National Council of Provinces - 27 March 2001
TUESDAY, 27 MARCH 2001 __
PROCEEDINGS OF THE NATIONAL COUNCIL OF PROVINCES
____
The Council met at 14:04.
The Chairperson took the Chair and requested members to observe a moment of silence for prayers or meditation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS - see col 000.
NOTICE OF MOTION
Mr K D S DURR: Madam Chair, I give notice that I shall move at the next sitting of the Council:
That the Council -
(1) notes the first state visit of a South African head of state to Cuba, currently under-way in March 2001;
(2) further notes the size of the delegation, which includes at least five Cabinet Ministers;
(3) given the poor status of Cuba’s relations with several of South Africa’s most important trading partners, poses the question as to whether any benefits that may arise from the visit may not be outweighed by the negative connotations raised;
(4) Given Cuba’s geography and the relative lack of importance of the Cuban economy and its poor human rights record, questions whether the visit is a good investment of scarce parliamentary and executive time and resources.
[Interjections.]
POSITION OF PETROL RETAILERS UNDER CURRENT PRICING STRUCTURE
(Draft Resolution)
Mr L G LEVER: Chairperson, I move without notice:
That the Council -
(1) notes -
(a) the position of many petrol retailers and the present pricing
structure that places their continued viability under threat
and;
(b) that petrol retailers as a group employ a large number of our
citizens and;
(2) consequently calls upon the Minister of Minerals and Energy to review the present pricing structure and settle the matter as speedily as possible.
The CHAIRPERSON OF THE NCOP: Order! Is there any objection to the motion?
Mr M V MOOSA: Yes, Chairperson.
The CHAIRPERSON OF THE NCOP: Order! There is an objection. The motion will therefore become notice of a motion.
ALLEGATIONS OF MISAPPROPRIATION OF FUNDS AGAINST CEO OF SANTA
(Draft Resolution)
Me E C GOUWS: Voorsitter, ek stel sonder kennisgewing voor:
Dat die Raad -
(1) kennis neem van bewerings dat die Departement van Gesondheid se oudit- verslag oor SANTV onreëlmatighede openbaar;
(2) verder daarvan kennis neem dat die verslag na bewering ernstige aanklagte teen die hoof-uitvoerende beampte, dr Andrew Ratsela, oor die wanbesteding van geld bevat;
(3) gevolglik die Departement van Gesondheid versoek om die verslag openbaar te maak; en
(4) versoek dat stappe onmiddellik teen dr Ratsela gedoen word indien die bewerings van wanbesteding inderdaad in die verslag gemaak word. (Translation of Afrikaans draft resolution follows.)
[Ms E C GOUWS: Chairperson, I hereby move without notice:
That the Council -
(1) notes allegations that the Department of Health’s audit report on SANTA reveals irregularities;
(2) further notes that this report allegedly contains serious accusations against the chief executive officer, Dr Andrew Ratsela, of misappropriation of money;
(3) consequently requests the Department of Health to release the report in question; and
(4) requests that immediate steps be taken against Dr Ratsela if allegations of misappropriation are indeed made in the report.]
Motion agreed to in accordance with section 65 of the Constitution.]
FARM MURDERS IN THE ELLIOT DISTRICT
(Draft Resolution)
Mnr P A MATTHEE: Voorsitter, ek stel sonder kennisgewing voor:
Dat die Raad -
(1) kennis neem van die grusame dubbele plaasmoord op wyle mnr Kevin en mev Lu McGregor eergisteraand op hul plaas, Bloemvlei, in die Elliot- distrik terwyl hul twee-jarige kleindogter, Tayla McGregor, ook in die huis was, en dat sy die hele nag stoksielalleen deurgebring het saam met die lyke van haar vermoorde grootouers voordat sy en die lyke gisteroggend eers deur in huishulp ontdek is;
(2) verder kennis neem dat hierdie die derde plaasmoord vanjaar in dié gebied is nadat die tagtig-jarige wyle mev May Rushmere op 8 Februarie in ‘n rooftog op haar seun se plaaswinkel naby Maclear in die kop geskiet is en wyle mev Martie Scheepel, voormalige burgemeester van Maclear, slegs twee weke tevore op haar plaas, Wickey Creede, in dieselfde omgewing doodgeskiet is;
(3) ‘n besluit neem dat die voortdurende plaasaanvalle en plaasmoorde in Suid-Afrika geheel en al onaanvaarbaar is;
(4) die President en die Regering versoek om alles moontlik te doen om ‘n stop te sit aan die vlaag van plaasaanvalle en plaasmoorde in ons land; en
(5) die Minister van Veiligheid en Sekuriteit versoek om so gou as moontlik aan die Raad verslag te doen oor die huidige stand van sake ten opsigte van plaasaanvalle en plaasmoorde in elke provinsie, die bevindings van die ondersoek na die moontlike motiewe vir die plaasaanvalle en plaasmoorde deur hom gelas en die stappe en maatreëls wat deur die Regering beoog word om ‘n einde te maak aan hierdie euwel op ons platteland, insluitende die relevante tydsraamwerke. (Translation of Afrikaans draft resolution follows.)
[Mr P A MATTHEE: Chairman, I hereby move without notice: That the Council -
(1) notes the gruesome double farm murder on the late Mr Kevin and Mrs Lu McGregor the night before last on their farm Bloemvlei in the Elliot district, while their two-year-old granddaughter, Tayla McGregor, was also in the house, and that she spent the whole night alone with the corpses of her murdered grandparents before she and the corpses were discovered by a domestic helper only yesterday morning;
(2) further notes that this is the third farm murder in this area this year, after the late eighty-year-old Mrs May Rushmere was shot in the head on 8 February during a robbery in her son’s farm shop near Maclear and the late Mrs Martie Scheepel, a former mayor of Maclear, was shot dead on her farm, Wickey Creede, in the same area just two weeks prior to that;
(3) resolves that the continuing farm attacks and farm murders in South Africa are completely unacceptable;
(4) requests the President and the Government to have everything possible done to put an end to the wave of farm attacks and farm murders in our country; and
(5) requests the Minister of Safety and Security to report to the Council as soon as possible on the present state of affairs with regard to farm attacks and farm murders in each province, the findings of the investigation he ordered into the possible motives for the farm attacks and farm murders, and the steps and measures envisaged by the Government to put an end to this scourge of our rural areas, including the relevant time frames.]
The CHAIRPERSON OF THE NCOP: Order! Is there any objection to the motion?
Mr M A SULLIMAN: Ek maak beswaar teen die mosie, Voorsitter. [I object to the motion, Chairperson.]
The CHAIRPERSON OF THE NCOP: Order! There is an objection. The motion will therefore become notice of a motion. [Interjections.] Could I indicate that there is no debate in terms of the Rules. I wanted to indicate that I just heard on the two o’clock news that there have been arrests in the particular case referred to. But there is an objection, and the motion therefore becomes notice of a motion.
REPORT OF EXECUTIVE DIRECTOR OF THE INDEPENDENT COMPLAINTS DIRECTORATE IN RESPECT OF THE DOMESTIC VIOLENCE ACT
(Draft Resolution)
Mr C ACKERMANN: Chairperson, I hereby move without notice:
That the Council -
(1) takes note of the findings and the recommendations contained in the report of the Executive Director of the Independent Complaints Directorate to Parliament, in compliance with the Domestic Violence Act, 1998 (Act No 116 of 1998), for the period June to December 2000, inter alia that there are police stations which are still not ready to implement the Domestic Violence Act;
(2) notes that - (a) domestic violence cases are not treated as priority matters;
(b) only a few police stations visited have trauma centres;
(c) there is no uniformity in respect of the use of incident forms;
and
(d) a lack of shelters for abused women is a major problem; and
(3) urges the Ministers of Safety and Security and of Social Development to see to it that their respective departments comply with the recommendations contained in the said report as soon as possible.
Motion agreed to in accordance with section 65 of the Constitution.
ARSON AT SCHOOL IN KENYA
(Draft Resolution)
Prince B Z ZULU: Chairperson, I move without notice:
That the Council -
(1) notes with shock and horror the recent incident of arson on Sunday night in which 58 pupils aged between 15 and 18 years were burnt beyond recognition in a school in south eastern Kenya;
(2) notes that according to reports, both doors of the crowded dormitory were locked at the time of the fire;
(3) expresses its sympathy and offers its condolences to families and friends and the people of that country; and
(4) appeals to the government of Kenya and the Machakos police to leave no stone unturned, in order to bring the perpetrators of this heinous crime to justice.
Motion agreed to in accordance with section 65 of the Constitution.
The CHAIRPERSON OF THE NCOP: Order! Could members please keep their hands raised until I indicate that I have noted them, if there are further members.
REFUSAL OF PERMISSION FOR SOCCER TO BE PLAYED AT NEWLANDS RUGBY STADIUM
(Draft Resolution)
Mrs E N LUBIDLA: Chairperson, I move without notice:
That the Council -
(1) notes
(a) the Democratic Alliance-ruled unicity council decision to
invoke a little-used bylaw to prevent soccer from being
played at Newlands;
(b) that the decision to invoke the bylaw was made after
objections from residents in the mainly white suburb;
(c) that no such objections were ever raised with regard to
cricket and rugby crowds who stumbled drunken through
Newlands after major games ...
Mr C ACKERMANN: Chairperson, on a point of order: The hon member is misleading the House, because her facts are not correct.
The CHAIRPERSON OF THE NCOP: Order! Mr Ackermann, that is not a point of order. Continue, Mrs Lubidla.
Mrs E N LUBIDLA: Chairperson, I continue:
(c) that no such objections were ever raised with regard to
cricket and rugby crowds who stumbled drunken through
Newlands after major games, making a loud noise and urinating
in public;
(2) believes the decision to invoke the bylaw was calculated to satisfy the whims of these racist objectors by excluding soccer fans, who are mostly African and coloured, from attending sports facilities in historically white areas;
(3) further believes that the decision smacks of the apartheid years, when blacks were required to carry ``dompasses’’ and needed special permission to enter white areas; and
(4) calls on the Democratic Alliance and its mayor to repeal this offensive bylaw and to show that they are committed to nonracism.
The CHAIRPERSON OF THE NCOP: Order! Is there any objection to the motion?
Mr C ACKERMANN: Yes, Chairperson.
The CHAIRPERSON OF THE NCOP: Order! There is an objection. The motion therefore becomes … [Interjections.] Order! I am not sure why members have suddenly become very excited. The motion therefore becomes notice of a motion.
CHAINING OF CRITICALLY ILL PRISONER
(Draft Resolution)
Mrs J N VILAKAZI: Chairperson, I move without notice: That the Council -
(1) though commending the Government’s commitment to preventing crime whenever it occurs and to bring perpetrators and potential perpetrators to book, is against the attitude of the Department of Correctional Services towards Vusi Nxumalo’s case;
(2) is of the opinion that chaining a critically ill patient because he is a prisoner is very dehumanising and totally unacceptable;
(3) notes the critical condition of Vusi Nxumalo and his long wait before a trial - according to a City Press reporter over a year now; and
(4) therefore requests the Minister of Correctional Services and his department to review legislation concerning chaining of prisoners.
