 8 - Public Enterprises:
Mr R J HEINE: Madam Speaker, I will rather make a short statement that the Minister can comment on. The Medium-Term Budget Policy Statement reflects a disastrous phase of the Government’s privatisation process. South Africa has missed one opportunity after another to implement an effective privatisation programme.
The delays in selling Telkom and M-Cell shares mean that the proceeds from privatisation will be down by 83% this year and by 18% over the three years from 2002 to 2004. It is a pity that the 2001 privatisation process faltered because of opposition, not because of technical and feet-dragging issues, but also because of certain ideological debates. This feet-dragging is clearly illustrated by the long planning stage. An amount of R70 million is now required because of an underestimated budget for a successful commercial public offering. This unacceptable delay damages the credibility of Government policy positions in this regard.
The MINISTER FOR PUBLIC ENTERPRISES: Madam Speaker, I think the DP is so politically insolvent that I have no option but to privatise them. [Laughter.]
The SPEAKER: Order!
The MINISTER: The budget for the Telkom IPO was unforeseen and therefore unavoidable, which is why we have added R70 million. It is so that we can execute a successful Telkom IPO to educate South Africans so that they can own shares in this state-owned company, and not the views that are expressed by the representative of the now defunct alliance. [Laughter.]
Vote No 13 - Arts, Culture, Science and Technology:
Mr S L DITHEBE: Madam Speaker, the Government has identified cultural industries as one of the growth sectors of the economy, as well as the importance of innovation in enhancing our levels of competitiveness. In the light of this, could the hon the Minister explain why it is that an amount of R565 000, earmarked for poverty relief programmes, had to be rolled over, as well as, R717 000 in respect of the innovation fund trust; R4,6 million in respect of innovation fund projects and nearly R1,1 million for the public understanding of science and technology? Are there any deadlines regarding when the committed funds have to be expended?
The MINISTER OF ARTS, CULTURE, SCIENCE AND TECHNOLOGY: Madam Speaker, I would like to remind the hon member that to spend money, one has to plan first. What has happened in all these cases is that the spending plans were not finalised timeously and, therefore, we have asked for roll-overs. Most of the expenditure takes place in collaboration with the science councils, such as the CSIR, Mintek and others. Furthermore, poverty relief funds are spent in conjunction with the provinces.
We sent out a call for proposals from provinces. Some of them responded in time and others did not. For instance, the Western Cape, as far as I can remember, had not finalised its plans, nor had a few other provinces. So that money has to be kept until the proposals and the sound business plans are acceptable before it is released.
Equally so, also, with the issue of cultural industries. We have just had a craft indaba and there is a music task team report which has just come through. But to spend the money on those projects in fact requires a lot of strategic planning, which has not happened. But it will have happened by the end of the financial year.
As far as the issue of innovation is concerned, we have a huge number of projects which have been adjudicated. But the payments have not yet been made and we are busy transferring the innovation trust to the National Research Foundation. That also takes its time. But the plans to spend these moneys are there and there is no danger of their not being spent.
The SPEAKER: Order! Mr Aucamp, just a moment. I believe the time allocated to the AEB … [Interjections] Sorry, I had the wrong time. My apologies, you may now take the microphone.
Vote No 14 - Education:
Mr C AUCAMP: Madam Speaker, I do not see in the budget the exact amount for private schools. We had a situation earlier this year in which Cosas had riots and so on, because of the large spending on private schools. Can the hon the Minister give us an indication? It seems to me that the amount is so low that it does not even register in the Budget. Can he tell us what the amount is and whether they will send adjustments in that regard?
The MINISTER OF EDUCATION: Madam Speaker, the hon member Aucamp should realise that he and his ancestors wanted that federal system. In education, one has that federal system. The amount does not appear here, because the educational budget is for provinces. Provinces have a block amount of money, a lump sum. It is for them to decide that. And, of course, it varies from province to province. In one province a private school will get about approximately 1,2% to 1,5% of the provincial expenditure on education. In other provinces it will be about 4,5%, 5% or 6%. We should remember, of course, and this is the reason we had hearings this morning on the National Curriculum Statement, next door, that the provinces have to implement national policy. According to the national policy, schools will not get assistance if they, in fact, charge fees four, five or six times the cost per student in that province. That is a graduated one. Some schools will get up to 60% of the expenditure from the province, whilst others might get from 10% up to 15%.
Basically, it is an antipoverty drive to ensure that poor private schools get the Government grant. So the myth that the Government is subsidising rich schools is a myth, and that is the reason it ought to be removed. But, of course, I would like to tell the hon Mr Aucamp that I want a much more unitary system. If we move towards that the national department will allocate the money to the private schools and then next year or the year after the amounts will appear in this Appropriation Bill.
Vote No 15 - Health:
Dr S J GOUS: Madam Speaker, of course, as far as HIV/Aids is concerned we welcome any increase in the budget. But what is worrying is that when one examines the figures, one will find that by far the biggest single figure here concerns roll-over funds. When examining Programme 2, the strategic health programmes, and the Government Aids action plan, the reasons given for the roll-overs are lengthy planning and information gathering. I would just like to know whether the hon the Minister could give us a bit more detailed explanation concerning what the lengthy planning and the information gathering are about?
The MINISTER OF HEALTH: Madam Speaker, as hon members know, health is also a concurrent responsibility of the provinces. Therefore, when we talk about lengthy planning we mean that the provinces plan at different levels. Even though we try and monitor them, obviously they plan at different levels.
Furthermore, the tendering processes themselves tend to be rather lengthy. What has also happened is that sometimes we offer the tenders and they are approved, accounts are not rendered, and, therefore, it is not possible for us to pay, because we just do not have the accounts to pay. This is something that we are trying to follow up.
One will also recall that we have reported in the portfolio committee that the difficulty also emanates from the NGOs because they have not been giving us the accounts. In fact, we have had to do something extraordinary, to ask accountants to go right round the provinces in order to gather this information so that, indeed, we do use the finances judiciously, and not waste them.
Vote No 17 - Social Development:
Mr A Z A VAN JAARSVELD: Madam Speaker, I would like to address the issue of the budget for Social Development, specifically the back pay of beneficiaries. Now the fact is that when the budget was allocated in February this year, the policy was still that backpay would only be for three months. After that there was a rulling that it would be for the term or period of application.
I have a reply from the hon the Minister, somewhere in June, stating that an amount of R262 214 120 was to be made available for the extra backpay. Now I do not see that in the adjustments. So I would like to ask the hon the Minister in what way was provision made for this specific amount? The SPEAKER: Order! I am not sure. I understand that the acting Minister of Social Development is going to respond.
The MINISTER OF EDUCATION: Madam Speaker, I am pleased that there are more questions for Social Development than for Education. This matter is being reviewed in the department. Of course, there are other outstanding issues concerning how far one goes retrospectively in providing for the grants.
There are also legal issues that arise and, I think, when the matter is finally resolved a special application will be made to the Treasury to deal with this issue. [Laughter.]
Dr W A ODENDAAL: Madam Speaker, I see the Minister of Finance does not agree. May we have his answer, please? [Interjections.]
The SPEAKER: Order! I think the body language did give the answer, but please respond, Minister. [Laughter.]
The MINISTER OF FINANCE: Yes, the household is divided. [Interjections.] Madam Speaker, the beneficiaries of grants are paid from provincial budgets. Now, the adjusted estimates here only deal with the national Votes.
Look at what has been provided to the provinces, and this is very important, to ensure that provinces are better able to provide for social grants. On the one hand there are the backlogs. There has been successful litigation against social development in general. It was brought primarily in respect of the Eastern Cape, but the norm has to be applied nationally. On the other had there is the take-up of child support grants, essentially.
If one looks at the allocations to provinces it is not just done in terms of the norms of the normal equitable share. Provinces that have a higher call on welfare payments, for instance, the Eastern Cape, has 22,5% of its budget going to welfare as opposed to Gauteng, where it is 14%. We have had to tweak the formula so that the economic component was reduced and the welfare component raised, to ensure that provinces, between now and the end of the fiscal year, are better able to deal with the call on payment backlogs.
The SPEAKER: Order! ACDP, I think it is your two minutes that have expired. So I cannot allow another question. Mrs R M SOUTHGATE: Madam Speaker, on a point of order: I would like to ask: How is it possible for us to keep Ministers accountable if we are given two minutes and there are 33 Votes? [Interjections.]
The SPEAKER: Order! Hon member, I think you need to raise that either at the Whips Forum or the Rules Committee. [Interjections.] Order! No, hon Minister Asmal, you are not getting another two minutes. [Laughter.]
Mr M L DA CAMARA: Madam Speaker, I have less of a question and more of a plea. It relates to the regulations limiting the child support grant to children under the age of seven. I am pleased to see that a healthy appropriation has been given to social development. However, many children fall in the age group between 7 and 18. My plea is: Can the Minister not see his way clear, in future appropriations, to do something about this, because many, many children are left out.
This relates to my second plea, which concerns the effect of the HIV/Aids pandemic on the social development budget. I am sure we can expect an avalanche of applications for grants, particularly the child support grant, in the wake of this pandemic. Again, I would like to make a plea to the Minister to see if we cannot plan ahead to ensure that these children do not fall through the cracks, because we are increasingly hearing more and more stories of Aids orphans, in particular, falling through the cracks.
The MINISTER OF EDUCATION: Madam Speaker, regarding the first question, or plea, there is a commission on comprehensive social security. I was told this morning that the commission will report at the end of this month. This is not a matter for the Treasury. This is a matter of Government policy. Mercifully, the Treasury does not make Government policy. The initiation is made by the department and goes to the Cabinet, which decides on policy.
There are enormous expenditure issues to look at with regard to any proposals concerning the lifting of the age. I do not see the connection between HIV/Aids and the child support grant. The child support grant has nothing to do with this. In fact, the department has a very developed HIV/Aids programme. This year alone it has spent R13,4 million in assistance to provinces, and it will spend R47 million in 2002-2003 and R51 million in 2003-2004. This is to mitigate the socioeconomic impact of HIV/Aids on vulnerable groups; to contribute to the reduction of HIV/Aids among very vulnerable groups - women, youth and children - and, finally, to work on appropriate policies in the provinces to look at the consequences of HIV/Aids on young people. So, it is a developing programme and the department is also involved closely with the provinces on this.
Finally, what the Minister of Finance said does not contradict what I said at all. [Interjections.] I said that this was a matter for the provinces. It is a matter for the provinces. There will be an occasion, though, at the end, when all the legal actions are brought together, where the provinces will be under some threat as far as finance is concerned. Then, there will have to be a further calculation as to how this will be met.
The SPEAKER: Order! I will not stop any party getting two for the price of one. So if there are two answers, that will be permitted.
Vote No 19 - Correctional Services:
Mr G C OOSTHUIZEN: Madam Speaker, hon Minister, regarding the capital expenditure budgeted especially under programme 7, is the Minister convinced that that amount will contribute to alleviating the problem of overcrowding and bring the department more in line in terms of the Act of 1988?
The MINISTER OF CORRECTIONAL SERVICES: Madam Speaker, I am not quite sure what the end of the question is.
Mr G C OOSTHUIZEN: Madam Speaker, hon Minister, under programme 7 in the Adjustments Appropriation Bill, there is some R308 million that is appropriated for asset procurement, maintenance and operating partnerships. The question to the Minister is: Will this be directed only at the Apops system or will this money also be directed at alleviating the overcrowding problem in terms of building new prisons and upgrading certain facilities that we have, so that we may be more in line with the Act of 1988?
The MINISTER: Madam Speaker, no, it would not simply be allocated to the Apops system. It will also be allocated generally for relieving the overcrowding in prisons through dealing with the dilapidated prisons that we have. I do not know whether people realise that the prisons that we have at the moment are ten years old and older. Therefore, they were not built for the kind of programmes on which we are progressively deciding as Government in terms of buildings, rehabilitation, low-cost housing, and so on.
Vote No 20 - Defence:
Adv H C SCHMIDT: Madam Speaker, the DA notes with concern the shortfall of approximately R68 million for the deployment of troops in the DRC. Only R19 million of the R88 million will be repaid to South Africa for the deployment of specialist elements in the United Nations’ organisations mission. Now, support by Parliament and ultimately the public was gained on the understanding that the UN would be funding this mission.
Dit blyk nou dat die Suid-Afrikaanse belastingbetaler ongeveer 75%, oftewel R68 miljoen, sal betaal vir die ontplooiing van Suid-Afrikaanse troepe in die boekjaar 2001-02, ‘n aspek wat nooit voorheen duidelik deur die Minister of die departement bekend gemaak is nie. Die vraag is nou wat dit die Suid-Afrikaanse belastingbetaler gaan kos om te betaal vir die huidige ontplooiing van troepe in Burundi sowel as vir die voortgesette ondersteuning in die DRK. (Translation of Afrikaans paragraph follows.)
[It seems now as if the South African taxpayer will pay approximately 75%, or R68 million, for the deployment of South African troops in the 2001-02 financial year, an aspect which has never been made clear by the Minister or the department before. The question now is what it will cost the South African taxpayer for the current deployment of troops in Burundi as well as the ongoing support in the DRC.]
The MINISTER OF DEFENCE: Madam Speaker, first of all, I think that Adv Schmidt should remember that we explained the particular formula that the UN follows when deployments take place. There is, certainly, a percentage that is higher than 50% that the UN funds.
With regard to our own experience, as South Africa, we made a point over and over again in the course of last year that, because South Africa had not been part of the peace support operations on the international scale, it was imperative for this country to acquire the necessary equipment. A lot of the expenditure that he is referring to has to do with the new acquisition which we had to make for the necessary equipment for those operations. It was a once-off acquisition.
With regard to Burundi, approximately three weeks ago the Deputy President addressed the question at length. The point was made quite clear. In his words, South Africa is not going to spend one cent of the taxpayer’s money on that operation, because the facilitator is raising all the funds necessary to fund the operation. Even now, there is no deviation from that position.
Mr M E MABETA: Madam Speaker, the UDM applauds and agrees with Programme 8 in terms of which the Department of Defence has requested certain adjustments to honour the United Nations’ mandated peacekeeping operations. In terms of our defence objectives and obligations, we see these as being totally unavoidable and indispensable.
I noticed that in the Minister’s budget, there is no specific reference to the HIV/Aids programme anywhere. Does this mean that the Minister believes that there is enough funding provided for dealing with HIV within his department and the National Defence Force? The MINISTER: Madam Speaker, the medical programmes are all under military health support. All of them are embodied in there, and members will see that all of them fall under other subprogrammes. But, there is a further breakdown, which is, unfortunately, not included here. If we were to further break it down, we would be able to indicate very clearly where the amount fits in. It does not appear here, but, it is under other subprogrammes as a specific amount that has been set aside. Unfortunately, it does not appear here, but we could make it available to the hon member.
Dr C P MULDER: Mev die Speaker, ek wil die agb Minister van Verdediging vra of hy die agb lid mnr Marthinus van Schalkwyk gaan oproep vir militêre diens in Burundi, en wat die koste gaan wees - dit so sydelings. [Gelag.]
Met verwysing na die Spesiale Verdedigingsrekening wil ek die agb Minister vra of dit so is dat geld verdien uit die verkoop van wapentuig van die SANW weer in sy begroting gestort word? My vraag aan die agb Minister is of hy voorsien dat die SANW nog meer toerusting gaan verkoop sodat die geld na hom teruggekanaliseer kan word by wyse van die Spesiale Verdedigingsrekening? (Translation of Afrikaans paragraphs follows.) [Dr C P MULDER: Madam Speaker, I want to ask the hon Minister of Defence if he is going to call up the hon member Mr Marthinus van Schalkwyk for military service in Burundi and what the cost will be - that is just by the way. [Laughter.]
With reference to the Special Defence Account I want to ask the hon Minister if it is true that money earned from the sale of weaponry of the SANDF is to be deposited in its budget again? My question to the hon Minister is whether he envisages that the SANDF is going to sell more equipment so that the money could be channelled back to it by way of the Special Defence Account?]
The SPEAKER: Order! Minister, I did promise there would be two for the price of one. Now you have two questions to answer.
The MINISTER: Madam Speaker, excuse me, could you say that again, please?
The SPEAKER: Order! I said I did promise the opposition that there would be two for the price of one. So, you have two questions to answer - the one is tongue in cheek and the other one is related to the budget.
The MINISTER: Madam Speaker, I propose to postpone my answer to the first one, which I will deal with in due course. [Laughter.] With regard to the purchase of equipment, let me say that we relied upon the special account to finance that portion of the main acquisition for the SA National Defence Force relating to the strategic arms package. Now, that does not relate to the acquisition that I was referring to, and which we will have to do from time to time in respect of the special peace support operations. When that comes up, we will always have to go back and raise money that as unforeseen and, perhaps, unavoidable expenditure and request funding for it.
The special account is to maintain the needs as set out in our mandate to protect the country and to maintain the necessary capabilities.
The SPEAKER: Order! Before I take questions from the New NP and the FF, I just want to read a question that was addressed to the Chair. I would like to respond to it. The question was: How much time does each party have? Could I indicate that the ANC has 17 minutes and 40 seconds, the DP has 2 minutes and 55 seconds, the IFP has 6 minutes, the New NP has 4 minutes, the UDM has 2 minutes, the FF has no time, the UCDP has 2 minutes, the PAC has 2 minutes, the FA has 2 minutes, the AEB has 35 seconds, and Azapo has 2 minutes. [Laughter.]
Mr H A SMIT: Madam Speaker, in a written reply to me earlier this year, the hon the Minister of Defence stated that an amount of approximately R70 million was still outstanding from the Department of Foreign Affairs for assistance rendered by the Department of Defence during the general elections in Mozambique. My question is: Is that amount still outstanding, or what is the current position?
The MINISTER: Madam Speaker, the Department of Foreign Affairs is the one through which that money was received and passed on to the Treasury. As I stand here, I am not in a position to confirm whether that money has been collected or delivered yet. Many times in disaster situations such as those countries make pledges through the UN and do not live up to them. I could check that out and I would not be able to confirm it straight away. I know that some of the countries still have outstanding money that is part of the amount that they pledged to support those disaster relief activities.
I think that I would like to take this opportunity to say that, with regard to the question which was raised earlier on, about the amount of money set aside for the Aids programme, it is, indeed, reflected in the Estimates of National Expenditure, on page 430, and the amount is R243 million.
Mr H A SMIT: Madam Speaker, I want to make it very clear that the funds in question were not for assistance during the disaster relief, but for assistance during the general elections in Mozambique.
The MINISTER: Madam Speaker, I have already made the same point that I am not in a position, as I stand here, to say whether the Department of Foreign Affairs was able to deal with that matter or whether it remains unresolved. As I stand here, I am not in a position to deal with that detail.
Vote No 22 - Justice and Constitutional Development:
Mrs S M CAMERER: Madam Speaker, the Minister has repeatedly said that the core function of the Department of Justice is the courts. The courts are in a mess. Today the portfolio committee was briefed by the director-general to the effect that the system of court administration in our country is out of date; that it is not coping adequately with the current pressures on it in terms of volume of work and the expectations of the community; and that the backlog of outstanding cases in the district courts is a whopping 120 000, in the regional courts 46 000 and in the High Courts approximately 1 000 cases. There are huge numbers of vacant court posts.
Yet, in this adjustment account R271 million has been taken away from court administration and given to the National Prosecuting Authority. I understand that this is because the prosecutors are now being paid from the National Prosecuting Authority budget. But the result of this and other adjustments in this adjustments appropriation in favour of the National Prosecuting Authority is that the latter’s budget has now doubled from R415 million to R822 million. It now amounts to more than half of the budget for court administration, which is a mere R1,3 billion. Is this not unbalanced? The growing National Prosecuting Authority empire seems to be a Rolls Royce operation compared to the court operation, which is more like a broken-down bakkie. Surely in a situation such as this, court administration should have received more funds rather than less. There is a tremendous number of notch increases that have not been funded in this budget and posts that are occupied but not funded. I wonder if the Minister could comment on this situation as it appears to us from this adjustments appropriation.
The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Madam Speaker, I am certain that the hon member will remember from her previous life that whenever a function shifts, it does so with its resources. One does not keep resources where the function was and yet move the function elsewhere. I suppose if the hon member is honest - and I know that she is making an effort to be honest - she would accept that this is how things work. [Laughter.]
While the situation in courts is not a bed of roses, an honest observer would give credit where it is due. People are working very hard in those courts with minimum resources, and yet the backlogs are being whittled down. They even spend their own time in the courts on Saturdays, instead of spending that quality time with their families. We as the people of the Republic of South Africa - and certainly, as public representatives - owe a huge debt of gratitude to these men and women who work in the system, instead of saying that the situation is a mess. [Applause.]
We accept that there are many shortcomings. By the way, these shortcomings are not a post-1994 development or phenomenon. They were inherited by those who deemed it necessary, in their skewed wisdom, to make 11 countries out of one. They created 11 departments of justice, 11 court systems, 11 prosecuting systems and so on, instead of one. Resources were wasted there.
The situation we witnessed with Minister Buthelezi in Mahlabathini only last week leaves so much to be desired. Yet, we cannot run away from this. Neither can we shift functions and keep resources, because we think we should use those resources where there is a greater need. If we did that, we would be acting in a manner which will be grossly improper. We have no intention to do so.
Mr C AUCAMP: Madam Speaker, the Bible says those who have should not despise those who have not. Therefore, I will ask a question on behalf of the ACDP because they do not have any speaking time left. [Laughter.]
The amount of R19 million has been allocated to the Department of Justice in respect of people who have been referred by the courts for psychiatric observation in order to determine their fitness to stand trial. Why has this function been shifted to the Department of Justice without the necessary funds? It is signed: ``The hon Green’’. [Laughter.]
The SPEAKER: Order! I thought the clause allowing a shift to other parties was still due to go through Parliament. [Laughter.]
The MINISTER: Madam Speaker, for a very long time a whole lot of us - maybe because of our understanding of where we come from - assumed that the funding for this function came from elsewhere. This was until the problem literally descended on our laps, and uncomfortably so too. We were happy with the way things were working. The function was, indeed, being performed elsewhere. But when provinces started complaining that they were not being paid or, for that matter refunded for performing this function, it dawned upon us that we needed to find funding for this exercise. So all along there was no need to find funding for this. It is only now that we have had to do so. Indeed, we are eternally grateful to the Treasury for acceding to our request.
Vote No 23 - Safety and Security:
Mr V B NDLOVU: Madam Speaker, Programme 2 talks about preventing the cycle of crime. Will that include the plea from the management of the SAPS to allow them to increase the number of police officers by 16 450 within 5 years? Will this be accommodated in that programme?
The MINISTER OF SAFETY AND SECURITY: Madam Speaker, at present we stand at 117 000. We are pushing that by the end of this financial year there should be 23 000. But this is still inadequate. We have accordingly presented our case to the Treasury for 16 000 additional personnel in the next three to four years. We hope that this request will be accommodated.
Adv A H GAUM: Madam Speaker, I refer to the items Crime Prevention and Detective Services under ``Other Adjustments’’. We welcome the additional allocation for vehicles. However, in view of the huge shortage of vehicles, do the additional allocations under these programmes only cater for the modernisation, upgrading and replacement of vehicles or is it also to reduce these shortages? If so, to what extent will these shortages be reduced in view of these allocations?
The MINISTER: Madam Speaker, at present we stand at 25 000. We have a complement of 25 000 vehicles.
The ideal situation would be when we reach 27 000. What has been done right now is that we, as a result of an additional allocation that the Treasury has given us, will be able to buy, in the course of this year, 6 300 vehicles, which will be a very great improvement. The shortfall of 1 200 for us to reach 27 000 will be addressed over the next few years.
Vote 24 - Agriculture:
Mr A J BOTHA: Mr Chairperson, in the main Budget there was much to be commended and it is therefore a major disappointment that the Agricultural Research Council receives no additional funding now, since the Auditor- General warned earlier this year that this council faces collapse in the absence of timeous funding.
I also wonder what the hon members who represent the Eastern Free State, Northern KwaZulu-Natal and Mpumalanga are going to report to their constituencies regarding the total absence of any mention of the cold weather disaster in September this year. By all accounts this unforeseeable disaster will cost those areas in excess of R100 million. I must remind the Deputy Minister that many of the farmers who were affected count amongst the poorest and some have lost all their stock.
Can the Deputy Minister enlighten us on these two glaring omissions, notwithstanding the delight with which the previous Minister of Agriculture welcomed the medium-term provisions today?
The DEPUTY MINISTER FOR AGRICULTURE AND LAND AFFAIRS: Madam Speaker, the hon member, Mr Botha of the DA must perhaps just remember what kind of items go into a budget such as this medium-term budget.
With regard to the ARC, if we were to allocate more money now it should have been tested against the test of unforeseeability and unavoidability. That is not what is at stake here at all. So I think that question falls away. We will see what happens in the new budget in the new year.
With regard to the cold weather and the death of the animals in the Free State and Northern Natal, that will be addressed here in due course, just as in the medium-term budget that the member has before him at the moment. Some of the flood disaster money is still being expended in this budget. So that will come in due course. It is being processed in the provinces, from where it will be coming to the Presidency and from there onwards it will be disbursed. There is no need to worry about it at this stage.
Vote 25 - Communications:
Mr M WATERS: Madam Speaker, the Minister of Communications has made a name for herself as the most agile in the Cabinet by continuing with flipflops and somersaults on matters such as how many competitors Telkom should have. [Interjections.] She could earn herself a place in the national Olympic squad; not content with a grand finale she is now performing a magnificent backflip on the Post Office.
The Minister has failed to deliver on the promise of a break-even organisation. Regrettably, it is the taxpayer who will suffer the consequences of this folly, forking out R1,5 billion over the next three years to an organisation which already owes a further R1 billion to the Post Bank. Moreover, yet again the ANC administration ensures that the poor will be the losers, as there is no guarantee that the subsidy will be used to fulfil our obligations to the anti-poverty drive through roll-out.
Can the Minister explain exactly what the money has been allocated for? It is high time that the Minister of Communications does the honourable thing and polevaults herself out of the Government before she trips up yet again.
The MINISTER OF FINANCE: Madam Speaker, I do not know if there is any point in responding to that young man from the brat pack. It is just a viewpoint; it is not a question. [Interjections.] I think that the DP is turning this adjustments estimate into a circus and not a point of accountability. I take exception.
Vote No 26 - Environmental Affairs and Tourism:
Mrs L R MBUYAZI: Madam Speaker, I would like to focus my question on programme 2 on the Johannesburg World Summit.
Since South Africa will be hosting this conference, I would like to know from the Minister whether there is, in this budget, any provision for an awareness programme for councillors, and also the implementation of Agenda 21, which was passed during the Rio Conference 10 years ago? May I please be informed whether this budget provides for the awareness programme as well as the implementation of Agenda 21?
The SPEAKER: Order! The Minister is not present. Minister of Finance, are you taking that response?
The MINISTER OF FINANCE: Madam Speaker, I am not aware that there is any specific programme during this fiscal year. In respect of preparations for next year, the Jowsco, Johannesburg World Summit Company, and the general preparations for the World Summit on Sustainable Development, are quite far advanced. The Jowsco has been launched, work is being done and I think that colleagues would be aware of the fact that there is already publicity and, in fact, a lot of activity also within the NGO community, so much activity that the leadership of Sangoco, the South African National NGO Coalition, who participated in the preparations of the WSSD, to date have already fallen out. So that does not cost money. It is part of the general work of the department and would be covered without making a specific allocation for it in the adjustments estimate.
Vote No 27 - Labour:
Mr N J CLELLAND: Madam Speaker, this Adjustments Appropriation Bill is the second blow to real skills development this year. Earlier this year we were informed by the Department of Labour that Setas were only able to pay out R47 million, out of the R1,25 billion collected through the skills levy. Now the department forfeits a further R50 million earmarked for skills development because Setas have not finalised their project planning in good time. I think it would be appropriate to warn the department and the Minister of Labour that skills development in South Africa, particularly under the Setas system, is under threat and demands decisive, capable leadership intervention. Is the Minister confident that Setas are still the appropriate vehicles for skills development, and is he confident that their performance will improve radically in the next period?
The MINISTER OF FINANCE: Madam Speaker, the Setas, in the first place, are not of Government. They are owned collectively by business and labour. Therefore, the question is more appropriately addressed to those sectors. In fact, the Setas exist as a paragon of what is possible with regard to tripartisan decision-making in skills development. All that Government can do, is to provide a leading or guiding hand, and part of that has been to collect the revenues.
However, the actual programmes of implementation must be developed jointly by business and labour as the key participants in the Setas. Clearly, there is now a failure, because big business tends to see the Setas or the skills development levy as a tax and that they can walk away from responsibility. That requires ongoing engagement and it is a tripartite engagement. It is not of the Ministry of Labour.
Secondly, the other issue is that there is an institutional matter that must be addressed, ie the small and medium enterprises, which are small contributors to the Skills Development Fund. They are minor participants in the Setas, and are not advantaged by being able to draw against the Skills Development Fund.
However, these are ongoing issues and part of it requires a change in mind- set. That change in mind-set is one that requires a commitment to long-term investment in human capital formation. That is about business. There is no problem with the shortage of capital in this regard. It is about engaging business quite differently.
Vote No 29 - Minerals and Energy:
Mr J H NASH: Madam Speaker, on page 156, under the heading Energy
Management: Electricity basic services support areas'', the report states,
the development of free basic electricity to consist of pilot projects in
nodal and selected targeted urban areas’’. Which target areas does the
department have in mind?
Secondly, will the additional funds be provided from the Department of Minerals and Energy in addition to the equitable share of local government to subsidise nongrid electricity systems?
The MINISTER OF MINERALS AND ENERGY: Madam Chair, the areas where we intend to pilot free basic energy are in all the provinces. We have targeted the poorest areas as identified and announced by the President earlier in the year. They include towns and villages like Antiok, Makepesvlei, Ga- Ragopora, Gesese, Maropong, Mathopestad, Malope City, and so on. They are all in the poorest districts of the country.
About whether the free basic energy is additional to the equitable share? Yes, it is.
The SPEAKER: Order! I think that the time of the New NP has expired. Are there any parties that wish to ask supplementary questions?
Vote No 32 - Transport:
Mr J P CRONIN: Madam Speaker, I would like to ask a couple of questions. The first is that in the roll-overs we see for the second time now, there is one with regards to expenditure on the implementation of the administration of adjudication of road traffic offences. We are doing it for the second time now and we seek reassurance from the Minister that we will now begin to implement that amount.
Secondly, with regard to the unforeseen and unavoidable expenditures, the bulk of them are directed at addressing subsidies for public transport, and we certainly support that because public transport does require subsidies, but one has a sense that this has become a bit of an inexact science. Could we have the assurance of the Minister that in future we will try to plan much better for the kinds of subsidies that need to flow to public transport?
The MINISTER OF TRANSPORT: Madam Speaker, firstly, steps have been taken to ensure that the infringement agency which needs to be set up in terms of the administrative adjudication of road traffic offences will be set up before the end of the current financial year. In fact, we hope that it will be on its feet before the end of this calendar year. There is progress in that regard.
With regard to the issue of subsidies, this is a very difficult issue, because the whole public passenger transport system is under scrutiny at the moment to ensure that there is better rationalisation promoting intermodalism so as to ensure that there is greater movement towards trains also taking into account that the minibus taxi industry is really not subsidised and present. The whole subsidy system is under scrutiny. I cannot promise that there will be results in the ensuing year, but certainly, the process of developing a subsidy system which benefits the poor and not just the operators, is under consideration at present.
Mr S B FARROW: Madam Speaker, the SA Rail Commuter Corporation budget has reflected operational shortfalls of R100 million and R23,5 million last year. Does the Minister foresee this particular trend continuing and, if so, how does he see it being resolved?
The MINISTER: Madam Speaker, part of the problem with the SARCC budget has been that we could not foresee the extent of inflation and the extension of services. We have received additional allocations, for which I am grateful, and my hope is that our baseline allocation will make adequate provision so as to ensure that this problem does not recur.
Debate concluded.
Votes Nos 1 to 13 put and agreed to.
Vote No 14 put and agreed to (Afikaner Eenheidsbeweging dissenting).
Vote No 15 put and agreed to (African Christian Democratic Party dissenting).
Vote No 16 put and agreed to.
Vote No 17 put and agreed to (Democratic Party dissenting).
Votes Nos 18 to 24 put and agreed to.
Vote No 25 put and agreed to (Democratic Party dissenting).
Votes Nos 26 to 33 put and agreed to.
Schedule agreed to.
Bill read a second time.
CONSIDERATION OF LEGISLATIVE PROPOSAL: LOSS OR RETENTION OF MEMBERSHIP OF NATIONAL AND PROVINCIAL LEGISLATURES BILL
(Draft Resolution)
Mr A C NEL: Madam Speaker, on behalf of the Acting Chief Whip of the Majority Party, I move without notice:
That the House, in terms of Rule 238(3), gives permission for the legislative proposal to be proceeded with.
The LEADER OF GOVERNMENT BUSINESS: Madam Speaker, as Leader of Government Business, I wish to inform this House that I have noted that the Portfolio Committee on Justice and Constitutional Development, working in conjunction with the Department of Justice and Constitutional Development, has introduced draft legislation, namely Loss or Retention of Membership of National and Provincial Legislatures Bill, 2001.
The purpose of this legislation is to establish mechanisms, firstly, for a member of the National Assembly or a provincial legislature who ceases to be a member of the party which nominated that member to retain membership of such legislation. Secondly, it provides for an existing party to merge with another party, or any party to subdivide into more than one party whilst allowing a member of a legislature affected by such changes to retain membership of such legislature.
The Department of Justice and Constitutional Development and the Department of Provincial and Local Government have in the meantime also been instructed to prepare draft legislation amending section 157(3) of the Constitution of the Republic of South Africa, 1996, and section 27 of the Local Government Municipal Structures Act, 1998, respectively, in order to introduce similar mechanisms at local government level.
In terms of the Constitution, particulars of these amendments will be published for public comment and will be considered by Parliament early next year. I have thus agreed with the chairperson of the Portfolio Committee on Justice and Constitutional Development, hon Adv Johnny de Lange, that while the portfolio committee will, with the permission of this House, continue to process the Bill before this House, the Bill will form part of a package of amending Bills that will come before this House early next year. [Applause.]
Motion agreed to.
CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON JUSTICE AND
CONSTITUTIONAL DEVELOPMENT - EMPLOYMENT BENEFITS OF TRC STAFF
Order disposed of without debate.
Report adopted.
CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON JUSTICE AND CONSTITUTIONAL DEVELOPMENT - EMPLOYMENT CONDITIONS OF PUBLIC PROTECTOR
STAFF
Order disposed of without debate. Report adopted.
CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON JUSTICE AND CONSTITUTIONAL DEVELOPMENT - DIRECTIVES IN TERMS OF SECTION 4 OF CRIMINAL
PROCEDURE AMENDMENT ACT, 1997
Order disposed of without debate.
Report adopted.
CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON JUSTICE AND CONSTITUTIONAL DEVELOPMENT - DIRECTIVES IN TERMS OF SECTION 7 OF CRIMINAL
MATTERS AMENDMENT ACT, 1998
Order disposed of without debate.
Report adopted.
CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON FOREIGN AFFAIRS - COTONOU PARTNERSHIP AGREEMENT
Order disposed of without debate.
Report adopted. CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON HOME AFFAIRS - CONVENTION ON NATIONALITY OF MARRIED WOMEN
Order disposed of without debate.
Report adopted.
The House adjourned at 18:16. ____
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS
THURSDAY, 8 NOVEMBER 2001
ANNOUNCEMENTS:
National Assembly and National Council of Provinces:
- The Speaker and the Chairperson:
(1) The Minister of Health submitted the Wysigingswetsontwerp op
Mediese Skemas [W 80 - 2001] (National Assembly - sec 75) to the
Speaker and the Chairperson on 8 November 2001. This is the
official translation of the Medical Schemes Amendment Bill [B 80 -
2001] (National Assembly - sec 75), which was introduced in the
National Assembly by the Minister on 3 October 2001.
National Assembly:
- The Speaker:
(1) Message from National Council of Provinces to National Assembly:
Bill, subject to proposed amendments, passed by National Council
of Provinces on 8 November 2001 and transmitted for consideration
of Council's proposed amendments:
(i) Judges' Remuneration and Conditions of Employment Bill [B
83B - 2001] (National Assembly - sec 75) (for proposed
amendments, see Announcements, Tablings and Committee Reports,
p 1265).
The Bill has been referred to the Portfolio Committee on Trade and
Industry* of the National Assembly for a report on the amendments
proposed by the Council.
(2) The following changes have been made to the membership of
Portfolio Committees, viz:
Agriculture and Land Affairs:
Appointed: Mudau, N W (Alt).
Finance:
Discharged: Mofokeng, T R.
Housing:
Appointed: Mudau, N W (Alt).
Minerals and Energy:
Appointed: Mofokeng, T R.
Public Works:
Appointed: Mudau, N W.
Safety and Security:
Appointed: Mudau, N W.
Transport:
Appointed: Mudau, N W.
(3) Mr T R Mofokeng has been elected as chairperson of the Portfolio
Committee on Minerals and Energy with effect from 7 November 2001.
(4) Report of the South African delegation to the 105th Inter-
Parliamentary Union Conference held at Havana, Cuba from 1 to 7
April 2001:
The Report of the South African Delegation to the 105th Inter-
Parliamentary Union Conference held in Havana, Cuba from 1 to
7 April 2001.
The members of the South African delegation were: Ms Baleka
Mbete, Deputy Speaker (Leader of the Delegation); Ms Gwen
Mahlangu, (ANC); Mr Tony Marais, (ANC - NCOP); Mr Moss
Chikane, (ANC); Ms Sandy Kalyan, (DP); Mr JH van der Merwe
(IFP); Mr Jacobus Dowry, New NP; and Mr Tommy Abrahams, (UDM).
The accompanying members of staff were Mr Sindiso Mfenyana
(Secretary to Parliament) Mr Mtutu Masiza (Manager:
International Relations) and Ms Ina Wium (Deputy Speaker's
Office).
Inaugural Ceremony
The Conference was opened by the President of the Council of
State and the Council of Ministers of the Republic of Cuba,
His Excellency Mr Fidel Castro Ruz, who declared the
Conference opened in an unusual 10 minute long speech. The
ceremony was also addressed by the President of the IPU
Council, Dr Najma Heptulla, the Representative of the United
Nations, Sir Kieran Prendergast and the Speaker of the
National Assembly for People's Power, Mr Ricardo Alarcon.
Supplementary Item
Of the seven requests received, the item proposed by Cuba was
agreed upon. The topic was:-
"Contribution of the world's parliaments to the struggle
against terrorism, in conformity with resolution 55/158 of the
United Nations General Assembly"
Item 7: Emergency Supplementary Item
The German delegation put forward a proposal for urgent
consideration of a matter regarding Afghanistan. The topic
was: "International action to meet the emergency situation in
Afghanistan, compounded by the recent destruction of cultural
heritage by the Taliban".
Mr Tony Marais represented the South African delegation in the
discussions. Ms B. Mugo from Kenya was appointed to chair the
proceedings of the Drafting Committee.
The resolution called on the "...Taliban to respect human
rights in accordance with the relevant international
declarations, conventions and covenants" and to "end the grave
violations of the human rights of women and girls, and
especially guarantee that women and girls have unrestricted
and equal access to health care, education and employment
outside the home".
Item 3: General Debate on the political, economic and social
situation in the world
The Deputy Speaker and Mr Moss Chikane delivered speeches at
the General Debate. The Deputy Speaker's speech was about the
Millennium Africa Recovery Program. She urged the Parliaments
- especially from the developed world - to understand and
support this African initiative on the basis that Africans
would drive it on Africa's terms.
The first highlights of the debate were the numerous exchanges
between the Arab countries and Israel, which led to a number
of rights of reply.
The second was the second address to the assembly by the
President Fidel Castro Ruz. In this speech, the President
placed particular emphasis on the situation in the developing
countries, noting that since the last IPU meeting was hosted
in Havana in 1981, the gap between the poor and the rich had
widened tremendously. The President also described at length
the economic difficulties faced by Cuba as a direct result of
the United States embargo against his country.
Item 4: Securing observance of the principles of international
law in the interests of world peace and security (First
Committee)
Messrs J H van der Merwe and Tommy Abrahams represented South
Africa in the Committee whose deliberations were led by the
International Committee of the Red Cross. Mr Van der Merwe
participated in the Drafting Committee and was one of the
nominees to chair the proceedings. Eventually, Mr Paez of Cuba
was appointed chairperson of the committee.
Item 5: Education and culture as essential factors in
promoting the participation of men and women in political life
and as prerequisites for the development of peoples
Ms Sandy Kalyan and Mr Kobus Dowry attended the discussions of
the debate and delivered speeches. Ms Kalyan was subsequently
interviewed by the Cuban television programme on the South
Africa's aids epidemic and steps taken to combat it.
Appointments into Committees
Ms L. Motsumi, MP from Botswana, was elected as one of the
Vice-Presidents to the Fourth Committee. Ms Motsumi was
replacing Ms Mavis Chidzonga who was no longer a member of the
Zimbabwe Parliament.
Discussion panel on the Optional Protocol to the Convention on
the Elimination of All Forms of Discrimination Against Women
Ms Gwen Mahlangu attended the meeting of men and women
parliamentarians whose panelists were members of countries
that had already ratified the Optional Protocol to the
Convention on the Elimination of All forms of Discrimination
Against Women.
On 10 December 1999 the Optional Protocol of CEDAW was open
for signature, ratification and accession. This Protocol to
the Convention entered into force on 22 December 2000. There
are now 18 state parties to the Optional Protocol and it has
been signed by 65 State parties to the Convention.
South Africa has signed and ratified the Convention but not
the Optional Protocol. As a result, in Cuba, when a panel
discussion around the Protocol took place, we were given
observer status. At this meeting Angela King gave a
presentation encouraging the IPU and its members to ratify the
CEDAW and its Protocol and that CEDAW and the IPU were working
together to prepare a handbook for parliaments on the Optional
Protocol to the Convention.
Most countries, including South Africa, committed to the
ratification of the Optional Protocol. A decision was taken
that the panel was a success and at future meetings of IPU a
panel discussion should be held on matters affecting women. It
was decided that in Ouagadougou (Burkina Faso), a panel
discussion be held on `Genital Mutilations', as this practice
is still rife in African countries including the host country
to the next IPU.
IPU Council
During the 104th IPU Council meeting in Jakarta, the Deputy
Speaker and Mr Fjuck of Estonia were appointed to study the
audited finances of the Union and to make a presentation in
Havana. The report presented by the two parliamentarians
raised a number of issues about the financial situation of the
IPU. Among the most sticking points was the non-contribution
of the United States Congress.
The Deputy Speaker held several meetings with the IPU
Secretariat and Mr Fjuck in order to finalise the financial
report that was tabled to the Council. Parliaments need to pay
attention to the financial position of the IPU. A possible
increase to the financial contributions cannot be avoided.
With the USA in arrears (its contribution amounts to 15% of
the Budget of the IPU), the country is due to be removed as a
member in terms of the Rules of the IPU.
Bilateral Meetings
The Delegation was involved in numerous bilateral meetings.
The Deputy Speaker attended a working lunch of Leaders of
African delegations called by Speaker Adjetey of Ghana.
There was a meeting with the Leader of the Swedish delegation,
in that country's capacity as Chair of the European Union. The
discussions mainly centered on the forthcoming World
Conference Against Racism to be held in Durban in September
2001.
The Deputy Speaker held separate lengthy discussions with the
Deputy Speaker and the Speaker of the National Assembly for
People's Power of Cuba.
The Delegation received a briefing about the nature and
character of the Cuban political system. The briefing dealt
with local government elections, parliamentary system and
civil society organisation. The Delegation was afforded the
opportunity to ask questions and interesting discussions took
place as a result.
Other Activities
Mr T. Abrahams was delegated to join delegates from other
countries on a visit to the Cuban Medical School. It was
illuminating to learn about the extent of the role played by
Cuba in training Cubans and prospective doctors from
practically every country in Latin America. In Cuba the state
covers all costs incurred in the training of students,
including non-Cubans. It was reported that, in Cuba, a doctor
is available for every 250 members of the population.