Motion agreed to in accordance with section 65 of the Constitution.
CONDEMNATION OF RACIALLY INSPIRED MURDER IN WELKOM AND VIOLENCE AGAINST FARMWORKERS AND FARMOWNERS
(Draft Resolution)
Rev M CHABAKU: Chairperson, I move without notice:
That the Council -
(1) expresses its horror at the blatant racism in Welkom where Sgt Nkonyane was shot dead because he could not keep his dog quiet;
(2) notes that even when he fled from his assailants, they followed him and shot him dead where he was hiding;
(3) notes that to add insult to injury, not a single one of his Caucasian police colleagues attended his funeral, be it in private capacity or officially;
(4) expresses its abhorrence at this outlawed action of racism;
(5) continues to condemn the continued violence against and murders of farmworkers and farmowners, which in turn continue to harden attitudes instead of changing the hearts and minds of God’s people; and
(6) reiterates its commitment to the eradication of racism in all its forms of expression and encourages public protests and exposure of perpetrators of this evil.
Motion agreed to in accordance with section 65 of the Constitution.
PRECEDENCE TO ORDER OF THE DAY
(Draft Resolution)
The CHIEF WHIP OF THE COUNCIL: Chairperson, I move without notice:
That precedence be given to Order No 2 on the Order Paper.
Order No 2 will then be followed by Order No 1. Mr P M MILLER (KwaZulu-Natal): Chairperson, obviously under the circumstances on this particular occasion we understand the reasons. I must, however, place on record that it makes life for us who travel and who make arrangements and flight bookings extremely difficult, and we ask that these issues be taken into consideration before last-minutes changes to the Order Paper are made. When I left this morning at 05:30 to attend the sitting of this House, I had the clear understanding that Order No 1 was to be the first item today.
The CHAIRPERSON OF THE NCOP: Thank you, Mr Miller, for your understanding. I believe it is important that I comment in response and indicate that we agreed to the Minister’s request following quite a serious look at it. It comes as the result of a bereavement, and, as you know, with bereavements it is very difficult to plan.
The Minister asked us, therefore, given the situation that in her family she has particular responsibilities, that we accord her this opportunity to present her Bill first. We agreed on that understanding.
It is not the practice of the NCOP to amend its programme at will. I am sure you will have noted that, since 1999, there certainly have been fewer and fewer such changes. We would hope that they become even fewer, but on the occasion of a bereavement, we believe that members must exercise some tolerance and understanding.
Motion agreed to in accordance with section 65 of the Constitution.
HOUSING AMENDMENT BILL
(Consideration of Bill and of Report thereon)
THE MINISTER OF HOUSING: Madam Chairperson, hon members, comrades, colleagues, ladies and gentlemen, in 1997 we promulgated the Housing Act of 1997 to provide a comprehensive regulatory framework for the effective delivery of housing for the poor and disadvantaged households in South Africa. The Act, among other things, defined the roles and functions of the three spheres of government in housing delivery. It obliged the Minister of Housing to phase out the housing subsidies of the previous dispensation, and make provision for the establishment of the National Housing Code.
As we speak today, we are counting seven years since the democratic dispensation laid the first foundation of housing for the poor. For the last seven years of national housing delivery, we have made it our business to constantly scan the housing environment, and to keep our fingers on the pulse of the low-cost housing industry in all its relevant facets. This was all to ensure that the national housing programmes match the expressed needs of the poor majority, spelt out in the White Paper of 1994, while maintaining a balance between executing our mandate, and protecting the state’s and taxpayers’ fiscal interests.
The amendment to the Housing Act of 1997 that I am proposing to this House today is the culmination of these seven years’ worth of observing housing development in the country. The Housing Amendment Bill of 2001 constitutes our strategy to close gaps in our housing policy, to tie up loose ends and to streamline our overall delivery operations, thereby improving access to housing by all our people well into the 21st century.
The Housing Amendment Bill of 2001, therefore, seeks to rectify what we have identified as inefficiencies of state institutional arrangements in the Housing Act of 1997 by effecting the following: firstly, abolishing the South African and provincial housing development boards; secondly, transferring the powers, duties, rights and obligations of provincial housing development boards to the MECs responsible for housing; and, thirdly, providing for the establishment of advisory panels to advise the Minister and the MECs. Both the Minister and the MECs will choose their own advisers. Fourthly it will empower the Minister to determine procurement policy in respect of housing development and put in place regulatory measures to restrict the sale or alienation of state-subsidised housing.
Spelt out in detail, the amendments are as follows: Under section 1 of the
Act I firstly propose to insert two new definitions of the terms code''
andprocurement’’. According to section 4(1) of the Housing Act of 1997,
the Minister must publish a code called the National Housing Code''. The
code has now been published, hence the need for the additional definition.
As section 3 of the Housing Act is being amended to include the
determination by the Minister of a procurement policy, it is necessary to
include a definition ofprocurement’’.
Secondly, with the abolition, by this amendment, of the provincial housing development boards, the need to define ``provincial housing development board’’ falls away. We therefore propose that the definition be deleted.
I propose an amendment to section 3 of the Act by the insertion of an additional subsection (c) A which compels the Minister to ``determine a procurement policy”, by no later than April 2002, which is consistent with section 217 of the Constitution in relation to housing development.
Our investigations of the housing subsidy scheme have revealed that with the exception of individual housing subsidies, procurement of goods and services were not complying fully with the Public Finance Management Act of
- We need to ensure such compliance to facilitate equitable distribution of the benefit of housing.
My department is currently working on a procurement policy, which will be submitted to me personally for approval. This necessitates that such ministerial power be incorporated in the Housing Act. Under section 3, I propose that a new subsection 6B be inserted which compels the Minister to publish, in the Gazette, updated lists of national housing programmes, instituted, or deemed to have been instituted, under subsection 4(g), as well as lists of national institutions established and financed, or deemed to have been established or financed, under subsection 4(h), and must indicate in such notice that details of such national housing programmes, and of the role and functions of such national institutions, are contained in the code.
The new subsection thus complies with the principles set out in section 2(1)(c)(iv) of the Housing Act, which requires all spheres of Government to ensure that housing development is administered in a transparent, accountable and equitable manner and upholds the practice of good governance.
I propose to insert a new subsection 9 to reinforce section 100 of the Constitution, which allows the national executive, that is the Minister, to intervene when a province cannot or does not fulfil an obligation in terms of the Act. Experience has taught us that owing to capacity-related and other constraints, the need sometimes arises for the national executive to intervene in the housing delivery processes at provincial level. The new insertion thus provides for national intervention when provincial circumstances so dictate.
Changes under section 4 of the Act relate to our previous references to the
National Housing Code. The Code'' referred to in section 4 of the Act has
now been published and distributed to the provinces. The amendment to this
section, therefore, deletes the phrasein this section referred to as the
Code’’ in subsection (1), as the term ``Code’’ is, per this amendment, now
defined in section 1 of the Act.
To enforce the application of the ``Code’’, we have added a new subsection (6) under section 4, which renders the National Housing Code binding on the provincial and local spheres of government. This was previously not clearly spelt out.
Under section 5 of the Act we deal with the SA Housing Development Board, which we are abolishing by this amendment. We propose to replace the board with a mechanism by which the Minister may establish a panel of persons to advise her or him on any matter relating to housing development. The new section deals with the qualification, the appointment and termination of such panel members.
I must mention that since the coming into operation of the Housing Act of 1997, the SA Housing Development Board has not come into existence. We feel that a board of 15 persons, which was the maximum allowed by the Act, is too cumbersome for quick decision-making.
Experience over the last few years has taught us that such boards are difficult to convene and attendance by members of the board is problematic. Board members are usually busy professionals who find great difficulty in attending meetings, much to the detriment of the housing programme that the boards were set up to drive.
We therefore propose, in the place of the board, a panel of experts who can be approached by the Minister on an ad hoc basis. We believe that this would result in a more focused streamlined process, costing less and resulting in greater efficiency in decision-making processes.
Regarding section 7 of the Act, we propose to amend the wording by adding
the words through its MEC'' after the wordgovernment’’ in line 4(b) on
page 5 of the Bill. This means that a provincial government must act
through its MEC when promoting and facilitating the provision of adequate
housing in its province. Subsection (2) is amended by the addition of the
phrase through its MEC'' after the wordmust’’ in line 54, for the same
reasons as above.
In the proposed amendment, new subsections (3), (4) and (5) are inserted. Subsection (3) sets out the MEC’s duties which are, briefly, to administer every national housing programme; determine provincial housing development priorities; apply procurement policy in respect of housing development determined by the Minister; and administer the assets contemplated in section 14.
Subsection (4) provides for the discretionary establishment of a panel of persons by an MEC to advise him or her on any matter relating to housing development. The subsection also deals with the qualifications, appointment, termination and allowances of members of the panel. Subsection (5) provides for the delegation and assignment of powers and duties respectively by the MEC. On the issue relating to the sale and alienation of state-subsidised housing, we are inserting new clauses, ie 10A and 10B into the Act. We are deeply concerned with the sale and alienation of state-subsidised houses that has come to our attention lately. Government has invested billions of rands in subsidised low-cost housing for the poor, mainly through the government’s housing subsidy scheme. Yet, some beneficiaries are selling or disposing of their houses at prices far below cost.
Municipalities have also been selling these houses in execution in instances where beneficiaries have defaulted on payments for municipal services. The houses are generally sold in execution at a fraction of their building cost. We have received numerous reports to the effect that the majority of the buyers of these houses are not the poor people for whom the houses were built in the first place. We are also aware of houses purchased for cash or bought at sales in execution by gangsters and drug lords, who either use the houses for their unscrupulous deeds or sell them at great profit.
Each time a subsidised house is sold or alienated, the pool of houses for the poor is diminished at considerable cost to the state and the taxpayer. The sale of state-subsidised houses in the manner outlined above goes totally against the letter and spirit of the Housing Act, Act 107 of 1997. It also goes against state policy as outlined in the National Housing Code. We simply cannot allow this practice to continue.
We are therefore taking action to restrict the sale and alienation of state- subsidised houses by inserting new subsections, ie 10A and 10B, to regulate these houses throughout the Republic of South Africa.
This insertion deals with the restriction on voluntary and involuntary sale of state-subsidised houses. It prohibits the sale or alienation of these houses for a period of eight years from the date of acquisition. If a beneficiary wishes to sell a state subsidised house within the eight-year period, he or she must first offer the house to the relevant provincial housing department. No purchase price or other remuneration would be paid to the beneficiary. The beneficiary would be eligible to obtain another housing subsidy if he or she qualifies for it.