Mr M Chikane joined the visit to Cuban Sports Institute. After
the visit, Mr Chikane commented that "Cuba knows those who
wish to survive tomorrow, plan yesterday and plant today". He
also mentioned that the open door policy of Cuba to
international youth to study sport was a priceless course that
would put that country ahead of other countries who invest in
other things. This endeavour encapsulates international
relations, tourism and friendship for the nations to come.
At the last meeting of the delegation an honourable member
confessed that he had come to Cuba with a negative attitude.
He went on to say he was going away with positive memories
about the country.
TABLINGS:
National Assembly and National Council of Provinces
Papers:
- The Speaker and the Chairperson:
Report and Financial Statements of the South African Human Rights
Commission for 2000-2001, including the Report of the Auditor-General
on the Financial Statements for 2000-2001.
National Assembly
- The Speaker:
Treasury Memorandum on changes in the form of the 2002 Estimates of
National Expenditure.
COMMITTEE REPORTS:
National Assembly:
-
Report of the Portfolio Committee on Minerals and Energy on the Gas Bill [B 18B - 2001] (National Assembly - sec 75), dated 7 November 2001:
The Portfolio Committee on Minerals and Energy, having considered the Gas Bill [B 18B - 2001] (National Assembly - sec 75) and a proposed amendment of the National Council of Provinces (Announcements, Tablings and Committee Reports, p 1253), referred to the Committee, reports the Bill with an amendment [B 18C - 2001].
Report to be considered.
-
Report of the Portfolio Committee on Trade and Industry on the Merchandise Marks Amendment Bill [B 33B - 2001] (National Assembly - sec 75), dated 7 November 2001:
The Portfolio Committee on Trade and Industry, having considered the Merchandise Marks Amendment Bill [B 33B - 2001] (National Assembly - sec 75) and a proposed amendment of the National Council of Provinces (Announcements, Tablings and Committee Reports, p 1203), referred to the Committee, reports the Bill with an amendment [B 33C - 2001].
Report to be considered.
-
Report of the Portfolio Committee on Trade and Industry on the Industrial Development Amendment Bill [B 32D - 2001] (National Assembly - sec 76), dated 7 November 2001:
The Portfolio Committee on Trade and Industry, having considered the Industrial Development Amendment Bill [B 32D - 2001] (National Assembly - sec 76), amended by the National Council of Provinces and referred to the Committee, reports that it has agreed to the Bill.
Report to be considered.
-
Report of the Portfolio Committee on Agriculture and Land Affairs on the Marketing of Agricultural Products Amendment Bill [B 26D - 2001] (National Assembly - sec 76), dated 6 November 2001:
The Portfolio Committee on Agriculture and Land Affairs, having considered the Marketing of Agricultural Products Amendment Bill [B 26D - 2001] (National Assembly - sec 76), amended by the National Council of Provinces and referred to the Committee, reports that it has agreed to the Bill.
Report to be considered.
FRIDAY, 9 NOVEMBER 2001
ANNOUNCEMENTS:
National Assembly:
- The Speaker:
(1) In the Announcements, Tablings and Committee Reports of 8
November 2001, it was announced that the Judges' Remuneration and
Conditions of Employment Bill [B 83B - 2001] (National Assembly -
sec 75) was referred to the Portfolio Committee on Trade and
Industry of the National Assembly. This was incorrect, as the
Judges' Remuneration and Conditions of Employment Bill [B 83 -
2001] (National Assembly - sec 75) was in fact referred to the
Portfolio Committee on Justice and Constitutional Development of
the National Assembly for a report on the amendments proposed by
the Council.
- The Speaker:
(1) Message from National Council of Provinces to National Assembly:
Bill, subject to proposed amendments, passed by National Council
of Provinces on 9 November 2001 and transmitted for consideration
of Council's proposed amendments:
(i) Land Affairs General Amendment Bill [B 71B - 2001]
(National Assembly - sec 75) (for proposed amendments, see
Announcements, Tablings and Committee Reports, p 1221).
The Bill has been referred to the Portfolio Committee on
Agriculture and Land Affairs of the National Assembly for a report
on the amendments proposed by the Council.
- The Speaker:
Report of the Delegation to the 3rd ACP-EU Joint Parliamentary
Assembly, Brussels from 29 to 1 November 2001.
Creda Insert Report
TABLINGS:
National Assembly and National Council of Provinces: Papers:
- The Minister of Trade and Industry:
Report and Financial Statements of the National Gambling Board for 2000-
2001, including the Report of the Auditor-General on the Financial
Statements for 2000-2001 [RP 177-2001].
COMMITTEE REPORTS:
National Assembly:
-
Report of the Portfolio Committee on Finance on the Adjustments Appropriation Bill [B 82 - 2001] (National Assembly - sec 77), dated 5 November 2001:
The Portfolio Committee on Finance, having considered the Adjustments Appropriation Bill [B 82 - 2001] (National Assembly - sec 77), referred to it and classified by the Joint Tagging Mechanism as a money Bill, reports that it has concluded its deliberations thereon.
-
Report of the Portfolio Committee on Justice and Constitutional Development on the RSA/Lesotho Extradition Treaty, dated 7 November 2001:
The Portfolio Committee on Justice and Constitutional Development, having considered the request for approval by Parliament of the Treaty between the Government of the Republic of South Africa and the Government of the Kingdom of Lesotho on Extradition, referred to it, recommends that the House, in terms of section 231(2) of the Constitution, approve the said Treaty.
Report to be considered.
-
Report of the Portfolio Committee on Justice and Constitutional Development on the RSA/Lesotho Mutual Legal Assistance Treaty, dated 7 November 2001:
The Portfolio Committee on Justice and Constitutional Development, having considered the request for approval by Parliament of the Treaty between the Government of the Republic of South Africa and the Government of the Kingdom of Lesotho on Mutual Legal Assistance in Criminal Matters, referred to it, recommends that the House, in terms of section 231(2) of the Constitution, approve the said Treaty.
Report to be considered.
-
Report of the Portfolio Committee on Justice and Constitutional Development on the Hague Conference Statute on Private International Law, dated 7 November 2001:
The Portfolio Committee on Justice and Constitutional Development, having considered the request for approval by Parliament of the Statute of the Hague Conference on Private International Law, referred to it, recommends that the House, in terms of section 231(2) of the Constitution, approve the said Statute.
The Committee is of the opinion that, in accordance with Article 6 of the Statute, the Department of Justice and Constitutional Development should be designated as the national office for the purpose of communication with the members of the Conference and the Permanent Bureau.
Report to be considered.
- Eighth Report of the Standing Committee on Public Accounts, dated 24 October 2001:
The Standing Committee on Public Accounts, having considered and
examined the extensive written and verbal evidence from the National
Commissioner of the SA Police Service regarding the Auditor-General's
Reports on the SA Police Service and the Secretariat for Safety and
Security for the 1998-99 and 1999-2000 financial years, and having
briefly reviewed parts of the Auditor-General's Report for 2000-2001,
reports as follows:
A. Background
The Committee welcomes the National Commissioner's personal
commitment to improving financial management and accountability
within a Department with a budget of approximately R14,5 billion.
The Committee also welcomes the National Commissioner's frank
acknowledgement regarding areas where problems are being
experienced. The Committee noted that significant improvements
have taken place in a number of areas, inter alia as a result of
the introduction of the Integrated Strategic Plan last year, aimed
at addressing areas of deficiencies identified in the Auditor-
General's Report. Particularly welcome is the reported reduction
in the number of staff members on paid suspension from 624 to 184,
the absenteeism figure that has been managed down, as well as the
reduction in the number of trained members doing administrative
work. The Committee eagerly looks forward to confirmation by the
external auditors of the improvements, and to future reports by
the National Commissioner of such improvements, as a result of the
corrective strategies.
The Committee further welcomes the quarterly reports furnished to
it and the Auditor-General by the National Commissioner, which
afford the Committee the opportunity to follow developments with
more regularity.
The issues mentioned below are specific areas still of concern to
the Committee.
B. Audit Committee and Internal Audit
The Committee noted comments by the National Commissioner that
progress is being made with the implementation of the PFMA,
including the appointment of a Chief Financial Officer, the
Internal Audit function and the compilation of applicable internal
prescripts as required by the provisions of the PFMA.
However, the Committee noted the delay in the appointment of
appropriately skilled individuals to the Internal Audit function,
as well as the difficulties arising from the composition of the
Internal Audit committee, which did not comply with the provisions
of the PFMA.
The Committee further noted that, while progress is being made
with the Audit Committee, as highlighted by the National
Commissioner, interim steps should have been taken to ensure an
acceptably composed and functioning internal audit unit due to its
importance as a tool to assist management. (See recommendation
L.3.)
C. Management of assets and debt control
The Committee has noted that, in terms of pararagraph 3.3. of the
Auditor-General's Report on the financial year ending on 31 March
2001, numerous weaknesses in logistical management were reported.
The Committee heard evidence at the hearing on 20 June 2001 that
progress has been made with regard to certain of these matters as
well as with the required reporting and control measures relating
to debt. The Committee expects further improvement in the
management of long outstanding debt. It is hoped that the
improvements reported by the National Commissioner during the
hearing will be reflected in the next annual report.
With regard to the Provisioning Administration System (PAS), the
Committee noted that the shortcomings of this system as well as
the shortcomings of the existing Workshop Accounting System do not
appear to sufficiently equip the police to keep adequate track of
assets and to capture sufficient amounts of data on existing
assets. The Committee further noted that the SAPS are currently
phasing in a new Workshop Accounting System that is to be rolled
out nationally. The Committee wishes to express its concern that
the PAS in particular does not seem to be in full compliance with
the provisions of the PFMA. (See recommendation L.4.)
D. Unauthorised expenditure
1. R116 737 000 (1996-97) and R3 405 508 (1997-98)
Over the last three years the Committee had requested from the
Department further information relating to unauthorised
expenditure for the financial years 1996-97 (R116 737 000) and
1997-98 (R3 405 508). Having considered further information
submitted by the National Commissioner, and having concluded
that the expenditure was in line with the goals of the
Department and that no one had unduly benefitted in any way,
the Committee recommends that the amount in question be
authorised or validated by Parliament.
2. R189 000 (1998-99)
The Committee noted that in terms of an amount of R189 000
(1998-99) for consultants that emanated from the Department of
Justice, a reply from the State Tender Board was still
outstanding. The Committee awaits further information by
January 2002 from the National Commissioner regarding the
State Tender Board's long outstanding view on the matter, as
well as other steps that the National Commissioner plans to
take in this regard.
E. Fuel and oil
Fuel cards and the vehicle fleet management system has been a
concern to the Committee for a number of years. The Committee
noted the assurance by the National Commissioner during the
hearing on 20 June 2001 that the automated fuel card system is
under control. It further noted that no losses and shortcomings of
closed-down fuel sites would be written off. (See recommendation
L.5.)
F. National Secretariat for Safety and Security
The Committee noted the finding by the Auditor-General, in his
Report on the 2000-01 financial year, that clarity regarding the
position and functions of the Secretariat needed to be obtained in
order to ensure the effective civilian oversight of the SAPS. The
Committee also noted that in the 1999-2000 financial year, unspent
funds amounted to R12,1 million (48,6%).
The Committee further noted the Department's implementation of the
Minister's directives that the Secretariat be rationalised. The
Committee, however, notes the slow progress made in rationalising
the secretariat, including its structure, within the bigger SAPS
structure, its budget and resource allocations and the
accountability thereof. (See recommendation L.6.)
G. PERSAL
The Committee has noted that the PERSAL system produced valuable
management information relating to personnel and related
expenditure. Given the magnitude of the personnel expenditure of
the SAPS and the Department's exposure to related liabilities such
as leave, medical aid and housing guarantees, the Committee wishes
the National Commissioner to note the recommendations in paragraph
L below. (See recommendation L.7.)
H. Dog School: Pretoria
The Committee noted the concern once again raised by the Auditor-
General that the Dog School was not functioning optimally.
However, the Committee accepts the undertaking of the National
Commissioner that the identified problems will be addressed in the
integrated strategic plan of the SAPS, scheduled for finalisation
by July 2001, a copy of which should be submitted to the Committee
and the Auditor-General by the end of December 2001. (See
recommendation L.8.)
I. POLMED
The Committee noted that the National Commissioner appointed a
team in January 2001 to conduct a full-scale investigation into
the functioning of POLMED. The Committee further noted that the
results of this investigation have been submitted to the Board of
Trustees in order to develop a target-linked implementation plan
to be submitted to the National Commissioner.
J. Consultancy services
The Committee noted that an internal forensic investigation had
been conducted. The Committee and the Auditor-General received a
copy of the report of that investigation, which will be reviewed
(to be held in abeyance until Cluster 1 has reviewed the internal
forensic investigation report).
K. PMG accounts
The Committee noted progress made in respect of the implementation
of POLFIN (Police Financial System) and the comments made by the
SAPS that the efficiency increases due to POLFIN's implementation
will impact on the PMG Account. The Committee will track the
progress in this regard in the quarterly reports, which are to be
submitted to it.
L. Recommendations
In view of the above comments and conclusions, the Committee
recommends that:
1. The Auditor-General, during the 2001-2002 audit, ensure that
the audit plan include those areas highlighted by the National
Commissioner and Management as areas of improvement or
weakness (see paragraph A: Background).
2. The National Commissioner continue to submit quarterly progress
reports, but that in the interest of expediency these be
furnished in a standardised format, to be provided by the
Committee secretariat.
3. The Committee be informed whether the four vacant internal
auditor posts have now been filled, and who the permanent
Chairperson and members of the Audit Committee now are, as
well as how many meetings are planned by the Committee for the
remainder of the financial year. In addition, the Committee
should indicate what key performance results it expects of the
internal audit for the 2001-02 financial year. In the event of
permanent appointments not yet having been made to either the
Audit Committee or the internal audit unit, interim steps are
taken to ensure an acceptable composition and a well-
functioning Committee and that progress be reported on a
quarterly basis.
4. The accounting officer report within two months on progress
made with regard to his full compliance with the requirements
of section 38(1)(c) and (d) of the PFMA regarding debtor and
fixed asset management, including -
(a) the reliability of the information provided by the
Provisioning Administration System (PAS), especially the
impact of modifications to the current systems and the
associated risks created by and during such
modifications;
(b) the utilisation of such debtor and asset management
information by management;
(c) progress made with PAS training against predetermined
milestones;
(d) management's use of age analysis of debtors (including
advances) and resultant action; and
(e) the extent of completion and success of the implementation
on the new Workshop Accounting System, and whether any
quality assurance process has been carried out regarding
the implementation process.
The Committee further recommends that:
5. In the quarterly reports, the National Commissioner and
Management indicate progress made with the fuel card system,
management of all fuel depots, and whether all stocks,
including fuel, are properly controlled and accounted for.
6. The Committee be fully informed in the quarterly reports on
progress made with the rationalisation process of the
Secretariat, with special reference to the issues raised in
paragraph F above, indicating the planned date for
finalisation. The Committee further recommends that the
Portfolio Committee on Safety and Security consider the entire
matter of the rationalisation of the National Secretariat for
Safety and Security, given the emphasis which section 208 of
the Constitution places on its role and the high level of
unspent funds.
7. In respect of PERSAL, the National Commissioner -
(a) fulfil his responsibility of ensuring that the National
Treasury is regularly informed of the SAPS' specific
PERSAL needs so that these can be updated;
(b) scrutinise all available exception reports on PERSAL and
take appropriate steps thereon;
(c) if necessary, arrange workshops for relevant staff
presented by the National Treasury on PERSAL features;
and
(d) ensure that State guarantees of staff members who had
resigned, are always redeemed or recovered.
8. Detail on corrective steps implemented at the Pretoria Dog
School be reported in quarterly reports to the Committee.
9. Given the prominence of POLMED's related expenditure in the
SAPS vote, both the results of the investigation into POLMED
called for by the National Commissioner as well as the
implementation plan drafted by the Board of Trustees of POLMED
be furnished to the Committee in the next quarterly reports.
Report to be considered.
- Ninth Report of the Standing Committee on Public Accounts, dated 24 October 2001:
The Standing Committee on Public Accounts, having considered and
examined the Report of the Auditor-General on the financial statements
of Vote 10 - Education for the year ended 31 March 2000 [RP 119-2000]
and certain papers referred to it, reports as follows:
Financial management
1. Fraud Prevention Plan
The Committee took cognisance of the fact that the fraud
prevention plan was not yet presented to the National Treasury
and certain processes still needed to be concluded.
The Committee therefore recommends that everything possible be
done to implement the proposed fraud prevention plan as soon
as possible, and that the Accounting Officer report back to
the Committee on the progress made thereon by 31 December
2001.
2. Appointment of Chief Financial Officer (CFO)
The Committee is concerned that a CFO was not appointed in the
Department by 1 April 2001, in terms of the PFMA. However,
having heard evidence presented by the Department, the
Committee took cognisance of the fact that the CFO will be
appointed by the end of 2001.
The Committee therefore recommends that the Department take
all the necessary steps to ensure the appointment of a CFO
with the appropriate skills, qualifications and experience by
the end of December 2001, and report to the Committee by the
end of January 2002 on the matter.
3. Internal audit and Audit Committee
The Committee took note of the Accounting Officer's concern
about the limited financial management expertise available in
the public sector. Given the implementation of the PFMA, this
expertise is becoming available only at a premium that may not
be affordable in terms of the public sector salary scales.
The Committee recommends that the Accounting Officer persevere
with the actions aimed at improved financial management,
specifically with regard to the following:
(a) To ensure that the Audit Committee fully complies with the
requirements of section 77 of the PFMA.
(b) To bring the Internal Audit Component up to full strength
and ensure continuous professional training for the
relevant staff. The Department should seek advice from
the Monitoring Unit: Internal Audit and Audit Committees,
established within the Office of the Accountant-General,
on the adequacy of staffing the Department's Internal
Audit Unit in terms of generally accepted benchmarks, and
report to the Committee in this regard by 31 December
2001.
(c) To tighten relevant control measures to prevent any
irregularities regarding cash cheques.
The Committee further recommends that a progress report be
submitted regarding the finalisation of the Risk Assessment
Plan by 31 December 2001.
4. Special audit investigation at six universities
The Committee expressed its satisfaction on progress made in
respect of the previous resolution [Paragraphs 4(1) and (2) of
Sixth Report, 2000]. However, the Committee is still concerned
that some of the universities, which formed part of the
special audit investigation, do not seem to have the capacity
to carry out the corrective steps set out in the business
plans developed as a result of the special audit. The
Committee further notes the appointment of administrators at
two of the six universities. Also, the Committee again notes
that section 41A of the Higher Education Act, 1997, empowers
the Minister of Education to intervene in cases of "financial
or other maladministration of a serious nature".
The Committee therefore again recommends that:
(a) The Department supply the Committee with bi-annual reports
on progress made at the two universities.
(b) The Department continue its endeavour to establish a
process of greater control over funds transferred to
higher education institutions, especially in the light of
the autonomy of the universities, thereby ensuring
greater accountability and the possible prevention of the
need for the Minister to intervene in the administration
of the universities in terms of section 41A of the Higher
Education Act, 1997, the Committee to be kept abreast of
developments in this regard.
(c) Where there are clear signs of maladministration at higher
education institutions, the Minister of Education at all
times be kept informed timeously by the Accounting
Officer in order for the Minister to consider when it
would be appropriate to invoke section 41A of the Higher
Education Act.
5. Transfer payments
The Committee notes that more than 90% of the Department's
total budget is transferred to higher education institutions.
Although during the hearing the Committee expressed its
satisfaction on the control measures instituted by the
Department, it whishes to stress that strict adherence to
Treasury Regulation 8.4 is required, as it is meant to provide
assurance to the tax-payer that departments exercise some
element of control over money transferred to outside bodies.
6. Savings/underspending
The Committee noted the explanation and evidence given by the
Accounting Officer with regard to the savings and
underspending, and is encouraged by the implementation of
control mechanisms by the Department in this regard. However,
the Committee wishes to alert the Department about the
difference between savings and underspending: Whereas savings
is generally encouraged, underspending is normally indicative
of poor planning and management.
The Committee therefore recommends that the Accounting Officer
continuously monitor underspending and take active steps to
minimise the percentage of underspending.
Report to be considered. 7. Tenth Report of the Standing Committee on Public Accounts, dated 24
October 2001:
The Standing Committee on Public Accounts, having considered and
examined the Reports of the Auditor-General on the financial statements
of Vote 17 - Home Affairs for the year ended 31 March 1999 [RP 141-99]
and Vote 16 - Home Affairs for the year ended 31 March 2000 and the
Performance Audit of the Migration Process [RP 125-2000], as well as
certain papers referred to it, reports as follows:
A. Unauthorised expenditure
1. 1998-99 financial year, R808 753
Unauthorised expenditure amounting to R705 758,38 was incurred
during the 1998-99 financial year and comprises the following:
(a) An amount of R620 307,07 in respect of attorney fees
related to the case of the Department of Home Affairs
versus K Baranato because the appointment was not in
accordance with the provisions of the State Attorney Act,
1957.
(b) An amount of R85 451,31 in respect of rental for
accommodation for two district offices due to the
Department's inability to obtain a signed lease agreement
from the Department of Public Works.
Unauthorised expenditure amounting to R102 994,62 was incurred
during the 1997-98 financial year in respect of attorney fees
for the same purpose and on the same conditions as referred to
in paragraph (a) above.
2. 1999-2000 financial year, R19 168 463,82
Unauthorised expenditure totalling R19 168 463,82 was incurred
and comprises the following:
(a) An amount of R1 139 430,08 in respect of a television
commercial ran by the national television broadcaster
during the period 11 to 29 January 1999, for which no
State Tender Board approval was obtained. Although the
services were rendered during the 1998-99 financial year,
the expenditure incurred was only settled during the 1999-
2000 financial year.
(b) An amount of R13 803 863,74 in respect of expenditure in
excess of the voted funds which is mainly due to, amongst
others, lack of funds as a result of supernumerary staff
for which funds were not allocated and an increase in the
allowance of officials abroad, due to foreign exchange
fluctuations.
(c) An amount of R4 225 170 was incurred in respect of
payments made for the chartering of flights for illegal
immigrants. This expenditure was incurred prior to
obtaining approval from the State Tender Board to deviate
from the required tender procedures.
Although the Committee is satisfied with the explanations
provided by the Accounting Officer regarding each of the
instances of unauthorised expenditure reported, the Committee
expresses its dissatisfaction at the Department's disregard
for State Tender Board directives. It is unacceptable that
rules and regulations are contravened, even in cases where the
projects achieve a desirable objective.
In expressing the above sentiments, the Committee notes that,
with regard to the unauthorised expenditure for the years
mentioned, the following issues need to be borne in mind:
*Technical non-compliance
*Services/goods were rendered/received
*Value for money were received
*The State had suffered no loss.
The Committee therefore recommends that the unauthorised
expenditure for the 1998-99 financial year (R808 753) and for
the 1999-2000 financial year (R19 168 463,82) be authorised by
Parliament.
The Committee further recommends that the Accounting Officer,
with regard to the expenditure incurred in repatriating
illegal immigrants:
*Provide documentation to the Committee where the State Tender
Board has agreed to extend this contract.
*Give written feedback to the Committee with regard to the
negotiations with the South African National Defence Force.
*Inform the Committee on the status of this contract by 31
December 2001.
B. Internal control - Market Street Regional Office
The Committee heard evidence relating to the reported shortcomings
in the internal control system at the Market Street Regional
Office. It is encouraging to note the corrective steps taken by
the Department to prevent a recurrence of the reported
shortcomings. However, the Accounting Officer is reminded that
internal control forms one of the pillars of effective financial
management in any organisation, and therefore the Committee cannot
over-emphasise its importance.
The Committee noted the Accounting Officer's comments, and
therefore recommends that the Accounting Officer, by 31 December
2001, provide the Committee with:
1. A progress report on the implementation of LOGIS.
2. A status report on the Market Street establishment,
particularly on the issue of supervision.
C. Government Printing Works
1. The Committee notes that the only outstanding matter with
regard to the closure of the Umtata Printing Works is a number
of security personnel that have not been transferred. The
Committee recommends that the Accounting Officer bring this
matter to a close and submit a final report to the Committee,
which includes the total amount of fruitless expenditure
incurred in the closing of the Umtata Printing Works.
2. The Committee further recommends that the Accounting Officer
provide it with:
(a) The actions taken and a status report on the overdraft of
the Paymaster-General Account.
(b) A progress report on the steps introduced to minimise the
outstanding debt by 31 December 2001.
D. Performance audit of migration process
The Committee noted the matters referred to in the Report with
regard to the process of collecting outstanding debt from
carriers, the recovering of cost for repatriation of prohibited
persons, the availability of equipment and documentation at the
Lindela Detention Camp and the general condition of equipment at
the Johannesburg International Airport.
Having heard and considered further evidence submitted and
explanations given by the Accounting Officer on the key findings
mentioned in the Report, the Committee recommends that the
Accounting Officer submit a detailed report on the following by
the end of December 2001:
1. Specific actions aimed at the collection of outstanding debt
centrally, an implementation plan for these actions and an
assessment of the steps implemented.
2. Progress made in modifying the immigration code to address
cases of non-compliance.
3. The progress and results of the negotiations with Mozambique
and Zimbabwe to ensure that prohibited persons reach their
destination.
4. All cost implications and expected savings of the proposed
changes in the structure at the Lindela Detention Camp and of
the management of such a facility by the Department itself.
5. How and when the Department envisage to revisit the current
migration system to ensure that it complies with all the needs
and requirements the Department is confronted with.
6. The progress made in establishing agreements with ACSA and SARS
to improve, maintain and secure facilities and controls at
ports of entry.
E. Accounting Officer
The Committee is concerned that the currant status of the
Accounting Officer remains uncertain, as this may impact on good
governance and financial management within the Department. These
issues could include expenditure incurred, contracts and tenders
entered into and other administrative matters. The Committee
therefore asks Parliament to request the appropriate executive
authority to take the necessary steps to clarify the status of the
Accounting Officer as soon as possible.
Report to be considered.
- Report of the Portfolio Committee on Housing on Gauteng study tour, dated 14 February 2001:
The Portfolio Committee on Housing having undertaken a study tour to
Gauteng on 29 September 2000, reports as follows:
A. Introduction
The Committee has decided to embark on the provincial study tours,
as a means to fulfill its monitoring and oversight function. The
Committee intended to establish the progress made on the "Housing
the Nation" programme and, have exchange of experience with the
Legislature and hear the feelings of people on the ground about
the programme.
B. Findings
1. Meeting with MPLs and officials of Department of Housing
The Chairperson of the Standing Committee on Housing welcomed
members of the Portfolio Committee to the Legislature. He
indicated that the Legislature has passed the provincial
Housing Act in 1998. The Act established the Provincial
Housing Advisory Board.
The Chairperson also submitted the department's annual report
for 1999-2000. The report addressed issues such as economic
development strategy, construction of housing on well-located
land, the housing backlog and the provincial waiting list. The
department has a programme of priorities:
*Greenfields Housing schemes
*Mass housing projects
*In-fill housing scheme
*Employer-backed housing scheme
*Informal settlement upgrading scheme
*Institutional housing (rental and high density)
*Enforcement of housing norms and standards.
2. Briefing on projects and site visit
(a) Tsutsumani (All African Games Athletics Village)
Background
In September 1999, South Africa was awarded the 7th All
Africa Games, scheduled to take place in Johannesburg. A
site in Alexandra Far East Bank was identified as
suitable for constructing a village for the athletes. A
total number of 1 799 housing units were constructed to
accommodate athletes and their supporting staff. Tshepo
Development Corporation was an appointed constructor to
build the village.
The Gauteng Department of Housing assisted by providing
subsidies to construct housing to accommodate athletes
during the Games. On completion of the Games, these units
were to be transferred in terms of institutional subsidy
arrangements to qualifying beneficiaries. The Department
also provided the service of a project manager during the
construction process. The institutional housing subsidy,
based on 1 799 units, was R31,28 million. The estimated
total development cost was R90 million. The balance was
obtained through external arrangements.
Current status
SEMAG Housing Corporation was established by the
developer as the housing institution to manage the
housing stock. SEMAG experienced isolated cases of
illegal occupation as early as May 2000. In July 2000, a
large-scale invasion took place in unoccupied Alexandra
FEB Phase 2 of Tsutsumani. An application for an urgent
court order to evict illegal occupants was granted. In
Tsutsumani village there were 250 illegal occupants.
During the invasion, incidents of vandalism and theft
occurred. The categories that received urgent attention,
were those where occupation had not yet occurred. The
reasons for units not being occupied, were mainly:
* Subsidies have not been approved.
* The beneficiary has not yet paid the required
deposits.
* Beneficiaries cannot be traced, are deceased, etc.
* Beneficiaries complying with all requirements are
not willing to occupy allocated units due to
intimidation.
* The invaders physically remove beneficiaries who do
occupy their allocated units.
Currently beneficiaries on the waiting list are matched
against the type selected and their affordability. The
department expected to allocate the remaining vacant
housing units by the end of September 2000.
(b) Carr Gardens Rental Housing Project
The Carr Gardens Rental Housing Project was hatched in
May 1998, when Cope Housing Association was selected as
the preferred housing association by the developers
(Ginker), and elected to offer the Johannesburg Housing
Company a portion of the land which the provincial
government had made available for affordable housing
development.
Subsidies were approved for the project in September
1999. The government contribution was 27% of the
development cost, the balance of which came from funds
raised by the company through the Flemish government.
Carr Gardens provided access to good quality housing
through the conventional rental-housing model.
Beneficiaries signed a lease agreement that regulated
their rights and obligations. The Johannesburg Company
with which tenants entered into agreements, was defined
as a "social landlord", because the company provided
accommodation to a low-income group with state subsidies.
The company reinvested the profits in the development of
further rental housing.
Carr Gardens provided an excellent example of what could
be done to integrate new affordable housing into existing
urban fabric in an interesting and enriching way. The
site of the project already had existing architectural
structures that were historically significance. This
included an old charge office and cellblock, protected in
law by the Monuments Council. In consultation with the
Monuments Council, the developer, the Housing Association
and the provincial government, the old and the new
structures on the site have been integrated in a way that
provided residents with a friendly and habitable living
environment.
Summary of Carr Gardens Project
Housing Association Johannesburg Housing Company
No. of units 126 (Phase 1)
Stand size 6 592 square metres
Density 19,1 units per 1 000 square metres
Design format Three-storey walk-ups
Unit types Single room (13)
One-bedroom (15)
Two-bedroom (111)
Tenure model Rental
Development cost R8,6 million
State grant portion R2 318 400
Average unit cost R68 714
Rentals Single (R350)
Beds (R820)
Two beds (R950)
Target market R2 000 to R3 500
C. Conclusion
The Chairperson of the Committee thanked the members of the
Standing Committee of the Gauteng Legislature and the officials.
Areas, like the hostels, should be included in the programme for
the next visit.
The Committee was impressed by the projects, and would like to
congratulate the Housing Department for their efforts to implement
the government policy of housing the nation.
- Report of the Portfolio Committee on Housing on Study Tour to Eastern Cape, dated 14 February 2001:
The Portfolio Committee on Housing, having undertaken a visit to the
Eastern Cape on 18 and 19 January 2001, reports as follows:
A. Introduction
A multiparty delegation undertook the study tour to the Eastern
Cape. The delegation consisted of seven members and two officials
from the Committee Section: Ms N E Hangana (Chairperson and Leader
of the delegation), Ms M S Maine, Mr W M Skosana, Mr J H Nash (all
ANC), Mr D K Maluleke (DP), Mr B W Dlamini (IFP), Chief N Z C
Mtirara (UDM), Mr M Nguqu (Committee Secretary) and Ms K Pasiya
(Committee Assistant).
The Committee decided to go on the tour to as part of its
monitoring and oversight function. The main purpose of the visit
was to undertake tours to various people's projects and inner-city
developments.
B. Start of visit
The Department of Housing, Local Government and Traditional
Affairs made two presentations to us during the visit.
1. Bisho
(1) Eastern Cape Housing Perspective
(a) Expenditure patterns after 1995
The 1994-95 financial year was not reflected because
no money was spent during that period. At that time,
the province was tasked to attend to institutional
and logistical arrangements. An attempt was made to
start to consolidate and integrate the then three
fragmented administrations - the Cape Provincial
Administration (CPA) and those of the former Ciskei
and the Transkei. The provincial housing board was at
that time operating from Cape Town. The Eastern Cape
did not have a housing board.
From 1995 to 1996 expenditure started to increase
gradually. An amount of R64 million was spent in that
year.
Expenditure increased to R132 million during the 1996-
97 financial year. It went to R268 million in 1997-
98, and to R382 million in 1998-99. During 1999-2000,
R328 million was spent.
In the 2000-01 financial year, R183 million had been
spent up to the time of the visit.
(b) Medium Term Expenditure Framework
The Eastern Cape operates within a three-year MTEF
budget cycle. For the current financial year, the
province has been allocated an amount of R422
million, and R490 million and R577 million,
respectively, for the two ensuing years.
As from this financial year, provinces are only
allowed a 5% roll-over of annual allocations. If the
amount is larger than that, they lose the money.
(c) Budget split
As regards the budget split for this financial year,
notice should be taken that R480 million has already
been allocated. This is more than what the province
has. During 1996-97, the provinces were allowed to
overcommit themselves in respect of budget
allocations for that specific year, by almost the
same amount. Despite these commitments, the money was
never received.
The Eastern Cape had entered into legal agreement
with land developers, and it had to honour these
commitments, even if the additional money was never
received. They are still in the process of phasing
out these commitments. Hopefully they will break even
by 2002-03, and thereafter start from scratch.
(i) Capital housing scheme
R3 million was voted towards the "transfer of
houses" programme. This was a National Housing
Programme, called the "R7 500 capital housing
scheme". All State housing schemes built
before June 1993 were transferred to the names
of the occupants, at the maximum discount
price of R7 500. If the outstanding house
price was less than R7 500, the occupant
received the house free of charge.
The Eastern Cape had a total of 150 000 houses
to be transferred, of which 94 000 had already
been transferred.
(ii) Expenditure on State assets
The provincial housing board had State assets
in the form of flats, especially in Port
Elizabeth and East London, which it had to
maintain. These stocks were in the process of
being phased out under the discount benefit
scheme.
(iii) Hostel upgrading
R12 million were voted for this financial
year. This will primarily be utilised for
Matthew Goniwe and Libombo hostels in Port
Elizabeth and Butterworth, respectively.
Upgrading was already completed in East
London, Duncan Village Hostel B, Somerset East
and Uitenhage. These were hostels identified
for upgrading in terms of a hostel
redevelopment programme in the province.
(iv) Old business
With the change-over in 1994-95, the province
had old projects up and running in some of the
towns. R500 000 was voted to have these
projects completed.
(v) Capacity building
R1,06 million was reserved for the training of
municipal officials and department officials
on policy implementation.
The course was initially offered at Wits
University, but has since been decentralised
throughout the province.
(vi) People housing process
R5,2 million was allocated in 1998-99 as a
ring-fence amount. This money can only be
spent for the particular purpose it had been
voted for.
(vii) Rural housing
R15 million was allocated as follows: R4
million to the disaster-struck rural part of
Umtata area; and the residual amount to the 10
regional authorities in the province.
The province identified rural growth points in
terms of their provincial growth strategy. The
first growth point was the Lady Grey/Lady
Frere/Dordrecht/Indwe Triangle.
At political level, this area was identified
as a rural growth point. Focus was beginning
to shape towards the area.
(d) Status of housing projects
Region Projects Subsidies Houses
Approved Approved Completed
Nelson Mandela Metropole
(Western Region) 93 47 218 23 822
Buffalo City
(Central Region) 68 28 761 16 882
Queenstown & surrounds
(Northern Region) 31 22 194 13 206
Umtata & surrounds
(Eastern Region) 16 8 672 2 007
Kokstad & surrounds
(East Griqua Region) 14 8 137 1 075
Rapid Land Development 38 20 991 0
Individual subsidies 21 213 21 213
Pilot housing 1 298
Total 260 157 186 79 503
The creation of housing ownership opportunities was
the primary policy objective of the Eastern Cape.
The total number of home owners created was 173 928.
This consisted of 94 425 houses transferred in terms
of the State discount benefit scheme and houses
completed.
(e) Provincial Initiatives to kick-start housing
development
The following initiatives were taken by the
Department, and some of them had a positive impact at
national level:
(i) Meeting between the Premier of the Eastern
Cape, the MEC for Housing and Local Government
and the Minister for Agriculture and Land
Affairs - to address land release problems
which negatively affected ongoing progress and
thus resulted in under-expenditure.
(ii) Appointment of a Provincial Task Team -
introduce project management systems to
identify and subsequently address blockages.
(iii) Establishment of the Eastern Cape Tribunal in
terms of the Development Facilitation Act - to
some extent this has also alleviated land
release.
(iv) Introduction of a Provincial Pilot Housing
Scheme - municipalities and local emerging
contractors were given an opportunity to
engage in small-scale construction in
identified areas where there were no approved
housing projects with provincial support.
(v) Operation Masakhe: The Department embarked on a
mass housing delivery initiative, designed
around a partnership between all levels of
government and the private sector.
(vi) Utshani Fund - established by the Ministry at
the behest of the South African People's
Homeless Federation in Port Elizabeth (Eastern
Cape).
(vii) Integrated Housing Development - the province
approved and supported attempts to promote
integrated housing development, as could be
seen in Cradock, a community which was thrown
into disarray by political upheaval during the
80s. A project to build 2 000 units with the
assistance of NURCHA brought together various
sectors within Cradock to create jobs,
establish small industries, train artisans and
empower the community to actively participate
in their own development.
(viii)Social Housing - with the assistance of
"Housing Association South Africa", based in
The Netherlands, a housing association had
been established in East London to manage an
institutional subsidy to promote
densification.
(ix) Earth Construction Technology - a pilot project
gained after a presentation at the 1996
Habitat Conference in Turkey, bringing skills
to produce bricks using earth construction
technology. This project transformed into a
s21 company after two years and was at the
time of writing called the Van Der Leij
Foundation, by means of which a large
community centre, three show houses and a
brick factory were constructed. A housing
project containing all the various subsidy was
approved by the Eastern Cape Provincial
Housing Development Board and construction was
due to commence.
(x) Individual subsidies for emerging contractors -
individual subsidies, with support from the
Department, were approved at manageable
numbers to emerging contractors to build
capacity while offering beneficiaries better
top structures.
(xi) New provincial norms and standards - the
political functionary of the Department laid
down new provincial housing delivery norms
which had to be introduced in the following
sequence (in line with the GEAR strategy of
alleviating poverty and building the economy
of the country):
* Job creation
* Skills development
* Maximum product (40 square metre)
(xii) Capacity building - the province had proved
beyond doubt that unless the municipalities,
clearly mandated by the Housing Act to
undertake housing development, were
capacitated to do so efficiently and
effectively, inroads made to date would not be
harnessed. Consequently, the Department
entered into partnership with various role-
players to capacitate municipalities,
provincial officials, emerging contractors and
communities, especially women. The following
partnerships were making a considerable
difference:
* Department of Housing and Local
Government (Province) and the Department of
Labour
* Department of Housing and Local
Government and GTZ through the Urban
Upgrading and Development Programme
* Department of Housing and Local
Government and the People's Partnership
Trust
* Department of Housing and Local
Government and the Delta Foundation
* Department of Housing and Local
Government, Wits University and the Fort
Hare Institute of Government
(f) Rapid Land Development Programme
The Department of Housing, Local Government and
Traditional Affairs had introduced a phased housing
programme which would disaggregate the existing
project-linked housing subsidy scheme into two
distinct phases. The first phase would provide
beneficiaries with land, civil services and tenure in
a planned manner. The second phase would provide for
the provision of top structures to be funded in
ensuing financial years.
Poverty alleviation and the building of the national
economy were government priority. The provincial
housing protocol was therefore:
* Job creation
* Skills development
* A satisfactory product - minimum of 40 square
metre
The Department had been talking to big contractors
towards the establishment of partnerships between the
established and emerging contractors. For example,
the big developer would be responsible for the
provision of infrastructure, thus carrying out the
more specialised work while the emerging contractor
would come into the partnership to build the top
structure. The whole idea was for the big
contractor/developer to mentor the emerging
contractor. This would facilitate a situation where
the established developer would leave the skills
behind when departing.
The Department was in contact with the Department of
Labour with a view to access funds for training
emerging contractor,s but the department and the
municipality had to have a common understanding of
the need for building the partnership, as the
training provided had to be within the project.
The rapid land development programme therefore had
three key strategic thrusts:
* Building of partnerships
* Building of servicing stock
* Effective planning that would assist in fast
tracking expenditure.
(g) Plan of Action for Housing: 2000 and beyond
The political functionary of the Department announced
during the tabling of the Department's 2000-01 policy
speech that three White Papers would be published by
November 2001, namely Housing, Local Government and
Administration and Finance. The following policy
measures would constitute the command line of the
Department in respect of housing, pending the
completion and publication of the White Paper on
Housing:
* Systematic elimination of the housing backlog
* Finalising the transfer of State rental houses
to occupants
* Encourage private bond holders to respond
positively to the government's initiatives in
assisting them
* Getting people who earn regular income to pay
for services rendered to them by municipalities
* Improve the quality of house delivered
* Improve housing subsidy management
* Resequencing the housing (or any capital)
project delivery protocol
(h) Challenges
The road ahead was definitely geared towards
accommodating policy shifts and finding alternative
sources of financial support to address:
* To further promote the People's Housing Process
* To allocate funds towards the special needs of
disabled persons
* To kick-start rural development on a
progressive basis
* To promote rental housing
* To attend to the immediate welfare of the
victims of gross human rights violations
* To assist with subsidy distribution of land
restitution claims
* Promoting holistic integrated development
planning through the integration of different
sectors and the integration of the efforts of
different actors
* To promote the building of partnerships between
emerging contractors and established developers in
particular
(i) Shortfalls experienced
The decrease in the Housing 2000-01 budget allocation
to the province had a negative impact on the
Department's strategic approach towards implementing
rural development after the announcement of the
national rural policy. The Department had limited
funds to start housing initiatives in the 10 regional
authorities in the Eastern Cape, and would have had
to opt for small pilot projects in the interim.
(2) Good Housing Development Practices
(a) Background
The Department of Housing, Local Government and
Traditional Affairs, in partnership with the German
Development Agency, through the Urban Upgrading and
Development Programme (UUDP), decided to create a
platform aimed at sharing lessons learnt and
experiences gained during the implementation of low-
cost housing projects. The workshop also served as a
platform to inform and consult with stakeholders on
new national and provincial policy, legislation and
strategic trends on housing development and expected
impact on housing delivery in the province.
Between December 1999 and May 2000, prior to the
workshop, a comprehensive investigation was
undertaken into good practices in the planning and
implementation of a selected group of housing
projects which were approved by the Provincial
Housing Development Board in terms of the current
national housing subsidy programme. 15 housing
projects were identified, of which three were
eliminated during the investigation process.
(b) Selection of Projects
Projects were selected as good practice on the
following criteria.
(i) Housing process - institutional arrangement,
financial arrangements, beneficiary and
community participation, local economic
development, and private/public partnership.
(ii) Housing product - consolidation process, design
and choices offered, planning issues, method
of construction and value for money.
The investigation placed emphasis on beneficiary
participation and on quality of the housing product.
The investigation may not have been representative of
all housing projects in the province, but
demonstrated what could be delivered through careful
design and delivery processes.
(c) Types of Projects
These projects could be classified into four types:
* Greenfields projects, as extensions of existing
built-up areas
* In situ upgrading projects through a People's
Housing Process
* High density projects
* Small-scale pilot/rolling projects for smaller
communities.