In the case of involuntary sale of state subsidised houses, the beneficiary’s successors in title, or creditors in law, shall not sell or alienate the state subsidised house unless it has first been offered to the relevant provincial housing department, at a price no greater than the subsidy amount. The new section also deals with the details of the offer and acceptance by the provincial housing authority, and provides for a mechanism, if there is a dispute regarding the purchase price. The section further stipulates the duties of the Registrar of Deeds when dealing with such properties.
By virtue of the abolition of the Provincial Housing Development Boards, the entire section 8, on the provincial housing development boards, is repealed. In terms of the amendments to section 7, which I dealt with earlier, the functions, duties and powers of the previous boards will vest in the MEC. Over and above the fact that boards are difficult to convince, our experience has shown that board members are sometimes involved in the housing industry themselves. This poses a potential conflict of interest.
In certain instances, members of the boards showed reluctance to implement the housing policy in their decisions. This impacted negatively on delivery rates. In addition, the boards were in many instances not following constitutional and legislative imperatives when procuring goods and services.
I am therefore convinced that with the abolition of the boards, MECs will be able to access, on an ad hoc basis, experts on a panel of persons, should they so wish. MECs will therefore take full responsibility for national and provincial housing programmes. This will without a doubt, expedite the housing delivery process.
The abolition of the provincial housing development boards and the vesting of powers in the MECs simply means that we shall substitute MECs for provincial housing development boards in all areas that make reference to the latter. Examples of these are sections 14, 15, 16 and 17 of the Housing Act, Act 107 of 1997. [Time expired] [Applause.]
Nksz P C P MAJODINA: Mhlalingaphambili, mandibulise kuMphathiswa wezeZindlu. Lo Mthetho uyilwayo ufakelwa izilungiso siwamkela ngezandla ezishushu kuba uchitha iBhodi yoPhuhliso lweZindlu kundlunkulu nakumaphondo olithoba. Lo Mthetho uyilwayo useka amaqumrhwana okucebisa uMphathiswa kwimicimbi enxulumene nezezindlu. Le yindlela yokukhawulezisa uthatyatho lwezigqibo kungalandelwanga ndlela inde enokulibazisa ulwabiwo lwezindlu. Sibonile ukuba maxa wambi ezi bhodi bezilibala yimibhodamo, zixhentsa ubusuku nemini zilibazisa inkqubela-phambili. Abaphathiswa bamaphondo baza kuthabatha inxaxheba ngakumbi kuthatyatho lwezigqibo, bakhawulezise ukuphucula impilo yabantu bakowethu.
Kungochulumanco ukuqaphela ukuba lo Mthetho uyilwayo ukhusela urhwebo ngezindlu zesibonelelo ezithi zinikwe abantu abangathathi ntweni, iimpula- kalujaca, oothina ke.
ILUNGU ELIHLONIPHEKILEYO: Ewe! Ewe! (Translation of Xhosa follows.)
[Ms PC MAJODINA: Chairperson and the hon the Minister of Housing, we welcome this amendment bill with warm hands, because it is aimed at abolishing the Housing Development Board in the national office and the nine provinces.
This Bill establishes advisory committees to advise the Minister on issues that have to do with housing. The intention is to speed up the decision- making process without following long-drawn out processes that could delay the provision of houses. We would sometimes notice that these boards were involved in hair- splitting processes, thereby delaying development. The provincial MEC’s will participate particularly in decision-making, and speed up the development of our people.
I note with joy that this Bill safeguards trading in houses that are provided for people that have nothing, poor people, and that means us.
Hon MEMBER: Yes! Yes!
Nksz P C P MAJODINA: Ngale ndlela siza kuba negunya lokulawula izindlu zesibonelelo singuRhulumente ukuze abantu bangashishini ngazo ngathi bathengisa amagwinya.
ILUNGU ELIHLONIPHEKILEYO: Ewe! Ewe! (Translation of Xhosa paragraph follows.)
[Ms P C P MAJODINA: In this way we in Government will be able to take control of these houses, so that people do not use them for business, as if they are selling fat cakes. HON MEMBER: Yes!Yes!]
Nksz P C P MAJODINA: Ukuba nendawo yokufihla intloko lilungelo lakhe wonke ummi waseMzantsi Afrika, kwaye uRhulumente wabantu uyayingqina le nto ngokunikezela ngezindlu mahala, felefele, oku kwenduku yomnquma, kuba uhoye isidima sabantu.
Phaya kuSomqulu weNkululeko kukho umhlathi othi: ``Kuya kubakho izindlu, ukhuseleko nobutofotofo kuye wonke ummi waseMzantsi Afrika.’’ Izicwangciso ezaneleyo zokuhlangabezana nolu xanduva zenziwe liSebe lezeZindlu ngakumbi ngokubhekisele kumcimbi wezimali. Andiboni sikhwasilima ke.
Eli Bhunga leSizwe lamaPhondo maliwuseke ngokupheleleyo lo Mthetho usayilwayo. [Kwaqhwatywa.]
Ms P C P MAJODINA: A roof over people’s heads is every South African citizen’s right and the Government of the people supports this by giving out houses for free, at no charge at all, because it cares about people’s dignity.
In the Freedom Charter there is a clause that reads: ``There shall be Houses, Security and Comfort!’ for every citizen of South Africa.’’ Appropriate plans for carrying out the responsibility were made by the Department of Housing, especially with regard to funding. I do not see anything wrong with that.
The National Council of Provinces should support this Bill fully. [Applause.]]
Mr B KOMPHELA (Free State): Madam Chairperson, hon Minister, hon members of the House, comrades and friends, I am pleased to rise here in support of the Housing Amendment Bill today.
I am participating in the joyous celebration of the tightening up on the pillaging, plundering and abuse of Government by people who do not want to acknowledge progress made by the ANC. [Interjections.]
I would like to reiterate a statement made by the President during his opening address to Parliament. He stated that whereas in the past suffering and degradation were the only things certain in the lives of millions of our people, the African people, ``hope has now taken the place of despair.’’
I wish to focus on the steps taken by the Minister to close the gap to ensure that the hopes of the people that were lost through despair return. [Interjections.]
Millions of our people were robbed of their rights. The ANC is there to ensure that their rights are realised, that they to acquire homes. That has been the call of our forefathers since 1955 in Kliptown, namely that there shall be houses for all. We are committed to that; we will not change.
During the first period of democratic government, the foundation was laid for the restructuring and transformation of the housing system. Significant policies and pieces of legislation were introduced and changes brought about within the framework of the Constitution and the Reconstruction and Development Programme.
The White Paper and a number of other policies, provide examples of policy changes in housing delivery. Indeed, there have been sweeping changes that have touched the lives of millions of our people in this country and that is unquestionable.
However, touching the lives of the poorest of the poor is not enough. We have to tidy everything up with the adoption of this amending Bill, which the Free State totally supports. [Interjections.]
We have to ensure that the way we work and the way in which we are doing some of these things does not lead to the further alienation and marginalisation of the most vulnerable sectors of the communities. In our province, for example, we have seen people ripped off by those who do not see value in what the Government is attempting to do. In Bothaville a house can be sold for R100 because the occupant cannot pay back the oomashonisa [money milkers] his R100, and therefore the house is taken. In some other instances in the Free State, houses are sold in exchange for food or a case of beer.
This Bill is there to make sure that that kind of pillaging and disrespect for the agenda of this Government come to an end. [Applause.]
Mr L NAZO (Eastern Cape): Madam Chair, hon Minister of Housing, hon members of the NCOP and delegates from the various provinces, I rise to support the Housing Amendment Bill as per the adopted mandate of the Eastern Cape standing committee on housing and local government.
We accept that the Bill in its entirety is designed to rectify the current inefficiencies of the institutional arrangements in the Housing Act of
- These include the abolishment of the Housing Development Board and the provincial housing boards; the transference of powers, duties, rights and obligations of the housing boards to the Minister and MECs; the establishment of panels to advise the Minister and the MECs, empowering the Minister to determine the procurement policy in respect of housing development; and putting in place regulatory measures to restrict the sale or alienation of state-subsidised houses.
Our mandate is to support specifically the proposed amendments by the select committee and to further propose that, in terms of clause 5, the Bill be specific regarding the number of panelists. We propose that the panels should consist of not less than five and not more than eight members. We believe this amendment goes to the heart of our political desire to let the people govern. It empowers the people to contribute at the cutting edge of political decision-making. This is why we fully support the abolition of both the national and provincial housing boards and the transference of powers, rights and obligations of the boards to the Minister and MECs responsible for housing.
The boards have been less accountable than we desired and, we believe, an empowered panel with skills is vital in assisting both the Minister and MECs in executing their political mandates. The present system locates the administration of housing programmes in our province in the department of housing and local government on behalf of the board. Our provincial department of local government and housing has been executing this duty satisfactorily. The new system will not be a major departure from the existing situation.
We fully endorse the changes in the sale of subsidised houses, because it has been experienced that such sales have not been in the interests of the state and the protection of taxpayers’ money used to subsidise such houses. It is our view that such sales usually translate into corruption and nepotism and flagrant abuse of the state subsidy. This subsidy is in the interests of meeting the state’s constitutional social obligation to house our people.
As I said at the outset, our province supports all the aspects of the Housing Amendment Bill. [Applause.]
Mr J P GELDERBLOM (Western Cape): Madam Chair, hon Minister, and hon members in the House, the Housing Amendment Bill allows for the abolition of the Housing Development Board and the provincial housing development boards, and establishes advisory panels. The Bill allows for the determination of procurement policy in respect of housing provision, makes the national housing code binding on all spheres of government, provides for the regulation of the sale of state-funded houses and amends the Housing Consumers Protection Measures Act of 1998.
Die afskaffing van provinsiale rade vir behuisingsontwikkeling is weens die volgende redes vir die provinsie van die Wes-Kaap onaanvaarbaar.
Ingevolge Bylae 4, Deel A van die Grondwet, het beide die nasionale Regering en die provinsiale regerings konkurrente wetgewende bevoegdheid op die funksionele gebied van behuising.
Artikel 104(1)(b) van die Grondwet lees soos volg:
(1) Die wetgewende gesag van ‘n provinsie berus by sy provinsiale wetgewer, en verleen aan die provinsiale wetgewer die bevoegdheid -
(b) om vir sy provinsie wetgewing aan te neem met betrekking tot -
(i) enige aangeleentheid binne 'n funksionale gebied in Bylae
4 vermeld. (Translation of Afrikaans paragraphs follows.)
[The abolition of provincial housing development boards is unacceptable to the province of the Western Cape for the following reasons.
In terms of Schedule 4, Part A, of the Constitution, both the national Government and the provincial governments have concurrent legislative competence with regard to the functional area of housing.
Section 104 (1)(b) of the Constitution reads as follows:
(1) The legislative authority of a province is vested in its provincial legislature, and confers on the provincial legislature the power -
(b) to pass legislation for its province with regard to -
(i) any matter within a functional area listed in Schedule 4
[Interjections.]