Project Subsidies
Large In situ High Pilot
greenfields through density projects
projects PHP projects
projects
Belgravia
(EL) 150
Bizana Pilot
projects 15
Cradock
Vision 2000 1 700
Dimbaza South 1 500 (+ 200
Phase 2 in situ)
Elliotdale
Pilot Project 15
Keiskammahoek 443
Libode 814
Missionvale
Community
Housing
Project 493
Ngqeleni 420
Ugie 250
(Uitenhage)
Masibambane
Village Hostel
Upgrading
Project 143
Uitenhage People's Housing Process
Project 1 745
Subtotal of subsidies 5 347 1 745 786 30
Total number of subsidies: 7 908
---------------------------------------
Number of projects 6 1 3 2
---------------------------------------
The majority of projects selected for this
investigation constituted greenfields projects, where
new residential areas were created adjacent to
existing built-up areas. Examples of large
greenfields projects were Cradock Vision 2000,
Dimbaza South Phase 2, Ngqeleni, Libode and
Keiskammahoek. These projects were targeted for
beneficiaries living in informal settlements or in
backyard shacks.
Only three of the 12 projects were in situ upgrading
projects or had a component of in situ upgrading. In
the case of the two Uitenhage projects, existing
residential areas and existing buildings were
upgraded and/or converted to family accommodation. In
Dimbaza, 220 subsidies were used for upgrading
existing settlements.
The two pilot projects were also greenfields
projects, but land within the inner municipal area
was used. These projects required the subdivision of
a large piece of land, to be concluded before
individual ownership could be granted.
The primary source of funding was project-linked
subsidies, which were used in nine of the 12
projects. Two projects were implemented via the pilot
project programme, which was a unique programme in
the Eastern Cape. The Belgravia housing project
utilised institutional housing subsidies for a social
housing project.
In 11 of the 12 projects, domestic water supply
consisted of an individual erf connection with water
piped to the residential unit. The only exception was
the Bizana Project, where one communal standpipe per
five residential units was provided. Sanitation was
in the form of waterborne sewerage in 10 of the 12
projects, with ventilated and improved pit latrines
provided in the rural towns of Bizana and Libode.
All projects had gravel roads, with surface
stormwater, except in the two Uitenhage projects and
in the Belgravia project, where bitumen surfaced
roads were provided. Electricity was generally not
supplied as part of the project, the exceptions being
the Belgravis project, Keiskammahoek, Cradock, Ugie
and the two Uitenhage projects.
The Housing Development Board supported larger
greenfields housing projects via the project-linked
subsidy mechanism.
(d) Good Practice Lessons
(i) Greenfields Projects
* Building Quality: The emphasis in the
Libode project on training and quality
control for the emerging contractors ensured
a good end product for the beneficiaries
(note that beneficiary interests such as
quality and size of the top structure were
paramount, a long-term objective, and
accordingly considered more important than
considerations such as short-term jobs for
the unemployed.
* Design: The innovative design (veranda
house) in Dimbaza, triggered an owner-
initiated consolidation process.
* Choices on Top Structure: The
construction of different show houses
enabling beneficiaries to choose, was an
important step to ensure beneficiary
satisfaction and to a certain degree helped
instill a sense of ownership and pride.
* Participation: Beneficiaries had to be
kept informed on all facets of the project
from inception to completion through proper
communication and community liaison
strategies. Project Committees had to have
balanced representation from all key
stakeholders in the project. Whenever
possible, beneficiaries had to be given a
choice in respect of the top structure
(choice in design, choice in building
materials, choice in placing the house on
the erf). Projects with a high level of
beneficiary participation through Project
Committees and strong local leadership were
the most successful projects in terms of
speed of delivery, choice and variety in the
top structure and subsequent consolidation.
Maximum community and beneficiary
participation depended on strong and
organised community structures (Cradock and
Dimbaza) and clearly defined institutional
arrangements, allowing for project ownership
by beneficiaries/community structures. Had
the Local Authority been in full control of
the project management, not allowing
consultants to forge ahead, beneficiaries
could make informed decisions and come up
with creative and innovative ideas and
mechanisms, like self-generated solutions to
problems (Libode).
* Empowerment: The financial limitations of
and the purpose housing subsidies did not
allow for general skills development. One
result of these limitations was that in
certain cases empowerment was only
incidental to housing development. In
several cases up-front selection of groups
to be empowered ensured that training had
impact and effect. Beneficiaries were first-
time homeowners. In the Dimbaza project, a
series of workshops around property
ownership, services and maintenance was
held. Such education programmes assisted
beneficiaries and local authorities to
integrate new low-cost housing areas into
the town.
* Beneficiary qualification criteria:
Transparent objective criteria were to be
introduced to select potential beneficiaries
where the housing need exceeded the
potential supply of units. Pre-project
selection was also helpful to identify the
real participants in the project and to open
proper channels of communication to them.
(ii) In situ Upgrading through People's Housing
Process
* Beneficiary driven construction:
Utilising sweat equity and emerging
contractors, a high standard of services and
one of the biggest top structures could be
achieved. The project demonstrated that some
low-income earners could contribute
financially through savings schemes.
* Gender: Women demonstrated their ability
to take up "conventional men's jobs" in the
building industry.
(iii) High Density Projects
* Integration: In Missionvalle and
Belgravia the good location of the projects,
relatively close to the city centres,
resulted in racially mixed communities, an
important element of social integration and
more compact cities.
* Planning: In the Missionvale project a
more compact lay - out was achieved
resulting in larger top - structures of up
to 54 square metre. Smaller sites ensured
more cost-effective infrastructure
installation and low maintenance costs.
* Gender: The majority of tenants in the
Balgravia project were women. This pointed
to the need for women (often single parents)
to obtain accommodation in a secure
environment. High-density developments were
attractive to single parents.
* Institutional Relationships: Both the
Missionvalle and Belgravia projects had
representatives from business bodies such as
the Border-Kei Chamber of Business and the
Delta Foundation, which ensured the
necessary expertise.
(iv) Pilot Rolling Projects
* Location of projects: Small projects were
developed on land readily available in the
towns. They contributed to consolidating the
municipal area.
(e) Why share good practices and not indicate bad
products?
The intention was to influence developers that to
share ideas and information certain things could be
done in certain ways. The intention was also to
downplay bad practices rather than promoting them.
2. Housing Association East London (HAEL)
Overview on role of East London Transitional Local Council
(ELTLC) in and the history of HAEL
HAEL was a very young and vibrant organisation. Initial
contacts between the City of East London and various
organisations in The Netherlands dated back as far as
1993, when the first discussions on alternative housing
solutions took place.
These discussions eventually led to the formal
establishment of HAEL as a s21 Company on 5 May 1998. The
initiative came about as a result of a joint effort
between the City of East London and the Housing
Association South Africa (HASA), a foundation comprising
32 housing associations in The Netherlands.
Together, the above parties undertook to provide
affordable social housing to those sections of the
community that did not have the means to finance or
construct a dwelling themselves.
Besides addressing the housing problems to low-income
earners in East London, HAEL undertook to make a
concerted contribution towards the social and functional
integration of the city by directing its efforts
primarily at compacting the urban form.
HASA committed itself to providing technical and
financial assistance during the first five years. In 1997
a Dutch Project Manager was seconded to HEAL.
Similtaneously, the East London TLC supported HAEL by
making land available at below market prices and
providing technical and financial support. HASA
principles complement the city council's policies on
promoting visible, upward mobility and in breaking with
the past high level of dependency for housing on local
authorities.
The composition of HAEL's Board of Directors reflected
the developmental stage that the organisation founds
itself in, with representatives of the parties that were
involved in the establishment of the organisation. The
eight-member board comprised representatives from the
Border-Kei Chamber of Business (BKCOB), the East London
TLC, HASA and the NHFC.
Funding was generated from grants from the following
organisations and/or institutions: Housing Institutions
Development Fund (HIDF), East London TLC, HASA,
Provincial Housing Board, and the City of Leiden.
Among the weaknesses and threats facing HEAL were high
interest rates, the unstable economic situation, lack of
a social safety net, HIV/AIDS, and the perception of
rental stock as being inferior. Critical success points
included strategic partnership between ELTLC and HASA,
"buy in" from NHFC and PHB, lengthy secondment of Dutch
advisor, on-line access to specialist knowledge via HASA,
and the commitment of staff.
HAEL wished and strived to become fully independent and a
financially-sustainable South African enterprise by 2002.
C. Group (on-site) visits
1. Belgravia Valley
Belgravia Valley was a mixed grouping social housing inner-
city development project, consisting of two phases. In total
the complex had 338 housing units. The project was managed by
HAEL.
The first phase boasted 150 walk-up units. Construction
started in October 1998 and was completed in November 1999.
The size of the units ranged between 35 and 67 square metre of
one, two and three bedrooms. Tenants would pay a monthly
rental of between R625 and R890, depending on the size of the
unit occupied.
Construction in Phase 2 started in January 2000, and
completion was foreseen for February 2001. There were 288
rental units of between 24 to 63 square metre. They varied
from one- to three-bedroom flats. Rental ranged between R650
and R900 per month, again depending on the size of the unit
occupied.
Over ans above the monthly rentals, tenants were liable for
their own consumption of metered water and electricity to the
East London Transitional Council (now Buffalo City).
Funding for the project came from a variety of sources.
Firstly, there was an institutional subsidy grant from the
government. Secondly, a mixed grant and loan fund from The
Netherlands. Thirdly, there was funding for bulk
infrastructure from the ELTLC. Fourthly, there was a loan from
the National Housing Finance Corporation (NHFC).
Tenants for the Belgravia Valley project were drawn from all
over the city - 50% from Duncan Village and the remaining 50%
from the municipal waiting list.
Potential tenants underwent a rigorous screening process,
which consisted of five interview sessions. HAEL's criteria,
which included gross and net income, household size and
composition, credit worthiness and cash-flows, were discussed.
Once that stage was passed, applicants would receive a
tenants' guide to study and a date to attend the four-hour
HAEL tenants' training programme. This programme was very
interactive and covered the understanding of social, financial
and maintenance rights and responsibilities of the tenant and
HAEL's and tenants' participation. An evaluation and slogan
competition concluded the session. Tenants then chose a unit
and signed a lease agreement.
2. Smuts Ngonyamaville
Beneficiaries are actually involved in building their own
houses.
The community designed plans for their own houses,
subsequently endorsed by the provincial housing board and
submitted to the local municipality for approval. The building
costs (including material supply) accompanying these designs
were calculated up to the last cent, with the involvement of
the community. Beneficiaries were not dependent on the State
subsidy grant of R16 000 alone - those who could contribute
some finance to build bigger houses, did so voluntarily.
Initially, in 1998, the cost of building a single house unit
of 51 square metre was R11 021,51, after expenses for basic
infrastructure were exhausted. Due to deliberate delays by
officials of the ELTLC and increase by suppliers in respect of
materials, the project could at the end of 1999 only manage a
48 square metre unit. When construction was supposed to start
in August 2000, the material costs brought down the unit size
to 40,5 square metre. However, some beneficiaries still made
contributions to enlarge the houses to 48 square metre.
The Smuts Ngonyamaville people's housing process project
consisted of 427 housing units. A total of between 107 to 138
units were under construction. Foundations had already
started and/or had been laid for 31 and/or 125 units. 186
units are in trenches.
Within one year, the project reached tremendous achievements.
These included hiring a competent architect, bringing students
on an internship programme from Botswana, creating employment
for the local people, designing houses, performing financial
cost estimations for the houses and hiring containers to kick-
start construction.
Despite all this, the project was experiencing problems
dealing with the ELTLC, the provincial department of finance
and, at times, the provincial housing board. Officials of the
municipality were not co-operative. There was no running water
on the building site. The municipality promised to connect
water at the rate of R100 per unit per month to provide a
support centre and to make land available for free. After
spending R60 000 on fencing, the municipality reneged and
demanded that the land be paid for and charged at double the
initial R100 rate for water.
The Accounts Administrator in the provincial department of
finance did not want to come to the site for payments, the
office being situated in Port Elizabeth, which was too far.
The community had to raise transport fare from their own
pockets - rather than from the subsidy grant - in order to
reach the office for payment.
All in all, Smuts Ngonyamaville people's housing process was a
typical reflection of a nation at work, building the country.
3. Sinebhongo Village
Sinebhongo Village was a Rotary-funded project for single
mothers. The project consisted of 100 complete housing units
of 45 square metre each - two bedrooms, a lounge, a kitchen,
and an inside toilet and shower. A total number of 52 houses
were already occupied by beneficiaries.
The names of the legible beneficiaries were selected from the
local municipal waiting list (single mothers only). The cost
of R28 000 per housing unit was derived from the R16 000 State
subsidy grant as well as the R12 000 fund from the Rotary Club
of East London/USA. Similarly, the beneficiaries made personal
contributions of R177 and R250 for water connections and
electricity boxes, respectively. The community had access to
basic infrastructure such as tarred streets, drainage water,
sewage etc.
In an endeavour to stimulate and hasten provincial economic
growth in terms of rural development strategy, the project
utilised a local emerging contractor in the name of
Christopher Funding Mfana Construction. The bulk of the labour
force was selected from the community, particularly the
beneficiaries.
D. Comments and recommendations
1. Partnerships between provincial and local governments should be
enhanced to speed up the delivery of services to all our
people, particularly the poorest of the poor in the rural
areas. The Committee deems it necessary to strive to forge
partnerships among the three spheres of governments,
particularly between provincial and local governments, in
order to fast-track service delivery. There is a dire need to
strategically co-ordinate activities between the national and
provincial governments on legislation.
2. The Committee believes that provinces should impact on the
national legislative-making process before it reaches the
NCOP. Provinces should be able to influence legislation at the
level of Portfolio Committee in the National Assembly. There
should be extensive public hearings and public submissions at
provincial level to strengthen the national legislative-making
process.
3. Overseas visits should be tidied up in order to facilitate co-
ordination amongst the different role-players. Revisits in
respect of international and continental trips by different
role-players on housing to the same host country is desirable.
On a recent visit to Brazil, the Committee discovered that
there were too many delegations from South Africa on housing -
different groups from different provinces. Ultimately, these
visits began to antagonise the host countries.
4. The capacity of emerging contractors should be given all
necessary support in terms of rural development strategy in
order to stimulate economic growth in the province.
5. The selling of State-subsidised houses is a cause of major
concern for the government. The government should as soon as
possible intervene and regulate the sale of subsidy houses
funded by the State.
6. Ongoing discussions between the government and provinces on
budget spending to promote service delivery (housing) should
be encouraged.
7. Local municipalities are the vehicle to steer development, and
until that is realised, development will not happen.
Stakeholders involved in rural development should show
commitment.
8. There is a need to change the mindset of some of the municipal
officials.
E. List of participants
1. Department of Housing, Local Government and Traditional Affairs
(1) MEC for Housing, Local Government and Traditional Affairs,
Mr Gugile E Nkwinti
(2) Personal Assistant to the MEC, Mr Litha Twaku
(3) Head of Department, Mr Solomzi Maye
(4) Chief Director: Housing, Ms Linda Mqokoyi
(5) Director: Housing Administration, Mr William Perks
(6) Head of Communication, Mr Mbulelo Linda
(7) Deputy Director: Housing Board Secretariat, Ms Thandi Cebe
(8) Regional Office of Department
2. National Department of Housing
People's Housing Partnership Trust: Ms Pinky Vilakazi
3. Housing Association East London
(1) Chairperson of Board of Directors and Deputy Mayor of
Buffalo City, Mr Desmond Halley
(2) Implementation Manager, Ms Gafeetha Vengadajellum
(3) General Manager, Mr Patrick Lemmens
(4) Tenants Administrator, Mr Lucian Strachan
(5) Social Caretaker, Ms Felicity Brauns
(6) Leasing Administrator, Ms Cynthia Klaas
(7) Ms Julia Alie
(8) The people of Belgravia Valley
4. Housing Institutions Development Fund (HIDF)
(1) General Manager: Operations, Mr Luthando Vuthula
(2) Finance and Administration Manager, Mr Andrew Higgs
5. People's Housing Process Project (PHP) - Smuts Ngonyamaville
(1) Chairperson: Smuts Ngonyamaville Development Trust, Mr
Khululekile Sotewu
(2) Secretary, Mr Sipho Mzamo
(3) Administration Officer, Mr Bongane Macwili
(4) The Smuts Ngonyamaville community
6. Sinebhongo Village (Rotary funded project for single mothers)
(1) Contractor, Mr Fundile Mfana
(2) Sinebhongo village community
(3) Liaison Officer, Ms Lindiswa Mbanjana
7. Local press media
8. All communities visited, including those involved with
refurbishing projects inherited from the dispensation before
1994, as well as those not visited for various reasons.
F. Conclusion
The Committee is satisfied that it had attained most of the
objectives for the study tour.
The delegation managed to lay the basis for a very constructive
relationship with the provincial government of the Eastern Cape.
Open and constructive discussions took place between the MEC for
Housing, Local Government and Traditional Affairs, Mr Gugile E
Nkwinti, his department's senior manager and the delegation.
The visit also succeeded in highlighting the government's rural
development strategy in terms of the economic growth. The MEC
pointed out the provincial initiatives towards the implementation
of the rural development strategy.
- Report of the Portfolio Committee on Housing on Study Tour to Northern Cape, dated 23 May 2001: The Portfolio Committee on Housing, having undertaken a visit to the Northern Cape from 18 to 20 March 2001, reports as follows:
A. Introduction
A multiparty delegation, under the leadership of Ms M S Maine,
consisted of six members and two officials, went on the tour: Ms M
Buthelezi (ANC), Mr L P M Nzimande (ANC), Ms E Ngaleka (ANC), Mr B
W Dhlamini (IFP), Mr A Singh (DP), Ms Jojozi (Committee Secretary)
and Ms Pasiya (Committee Assistant).
B. Objectives of Tour
The Committee went on tour with the following objectives:
1. To fulfil its monitoring and oversight function. The Committee
intended to establish progress made on the "Housing the
Nation" programme.
2. To have an exchange of views and experience with the
Legislature and hear the feelings of people on the ground
about the housing projects.
3. To visit the various housing projects such as People's Housing
Projects and other Inner City Developments.
C. Meeting with MEC
1. Housing Impact
The Northern Cape has a low population density in most areas.
Some housing projects are far from Kimberley as the province
is very vast. A number of criticisms from various dimensions
regarding housing programmes have resulted in the development
of policy tensions. The Northern Cape government is delivering
faster compared to other provinces and is playing a large role
in housing projects. They have placed more emphasis on people-
driven delivery. The main idea of the concept of "people
driven delivery" is that the people are in control of
decisions taken about their own housing constructions. This
has resulted in much larger top structures and higher
satisfaction levels. The "People's housing process" has
contributed enormously to the delivery of houses much bigger
than 36 square metres.
2. Housing Delivery
(a) In 1995 the Department decided that no developers should
build houses smaller than 33 square metres. Considerable
progress has been made with regard to the delivery of
houses, achieved through co-ordinated efforts of
developers, financial institutions, local authorities,
women's groups in housing and material suppliers. The
past six years have been a great success for the Northern
Cape - over 22000 houses have been built.
(b) The Department has identified a few projects for disabled
people and is waiting for Disabled People of South Africa
to get back to it.
3. Housing Allocation
(a) The national Department of Housing allocated R65,475
million to the provincial Department of Local Government
and Housing (the Department) for a low-cost housing
programme for the 2001-02 financial year, which will
deliver 3 500 units across the entire province. In
support of the national Department, the Department
embarked on a process to draft a housing plan that is
appropriate, realistic and affordable for the
continuation of the housing process in the Northern Cape
during 2000-2001.
This plan will serve the following purpose:
* To serve as a guideline for all departmental
officials to implement the housing programme
effectively.
* To serve as a tool to communicate the processes to
be followed with external stakeholders. The process is
therefore transparent.
* To integrate the housing process with other
programmes.
* To propose a clear strategy with targets and
timeframes for the 2000-01.
4. External Factors / Problems Experienced
There are different circumstances which have a direct
influence on the low-cost housing programme, namely:
(a) The geographic vastness and low population numbers
resulting in long distances between small communities and
towns. The Northern Cape is a vast province and there are
long distances between housing projects and towns. To
transport building material to the different projects is
very costly.
(b) Building material is not always available in small towns
and has to be transported over long distances.
(c) The constant migration of communities between towns as
well as between towns and cities.
(d) Funds allocated to the Department for housing projects are
not adequate to address the needs of the communities.
(e) There are only three areas where women are involved in
construction and yet most beneficiaries are women.
(f) It is difficult to identify disabled people from the
application forms that are used for housing applications.
(g) There is sometimes conflict between developers and the
Department. When the Department give advice to the
communities, the developers complain that they are
playing too much of a role in housing delivery.
(h) The pace of delivery is very slow in the province. This is
due to the following:
* It takes time before projects are approved. This is
due to the fact that there is a lot of administrative
backlog, there is shortage of personnel to deal with
administration and finances related to housing
delivery. In the Department, there are 22 staff members
to deal with administration and finances related to
housing delivery. The head of the Department is at the
level of Chief Director. In other provinces the head is
at the level of Deputy Director-General. In other
provinces there are about 100 staff members who work
with housing delivery projects.
* There are not enough funds to process applications
for people who qualify for housing subsidies.
5. Future Developments
(a) This year, the province will review what has been built so
far and the constraints women face in obtaining access to
housing opportunities. The Department will continue to
forge links with the private sector and financial
institutions. Subsidy benefits subject to individual
savings performance will be made a prerequisite to
gaining access to both ownership and rental housing. A
sound strategy based on the public/private partnership,
to reward those who save, would appear to be the right
route to follow.
(b) People with moderate incomes still do not have access to
ample affordable housing finance, hence a strategy
aligned to the Savings Strategy is needed to ensure an
adequate flow of private lending funds to the low-income
segment of the market on terms and conditions, and with
lending practices that are appropriate, fair and
equitable.
(c) The provincial government will continue its endeavour to
provide shelter to the homeless and to gently restore the
rights of our people to a secure place in which to live
with peace and dignity.
D. Galesewe Housing Support Centre
The primary objective of the Centre is to facilitate beneficiary
families to build or to make improvements to their own houses.
1. Project Objectives Achieved
The project has achieved a significant increase in the rate of
delivery of low-cost housing.
The Centre was involved in the facilitation of the
construction of houses in Roodepan (391) and Boikhutsong
(415). The construction of houses in these areas have been
finalised.
The projects where the Centre has played a major role in the
implementation process, was Greenpoint (233), Coville/Floors
(64), Chris Hani Park (251), Boikhutsong Phase 11 and John
Mampe 111.