An HON MEMBER: You want independence.
Mr J P GELDERBLOM (Western Cape): No, sir, we are part of South Africa.
The Housing Act of 1997, in section 8(13), makes provision for a discretionary right for provinces either to have a provincial housing development board or another body dealing with housing matters. By repealing this portion, national Government effectively deprives provinces of their right to choose.
Die Wes-Kaap het ‘n behuisingsontwikkelingswet, wet 6 van 1999, wat voorsiening maak vir die instelling van ‘n Wes-Kaapse raad vir behuisingsontwikkeling. Dié raad is saamgestel uit mense met kennis van behuisingsaangeleenthede. Die raad funksioneer besonder goed en verteenwoordig almal uit verskillende politieke sfere.
‘n AGB LID: Dit is nou onsin.
Mnr J P GELDERBLOM: Hierdie provinsie is nie ten gunste van die herroeping van artikel 8 van die wet nie weens die feit dat dit inbreuk maak op die funksies en magte van ‘n provinsie om ‘n provinsiale behuisingsraad in te stel.
Die Wes-Kaap ondersteun in beginsel die bepaling ten opsigte van ‘n verkrygingsbeleid.
Daar moet egter gewaak word dat sodanige beleid nie vertragings veroorsaak deur amptelike omslagtigheid nie. In beginsel word dit egter ondersteun.
Met verwysing na die behuisingskode net die volgende: die wysiging met betrekking tot die behuisingskode word ook ondersteun. (Translation of Afrikaans paragraphs follows.)
[The Western Cape has an Act on housing development, Act 6 of 1999, which provides for the establishment of a Western Cape housing development board. This board is composed of people with knowledge of housing matters. This board functions extremely well and represents everyone from different political spheres.
An HON MEMBER: Now that is nonsense.
Mr J P GELDERBLOM: This province is not in favour of the repeal of section 8 of the Act, because it interferes with the functions and powers of a province to establish a provincial housing board.
In principle the Western Cape supports the provision with regard to a procurement policy. However, we must be careful that such a policy does not cause any delays due to official redtape. However, in principle, it is supported.
With regard to the housing code just the following: the amendment with regard to the housing code is also supported.]
As far as the regulation of the sale of state-funded houses is concerned, this is a matter that we have been advocating ever since the inception of state-subsidised housing. However, the amendment as it stands is impractical. Beneficiaries will have to have direct access to provincial housing departments. This implies that beneficiaries will have to find their way from far-off towns to the provincial housing office in order to register the fact that they wish to sell and to initiate the process.
Om hulle in staat te stel om hierdie wonings aan ‘n volgende begunstigde toe te ken, sal provinsiale departemente ‘n databasis of waglys vir die hele provinsie moet opstel. Op die oomblik hou elke munisipaliteit reeds so ‘n waglys in stand ten opsigte van hulle munisipale gebied. Provinsiale departemente sal hierdie huise moet beskerm teen vandalisme en onwettige besetting en sal die kostes hieraan verbonde moet dra. (Translation of Afrikaans paragraph follows.)
[To enable them to allocate these homes to a different beneficiary, provincial departments will have to compile a data base or waiting-list for the whole province. At the moment each municipality already has such a waiting-list with regard to their own municipal area. Provincial departments will have to protect these houses against vandalism and unlawful occupation and will have to bear the costs in this regard.]
The total effect is that provinces would be increasing their housing stock and this would have an impact on the administration and staffing of provincial housing offices. The principal Act, like the Constitution, is based on the sound principle that a function should not be performed at a higher sphere of government if it can be performed at a lower sphere.
The principal Act furthermore seeks to entrench the role of municipalities in housing delivery. We should recognise and reinforce this role and not usurp it. Only if a municipality does not want to buy back a house should it refer the matter to the province.
Municipalities should ideally perform this function because they are at the coalface of housing delivery. Their offices are locally situated and easily accessible to the public. They can more easily secure the property and reallocate or resell it to persons on the local waiting list.
I would recommend the following amendments to the section through the insertion of a section 10A in Act 107 of 1997.
The following section is hereby inserted after section 10 of the principal Act:
Restriction on sale of state-subsidised housing
10A. (1) Notwithstanding any provisions to the contrary in another law,
it shall be a condition of every housing subsidy, as defined in the
Code, granted to a natural person in terms of any national housing
programme for the construction or purchase of a dwelling or serviced
site, that such person or his or her successors in title or his or her
creditors in law shall not sell or otherwise alienate such dwelling or
site within a period of eight years from the date on which the property
was acquired by such person or from the date of registration of the
mortgage bond, as the case may be, unless such dwelling or site has
first been offered for sale to the relevant municipality concerned,
and, if the municipality refuses to purchase, also to the provincial
housing department.
(2) When any dwelling or site is purchased by a municipality in terms
of the aforementioned subsection, the provisions of the Code shall
apply in respect of such dwelling or site as if it were a dwelling or
site constructed in terms of the Code.
As regards the amendment to the Housing Consumers Protection Measures Act, this Bill can only amend the Housing Act and should not be used as a mechanism to amend a completely different Act such as the Housing Consumers Protection Measures Act, Act 95 of 1998. This clause should therefore be removed.
Dr P J C NEL: Geagte Voorsitter, ek neem baie graag aan hierdie debat deel, want as dit oor behuising gaan, dan gaan dit oor die wel en wee van ons hele bevolking. Die tipe behuising wat dié stuk wetgewing aanspreek, raak die grootste deel van die bevolking en veral die arm mense wat afhanklik is van staatsubsidies. Hierdie wetsontwerp poog om hierdie deel van die bevolking te beskerm teen korrupsie en om te voorkom dat hulle hul huise as gevolg daarvan verloor. Met hierdie beginsel het die Nuwe NP geen fout te vind nie. (Translation of Afrikaans paragraph follows.)
[Dr P J C NEL: Hon Chairperson, it is a pleasure participating in this debate, because when it deals with housing, it deals with the weal and woe of our entire population. The type of housing which this piece of legislation addresses affects the biggest part of the population and especially the poor people who are dependent on the state subsidies. This Bill aims to protect this part of the population against corruption and to prevent them from losing their houses as a result of that. With this principle the NP cannot find any fault.]
In the report of the Auditor-General on the accounts of the Free State Provincial Board, many irregularities were revealed. It revealed, inter alia, that property was transferred to beneficiaries without evidence that the subsidies had been paid. In many cases it was found that houses were not built on the properties for which the subsidy had been paid and happy letters were signed for.
No evidence could be submitted that the board had inspected the completed houses to ensure the existence, quality and validity of the subsidies paid.
In soverre dit die Vrystaat aangaan, wil dit lyk asof dit tot die voordeel van die gemeenskap van die Vrystaat sal wees as die provinsiale behuisingsontwikkelingsraad afgeskaf word. Ek het egter begrip vir ander provinsies wat hulle rade graag wil behou omdat dit goed funksioneer en goeie diens lewer. Dit sou beslis ‘n beter opsie gewees het as hierdie wetsontwerp voorsiening gemaak het vir die reg van ander provinsies om ‘n eie keuse uit te oefen. Die herroeping van artikel 8 van die hoofwet in klousule 6 van hierdie wetsontwerp ontneem die provinsies hul reg om dit te doen.
In klousule 7 word twee nuwe klousules, naamlik 10A en 10B in die wet ingeskryf. Hierdie klousules handel oor die beperking op die verkoop van staatsgesubsideerde huise deur eienaars. Die bepaling wat huiseienaars verbied om eiendomme te verkoop voor ‘n tydperk van agt jaar verloop het, gaan tot ‘n groot mate verhoed dat huiseienaars uitgebuit gaan word deur kopers wat net een ding voor oë het, naamlik om geld te maak.
Dit word egter betreur dat subklousule 10A(9), wat in die oorspronklike wysigingswet ingeskryf was, in die finale dokument geskrap is omrede die regsadviseurs van mening is dat die belange van instansies soos banke wat huislenings verskaf aan vir mense wat huise wil opgradeer, ondervang word in ander subklousules. Dit is nie aanvaarbaar vir die Nuwe NP nie. Dit is ‘n feit dat munisipaliteite voorkeurbesitregte op sommige munisipale behuisingskemas het. Dit geld ook vir huise waarvoor banke lenings toegestaan het. Subklousule 10A(9) het hierdie regte van banke en munisipaliteite beskerm. Die skrapping van hierdie subklousule gaan finansiële instansies ontmoedig om enigsins lenings aan huiseienaars toe te staan.
[In so far as it regards the Free State, it looks as if it would be to the advantage of the community of the Free State if the provincial Housing Development Council is abolished. I, however, do have understanding for other provinces who would like to hold onto their councils because they are functioning well and providing good services. It would indeed have been a better option if this Bill made provision for the right of other provinces to exercise their own choice. The repeal of section 8 of the principal Act in clause 6 of this Bill deprives the provinces of their right to do so.
In clause 7 two new clauses, namely 10A and 10B, are included in the Act. These clauses deal with the restriction on the sale of state-subsidised houses by owners. The provision which prohibits home owners from selling their property before a period of eight years has elapsed, will to a great extent prevent the exploitation of home owners by buyers who only have one thing in mind, namely to make money.
It is, however, deplorable that subsection 10A(9), which was included in the original amending Bill, has been scrapped in the final document, because law advisers are of the opinion that the interests of institutions such as banks, which provide home loans for people who want to upgrade their houses, are being obviated in other subclauses. This is not acceptable to the New NP. It is a fact that municipalities have preferential ownership rights on certain municipal housing schemes. This is also applicable to houses for which banks have granted loans. Subclause 10A(9) protected these rights of banks and municipalities. The scrapping of this subclause will discourage financial institutions to grant loans to home owners.]
Owners are encouraged to improve their houses and we do not want to chase the money markets away, and, in doing so, redline certain areas. We therefore cannot support the Bill as it stands. [Interjections.]
Ms G N SWARTBOOI (KwaZulu-Natal): Madam Chairperson, let me congratulate the Minister of Housing on introducing an amending Bill that addresses and corrects the current situation within the Department of Housing.
With the four minutes given to me, let me kick off by saying that KwaZulu- Natal supports the principle of the Bill. I will only focus on clause 5 of the Bill, which deals with the replacement of the boards by advisory panels. It has been a great step that these boards have been abolished. The boards had all the executive powers. They were responsible for administering every housing programme and approving the financing of the programme from money paid into the Housing Fund.
Secondly, these boards caused housing delivery to be developer-driven instead of people-driven.
I am saying this because a registered developer is the person who identifies housing needs and beneficiaries, and who submits projects for approval to the provincial housing development boards.