2. Problems Experienced
(a) The pace of delivery is slow.
(b) In winter the shacks that are built in some areas catch
fire.
E. Chris Hani Park - People's Housing Process
1. Project Profile
(a) This project was started on 23 March 1999. Weekly meetings
were held with the Community Development Forum in an
attempt to resolve all problems regarding the development
of the top structures.
(b) The Department has supported 20 females with the necessary
tools to build their own houses. The houses they have
built are bigger than the houses that the Housing Support
Centre in conjunction with the Kimberley Municipality
have built.
(c) The houses built were 45 square metres and 54 square
metres in extent, respectively, with two bedrooms, a
kitchen, a lounge and a bathroom. The owners have to pay
R150,00 for electricity connection. The houses cost about
R15 000, including services. The owners are happy with
the houses.
2. Problems experienced
(a) A large number of people want to withdraw from the
Kimberley City Council housing projects because of the
bigger houses that the 20 females have built for
themselves. The problem with these houses is that they
are not of good quality and standard.
(b) Confusion is created by the fact that the Department has
started with a second project in the community. This
project is going to be stopped due to political problems
in the area. Two houses still need to be built.
(c) There are people who are occupying a church site
unlawfully. A rezoning application for the church site
has been submitted to town planning. This is to ensure
that these people are accommodated.
F. Kutlwanong
1. Project Profile
(a) Kutlwanong is located eight kilometres from Kimberley.
Kutlwanong was founded in 1994 through an effort of a
local civic organisation, which put pressure on the
municipality to establish a recognised community from the
growing settlement. Kutlwanong housing project is the
result of the USA/SA Gore/Mbeki Binational Commission
Energy Conference, held in Kimberly in 1995. Several
community leaders attended the conference, and this
spawned a decision by the Kutlwanong Community to use the
environment engineering firm of PEER Africa to help plan
and rebuild the township into a holistic, sustainable and
economically viable community. The intention was to
incorporate environmental and energy efficiency
awareness, economic upliftment and capacity building into
the planning, development and implementation process.
(b) The community is governed by an elected council of eight,
called the Kutlwanong Civic Executive Committee. The
Executive Committee works closely with its community to
ensure that they have support in their initiatives.
Because housing is a priority, the Executive Committee
met with developers before selecting PEER Africa
(community-based developer) to assist in training the
community to build new homes. The Kutlwanong-style house
is a product of participative management and design by
PEER Africa. The process involved, firstly, understanding
the resident's acceptable living standards and then
developing those standards into a basic house plan. The
beneficiaries defined the number of rooms and the total
space required to achieve a liveable, comfortable home.
(c) The Kutlwanong style house has the following features:
* Correct (northward) orientation of the dwelling.
* Placement of windows on the north side of the house
to maximise thermal benefit in winter, when the sun is
low on the horizon.
* Extension of roof line to shade windows during
summer, when the sun is high on the horizon, and thus
minimises unwanted solar gain.
* Installation of an insulated ceiling to moderate the
thermal comfort zone in the dwelling.
* Installation of wall cavity to further prevent heat
loss in winter and heat gain in summer.
Kutlwanong has an adequate infrastructure: Paved and wide
streets, electricity, individually serviced water and
sewerage plots. Provision of formal housing is a priority
for the community.
2. Problems Experienced
(a) Kwatlenong is not conveniently located, potential places
of employment and shopping are far away and transport to
these places is very expensive.
(b) At present, the majority of the community live in 20 to 30
square metre shacks constructed of corrugated iron
sheeting. These shacks have no ceilings and curtains are
often used as room dividers. The shacks are colder
inside than outside in the winter, and hotter inside than
outside in the summer.
(c) There is high rate of unemployment in the area, which
makes it difficult for the community to sustain their
houses.
G. Warrenton
1. Project Profile
Prior to the implementation of the housing policy in 1994, the
lack of adequate housing was the single largest problem
Warrenton Municipality had to contend with. It was therefore
decided that at least 1 000 houses be built in Warrenton and
surrounding areas in order to address the lack of adequate
housing, which by that time had reached crisis proportions.
The various communities of Warrenton, in collaboration with
the CBOs, Warrenton Municipality and the Department,
identified the urgent need for the provision of housing as
well as to upgrade the unacceptable living conditions for the
inhabitants of Warrenton. This was the birth of the first
housing project in Ikhutseng. Warrenton Municipality
constructed 200 houses in a former traditional poor black
township, which was completed in 1996. Ikhutseng was
enormously disadvantaged and is still suffering the effects of
the apartheid government reign.
The construction of the 121 houses in Warrenvale by Warrenton
Munipality, as well as the construction of 600 houses in
Ikhutseng by Grinaker Housing, were approved shortly
afterward. The construction of the 121 houses in Warrenvale
and the construction of 475 houses in Ikhutseng were both
completed in 1996, thereby generating a number of employment
opportunities.
2. Problems Experienced
(a) Some of the houses are collapsing, especially during the
rainy season. The Department is trying to fix them.
(b) There are people who apply for houses when they already
own houses.
H. Windsorton
1. Project Profile
The town of Windsorton has encountered many of the same
experiences as Warrenton, but in many instances conditions
were far worse.
The first project was approved during 1995 by the MEC for
Local Government and Housing. This project was completed
during 1998 whilst the size of the structures were as little
as 16 square metres, which was not acceptable to the MEC. He
was horrified at the delivery of these small top structures,
which formed part of the initial projects that were
implemented in the Northern Cape.
Communities started complaining about the small top structures
that were delivered by China Feng Pu and New Way Development.
The MEC issued a directive, stating that all houses to be
constructed in future would not be smaller than 32 square
metres. Housing delivery has since become a major topic of
discussion at a number of meetings and news reports, and
although the housing programme has been criticised severely,
the government will continue in its endeavour to provide
shelter to the homeless, whilst gently restoring the rights of
people to a secure place in which to live with peace and
dignity.
2. Problems Experienced
(a) Roofs are not intact - beneficiaries have placed stones
and bricks on top of the roofs.
(b) In 1998, 41,60 square metre houses were built. In 2000,
44,8 square metre houses were built. Now the
beneficiaries of the 41,60 square metre houses are
complaining that their houses are small and that they
also would like to occupy the bigger houses.
I. Comments and Recommendations
1. In order to ensure that housing delivery occurs, roll-over
funds allocated to other provinces for housing projects should
be made available to needy provinces.
2. Housing subsidy application forms should cater for disabled
people, so that the Department would be able to determine from
them who are disabled.
J. Conclusion
The Committee members are convinced that, with regard to the
delivery of houses, the Department has played a big role. Amongst
the provinces that the Committee has visited, the Committee has
observed that the Northern Cape has delivered more houses than any
other province.
- Report of the Portfolio Committee on Housing on Study Tour to Northern Province, dated 20 June 2001:
The Portfolio Committee on Housing, having undertaken a visit to the
Northern Province from 16 to 20 April 2001, reports as follows:
A. Introduction
The multiparty delegation undertook the study tour. The
delegation, under the leadership of Mr G Scheeneman, consisted of
five members and two officials: Mrs M M Ramakaba-Lesiea (ANC), Mr
M W Skhosana (ANC), Mr B W Dhlamini (IFP), Mr A Singh (DP), Ms A-M
Jojozi (Committee Secretary) and Ms K Pasiya (Committee
Assistant).
B. Objectives
The Committee went on the tour with the following objectives:
1. To fulfil its monitoring and oversight function - the Committee
intended to establish progress made with the "Housing the
Nation" programmes.
2. To exchange views with the Legislature and hear the feelings of
people on the ground on housing projects.
3. To look at the various housing projects, such as People's
Housing Projects and other Inner City Developments.
C. Provincial Department
The Department determined that houses built should not be smaller
than 40 square metre. R334 million was allocated for housing. With
the flood disaster experienced in February 2000, 23 000 houses had
to be built, and 3 000 have been completed. The remaining 20 000
have to be funded from the R334 million allocated for housing. R48
million was rolled over from the previous year.
The Department has a huge backlog in respect of rebuilding
people's homes.
Some beneficiaries refuse to occupy houses built in townships, and
others sell their houses for far less than the actual cost. The
Department does not have a mechanism to curb this corruption.
There are also foreigners with false IDs' which are difficult to
detect. They also engage in marriages of convenience in order to
qualify for houses.
The Department did not have sufficient funds to train developers.
There were squatter camps, especially close to rural towns, with
which the Department had problems.
The government did respond appropriately to the flood disaster of
February 2000. The Department needed a policy on disaster
management to enable them to address the plight of communities
experiencing disasters.
There was tension between traditional leaders and new local
government systems.
The Department of Labour did not follow up on trained people after
projects were finished in order to ensure that those people could
be employed elsewhere. No certificates were given to the traines
people.
Former white towns had legislation which made provision for how
land should be developed. Rural areas were not taken into
consideration. For example, the housing manual did not make
provision for upgrading rural settlements.
Some of the projects took about six months or one year to be
approved.
D. Sengatane Housing Project (Rural Project)
1. Project Profile
Sengatane is a rural village on tribal land. It is situated
about 30 km west of Pietersburg under the jurisdiction of
Aganang Municipality. The first people to live in this
village, settled in the early 1900s, almost 100 years ago.
Many people had built their own houses, and some were
traditional mud houses. In recent years the village was
enlarged by approximately 100 stands. These stands were mainly
taken by young people who grew up in the village.
In 1994 the community initiated the Sengatane Housing Project
by approaching VBL Consulting Engineers CC to launch an
application on their behalf. The Project was approved in 1995
and 243 units (40 square metres) were allocated, with a
contract value of R3 645 000, (Geo-technical Allowance of R269
730). The value of the project was R3 914 730 The Tribal
Authority involved itself in the Project because Sengatane was
on tribal land. The first occupant moved in in 1998. A school
has been built in the area and services have been improved.
The services offered, were water connection in the yards and
ventilated and improved pit toilets. Two local artisans and
labourers were used for constructing houses.
2. Problems experienced
The Project was delayed because of the following:
(a) Different role-players had to be consulted. The Tribal
Authority was one of the role-players that had to be
consulted, as the Project was on tribal land. The
municipality had to request permission from the Tribal
Authority to allow developers to start the Project and
also to the transfer land to Municipality. Beneficiaries
had to be issued with title deeds. This resulted in the
availability of land becoming a point of dispute,
traditional leaders fighting among themselves. Eventually
it was agreed by the Northern Province Housing Board that
permission to occupy land was sufficient tenure right to
allow people to obtain subsidised houses. This dispute
delayed the project for three years before the agreement
was signed.
(b) Transfer of power from the Transvaal Housing Board to the
Northern Province Provincial Housing Board also caused
delays to the approval of the Project.
(c) Shortage of water in the area was a huge problem.
Beneficiaries were scattered amongst non-beneficiaries.
Non-beneficiaries refused to pay for water connections.
The contract with the developer stipulated that the
developer should install water connections to all units.
The fact that not everybody qualified for the subsidy and
only those who did were contributing towards the cost of
the water service, was a problem for the developers, as
they were required to install services for everybody,
regardless of whether they were contributing or not. This
made the installation of services very uneconomical for
the developer.
(d) Potential beneficiaries were intimidated. Some people were
told by outsiders, including tribal leaders, that they
would eventually have to pay for the houses. This led to
many people rejecting the Project and opposing the
developer in every possible way.
(e) The housing manual was written for urban development, and
does not make provision for upgrading of rural
settlements. For example, many of the people who live in
rural areas have built their own houses - of better
standard than RDP houses. But they do not have access to
water and sanitation, and they also need these services.
The Provincial Housing Board was requested to make a
ruling in this regard. They provided those people with a
full subsidy, except the top structure component of the
subsidy. The saving brought about was utilised to serve
more people in the community. 286 beneficiaries
benefitted from the Project without increasing the
Project budget.
(f) Traditional leaders are not represented in the local
council.
(g) Houses are very hot in summer and very cold in winter.
3. Positive features
(a) The Project is community-driven.
(b) The local community was empowered by trained, as they
were involved in all the work done with regard to
building the structures. This enabled them to obtain
employment in other areas.
(c) The community earned about R1,5 million in the form of
wages.
(d) The standard of living of the community has improved.
E. Jane Furse Project Linked
1. Project Profile
Jane Furse is about 130 km north of Pietersburg. The Project
is allocated 1 000 units, (40 square metres) and out of 1 000
units, 524 (52%) were completed and 521 transferred to
beneficiaries. 250 sites were set aside for middle-class
income earners. The Project was approved at the end of 1996,
and it was expected to be completed by November 2001. More
than 10 subcontractors were employed.
2. Problems experienced
The town register was delayed. The MEC for Local Government
and Housing wanted to comply with the new regulation, which
stipulated that an advertisement must be published and that 21
days have to pass before the community can be allowed to
participate in the Project. This new regulation came about
after the Project was started and it resulted in a delay.
(a) The community had to apply for title of streets/roads, as
they were in a bad state.
(b) It took about three months to negotiate with Tribal
Authorities.
(c) P4 and P5 certificates slowed the construction progress-
most projects are stopped due to them.
(d) Only about 286 people have paid the electricity connection
fee. Most people were under the impression that it was
free of charge. Eskom can only install electricity when
about 80% of the beneficiaries have paid the fee. The
beneficiaries are prepared to pay the connection fee
after Eskom has installed electricity. The refusal to pay
the fee was caused by the fact that the municipality had
delayed explaining to beneficiaries that there was a
certain amount to be payed for connection.
(e) There are about 1 500 people on the waiting list for
houses.
3. Positive features
The Project has created employment for local people, as local
contractors and suppliers have been used. The Project has
improved the lives of many people, as electricity, water taps
and water sewage were installed.
F. Witrivier (Agrivillage)
1. Project Profile
(a) In 1999, the Housing Board was approached by local
councillors and representatives from the Witrivier
community. The aim was to request the Board to assist the
Witrivier community to acquire subsidised houses
agreement was reached in October 2000. Town planning has
been consolidated and reaffirmed. There was no
electricity in the area and installation of services were
to be done at the beginning of May 2001. 550 houses have
been registered under the township. Beneficiaries were
people working in the mines and on farms in the area. The
Project was called Agrivillage and the beneficiaries were
encouraged to engage in agricultural activities, whether
farming or agricultural (crop) production. The idea of
Agrivillage came about when beneficiaries who were farm
workers, were identified.
(b) Engineering designs have been completed. The houses to be
built, are 40 square metres, with an outside toilet. The
community used to be skeptical of the project, as there
were delays before it was started. The Project is three
months behind and the community is not happy with the
delay.
(c) Services are offered by an emerging contractor and
interested unemployed people in the community are trained
to provide top structures.
2. Problems experienced
The Project was delayed because of the following:
(a) The construction of houses was supposed to have commenced
in January 2001, but in February 2001 it was discovered
that the Witrivier township falls under the "old
KwaNdebele homeland". The land had to be transferred
from Land Affairs to the local council. This transfer of
land took a long time to be completed, as various
stakeholders had to be consulted before town planning
could bring the township to the stage of opening the
register. Town planning for the area was done in Pretoria
in 1980, and the new government had to do own town
planning. This has not been completed; and the developers
are hoping that it would be completed within two and a
half months. The process of opening the township register
entails making contact and reaching an agreement with the
chief of the area. And the Department of Land Affairs,
inviting objections pertaining to any claims to the land.
This delayed the Project, and the community is anxious to
get the houses. Beneficiaries still have to be
identified.
(b) The developers were hoping to start with the top
structures in January 2001. This did not happen. The
community was expecting the top structures to be made
available to them by February/March 2001. The completion
and transfer of units to beneficiaries will only be done
after opening of the township register.
(c) The 550 houses to be built, are not adequate, as there are
more farm workers who need houses.
G. Ramathlodi Park (Inner City)
1. Project Profile
(a) Ramathlodi Park is situated about seven km from
Pietersburg on the way to the University of the North. It
is a middle-income housing project, falling within the
Polokwane municipal jurisdiction. The Project commenced
on April 2000, following the approval date on 20 December
1999. The contract was signed on 14 April between TEBCON
Development and the Department of Local Government and
Housing. The total budget for this Project was R1 250
000. Actual construction of houses was expected to start
in July 2001; after that the services will be handed over
to the municipality. The developer is presently marketing
the stands. 544 hectares of the farm where the houses
will be built, is owned by TEBCON. The area has no
municipality wards. The developers have been on site for
three months.
(b) The area is going to be electrified by Eskom and streets
will be tarred. TEBCON has been in contact with the
relevant departments (i.e. Education, Health, etc) to
ensure that all required and essential services are
provided.
(c) 1% White, 0% Indian, 0% Coloured and 99% Africans have
submitted applications for stands. Most of the applicants
will be financed by financial institutions.
2. Problems experienced
(a) The developers are unable to build show houses to market
stands, as they were refused approval by the Department
of Local Government and Housing.
(b) Heavy rains in the area have slowed progress with building
sewage pipelines.
(c) A communication breakdown between officials has also
caused delay.
(d) 70% of the applicants do not qualify for stands and 30%
are overqualified. This means funds which are not used,
will be sent back to the Department of Local Government
and Housing.
H. Nancefield Hostel/Extension 4
1. Project Profile
(a) Nancefield hostel is situated in Nancefield Township in
Messina. The hostel was established in 1965 and
accommodated males only. An application was made to the
Northern Province Housing Board to redevelop the hostel
into family units. There were about 500 males who
occupied the hostel. The initial application was for 63
family units, but it was clear that others would be
without accommodation. Land was identified where 250
units could be built for them. 74 family units came out
of the hostel (at R1 121 000). The remaining 250 families
will be accommodated in the housing units to be built.
The family units were officially handed over to the
beneficiaries in December 2001 and will receive
electricity before the end of 2000. Hostel dwellers are
happy with the new arrangement and they feel that the
change is a great improvement.
2. Problems experienced
(a) At first it was difficult to convince hostel dwellers that
family units are important for them and their families.
(b) With regard to Extension 4, there were beneficiaries who
were not occupying their sites, and it was difficult to
trace them. These unclaimed houses were occupied by those
without houses, until the beneficiaries claim them. The
Department cannot sell houses to those who need them, as
there is legislation in place to protect those with title
deeds.
(c) There are people who apply for houses when they already
own houses.
I. Nzhelele/Tshipise Flood/Disaster Project
1. Project Profile
(a) Nzhelele/Tshipise is about 190 km north of Pietersburg. In
February 2001, the area experienced floods and most of
the people were affected. The Tshipise disaster project
has about 530 units, scattered in about 36 villages. At
least 107 units (up to wallplate) and 237 foundations
have been completed. The Project is managed by a woman
developer with about 110 employees.
(b) At present, some of the people who were affected by the
disaster are accommodated in tents, in schools and by
relatives. The Department has managed to fund about 1 054
units in different areas that were also struck by the
flood disaster. Traditional Leaders have given the
council some land to build about 500 units (54 square
metres).
2. Problems experienced
(a) Funds allocated for the Tshipise Disaster Project are not
enough. The Department has decided to use funds allocated
for other projects to assist the areas most affected.
There are a number of people who need houses but who are
poor and cannot afford to rebuild their own houses.
(b) Developers and contractors delay construction of units.
J. Mukumbani People's Housing Process
1. Project Profile
(a) The Mukumbani People's Housing Process project was
approved in April 1999 (250 housing units). An amount of
R1 268 00 allocated for this Project is already deposited
in the Thohoyandou TLC project account for construction
of the housing units. It was specified in the business
plan that all 40 labourers and four office-bearers should
undergo capacity-building training at the Northern
Training Trust (NTT). The NTT has provided training to
these labourers and office-bearers.
(b) 43 units (52 square metres) have been completed and 37
local labourers out of the 40 labourers trained, are
involved in the construction of these units. The Project
has six office-bearers. Each office-bearer is paid R1 000
for 12 months.
(c) The Department of Labour has provided free training.
Different organisations identified people to be trained
and names were submitted to that department. The local
council has assisted with technical issues by assessing
the houses built and assisting local builders in
improving their skills. Salaries for builders are paid
though the establishment grant.
(d) No developers are involved in the Project, because
developers determine their own housing structures, which
the beneficiaries are not happy with sometimes. The
community feels that, as beneficiaries, they have
experienced less problems when building their own houses
according to their own needs and to their own
satisfaction. There is less theft of building material,
as the community is aware that should they steal the
building material, they will be the ones to suffer.
(e) Local building-brick companies are used and they have to
go through the normal tender process, hence they charge
reasonable prices.
2. Problems experienced
Like all other projects the Mukumbani project was delayed due
to the following:
(a) Construction was supposed to have commenced in July 1999
but this did not happen, due to some technicalities
between the Department of Finance and the Department of
Local Government and Housing. Although it only started on
15 October 2000, some significant progress has been made.
(b) On rainy days, it is difficult to work, due to the type of
roads builders have to cross to reach the construction
sites where they have to deliver building materials.
(c) Some people do not want to see progress and development
taking place in the area.
K. Meeting with MEC
1. Problems experienced
(a) There is a high level of poverty in the province. State
intervention is needed to provide both social and
economic infrastructure so as to eradicate poverty.
Providing houses to people can assist in ensuring that
poverty is eradicated. Housing should be seen as not only
a social development but as building the economy. In
February 2000, the province was struck by a flood
disaster, and infrastructure like roads and bridges were
damaged. The damage was about R2 million, which also
contributed to the backlog in respect of housing
projects.
(b) Projects are delayed because some communities fight over
land, transfer of land and the way in which land is being
administered (more powers are given to the Minister).
Land claims also contribute to this delay.
(c) The Department of Local Government and Housing's
administration has experienced some problems.
Resignation, suspension and dismissal of officials
involved in housing projects within the Department
resulted in projects being delayed.
(d) Developers sometimes use funds allocated to them for other
purposes. The Department will be terminating some
contracts with developers who were allocated funds and
have delayed starting their projects. For example, there
are developers who were given funds in 1997 and who have
not finished their projects. The Department will monitor
their progress closely and will terminate their
contracts, should they not meet their deadlines.
2. Future developments
This year the Department will address the entry of women
developers and women constructors in the construction
industry. In a Minmec meeting held in April 2001, it was
agreed that more than 10% of the housing budget should be
allocated to women contractors. The MEC has engaged in
discussions with women constructors and developers.