Yiyo loo nto siye saba nengxaki kwiphondo laKwaZulu-Natal xa besixoxa ngalo Mthetho uyilwayo, ungokupheliswa kweebhodi. Amalungu e-DP ngawo ebekukhaba kakhulu ukupheliswa kwezi bhodi kuba esazi ukuba anonxibelelwano oluninzi nezi bhodi. Kwakhona, abantu abangabaphuhlisi bezindlu abasetyenziswayo ngabantu babo. Bambalwa abaphuhlisi abangabantu abamnyama. [Uwele-wele.] (Translation of Xhosa paragraph follows.)
[That is why we had a problem in the province of KwaZulu-Natal, when we were discussing this Bill, about abolishing these boards. Members of the DP were the ones that objected to the abolishment of these boards because they knew that they were very closely connected to these boards. Furthermore, the people that are housing developers are their people. There are very few black developers. [Interjection.]]
It is from this premise that we support the transfer of powers to the Ministers or MECs. Being the executing authority, the Minister must determine the policy direction and outcome of his or her department. As an elected official entrusted with the housing portfolio, the Minister must carry out his or her executing duties to ensure that houses are delivered to the people who elected him or her to office. It is anomalous, therefore, for a housing development to assume an executing role in housing delivery. It is even worrisome when one realises that the members of the housing board, once in office, are not accountable to the sectors which nominated them, nor to the general public.
Secondly, sections 38 to 45 of the Public Finance Management Act defines clearly the responsibilities of accounting officers. This includes responsibilities relating to budgetary control; reporting responsibilities; the safeguarding and maintenance of public assets and liabilities; responsibilities relating to the delegation of powers and duties; and the prevention of unauthorised, irregular and fruitless and wasteful expenditure and losses resulting from criminal conduct. Also included is the responsibility of managing available working capital efficiently and economically.
The above shows that even the allocation of housing grants - conditional grants from the national body - and approval of expenditure are the responsibilities of the accounting officer, not any established body.
Lastly, the Housing department is the one which is accountable to Parliament or legislature for the manner in which grants are spent. Above all, the Public Finance Management Act provides for sanctions for financial misconduct. Section 86 of the Act provides for an accounting officer to be fined or sentenced to prison for a period of five years if he or she wilfully or in a grossly negligent way fails to execute any of his or her responsibilities.
Yiyo ke loo nto thina kwiphondo laKwaZulu-Natal sisithi siyawuxhasa lo Mthetho uyilwayo njengoko unjalo. [Kwaqhwatywa.]
[That is why we in KwaZulu-Natal fully support this Bill as it is. [Applause.]]
Mr N M RAJU: Madam Chair, hon Minister, hon MEC Peter Miller of KwaZulu- Natal, hon special delegates and hon colleagues, the Housing Amendment Bill of 2001 proposes to amend the Housing Act, Act 107 of 1997, so as to streamline the modus operandi of the all-important housing development and procurement policy of the state.
The Bill seeks to rectify certain salient features of the Act, namely by proposing the abolition of the South African and provincial housing development boards; by providing for the establishment of panels to advise the Minister and the MECs; by transferring the powers, duties, rights and obligations of the provincial housing boards to the MECs responsible for housing; by empowering the Minister to determine procurement policy in respect of housing development; and by putting in place regulatory measures to restrict the sale or the alienation of state-subsidised housing.
Now just to dwell on one of these amendments: the DP has serious problems with the abolition of the provincial housing development boards. In terms of section 8(1)(a) of the Housing Act, Act 107 of 1997, the decision to abolish the provincial housing development board is clearly the function of the respective provincial legislatures. The amendment proposing the abolition of the provincial housing development boards is in flagrant contravention of section 8(1)(a). The Western Cape special delegate has already underlined this important fact. [Interjections.]
The national Government’s motives in seeking to do this, without the proper knowledge or participation of provincial legislatures, is therefore problematic for the DP.
While certain provinces may have experienced problems with their respective boards, this is not the case in all provinces. The provincial housing development board in KwaZulu-Natal, for example, has always operated in a professional, transparent and exemplary manner. [Interjections.] So why destroy that which works? The DP does not believe that the time is right for the KwaZulu-Natal provincial legislature to abolish its provincial housing development board. This is one statutory body that has worked tirelessly to remove the political controversy from strategic housing decisions. To destroy what works well is not only politically naive, but extremely destructive for the future of housing development in that province.
The DP, therefore, submits that the abolition of provincial housing development boards is clearly a matter that falls within the legislative competence of the provinces, and the future role of housing development boards should fall within the ambit of provincial legislation and regulation. My party sees this amendment as an undisguised attempt to emasculate provincial powers, and therefore opposes it.
There are other concerns too. Will there be any provision for a national housing data bank to prevent the abuse of housing subsidies? How does the Bill intend to prevent applicants from applying and possibly receiving more than one subsidy?
We need further elucidation on how the advisory housing panels will be constituted. I know the Minister did mention that they would be panels of experts. Will there be political appointments? What my party suggests is that the panels be made up of only housing industry professionals, such as civil engineers, members from the Institute of Town and Regional Planners, as well as other role-players. [Interjections.]
In the light of these problematic areas of concern, the DP cannot support the Bill as proposed. [Interjections.]
The CHAIRPERSON OF THE NCOP: Order! Hon members, I must say I am very pleased to see the permanent delegates of the NCOP so active and awake. [Laughter.] It is most exciting.
Mr T M SHABALALA (KwaZulu-Natal): Madam Chair, it is pity that I am going to speak after my colleague, because I am boiling now. [Laughter.] People have been calling me a whole lot of things for years. I feel like taking off my coat. [Laughter.] [Applause.]
It is a pity that I have only a few minutes to talk. I think people must be aware, when we talk about the boards, that we are talking about boards which affect us, especially as black people living in our areas. We are not talking about the board doing the work for people who live in luxurious areas. [Interjections.] We are talking about our areas, especially for squatters, where our people suffer. I am the leader of more than 200 000 people. We know what is happening there. So, to just say that you oppose the abolition of the boards when you do not know what the boards have been doing to us, really hurts us.
Madam Chair, hon Minister, chair of the select committee, special delegates from other provinces, it is a great pleasure for me to take part in this debate in this House on this amending Bill. In KwaZulu-Natal we had enough time to look at this Bill, which is something that we appreciate a lot. We even debated the Bill in the province. There were sharp differences towards this Bill among certain parties. I have just forgotten which parties they were, because I am an old man now. I will remember them as we progress, but I have forgotten them now just for a minute. Chair, please remind me if, at the end of my speech, I do not mention them, because I think it is important for the Chair to know who those people are who always oppose for the sake of opposing. [Interjections.] The differences were around the abolishment of the boards. Those are the differences we had in Kwazulu-Natal: the power given to the MECs in all provinces and the composition of the panels. There are people who want the boards to remain because they benefit from these boards. We say loudly and clearly that the boards must go: ``Hamba, hamba! [Go, go!] We do not need you.’’ [Laughter.]
We thank the Minister and we support her wise move of disbanding these groups of sharks. Our people support her for being wise. She deserves compliments from us. We wish her to go beyond the abolition of these boards. We also wish her to investigate these former boards and their members in their individual capacities, to see how truthful they were in their activities as members of the boards. Maybe some of them have bought 8x8s, 4x4s or 20x20s - we do not know. [Laughter.]
But now this really hurts me, as I have said. Where I live in Lindelani, we applied for that area to be developed at the time of the apartheid Government seven years ago. Now that this Government has come to power, we can see that progress is being made. So anyone who mentions a board to me, or tells me about a board, is telling me about a monster. I just do not want to see it again, because I live in a squatter area. [Applause.]
The CHAIRPERSON OF THE NCOP: Fortunately, Mr Shabalala, your time has expired, so I do not have to ask you to tell me about the parties you forgot. [Laughter.] I will not put you through such a test.
Mr B J MKHALIPHI: Madam Chairperson, hon Minister and honoured guests, I must say immediately that some members of this House tend to forget that South Africa is a unitary state and, as such, the provinces work in tandem with the central Government. When we said that we would do everything in partnership with the people, we meant that we would involve people in every sphere of development, not only when it comes to petty issues.
Among the several amendments that this Bill seeks to bring about in the Housing Act of 1997, the stipulations of the proposed section 7(4) are of paramount importance in that these amendments touch on the crucial issue of our interaction and partnership with the broader community.
The abolition of the housing development boards is indeed a bold step for the transformation of housing delivery by Government. While it has been the norm to bind such advisory boards to stringent regulations pertaining to the frequency of meetings and other related matters, this Bill seeks to some extent to acknowledge and encourage the sense of maturity and accountability reached in some of our provinces. The panel of experts advising the MEC for housing will therefore sit only if and when necessary.
This relaxation of regulation has the benefit of freeing the members of the panel to pursue their respective occupations, instead of having to stick around government offices, sometimes being exposed to all kinds of temptations and human failures. These members will therefore not necessarily rely on a government stipend for a living.
The fact that procurement policy will be laid down in terms of section 217 of the Constitution assures us that the possibility of nepotism, favouritism and corruption will be kept under close check. [Applause.]
Kgoši M L MOKOENA: Mohlomphegi Modulasetulo, ke tlabja ke go lemoga gore go na le maloko ao a sa tsebego gore diphetošo tša Molaokakanywa di dirwa neng, ka nako efe. Motho o tlo tlabega go lemoga gore maloko a mangwe a tliša diphetošo tša Molaokakanywa lehono re le mo lekgeng la ngangišano. Go leša dihlong bjang!
A nke ke thome ka go leboga mohlomphegi Tona ka matsapa ao a tšerwego go kaonefatša maphelo a setšhaba sa gešo. E be e le la mathomo historing ya mmušo wa Afrika-Borwa ge batho ba agelwa mengwako. Re re mohlomphegi Tona o kgonne, re a mo leboga. [O tsenwa-ganong.] (Translation of Pedi paragraphs follows.)
[Chief M L MOKOENA: Madam Chair, it is almost unbelievable that some hon members are, even at this stage, not yet au fait with the processes of amending a Bill. One may be surprised that some members are starting to bring their amendments to the Bill while it is at the point of being debated. That is utterly shameful!
May I at the outset thank the hon the Minister for the initiatives she has taken so far to improve the standard of living of our people. It is for the first time in the history of South Africa that a government has undertaken initiatives in respect of housing people. We want to say to the Minister that she has succeeded, and we are really grateful for that. [Interjections.]]
Mr L G LEVER: Chairperson, on a point of order: I would as as a matter of courtesy like to listen to my hon colleague, but there is no interpretation service, and the Order Paper, in fact, says the speech will be delivered in another language. Perhaps we can correct this, Chairperson.
The CHAIRPERSON OF THE NCOP: Order! As far as I am aware, members had not alerted the parliamentary staff to the fact that they would require interpretation services, so it is indicated to me that there are no staff on standby at this time. We would have to look into whether, in fact, staff were alerted. Members are fully aware that we need to indicate. As you will see, with some members speaking there was an indication on the speakers’ list that more than one language or a particular language would be utilised.