L. Comments and recommendations
1. The Department of Housing and Local Government should hold
meetings with community development forums in order to solve
and discuss problems experienced by communities.
2. There should be a joint venture between developers, management
and the council to solve problems experienced before and
during the construction of projects.
3. The issue of P4 and P5 certificates has to be addressed.
4. Town planning should be completed before other stakeholders
like developers are consulted in respect of projects.
5. Informal training offered by developers should be accompanied
by certificates to ensure that those who are trained, are able
to get employment elsewhere.
MONDAY, 12 NOVEMBER 2001
ANNOUNCEMENTS:
National Assembly:
- The Speaker:
The following papers have been tabled and are now referred to the
relevant committees as mentioned below:
(1) The following paper is referred to the Joint Monitoring
Committee on Improvement of Quality of Life and Status of
Children, Youth and Disabled Persons:
Programme 5: Auxiliary and associated services of Memorandum on
Vote 1 "Presidency", Adjustment Estimates, 2001-2002.
(2) The following paper is referred to the Portfolio Committee on
Foreign Affairs:
Memorandum on Vote No 3 - "Foreign Affairs", Adjustments
Estimates, 2001-2002.
(3) The following paper is referred to the Portfolio Committee on
Home Affairs:
Memorandum on Vote No 4 - "Home Affairs", Adjustments Estimates,
2001-2002.
(4) The following paper is referred to the Portfolio Committee on
Provincial and Local Government:
Memorandum on Vote No 5 - "Provincial and Local Government",
Adjustments Estimates, 2001-2002.
(5) The following papers are referred to the Portfolio Committee on
Communications:
(a) Memorandum on Vote No 6 - "Government Communication and
Information System", Adjustments Estimates, 2001-2002.
(b) Memorandum on Vote No 25 - "Communications", Adjustments
Estimates, 2001-2002.
(6) The following paper is referred to the Portfolio Committee on
Public Enterprises:
Memorandum on Vote No 8 - "Public Enterprises", Adjustments
Estimates, 2001-2002.
(7) The following papers are referred to the Portfolio Committee on
Public Service and Administration:
(a) Memorandum on Vote No 9 - "Public Service and
Administration", Adjustments Estimates, 2001-2002.
(b) Memorandum on Vote No 10 - "Public Service Commission",
Adjustments Estimates, 2001-2002.
(c) Memorandum on Vote No 11 - "South African Management
Development Institute", Adjustments Estimates, 2001-2002.
(8) The following paper is referred to the Portfolio Committee on
Arts, Culture, Science and Technology:
Memorandum on Vote No 13 - "Arts, Culture, Science and
Technology", Adjustments Estimates, 2001-2002.
(9) The following paper is referred to the Portfolio Committee on
Education:
Memorandum on Vote No 14 - "Education", Adjustments Estimates,
2001-2002.
(10) The following paper is referred to the Portfolio Committee on
Health:
Memorandum on Vote No 15 - "Health", Adjustments Estimates, 2001-
2002.
(11) The following paper is referred to the Portfolio Committee on
Housing:
Memorandum on Vote No 16 - "Housing", Adjustments Estimates, 2001-
2002.
(12) The following paper is referred to the Portfolio Committee on
Social Development:
Memorandum on Vote No 17 - "Social Development", Adjustments
Estimates, 2001-2002.
(13) The following paper is referred to the Portfolio Committee on
Sport and Recreation:
Memorandum on Vote No 18 - "Sport and Recreation South Africa",
Adjustments Estimates, 2001-2002.
(14) The following paper is referred to the Portfolio Committee on
Correctional Services:
Memorandum on Vote No 19 - "Correctional Services", Adjustments
Estimates, 2001-2002.
(15) The following paper is referred to the Portfolio Committee on
Defence:
Memorandum on Vote No 20 - "Defence", Adjustments Estimates, 2001-
2002.
(16) The following papers are referred to the Portfolio Committee on
Safety and Security:
(a) Memorandum on Vote No 21 - "Independent Complaints
Directorate", Adjustments Estimates, 2001-2002.
(b) Memorandum on Vote No 23 - "Safety and Security",
Adjustments Estimates, 2001-2002.
(17) The following paper is referred to the Portfolio Committee on
Justice and Constitutional Development:
Memorandum on Vote No 22 - "Justice and Constitutional
Development", Adjustments Estimates, 2001-2002.
(18) The following papers are referred to the Portfolio Committee on
Agriculture and Land Affairs:
(a) Memorandum on Vote No 24 - "Agriculture", Adjustments
Estimates, 2001-2002.
(b) Memorandum on Vote No 28 - "Land Affairs", Adjustments
Estimates, 2001-2002.
(19) The following paper is referred to the Portfolio Committee on
Environmental Affairs and Tourism:
Memorandum on Vote No 26 - "Environmental Affairs and Tourism",
Adjustments Estimates, 2001-2002.
(20) The following paper is referred to the Portfolio Committee on
Labour:
Memorandum on Vote No 27 - "Labour", Adjustments Estimates, 2001-
2002.
(21) The following paper is referred to the Portfolio Committee on
Minerals and Energy:
Memorandum on Vote No 29 - "Minerals and Energy", Adjustments
Estimates, 2001-2002.
(22) The following paper is referred to the Portfolio Committee on
Public Works:
Memorandum on Vote No 30 - "Public Works", Adjustments Estimates,
2001-2002.
(23) The following paper is referred to the Portfolio Committee on
Trade and Industry:
Memorandum on Vote No 31 - "Trade and Industry", Adjustments
Estimates, 2001-2002.
(24) The following paper is referred to the Portfolio Committee on
Transport:
Memorandum on Vote No 32 - "Transport", Adjustments Estimates,
2001-2002.
(25) The following paper is referred to the Portfolio Committee on
Water Affairs and Forestry:
Memorandum on Vote No 33 - "Water Affairs and Forestry",
Adjustments Estimates, 2001-2002.
(26) The following papers are referred to the Portfolio Committee on
Transport. The Reports of the Auditor-General contained in the
following papers are referred to the Standing Committee on Public
Accounts:
(a) Report and Financial Statements of the Road Accident Fund
for 1999-2000, including the Report of the Auditor-General on
the Financial Statements for 1999-2000.
(b) Report and Financial Statements of the South African
Maritime Safety Authority for 1999-2000, including the Report
of the Auditor-General on the Financial Statements for 1999-
2000.
(27) The following paper is referred to the Portfolio Committee on
Justice and Constitutional Development for consideration and
report:
Rules and Regulations in terms of the Promotion of Administrative
Justice Act, 2000 (Act No 3 of 2000).
(28) The following paper is referred to the Standing Committee on
Public Accounts for consideration and report and to the Portfolio
Committee on Justice and Constitutional Development for
information:
Report of the Auditor-General on the Summary of Statements of
Moneys kept in Trust in the Gaurdian's Funds for 2000-2001 [RP 165-
2001].
(29) The following paper is referred to the Standing Committee on
Public Accounts for consideration and report and to the Portfolio
Committee on Labour for information:
Report of the Auditor-General on the Financial Statements of the
Compensation Fund for 2000-2001 [RP 167-2001].
(30) The following paper is referred to the Standing Committee on
Public Accounts for consideration and report and to the Portfolio
Committee on Minerals and Energy for information:
Report of the Auditor-General on the Financial Statements of the
Mines and Works Compensation Fund for 2000-2001 [RP 166-2001].
(31) The following paper is referred to the Portfolio Committee on
Public Enterprises:
Report and Financial Statements of Denel for 2000-2001.
TABLINGS:
National Assembly and National Council of Provinces:
Papers:
- The Minister of Finance:
Report of the Registrar of Unit trust Companies for 1999.
- The Minister of Water Affairs and Forestry:
(a) Report and Financial Statements of the Department of Water
Affairs and Forestry for 2000-2001, including the Report of the
Auditor-General on the Financial Statements of Vote 34 - Water
Affairs and Forestry for 2000-2001 [RP 88-2001].
(b) Report and Financial Statements of the Water Research Commission
for 2000-2001, including the Report of the Auditor-General on the
Financial Statements for 2000-2001.
National Assembly:
Papers:
- The Chairperson of the Portfolio Committee on Justice and Constitutional Development:
SUBMISSION OF LEGISLATIVE PROPOSAL: MEMORANDUM, IN TERMS OF RULE 238 OF
THE RULES OF THE NATIONAL ASSEMBLY, BY THE PORTFOLIO COMMITTEE ON
JUSTICE AND CONSTITUTIONAL DEVELOPMENT:
The Portfolio Committee on Justice and Constitutional Development
is hereby requesting the permission of the House in terms of Rule
230(1) for the introduction of the following legislation in the
House:-
(a) Particulars of the proposed legislation
The legislation will comprise a Loss or Retention of
Membership of National and Provincial Legislatures Bill, and
will be aimed at substituting items 23 and 23A of Schedule 2
to the Constitution of the Republic of South Africa, 1993 (Act
No. 200 of 1993).
(b) Objects of the proposed legislation
1. In terms of item 23A of Schedule 2 to the Constitution of
the Republic of South Africa, 1993, an Act of Parliament
may, within a reasonable period after the new (1996)
Constitution took effect, be passed in accordance with
section 76(1) of the 1996 Constitution to amend that item
and item 23 in order to provide for the manner in which
it will be possible for -
* a member of a legislature who ceases to be a member
of the party which nominated that member, to retain
membership of such legislature; and
* any existing party to merge with another party, or
any party to subdivide into more than one party,
whilst allowing a member of a legislature affected by
such changes, to retain membership of such
legislature.
2. The Bill therefore aims to substitute the said items 23
and 23A in order to provide for the procedures referred
to above.
(c) Financial implications for the State
The proposed legislation will not lead to any expenditure for
the State.
COMMITTEE REPORTS:
National Assembly and National Council of Provinces:
-
Report of the Mediation Committee on the Cultural Laws Second Amendment Bill [B 46B and B 46D - 2000] (National Assembly - sec 76), dated 9 November 2001:
The Mediation Committee, having considered the Cultural Laws Second Amendment Bill [B 46B and B 46D - 2000] (National Assembly
- sec 76), as well as the papers referred to it, reports as follows:
-
The Cultural Laws Second Amendment Bill [B 46B - 2000] (National Assembly - sec 76) was passed by the National Assembly on 24 May 2001 and submitted to the National Council of Provinces for approval.
-
The National Council of Provinces passed the Cultural Laws Second Amendment Bill [B 46D - 2000] (National Assembly - sec 76) on 28 September 2001, containing a number of amendments agreed to by the Select Committee on Education and Recreation.
-
Upon referral of the latter amended Bill to the National Assembly, that House did not accept the amendments passed by the National Council of Provinces. Consequently, the National Assembly rejected the further amended version of the Bill.
-
The Bill was referred to the Mediation Committee on 25 October 2001 in terms of Joint Rule 186(1)(b) of the Joint Rules of Parliament. The Mediation Committee met on 9 November 2001, and, after deliberation, agreed on another version of the Bill.
-
The effect of this decision is that the Secretary to Parliament is required to submit the latter version of the Bill to both the Speaker of the Assembly and the Chairperson of the Council in terms of Joint Rule 188(3), for consideration by the Assembly and the Council.
-
The Committee therefore submits the Cultural Laws Second Amendment Bill [B 46F - 2000] (National Assembly - sec 76), and recommends that the Assembly and the Council pass this mediated version.
TUESDAY, 13 NOVEMBER 2001
ANNOUNCEMENTS:
National Assembly and National Council of Provinces:
- The Speaker and the Chairperson:
(1) The Joint Tagging Mechanism (JTM) on 13 November 2001 in terms
of Joint Rule 160(6), classified the following Bill as a money
Bill (section 77):
(i) Revenue Laws Second Amendment Bill [B 84 - 2001] (National
Assembly - sec 77).
(2) The Minister for Justice and Constitutional Development
submitted the Tweede Wysigingswetsontwerp op die Grondwet van die
Republiek van Suid-Afrika [W 78 - 2001] (National Assembly - sec
74) to the Speaker and the Chairperson on 13 November 2001. This
is the official translation of the Constitution of the Republic of
South Africa Second Amendment Bill [B 78 - 2001] (National
Assembly - sec 74), which was introduced in the National Assembly
by the Minister on 27 September 2001.
National Assembly:
- The Speaker:
(1) The following private member's legislative proposal was
submitted to the Speaker on 8 November 2001, in accordance with
Rule 234:
(i) Draft Medical Schemes Amendment Bill (Mr B G Bell).
In accordance with Rule 235 the legislative proposal has been
referred to the Standing Committee on Private Members' Legislative
Proposals and Special Petitions by the Speaker.
(2) The following private member's legislative proposal was
submitted to the Speaker on 9 November 2001, in accordance with
Rule 234:
(i) Draft Patents Amendment Bill (Mrs S V Kalyan).
In accordance with Rule 235 the legislative proposal has been
referred to the Standing Committee on Private Members' Legislative
Proposals and Special Petitions by the Speaker. 2. The Speaker:
The following papers have been tabled and are now referred to the
relevant committees as mentioned below:
(1) The following paper is referred to the Standing Committee on
Public Accounts for consideration and report and to the Portfolio
Committee on Public Service and Administration for information:
Report of the Auditor-General on Auditing and Financial Management
Matters in the Public Sector [RP 265-2001].
(2) The following paper is referred to the Standing Committee on
Public Accounts for consideration and report:
Report and Financial Statements of the Auditor-General for 2000-
2001 [RP 200-2001].
(3) The following papers are referred to the Portfolio Committee on
Finance. The Reports of the Auditor-General contained in the
following papers are referred to the Standing Committee on Public
Accounts for consideration and report:
(a) Report and Financial Statements of the Financial and
Fiscal Commission for 1999-2000, including the Report of the
Auditor-General on the Financial Statements for 1999-2000 [RP
197-2001].
(b) Report and Financial Statements of the Financial and
Fiscal Commission for 2000-2001, including the Report of the
Auditor-General on the Financial Statements for 2000-2001 [RP
201-2001].
(4) The following papers are referred to the Portfolio Committee on
Finance:
(a) Government Notice No R.997 published in Government Gazette
No 22723 dated 2 October 2001, Recognition of Stock Exchanges
in terms of the definition of "Recognised Exchange" in
Paragraph 1 of the Eighth Schedule to the Income Tax Act, 1962
(Act No 58 of 1962).
(b) Government Notice No R.1036 published in Government
Gazette No 22752 dated 12 October 2001, Notice in terms of
Regulation 4(3) of the Exchange Control Regulations, 1961.
(c) Explanatory Memorandum on the Second Revenue Laws
Amendment Bill, 2001 [WP 3-2001].
COMMITTEE REPORTS:
National Assembly and National Council of Provinces:
- Report of the Joint Budget Committee on the Medium Term Expenditure Framework, dated 13 November 2001:
The Joint Budget Committee report as follows:
A. Introduction
The terms of reference of the Committee was:
1. To analise and debate the 2001 Medium Term Budget Policy
Statement (MTBPS).
2. To conduct hearings on the Medium Term Expenditure Framework
(MTEF) and the Division of Revenue Bill.
3. To engage in the budgeting process throughout the budget cycle
in order to allow Parliament to have an input during the
drafting stage of the budget.
The Committee was formed on 30 October 2001, the same day that the
MTBPS was tabled. In an effort to interrogate the spending
priorities of national departments, as outlined in the MTBPS, the
Committee invited the following participants:
(a) National departments, as mentioned in the MTBPS.
(b) Civil society.
(c) Business leaders.
(d) Chairpersons of Portfolio and Select Committees.
The Intergovernmental Fiscal Review (IGFR) formed a basis for the
discussion on the Division of Revenue.
The broad policy priorities of the government over the Medium Term
Expenditure Framework (MTEF) is the "reduction of poverty to
alleviate inequality and vulnerability". The context in which this
can be achieved, is through the following priorities of the
national government, as listed in the MTBPS:
* "Continued emphasis on investment in, and maintenance and
rehabilitation of infrastructure, enhancing South Africa's job
creation and economic growth prospects over the medium to long
term".
* "Strengthening programmes that address the impact of the
HIV/AIDS epidemic".
* "Rebuilding Local Governments and meeting commitments to ensure
free basic service delivery".
* "Strengthening capacity in the safety and security sector to
prevent and combat crime".
* "Restructuring national entities, specifically the Unemployment
Insurance Fund and the SA Post Office, enabling them to
improve the quality and access to service delivery".
* "Further strengthening of tax administration capacity and
establishing a financial intelligence centre to assist global
efforts in combating money laundering".
B. South Africa's macroeconomic environment
The government's commitment to budgetary restraint over the past
five years has produced a reduction in borrowing and debts service
costs. The resulting increase investor confidence, led to
increases in gross domestic fixed investment, which will
facilitate strong real growth in spending over the next three
years while still maintaining a sound and sustainable fiscal
policy stance. In addition, improved efficiency in revenue
collection has improved tax compliance and tax morale, resulting
in additional resources to reduce government debt and provide room
for tax cuts.
C. Benefit of depreciating rand
The depreciating rand to the dollar has benefitted the economy,
mainly in encouraging higher and more diversified exports of
manufactured goods and services, leading to the increase in
competitiveness of our exports and sustaining growth. However, a
depreciated rand raises the cost of imported technology and
services to maintain our competitive advantage in the export
market.
D. Resilience of economy contributing to relative growth
The current momentum in economic growth places South Africa in a
rather comfortable position to respond to the downturn in the
world economy with an appropriate mix of tax relief, accelerated
infrastructure spending and further capital expenditure on social
services and municipal infrastructure providing real growth in
public spending. The European Union Commission's report on South
Africa indicates that trade is up by 35%, in rand terms, with the
slowdown in the European economy not expected to be as big as that
of the United States. The United States is expected, after the 11
September attacks, to begin substantial public spending and a
series of interest rates cuts to stimulate growth in their
economy, shoyuld improve the economic outlook for next year. The
European Union has already started implementing monetary and
fiscal policies to stimulate growth, leading to further demands in
our export market. Further increases in stability and confidence
in our economy is expected to come from an upgrading of our credit-
worthiness from Moody's next year. This will also result in
increased fixed investment and reduced borrowing cost.
E. Tax policy and administration
The restructuring of SARS along with other tax reforms has enabled
more revenue to be collected at a lower tax rate, contributing to
both a steady improvement in the fiscal position and further tax
relief. Two most significant changes to the tax structure have
been the change from a source-based tax to a residence-based
income tax, with the introduction of capital gains tax. Residence-
based income tax adds to the fiscus by taxing the foreign earnings
of South African companies and individual. Capital gains tax
remedies a fundamental deficiency in the income tax regime,
thereby improving the overall equity and efficiency of South
Africa's tax system.
As part of the drive to stimulate growth in the economy by
creating jobs, a wage incentive aimed at encouraging the
employment of learners has been introduced. This wage incentive is
set to encourage job creation by reducing the cost of hiring new
workers and to increase the skills base by offering learnerships.
It is also to encourage the formalisation of the informal
employment sector, which will see further contributions to the UIF
and other goverment programmes, ultimately benefitting the
workers.
F. Improvement in savings and investments by national government
and households
The monetary policies pursued by the government have resulted in
declining interest rates. Inflation targeting by the SA Reserve
Bank in the band of 6 to 3 per cent has led to certainty for
investors. Low inflation results in more disposable income
benefiting poor people. Both investments and savings in our
economy have shown signs of recovery with Gross domestic saving
rising from 14.3 to 15.3 per cent of GDP from 1998 to the first
half of 2001. Declining interest rates and inflation is expected
to accelerate gross fixed capital formation contributing to growth
in our economy, rising from 2.6 per cent in 2001 to average 3.3
per cent over the next three years.
G. Competitiveness
The Department of Trade and Industry has also highlighted the need
for the increase in quality of raw materials produced to ensure
competitiveness of South African exports. Examples mentioned were
improvements needed in the quality of leather produced for the
motor vehicle industry in order to ensure exportable quality. The
department is also involved in advising SMMEs and entrepeneurs to
become more competitive by producing goods that are of a high
quality and standard.
H. Fiscal Policy
The 2001 Budget announced a change in fiscal policy from an
environment where the focus was on reducing the deficit to one
that decidedly contributes towards economic growth. Continuing
with the trend, the Budget for 2002 is expented to announce a
further acceleration in public spending, especially on capital
infrastructure and provides room for a reduction in tax rates,
especially to low and middle-income workers. This more growth-
oriented fiscal policy is possible because of a healthy fiscal
position and declining debts service costs. The Government will
continue to moderate its borrowing in order to reduce debt service
costs and interest rates in the long-term.
I. Medium Term Expenditure Framework
In keeping with the budget theme for next year - "Reducing
Poverty, Inequality and Vulnerability", the following section
outlines how departments are responding to the government's
priorities in the way in which the policies are changing and the
2002 budgets are being put together.
J. Restructuring national entities
The Committee supports the additional allocations for the
restructuring of the SA Post Office over the MTEF period, but
caution that it should become self-sustainable in future, while
retaining its social responsibilities to deliver services to
previously underserved areas. The operational losses incurred by
the SA Post Office can in part be attributed to the failure of the
strategic management partner, poor financial management and
corruption. Furthermore, the extension of services to areas not
covered is not compromised.
Another spending pressure on the MTEF arises from the past policy
and administration of the UIF, which has resulted in poor funding
mechanisms to deal with increased levels of unemployment. A
turnaround strategy by the Department of Labour was designed to
ensure that the fund becomes sustainable in future. Extending
coverage to high-income earners whose contribution will cushion
reserves, as they are less likely to lose their jobs and claim
unemployment benefits, will ensure this objective. The use of a
sliding scale for paying out claims will also help in this
endeavour. In addition, funds are collected from all employers who
make deductions, and SARS is now responsible for collections. The
collection and benefit of the fund has furthermore been extended
to farm and domestic workers, whose sectors are more vulnerable
than those of people in permanent employment. Installing a
computer-based database system should facilitate this turnaround.
K. Poverty alleviation
The key objective identified in the MTBPS is poverty alleviation,
to reduce the burden on the most vulnerable members of society.