I understand there was no such indication in respect of Mr Mokoena, and the rules are quite clear with respect to this, so I would ask that you proceed in the language as indicated. Otherwise I will have to go to the interpreting booth and translate on your behalf, which would leave the House without a presiding officer. [Laughter.]
Chief M L MOKOENA: Chairperson, with due respect, I indicated even yesterday during our meeting that I would be participating in Sepedi. I even made the Whip on duty aware of my intention to participate in this Chamber in my language, as a reminder. May I be allowed to participate and enjoy myself in Sepedi, which I so love?
The CHAIRPERSON OF THE NCOP: I believe you should continue, Mr Mokoena, but I would ask that members do assist us because, as you know, Parliament cannot provide simultaneous interpretation throughout the sittings. We need to have staff available and clear times indicated. But, being persuaded by the multilingual approach of the NCOP, I will allow you to proceed and we will try to ensure that in the next minute or so, we do a have a staff member available. But I must urge members to ensure that we do provide notice, because we do have the staff available and the facility, but it is important that we are made aware, well ahead of time, in order to provide this service. Proceed, then, in Sepedi. Chief M L MOKOENA: I am humbly grateful, Chairperson. Thank you very much.
Ka gona ke re mohlomphegi Tona o kgonne, re a mo leboga. Ka segagešo re re: Mme o tlile, tlala e … Ke tšhaba mediti! [Disego.] E no ba go hloka mahlatse ka gore ge motho a šomela setšhaba, go fela go e ba le diphure goba bona bomabina-go-solwa, elego bomasenya.
Mmušo o agetše batho mengwako. Gare ga bona bao go na le bao ba ratago go buna moo ba sego ba lema gona. Molaokakanywa wo o leka go thibela bošaedi bjo bo dirwago ke mafeela a. E be e se ka phošo ge Mmušo o hloma mekgatlo yeo go thwego ke SA Housing Development Board le provincial housing development boards. Mekgatlo yeo e be e swanetše go eletša Tona le Molekgotla ka ditaba tša kabo ya mengwako. Efela e bile maswabi go lemoga gore a mangwe a maloko a dibodo, go e na le gore a eletše mohlomphegi Tona, a be a fepa malapa a wona le dimpa tša wona tše disehla.
Go na le gore ba šomele setšhaba, ba thomile go somiša seatla-kobong. Ke ka baka leo re rego go botlhokwa gore dibodo tšeo di fedišwe, di hwe la pitšana, gomme re di epele. Ga re nyake le go di bona. Ke rata go fihliša mantšu a ditebogo go tšwa Northern Province ka ge le kgonne go bonela pele gore setšhaba se holege ka Molaokakanywa wo. (Translation of Pedi paragraphs follows.)
[In my language we have a saying: Mme o tlile, tlala e … [Mother has arrived, so we will not be hungry any more …] So far so good! [Laughter.] It is just unfortunate that when one is serving the public, there are bound to be a few characters who might well be worthless obstinates.
Government has assisted in housing people. Among them there are those who are intent on reaping where they have not sown. This Bill attempts to prevent the anomalies that might be caused by such rogues. The Government was not wrong in establishing the SA Housing Development Board and the provincial housing development boards. Those boards were initially intended so serve as advisory panels to advise the Minister and the MECs. However, it is unfortunate that some officials of those boards, who were supposed to advise the Minister, have become unscrupulous sharks who indulge in enriching themselves and their families.
Instead of working for the improvement of the public lot, those greedy fat cats with no feelings for their fellow communities have resorted to bribery. That is why we are saying that those boards should be abolished forthwith. We do not want to have them any more.
I wish to commend the Northern Province on account of their farsightedness with regard to this Bill because it will eventually benefit our nation.]
The CHAIRPERSON OF THE NCOP: Order! Members can now use their interpreting devices; interpreting is now available. Continue, Mr Mokoena.
Kgoši M L MOKOENA: Go na le bao ba rego ge ba filwe mengwako yeo, ba thoma go e rekiša ka mašeleng a tlase. Ge ba bona gore mašeleng ao ba a nwele gomme ba a feditše, ba thoma ba boela laeneng gomme ba re ga ba na mengwako. Tšeo ka moka ke mošomo wo o bego o swanetše go dirwa ke seo re ka rego ke maloko a dibodo tsa mengwako; efela ga ba kgone go lemoga mathata ao. E no ba batho bao e lego gore ga na kelello, e bile ba palelwag ke go gopola ge ba re ba nyaka gore dibodo tšeo di se ke tša fedišwa. Go swabiša e le ruri! Ke maswabi gape go lemoga gore bao ba rego ga ba thekge Molaokakanywa wo, le ka letšatši le tee ga se ba ke ba ya go bona gore go direga eng ka mengwako yeo Mmušo o filego batho bao.
Tšhipu e rile ke lebelo, mohlaba wa re ke nabile. Ka Molaokakanywa wo, lešoba le re a le tswalela. Motho a ka se sa kgona go rekiša ntlo yeo a e filwego ke Mmušo. Motho o tlo dumelelwa fela go rekiša ngwako woo ka morago ga mengwaga ye seswai, le gona ka mabaka ao a kwagalago. Ge e ba ga a sa nyaka ngwako woo, Mmušo o tlo o tšea. Lena dikalatšane, ihlobogeng ka gore ngwedi o apogetšwe ke maru! (Translation of Pedi paragraphs follows.)
[Chief M L MOKOENA: There are those beneficiaries who, when allocated houses, often put them on sale at recklessly low prices. After they have spent every cent they got from the deal, they then go back onto the waiting lists and apply for new subsidies. That anomaly was supposed to have been detected by members of these so-called housing boards, but unfortunately they do not even know that such problems exist. It is only those without understanding, or those who fail to think, who would support the idea of retaining those boards. That is really sad! It is also sad to realise that those who are saying they do not support this Bill have never gone out to see for themselves what is happening with the houses that the Government has built for those people.
We have this proverb in Sotho languages: Tšhipu e rile ke lebelo, mohlaba wa re ke nabile. [The law has a long arm.] With this Bill we are closing up that loophole. This Bill prohibits the beneficiaries from voluntarily or involuntarily selling their state-subsidised houses or alienating them for a period of eight years from the date of acquisition. One has to give good reasons for doing so. If one feels that one no longer needs that house, the Government will take it over. Corrupt officials need to be cautioned to get their acts together because their days are numbered!]
It is fine to lend a helping hand, but the challenge is getting people to let go of it. There are some comments or proposals put forward by the Western Cape which cannot be left unchallenged. For example, they want the committee, Chamber or Council to define the provincial government. Really, they cannot be serious. Perhaps they are like those people who say: Shoot for the moon; even if you miss it, you will land amongst the stars. [Laughter.] Oh my God! [Laughter.] [Applause.]
The CHAIRPERSON OF THE NCOP: Order! I must indicate that I am really sorry, Mr Mokoena, that you did not have an interpreting service available when you started speaking. I will look into why this happened, but sadly, hon members have missed some very rich idiomatic expressions. Perhaps you can elaborate those to them later. I am interested in the ``tlala m-m-m’’ … [Laughter.] … and hope we will get an explanation at some later time.
Ms J L KGOALI: Chairperson, hon Minister, comrades and members of the Council, it is a great pleasure for me to be back in this Chamber and to participate in this very important debate. I thought by this time we would have put in place legislation to transform hon member Ackermann. [Laughter.]
Housing is a right, not a privilege. The legislation in front of us shows that Government is well awake and monitors the development of housing around the country. Abolition of the housing boards shows the capability of the department and the process that has to be followed in cutting the red tape for quicker development.
Government has made housing free for the poorest of the poor, but there are those who want to enrich themselves with what has been meant for the needy. The department must continue to assist because one knows that there are problems in other provinces. The department must continue to assist those provinces in need of help, not those who feel that they are a government unto themselves.
Those who rob the poor, must be jailed. Corruption must be stopped. We need development to help for the poorest of the poor.
This brings me to the various political parties that we have in this House and in all the provinces. If one goes back to the provinces, one will find that various parties have different views, even though they are from the same province. In Gauteng, unlike Kwazulu-Natal, the DP supports the Bill a hundred percent. [Applause.]
Nksz N D NTWANAMBI: Mhlalingaphambili, mandiqale ngeyokugqibela. Egameni le- ANC, nabo bantu basalindele ukuzuza izindlu, abo baziyo ukuba lo Rhulumente uza kubalungiselela, ndiyasixhasa esi silungiso.
Kuluvuyo ukubona ukuba uRhulumente uzimisele ukuwuqwalasela ngokumandla umcimbi wezindlu. Lo Rhulumente ukhokelwa yiANC wenze iinzame ezinkulu ukubonelela abantu ngezindlu, nto leyo ebe inqabile kwiminyaka elishumi eyandulela ukungena kwalo Rhulumente.
Eyona nto ibalulekileyo kukuguzulwa komhlathana owawulungiselelwe ukukhupha abantu ezindlwini, ngakumbi abo bangakwaziyo ukuhlawula ngenxa yokungabi nanto. Icacisiwe nguMphathiswa loo nto. Andifuni kuyiphinda.
Lo Mthetho ulungiselela ukususwa kweebhodi zezindlu. Loo nto iza kwenza ukuba ithuba elide ebezilizichitha licutheke. Kwabo bathengisa utywala neziyobisi akusayi kuphinda kube yinto elula ukuthenga ezi zindlu zilungiselelwe abantu abahluphekileyo nabamivuzo iphantsi, ngamaxabiso aphantsi.
Kwakhona, xa umphathiswa wephondo engawenzi umsebenzi wakhe njengoko kulindelekile, esi silungiso sithi uMphathiswa wezeZindlu uza kungenelela, kuba lilungelo lakhe ukungenelela ngenjongo yokuqhubela phambili umsebenzi.
Intetho yelinye ilungu ibisithi kukho inkcitho eninzi kuRhulumente yiyo le ibangele ukuba uMphathiswa eze nesi silungiso. Kukuzama ukucutha kanye loo nkcitho ingako ukuze kubonelelwe abantu ngezindlu ngokukhawulezayo. UMphathiswa obekekileyo utshilo ukuba ususa ilungelo leebhodi, unika abaphathiswa bamaphondo amagunya.
Kwakhona, lithe elinye ilungu xa ubani enokusweleka, abantwana bakhe okanye abo abamele kuyifumana indlu yakhe abayi kuyifumana. Ayikho into enjalo. Xa into enjalo ithethwa lilungu lale Ndlu iba ngumnqa, ngoba loo nto yayicacisiwe. Loo mbuzo sawubuza kuba sasifuna ukwazi ukuba kwenzeka ntoni na kubantu abamele ukuba bazuze indlu yakhe lowo uthe wasweleka. Impendulo yathi kulandelwa indlela eyiyo ukuze ifunyanwe ngabo banelungelo le ndlu leyo.
Ayilunganga into yokuba athi ubani xa etyhala iinjongo zombutho wakhe ayenze ngokuphosisa loo nto. Okufanele ukwenzeka kukuba athi umntu xa ezibona ekwinqanaba eliphakamileyo, akhangele indawo nendlu efanele umgangatho wakhe nepokotho yakhe, ze anikezele ngendlu kulowo useseluhlwini ukwenzela ukuba naye axhamle.
Inyani yeyokuba xa ubani eqhele ukuxhamla akasayi kusixhasa esi silungiso. Kananjalo abo bakwezi bhodi, ixesha elininzi, ngabantu abawaziyo umthetho. Bayaphakamisa, bayaxhasana, bakwangabakhi. [Kwaqhwatywa.] (Translation of Xhosa speech follows.)
[Ms N D NTWANAMBI: Chairperson, I am going to begin with the last issue. On behalf of the ANC and all the people who still expect to get houses, those that know that this Government is
going to provide for them, I support this amendment.
It is with great joy that one notices that the Government shows commitment to look into the issue of housing. This ANC-led Government has made great strides in providing people with houses, and that is something that did not happen very often in the ten years before this Government came into power.
What is most important is the removal of the clause whose aim was to evict from their houses in particularly those who could not afford to pay. The Minister went into detail about that. I do not want to repeat it.
This Bill aims to abolish these housing boards and that is going to reduce the time that they used to take. It will no longer be easy for those that sell liquor and drugs to buy these houses that are provided for poor and low-income people at a low cost.
Again, when the provincial MEC does not do the job that she/he is required to do, this amendment says that the Minister of Housing will intervene because it is her right to do that to ensure that the process is not delayed.
A comment from another hon member that there is a lot of overspending in Government is what caused the Minister to come up with this amendment. It aims to address such expenses so that people could be provided with houses quickly. The hon Minister said that she was taking away the right from the boards and was giving authority to the provincial MECs.
Again, another hon member said that if one should die, one’s children or whoever had a right to the house would not get it. There is nothing like that. When an hon member of this House says something like that, it comes as a surprise because that was explained. We asked such a question when we wanted to know who would get one’s house if one died. The answer was that an appropriate procedure would be followed so that those that had a right to the house would get it.
It is not right that, when a person wants to push the interests of his/her party, she/he should do that by lying. What should happen is that if one’s financial situation improve thereby putting one on a higher income level, one should look for a place and a house that is in line with his/her new status, and then give the other house to the person that is still on the waiting list, so that that person could also enjoy the privileges.
The truth is that if one is used to enjoying privileges one will not support this amendment. Furthermore, those that serve on these boards most of the time are people who have a legal background. They work hard and support one another and they are also the builders. [Applause.]] The MINISTER OF HOUSING: Chairperson, I thank everyone who participated in the debate.
We understand very well why there are people who do not want us to abolish the boards. Firstly, they do not want us to abolish the boards because they are beneficiaries. Some people were sitting on the boards to serve their own interests. Members of the boards were appointed by sectors, but they never went back to report on the activities of the boards. Above all, in the seven years that we are talking about, we discovered that the majority of people who were sitting on the boards had financial interests.
In that instance, it was important for the Department of Housing together with the provincial structures to go out and investigate further as to the nature and character of the boards that had been established in the provinces. The outcome of that investigation was that the boards had assumed their nature nature and were growing in different directions. Every board was doing whatever it wanted to do. [Interjections.] It was important therefore … [Interjections.]
The CHAIRPERSON OF THE NCOP: Order! What is the point of order, Mr Durr?
Mr K D S DURR: Chairperson, it is not a point of order. May I ask the hon the Minister a question, please?
The CHAIRPERSON OF THE NCOP: Are you prepared to take a question, Minister? [Interjections.] No, the Minister is not prepared to take a question. Please sit down, Mr Durr. [Interjections.]
The MINISTER: It was therefore important that this Government, which is responsible to the public and has been put in office by the public, ie the voters, and which is utilising the taxpayers money, does something about it. These amendments are actions driven by the concern of this Government, because this is a government that cares.
Secondly, I do not know why hon members are bringing forward arguments that are really not convincing. If beneficiaries can apply for subsidies at the provincial housing department, our assumption is that sales would be an exception rather than the norm. We also want to make sure that the co- ordination between local and provincial government in submitting these applications can be facilitated, and this does not need legislation.
I also want to state that it would be irresponsible for anyone who is aware of the problem not to do anything about it. I would like to illustrate why it was important for us to abolish the boards.
Firstly, there are national requirements and presidential instructions that relate to issues of national interest. Secondly, there are provincial programmes that the boards were not looking at for whatever reason. I think we all agree that we would like this country to develop in a manner which does not continue to perpetuate the practices and policies that have separated our people for a very long time.
One of the problems we have had with the boards is that they never gave enough consideration to the location of the projects that they were contracting out. That is a problem for us. We also had to make sure that we set up a structure that is going to be responsible and accountable to the constituencies that have put those people in office.
If, for example, in Gauteng development was planned around a particular economic nodal point, and then houses in that provinces were built out there, far from where the people were, we would be perpetuating what we have inherited and not solving problems. What we are saying now is that people who sit in offices, such as officials and public authorities appointed by the President and the premiers, are going to be accountable for whatever goes wrong. The boards were not accountable. They were private persons and did not really care about what went on in those areas.
I would like to appeal to those who are arguing for argument’s sake to, just for one moment, remember that all of this activity is on behalf of the poor, not on behalf of the people who come forward, benefit from the contracts, and disappear. We are doing this on behalf of the poor, and the majority of the people in this country are the poor and, incidentally, the majority of the poor are African and black. We are therefore saying that we need to be sensitive on how we deal with this issue.
I would also like to say to the hon members that we in the Department of Housing have taken this long to address this issue, not because we did not care, but because we wanted to make sure that we understood the depth of the problems. We are coming out with this decision as a collective effort by hon members, MECs and the participation of heads of department, including the Western Cape.
I am shocked to learn from that hon member that the provincial housing board in the Western Cape was acting in a manner that was not biased or discriminatory. As I stand here, I can tell hon members that the Provincial Housing Development Board in the Western Cape has been cause for concern. [Interjections.] I have in my office records of municipalities that have complained that they had been given assurance by the board that they were going to be afforded subsidies and would go on with the task of construction in their areas. But because they happened to belong to certain political parties, those assurances have been withdrawn.
I can tell hon members that as I stand here, I have made rounds during a visit of the Western Cape. In those areas where we have the majority of the black people, projects are not proceeding. Just round the corner in Khayelitsha there is application that is more than four years old. Today people are told that they are going to get their subsidies, and three months down the line they are told the file has disappeared. When we try to enquire about and search for the actual reasons the people have not received their subsidies - and we do that up to the second year - yet we never get to understand why certain communities are not being serviced by the board.
One hon member was talking about what happened in the Free State, about money that was paid out, but no houses were built. I am not going to defend anybody here. But what I want to tell hon members is that this Government is in the forefront of the war against corruption and nepotism, and against whatever practices that are not acceptable and unconstitutional in our environment.
These amendments are going to make sure that those kinds of activities do not survive in the environment, be they by members of the NP or the ANC. Anybody who will not observe the rules that apply shall not be supported by this Government or department. This should not come as news, because we are the people who have led this democratic Government by example. From the first day we discovered that we had a problem, we made a public announcement. We are proceeding with that action by making sure that if whoever is in office becomes corrupt, the due process of the law takes its course.
I would like to say to the hon members of the New NP that they should not make claims that their boards have distributed resources equitably, because they have not.
We have done a survey. I am saying this because we do keep a record of information and a data bank, which indicate where the subsidies have been allocated, who the developers are that are going to provide us with the service and who the beneficiaries are.
During the campaign, I did some work here in the Western Cape. I just cannot remember the name of the area which I went to. When houses were allocated, no fewer than 100 houses were given to friends and relatives of an individual who is a member of the council. The rest of the houses that remain along that belt have been given to people on the basis of whether the rooms are big or small.
I must state here that, unfortunately, also that activity was done on a biased basis. There is a lot of discrimination that borders on racism. We are therefore saying that if people are honest about transformation and changing this country, we will go back to the appointed officials, the MECs and the Ministers.
The Ministers will liaise and work very closely with their heads of departments to try and make sure that whatever institution and whatever instrument we put into place adheres to the constitutional requirements, observes the Bill of Rights and observes the policies that have been instituted in those line function departments. However, above all, whatever services are provided, it is ``batho pele’’ [people first] and other interests at the back.
Whilst some members of the New NP are so worked up and irritated about this thing, it is also because these boards are being introduced from the past. This is an instrument of the past, which was functioning under the policies and the principles of apartheid. It is time to change and transform, and put into place democratic institutions.
I want to come back to the fact that anybody who has a problem with the houses, with the implementation of the policy and with the instruments that have been put into place will, at least, be able to go to an accountable individual - in this instance it is the MEC - so that we can all begin to be accountable to those people who voted for us, and not be accountable to sectors, companies or industries that benefit from this housing policy.
Once more, to remind the House, this capital housing subsidy has been put into place to provide homes and shelter for the poorest of the poor. I am therefore saying that if, by being in this House, members want to claim that they are coming in as a sector that cares for the poor, they are then going to support this Bill, because if they do not, it is contrary to all the things that they go about saying in public when it is election time: saying that their parties have transformed and that they have changed. It is about change and it is about dealing with the poor and the homeless.
If they want to prove their worth, then here is a Bill; it is an amendment, it is work that has been observed over seven years and it has been done with institutions that are independent and nonpartisan. The outcome of this amendment is a report that says we really do not need the boards in our environment because they are not serving our purpose.
I would like to conclude by saying that no amount of screaming or protestation is going to divert us from the actual purpose of why we are here. We are here to transform society. Whatever we do, whether it is a board, whether it is a policy, whether it is a tool or an instrument that is being put into place and relates to the people, to the public, it has to be something that paves the way and indicates to all of us that we are about change.
This board, to me, says we are about change. It is time that we stopped the
corruption and the bullying that comes with the drug lords. It is very
disturbing when somebody says: We have not had problems with the
boards'';the boards have been doing very well’’, when, actually, members
from that party were sitting at MinMec with us and saw how the special task
team forces went out to investigate the damage that had been done by the
boards.
However, I also want to say that in one or two boards we have had an activity and a service that was not that disastrous. As people have said, the KwaZulu-Natal board has done a good job. Yes, they have done a good job, but there also have been weaknesses in that board, weaknesses that have to be solved by these amendments, unless somebody wants to tell me that people who sit on these boards are perfect and are honourable people that we can rely on.
We can give a list of cases of how people were sitting on the boards and, at the same time, were making sure that whoever got the contract from outside got back to them, and then their friendship and partnership would continue.