Social development is the one area where the government can
directly attempt to eradicate poverty. The Department of Social
Development has taken a step towards eradicating poverty by
implementing a poverty relief programme. This programme will focus
on food, security, income generation, youth development, micro-
financing and the integration of people with disabilities. In its
contribution, this programme supports employment of more women in
construction to generate income for their own means of survival.
From the Health Department's side, there is huge investment in the
school-feeding programme that provides nutrition to those in
poorer communities.
The poverty relief fund provides further benefit for projects
aimed at alleviating the plight of the rural poor, women, youth
and the disabled. Funding of R1,5 billion is available for
projects that address water resourcing, waste management, creation
of infrastructure and protection of water resources.
Infrastructure projects under way include créches, community
facilities, access roads, community gardens and water supply
projects.
L. Social services cluster
The social services cluster forms the backbone of the MTEF, as
outlined in the MTBPS. The various departments in the cluster have
all committed themselves to undertake an institutionally
integrated approach to increase the infrastructural capacity to
deliver on social services through, in some instances, jointly co-
ordinated projects.
"Education and training are long-term investment that lay the
foundation for an improved quality of life through increased
skills and capabilities", conferring a positive externality in the
sense that the benefits spill over to the entire population. An
educated labour force is much more innovative and can bring about
technological advancement, which will eventually contribute to
growth.
Within the social services cluster, the Department of Education
has its emphasis on the following objectives: Equity, efficiency,
quality and accountability. Priorities include HIV/AIDS, Early
Childhood Development (ECD), and school effectiveness. The
department is specifically focusing on ECD, since they believe
that it addresses the needs of the poor. The allocation of
resources for early childhood development is particularly welcomed
by the FFC.
A lack of investment on maintenance has also been identified in
provincial education departments and the number of schools that
needs repairs still remains high. The national Department of
Education has established a Directorate: Physical Planning to look
into the spending rates of various provinces.
M. Capacity problems
One of the challenges facing the Department of Education is the
lack of capacity to convert money into resources, e.g. buying
learner support material or building classrooms. It is often found
that provinces do not know how to spend money in a timely and cost-
effective way. This problem usually exists because of poor
planning at management level.
The spread of HIV/AIDS is a challenge to society and the
government at large. The National Integrated Plan (NIP) includes
making resources available for implementing programmes available
to the Departments of Health, of Social Development and of
Education. These programmes are also linked to the poverty
reduction strategy. The NIP is lead by the Department of Health
and is aimed at spending money on prevention priorities, expanding
home-based care and community-based care programmes, life-skills
programming schools and voluntary counselling and testing. In
respect of the Education Department, roll-overs will be used to
pay HIV/AIDS officials that will be appointed to work on projects
relating to HIV/AIDS.
The FFC highly commends the additional allocation of resources for
the integrated strategy against HIV/AIDS - R320 million to R422
million for 2002-03 to R546 million for 2004 - to strengthen home-
and community-based care, and support voluntary counselling and
testing and strength life-skills programmes in schools. However,
the FFC has reservations about including this as part of the
equitable share because HIV/AIDS and other diseases associated
with it may be covered in the PHC sector budgets.
The child support grant has been extended to reach three million
beneficiaries by the end of 2002-03. Despite available funding,
problems persist. e.g. children not being supported because of
foster parents misusing the money. This leaves the Social
Development Department to work together with the Department of
Home Affairs to make sure that applicants have the necessary and
valid identity documents and birth certificates when they apply
for grants. This departmental co-operation can also speed up the
application processes.
Even though additional resources have been made available for
increases in the child support grant and other grants, the FFC
fears that the budgeted values - 2 000 values were used - would
underestimate the demand placed on these grants, especially the
foster care grant.
On the housing front, the change in focus from quantity to quality
of housing has slowed down the delivery process. In addition, the
department needs to develop a proper planning and relocation
approach, as well as focus on the integrated rural development and
urban renewal plans for future developments.
N. Co-ordination between departments
In the administration services cluster, the Department of Home
Affairs has placed itself in a position to facilitate the
integration of all departments - Health, Police, etc, as well as
the Department of Labour (UIF), to ensure effective delivery of
services and to enable access to pension funds, the UIF and
welfare grants. The proper financial management system should be a
priority for the department, i.e. a system to give all details
about an individual when applying for grants, identity documents,
UIF, etc.
With the inheritance of infrastructure backlogs especially
prevalent in housing, health and education, the government has
undertaken to increase spending on infrastructure maintenance,
rehabilitation, and on construction to provide the necessary
microeconomic framework, complementing the already macroeconomic
achievements, to bring about an integrated departmental approach
to sustain and support the delivery of public services.
O. Protection services cluster
The objective of an integrated justice system, comprising police,
justice, correctional services and defence, is pivotal in
stabilising crime levels and promoting growth in the country.
Evidence presented to the Committee attested to the fact that
integration of policy priorities and budgetary allocation is a
crucial factor within this cluster. In order to "strengthen
capacity in the safety and security sector and to prevent and
combat crime the budgetary allocation will grow by 7,2 per cent
annually over the medium term". The Committee noted that a key
part of the hearings was devoted to personnel issues and salaries
across the cluster.
P. Skills development and job creation
One of the key issues for the Department of Labour is sustainable
job creation in accordance with the job summit commitments agreed
to in 1999, through special employment programmes, integrated
provincial projects, sectoral job creation and human resource
development. The skills development levy is largely used to
achieve this objective.
In addition, the department aims to instil ordinary citizens with
the necessary skills required in the job market. Another challenge
for the department is the training of people for these programmes,
especially in rural areas.
Q. Division of revenue
The Committee considered a report on the vertical transfer of
funds from national to provincial and local governments. The
spending priorities of the government, with respect to provincial
and local government, encompasses social services spending on the
provincial side and the provision of basic services to local
government. In line with this, the government adjusted the
vertical share of the spheres of government to enable execution of
these priorities. In order to achieve equity, revenue is divided
horizontally by means of unconditional grants (equitable share)
and conditional grants. In addition, local governments have
undergone major restructuring, in order to deliver efficient
services, and some of this cost burden is being met from
nationally raised revenue.
Some concerns raised by the Committee includes the fact that these
grants may not be sufficient to address the challenges ahead of
local government, where people can experience direct benefits.
Some thought needs to given to increasing their share of the
equitable grant. Whereas a previous concern was the flow of funds
to local governments, the challenge currently is the underspending
of funds. Second is the lack of capacity that still exists within
some departments to spend allocated funds. In addition, the
Committee was of the opinion that the mindset of local governments
should be changed to include three-year budgets and spending
priorities in order to ensure sustainable spending, providing that
the necessary spending capacity is available. This, in turn, will
lead to the improvement in and increase of municipal
infrastructure, in line with government priorities. In addressing
the capacity problem, more information needs to be provided to the
National Treasury on spending measures in order to have proactive
strategies to deal with underspending, as this could lead to lack
of growth and non-delivery of services, in direct opposition to
government priorities. More co-operation between different spheres
of government will ensure that local governments take ownership of
functions assigned to them, for instance to make sure that
affordable service charges accompany provision of low-cost housing
by the national government to the lower-income groups. Finally,
the Committee is of the opinion that the rural development and
urban renewal strategies should be vigorously pursued by
provincial and local governments through co-operative governance
and a sound infrastructure planning.
Provinces and municipalities are the service delivery agents of
the government, and it is all the more important that they be
capacitated to adjust their spending priorities to be in line with
those of the national government. Whereas provinces receive most
income (95%) through national transfers, i.e. the equitable share
and various unconditional grants, municipalities have the ability
to generate up to 90% of their own revenue. This capacity depends
on their respective tax bases, and varies for Category A, B and C
municipalities. Some financial assistance is thus required for
local government in particular, where major restructuring has
taken place with the amalgamation of 284 local governments in
order to meet spending priorities. This was done with the aim of
delivering more efficient and effective services across
boundaries, particularly to areas lacking in infrastructure and
service delivery. The provision of services to communities,
promoting social and economic development and infrastructure
development, should be done in a sustainable way, and also involve
the community organisations. Due to varying tax bases between
municipalities resulting in lack of capacity, there is often a
tendency for some municipalities to be unable to spend their
funds. It therefore becomes important for provincial and the
national government to intervene and support the local government
to address service backlogs and improve service delivery. Once all
these structures are in place, municipal managers should then be
held accountable for non-delivery of services, arrears in
payments, deficits, corruption and non-reporting of information.
The other way of improving service delivery and eradicating
poverty is PPPs, whereby the public departments are joining
together to increase the capacity and skill transfer to explore
the necessary opportunities and improve infrastructure. The
Department of Provincial and Local Government is overseeing the
implemention of the Integrated Development Plans (IDPs) in
municipalities to direct resources towards key policy priorities.
Furthermore, the effective implementation of the Integrated
Sustainable Rural Development Programme (ISRDS) uses existing
funding to focus on improving service delivery in co-ordinated
manner.
R. Minister of Finance's response to inputs of Committee
1. General observations on inputs
(a) Most input were supportive of the growth-oriented budget
statement.
(b) Some people argue for faster growth and others for less
borrowing and tax cuts.
(c) The 2002 budget provides a balance that will contribute to
strong growth in respect of infrastructure and social
services, as well as tax relief, mainly for low- and
middle-income workers.
2. Current economy
Although the global economic slowdown will affect our growth
negatively, we are still projected to post positive real
growth in the economy, due to:
* Strong fiscal position provides room for fiscal policy as
a growth stimulant.
* The export sector is performing well, due to a competitive
currency.
* Inflation is on a downward trend, and we have not had to
hike interest rates or run up foreign liabilities, as was
the case in 1998.
3. Fiscal policy
(a) The fiscal framework makes provision for strong real
growth in spending next year.
(b) The frameworks create room for tax cuts to stimulate
expenditure on consumption.
(c) Limitations to borrowing and low interest rates will
render growth in spending more sustainable.
(d) PPPs and regulatory reform can be used to stimulate
capital investment and job creation.
(e) An increase in the deficit to 2,6% is projected.
4. Tax policy
(a) No major tax reforms in 2002.
(b) Tax cuts will aim to stimulate consumer demand, lower
employment cost, improved overall progression and
fairness of the tax system.
(c) During 2002, the government will review retirement fund
taxes, public benefit organisations and specific sectors
where the effective rate is low.
5. Spending framework
(a) Top priority in 2002 will be given to reducing poverty,
inequality and vulnerability.
(b) Other priorities are increased spending on health
services, social grants, municipal services,
infrastructure, policing and administration services,
strengthening of programmes and tackling HIV/AIDS.
(c) The government must improve the quality of spending.
(d) A situation of underspending is improving signalled by
government capital formation grew in the first half of
2001, the size of roll-overs is declining and conditional
grant mechanisms are changed to aid spending.
6. Intergovernmental finances
(a) Growth in local government share caters for the extension
of services to those at present excluded, provision of
free basic services and covering costs of governance in
fiscally weak municipalities.
(b) The transformation of local government should improve the
level of efficiency and quality of services to the poor.
(c) The provincial share rises to accommodate the social grant
take-up and inflation-related increase in grants,
programmes to fight HIV/AIDS, early childhood education
and acceleration of spending on infrastructure.
The Minister said that "hearings conducted in the Budget
Committee are a very positive development and that inputs
and comments made will be factored into the 2002 Budget".
S. Comments and recommendations
1. The Committee supports the theme of the 2002 budget of
addressing poverty and vulnerability. The Committee further
agrees with major priorities of the government and the
expansionary fiscal policy as projected over the MTEF. It
proposes to release funds to deal with the social problems
affecting the poor, while at the same time stimulating
economic growth and job creation over the medium to long term.
2. The Committee is concerned with the lack of capacity to spend
in some areas of spending where services are delivered. While
there are improvements, the government must put measures in
place to deal with these urgently. Committees of Parliament
must play a role in monitoring this. Committees of the various
legislatures must also, scrutinise and monitor monthly
expenditure figures released by the Treasury on a continuous
basis and hold departments accountable in accordance with the
PFMA. This should limit the roll-over of funds and reduce
underspending.
3. The Committee is concerned with the levels of co-ordination
between government departments, despite the cluster approach
of ministries at national level. This is more visible in
government capital projects, with the resultant roll-overs.
The Committee therefore recommends the intensification of
better co-ordination at all levels, better planing at local
level and the utilisation of PPPs to enhance delivery, provide
skills and expertise, where necessary. However, there needs to
be proper regulation of these PPPs in order to avert problems
similar to those experienced with in some areas.
4. The lack of financial services in the rural areas is of
concern, as such services are crucial for rural development.
Possible mechanisms for financial services to reach poor
areas, via The Post Bank, is one option in respect of such a
service. The government, via the Department of Trade and
Industry, is urged to explore increased spending on small,
medium and micro enterprises.
5. Effective co-ordination for maintenance and infrastructure
between Department of Public Works and orther departments is
necessary for maintenance and the roll-out of capital works
programmes of government.
6. There is a need to strenghtened the capacity of local
government in order to carry out its mandate to deliver
services.
7. The Committee recommends that in future departments should make
presentations to the committee as clusters to further improve
co-ordination between departments.
T. Conclusion
The Committee would like to thank all participants in the MTBPS
hearings, as this will assist Parliament in its oversight role and
further contribute to the budget process.
APPENDIX 1
The following stakeholders were invited and participated in
hearings on the MTBPS:
Representatives from the following entities attended the hearings:
Departments
1. Communications
2. Correctional Services
3. Education
4. Health
5. Housing
6. Home Affairs
7. Justice and Constitional Development
8. Labour
9. Minerals and Energy
10. National Treasury
11. Provincial and Local Government
12. Public Enterprises
13. Public Works
14. Safety and Security
15. Social Development
16. Trade and Industry
Constitutional bodies
1. Financial and Fiscal Commission
Private sector
1. Economist from Standard Bank
2. SACOB
Civil society
1. IDASA
2. People's Budget (SACC, SANGOCO, COSATU).
3. FEDUSA.
APPENDIX 2
Abbreviations
ECD Early Childhood Development
FDI Foreign Direct Investment
FFC Financial and Fiscal Commission
HIV/AIDS Human Immuno-Deficiency Virus/
Acquired Immuno-Deficiency Syndrome
IDP Integrated Development Plan
ISRD Integrated Sustainable
Rural Development
MTBPS Medium Term Budget Policy Statement
MTEF Medium Term Expenditure Framework
NGO Non-governmental Organisation
NIP National Integrated Plan
PFMA Public Finance Management Act
PHC Primary Health Care
PPP Public-Private Partnership
SACOB South African Chamber of Commerce
SARS South African Revenue Services
SETA Sectoral Education and
Training Authority
UIF Unemployment Insurance Fund
-
Report of the Joint Committee on Revenue Laws Second Amendment Bill on the Revenue Laws Second Amendment Bill [B 84 - 2001] (National Assembly - sec 77), dated 12 November 2001:
The Joint Committee on Revenue Laws Second Amendment Bill, having considered the subject of the Revenue Laws Second Amendment Bill [B 84 - 2001] (National Assembly - sec 77), referred to it and classified by the Joint Tagging Mechanism as a Money Bill, reports that it has concluded its deliberations thereon.
National Assembly:
-
Report of the Portfolio Committee on Justice and Constitutional Development on the Judges’ Remuneration and Conditions of Employment Bill [B 83 - 2001] (National Assembly - sec 75), dated 13 November 2001:
The Portfolio Committee on Justice and Constitutional Development, having considered the Judges’ Remuneration and Conditions of Employment Bill [B 83 - 2001] (National Assembly - sec 75) and proposed amendments of the National Council of Provinces (Announcements, Tablings and Committee Reports, p 1265), referred to the Committee, reports the Bill with amendments [B 83A - 2001].
Report to be considered.
-
Report of the Portfolio Committee on Agriculture and Land Affairs on the Land Affairs General Amendment Bill [B 71B - 2001] (National Assembly - sec 75), dated 13 November 2001:
The Portfolio Committee on Agriculture and Land Affairs, having considered the Land Affairs General Amendment Bill [B 71B - 2001] (National Assembly - sec 75) and a proposed amendment of the National Council of Provinces (Announcements, Tablings and Committee Reports, p 1221), referred to the Committee, reports the Bill with an amendment [B 71C - 2001].
Report to be considered.
-
Report of the Standing Committee on Private Members’ Legislative Proposals and Special Petitions on Petition of Mr G C Clarke, dated 31 October 2001:
The Standing Committee on Private Members’ Legislative Proposals and Special Petitions, having considered the petition of Mr G C Clarke, referred to it, reports as follows:
That Mr G C Clarke be granted - (a) a pension of R1 500 per month, in addition to the pension he receives at present; and (b) backpay of this pension for a period of six months.
Report to be considered.
-
Report of the Standing Committee on Private Members’ Legislative Proposals and Special Petitions on the Proposed Transfer of Convicted Prisoners Bill, dated 31 October 2001:
The Standing Committee on Private Members’ Legislative Proposals and Special Petitions -
(a) having considered the proposed Transfer of Convicted Prisoners Bill, submitted by Mr H C Schmidt and referred to the Committee;
(b) having consulted the Ministries of Correctional Services, of Justice and of Foreign Affairs; and
(c) having heard evidence from the Departments of Correctional Services and of Justice,
recommends in terms of Rule 235(4) that permission to proceed with the proposed legislation be refused.
Report to be considered.
- Report of the Ad Hoc Committee on Powers and Privileges of Parliament, dated 2 November 2001:
The Ad Hoc Committee on Powers and Privileges of Parliament reports as
follows:
1. The Ad Hoc Committee was appointed on 5 April 2001.
2. The Ad Hoc Committee was instructed to consider the
recommendations of the Joint Subcommittee on Powers and Privileges
of Parliament, and to introduce a Bill in accordance with Chapter
13 of the National Assembly Rules, by 7 September 2001.
3. The Ad Hoc Committee members were appointed on 1 June 2001.
4. The Ad Hoc Committee met on 6 and 13 June 2001, to elect its
chairperson and to plan its work. It was decided to await a third
draft of the Bill, which would include amendments suggested by the
Joint Rules Committee at its last meeting.
5. A third draft Bill was prepared by the Parliamentary Law
Advisers, and published in the Government Gazette on 11 July 2001.
The public was invited to comment on the contents of the Bill and
make recommendations to the Ad Hoc Committee on it within 21 days,
in terms of National Assembly Rule 240(a).
6. A few stakeholders suggested possible amendments to the Bill.
7. Having considered the draft Bill, written submissions by members
of the public and some research work on the subject matter
throughout the world, the Ad Hoc Committee realised that the
scope, range and complexity of the matters to be dealt with in the
legislation were of particular consequence to Parliament, and that
there was much to be derived from investigating all contributing
factors, including incidences which may have bearing on
legislation on these matters.
8. At its meeting on 21 August 2001, the Ad Hoc Committee agreed to
utilise its mandate to confer with the Ad Hoc Select Committee on
Powers and Privileges of Parliament, by holding joint meetings
with them. It was the view of the Ad Hoc Committee that it would
also save time to co-ordinate the meetings of both Committees.
This, however, meant that the programme of meetings had to be
amended to accommodate the cyclic nature of the NCOP's activities.
The Ad Hoc Select Committee elected its Chairperson on 21 June
2001, and held its first meeting on 7 September 2001.
9. However, one of the Ad Hoc Select Committee's responsibilities
is to consult with provincial legislatures on matters which affect
them. Such consultation was entered into with the legislatures,
but to date only two of the nine legislatures have responded. That
process has therefore not been completed.
10. In view of the above, it became clear that the Ad Hoc Committee
would not be able to complete its work within the period it was
given to do so, also as a result of the duties of Members of
Parliament at that time.
11. The Ad Hoc Committee was consequently given an extension of its
deadline for reporting to the National Assembly until 2 November
2001.
12. The Committees requested the parliamentary researchers to do an
in-depth study of similar legislation in the world, particularly
in Africa, with a view to introducing legislation providing for
South African public representatives worthy of high esteem.
13. All parties agreed that, to save time and meet the new deadline,
it was important to run workshops jointly with the Ad Hoc Select
Committee. The Committees held workshops on 13, 14, 26 and 28
September and 2 October 2001, at which they considered the third
draft Bill. These workshops were successfully concluded and led to
the foundation being laid for the fourth draft of the Bill.
14. The Committees held public hearings on the legislation on 26
September 2001. Although a number of stakeholders had been invited
to participate and had indeed indicated their interest in doing
so, only Prof C Murray of the Law Faculty at the University of
Cape Town, Mr R Louw of the Media Institute of South Africa and Mr
N Dieltiens of Freedom of Expression gave their views on the third
draft of the Bill.
15. After earnest discussions on the legislation and identifying
numerous provisions to be amended, the Committees requested the
Parliamentary Law Advisers on 28 September 2001 to prepare a
fourth draft of the Bill, including all possible provisions to be
considered for inclusion in a final draft Bill.
16. The fourth draft of the Bill was made available on 17 October
2001, and distributed to members of the Ad Hoc Committee on 18
October 2001. It is the intention of the Ad Hoc Committee to
consider the fourth draft with a view to improving it, with a view
to preparing a fifth and final draft.
17. One of the logistical difficulties encountered by the Ad Hoc
Committee is that, unlike other parliamentary Ad Hoc committees,
ad hoc committees do not have their own time-slots for meetings.
This fact makes it well nigh impossible to find meeting times
which do not clash with several other committee meetings which the
members of the Ad Hoc Committee are supposed to attend, as part of
their duties as Members of Parliament.
18. The Ad Hoc Committee had permission to meet on 24 October, 2, 7
and 14 November 2001, to consider the fourth draft of the Bill.
Unfortunately, the Ad Hoc Select Committee was not in a position
to meet on 24 October, and the meeting had therefore been
cancelled.
19. At its meeting on 2 November 2001, the Ad Hoc Committee resolved
to request the National Assembly to grant it a further extension
of its deadline until 31 March 2002. It also agreed not to meet on
7 and 14 November 2001, but that its work be prioritised for next
year. It is the intention of the Ad Hoc Committee to meet from 14
January 2002 in order to finalise its work. The Ad Hoc Committee
further resolved that the Chairperson of Committees of the
National Assembly be requested to ensure that the Ad Hoc Committee
be granted specific time-slots in 2002, in order to enable it to
hold its meetings, despite meetings of portfolio and select
committtees.
Report to be considered.