We are therefore saying as responsible citizens that that has to stop here and now. Hon members should support the Bill. [Applause.]
Debate concluded.
Question put.
The CHAIRPERSON OF THE NCOP: Order! The decision is to be dealt with in terms of section 65 of the Constitution. We therefore need delegation heads to be present in the Chamber to indicate the votes of their provinces.
I note that all delegation heads are present. We were missing the Northern Province, but I see that the Northern Province is, indeed, back in the Chamber. In accordance with Rule 71, I shall first allow provinces … Ms Botha, is there something that the Free State has mandated you to pursue with the Western Cape? [Laughter.]
Mr C ACKERMANN: [Inaudible.]
The CHAIRPERSON OF THE NCOP: She is disrupting the Western Cape, is that right? I see. Ms Botha, please desist. We will allow provinces the opportunity to make their declarations of vote. Is there any province wishing to make a declaration of vote? We have debated the subject. We may therefore proceed to voting on the question.
Bill agreed to in accordance with section 65 of the Constitution.
DIVISION OF REVENUE BILL
(Consideration of Bill and of Report of thereon)
Ms Q D MAHLANGU: Chairperson, Deputy Minister of Finance, MEC Miller - thank you for attending - special delegates and also members of this Council at large, the select committee had public hearings on 6 and 7 March 2001, in order to consider the Bill.
The following stakeholders participated: the National Treasury, the Financial and Fiscal Commission, Salga, the Auditor-General and the Departments of Health, Education, Water and Forestry, Housing, Public Works, Social Development and Provincial and Local Government.
The reason we invited these departments is that all of them have conditional grants in the provincial and local spheres of government. The Minister of Health and the Deputy Minister of Finance were in attendance and they really contributed a great deal.
The committee is mindful of the fact that South Africa’s physical environment and intergovernmental fiscal relations give priority to servicing the national debt. The costs of servicing the debt are met before resources are shared between the three spheres of government.
In addition, the committee observed that the fiscal system is maturing. The vertical division of revenue between spheres is determined by Cabinet in an extensive political process that takes place at the executive level, which involves MECs for finance and organised local government in the form of the Budget Council and the Budget Forum respectively. After debt servicing costs and contingency reserves are deducted, the total to be shared between the three spheres of government amounts to R208,1 billion over the Medium- Term Expenditure Framework. The committee also noticed that the national share increases from 39,4% in the 2000-01 financial year to 40,5% in 2001- 02, and declines marginally over the MTEF up to 2004.
The share dedicated to local government also rises from 3,0% to 3,3% over the MTEF, the reason being that local government is going through restructuring, through the new demarcation process that has just taken place. The provincial share declines as a result of this from 57,6% to 56,4% in the year 2001-02.
The objectives of the conditional grants, in particular, are as follows: one, to provide for national priorities at provincial and local government levels; two, to promote national norms and standards; three, to compensate provinces for cross-boundary flows; and, four, to provide special services and to effect transition by supporting capacity building.
The combined conditional grants for provinces and local government amount to R1,7 billion. Eighty-eight percent of the national transfer to provinces constitutes equitable share while the remaining 11,3% flows through the conditional grants. However, in the case of local government, conditional grants constitute 60% of the total transfer.
It was the contention of the committee that the administration and performance of conditional grants were in urgent need of review. This urgent need prompted the committee to host public hearings on the Bill and invite affected departments. While the administration of conditional grants may have improved greatly, a huge underspending on a number of conditional grants is common. The nonspending adversely affects the delivery of important basic social services. There were key issues that the committee raised in considering the report on the public hearings.
There are two forms of conditional grants, those that go to provincial government and those that go to local government.
I will address the conditional grant that goes to provinces. In 2000 the National Treasury conducted a review of the conditional grants framework. The review identified the need to reduce the number of conditional grants in order to rationalise the number of grants in the system. The Departments of Health and Housing and the National Treasury administer the largest proportion of the conditional grants to provinces.
Four small grants have been merged into the Supplementary Grant administered by the National Treasury. They are the Financial Management Grant of the National Treasury, the Capacity Building Grant of the Department of Housing, the National Land Transportation Act Grant of the Department of Transport and the R293 Grant of the Department of Provincial and Local Government. All these come from these national departments’ Votes.
The R293 grant forms part of the Supplementary Grant in 2001-02, after which it will go into the provincial equitable share. The Supplementary Grant also includes R243 million over the MTEF period for a pilot project to improve financial management in health departments as well as hospital management.
I now come to the conditional grant that goes to the Government. The following are the new local government grants. The first is the Local Government Restructuring Grant, which is going to cease after a few years. This will assist large municipalities to undertake complex institutional and budgetary restructuring exercises. The costs imposed are deemed to be short-term, but their yield is only realised in the medium term. Municipalities with budgets over R300 million are eligible for this grant.
The second is the Local Government Support Grant. This will assist the smaller municipalities. It is likely that this grant will merge with the Local Government Restructuring Grant.
The third is Municipal Finance Management Grant. This will assist municipalities to reform their financial management and budgeting practices, in line with the national Medium-Term Expenditure Framework. The fourth is the Municipal Systems Improvement Grant. It will have a five- year lifespan and will be allocated in terms of a framework determined by an interdepartmental committee.
The fifth is the Transitional Grant. It has been established to assist municipalities to meet the one-off costs incurred as a result of the merging of the municipalities. The lifespan of this grant extends over two years. It will subsequently be incorporated into the equitable share.
Some of the issues that I am going to talk about were raised in public hearings. Some of them also arose during the Budget Review process conducted by the Ministry of Finance in February. One of the issues concerns municipal borrowing.
The encouragement of municipal debt market is a new development for local government financing. While an active debt market for municipalities will promote greater responsibility, regulation will be in place to govern municipal borrowing. This will establish requirements for raising loans and put in place the framework unambiguously outlining the position of both borrowers and lenders.
The committee will approach the Asset and Liability Management Division of the National Treasury for clarity on the impact of additional activity of municipalities in the bond market on interest rates and the level of state debt.
Other issues raised during the deliberations include underspending on conditional grants in the several departments I am going to talk about.
First of all, there is the Education department. One of the grants which have been underperforming is the Financial Management and Quality Enhancement Grant. Underspending has been noted for two consecutive years on this grant. In the current year the report reflects that spending is still very low, amounting to less than 5% nine months into this financial year, which is about to end in the next few days.
During the public hearing we were also informed that only 37% of the total allocation had been spent by 31 January 2001. The same applies to Health, notably the integrated nutrition programme. The committee was also informed that 68% of this grant has not been spent in the current financial year. Underspending has been recorded for at least three consecutive years.
In addition, with regard to redistribution of specialised health services conditional grants, trends up to the end of December 2000 show that spending is still very low, at less than 40% of the allocated amount. However, the construction of some of the hospitals is about to be completed, such as the Umtata regional hospital, and that creates space for the construction of the Pretoria Academic hospital and the Durban hospital.
With respect to the Housing Fund conditional grant, the committee learned that underspending occurred in the financial year 1999, while current spending is at about 52% of the budgeted amount.
With respect to the human resettlement development pilot conditional grant, it is observed that underspending also occurred in the 1999 financial year, and that by 31 December last year less than 30% of the money allocated had been spent. The following explanations were given for this underspending. Firstly, we were informed that originally inexperience with the conditional grants mechanism, coupled with delays and uncertainty about the release of funds, made proper planning very difficult.
Secondly, in subsequent years inexperience and uncertainty about how exactly the mechanism was supposed to operate continued to present some difficulties. In addition, the capacity of departments at provincial and national levels was not fully geared for optimal conceptualisation, management and implementation of conditional grants. This led to late planning, as a result.
Thirdly, the delays also occurred as a result of further tendering or procurement processes between the departments concerned and the respective provincial tender boards.
Fourthly, moreover, the unanticipated difficulties associated with co- ordination of projects are a major cause of underspending in respect of conditional grants.
Most projects in respect of housing, education, social development and health involve negotiations at school, municipal, district, provincial and national levels, which is a major time-consuming factor. This is further aggravated by the lack of capacity in some provinces and municipalities.
A crucial element of underspending is also the availability of donor funds for similar projects, for example with regard to education. The process of accessing donor funds is a lot simpler, and requires fewer administrative hurdles, than the list of departments not spending the money allocated to them.
The HIV/Aids grants were given later in the financial year, that is 2000- 01, and as a result of the late planning of the project, the spending could not take place at an appropriate time.
One of the issues that the committee raised is that we should try and find ways of clustering the conditional grants. There are too many conditional grants in the social development system, for instance health, education and social development have all received the HIV/Aids grants and these three departments all do different things with it.
The perception that we got from the hearings was that these grants were not properly co-ordinated, and as a result they lead to duplication in one way or the other. There has to be much planning and clustering of these grants if we want to see better effectiveness and the impact of this grant.
There were specific clauses in the Bill that were raised as being problematic. I would like to deal with those. Clause 15(2), which refers to the conversion of conditional grants to unconditional grants and transfers to provinces and municipalities, weakens the financial monitoring of grants. However, the National Treasury argues that this conversion is used as an instrument to prompt national departments into compliance with the reporting requirements of these conditional grants. I think one of the things that members must note is that some departments do not even have conditions attached to their grants. As a result, it becomes difficult to monitor if we do not know what conditions are attached to these grants. This clause is aimed at dealing with such issues.
The Office of the Auditor-General also alleged that clause 31(3) of the Bill overextends its brief because the recovery of funds from negligent individuals is not the responsibility of the Auditor-General. This executioner function should reside with the NCOP or with the legislature. The committee has recommendations that we have made to this effect. As a result the committee amended the Bill to cover the concerns raised by the Auditor-General, but at the same time tried to define mechanisms on how the department can respond to this problem.
There are also the concerns raised by Salga and other stakeholders which members will have to deal with. I just want to deal with the timing and tabling of this Bill. I think in the past members have raised the concern that the Bill becomes problematic if it is tabled at the same time as the national Budget, because it does not give enough time to provinces to participate. As a result, MECs’ views tend to prevail more than those of the legislatures and we think that the Intergovernmental Fiscal Relations Act of 1997 needs to be reviewed because it is one piece of legislation that gives authority to this effect.
With regard to beneficiaries of social security grants and bank charges, the committee was concerned that poor beneficiaries of the social security grants are still burdened with banking charges when their social grants are collected from the conventional banking sector. This question was raised separately with the Department of Social Development and the National Treasury. The response was that representations have been made to the Banking Council with a view to excluding bank charges and minimum balance requirements for accounts held by beneficiaries of social security grants. Discussions on such service agreements continue and the Banking Council is amenable to such arrangements, but these must be subject to the transforming of the pension beneficiary system.
Our recommendations are as follows: We should review the conditional grant mechanism. There are too many conditional grants in the system and they must therefore be consolidated and rationalised to improve their effectiveness.
The institution of nonfinancial monitoring mechanisms needs to be reviewed so that the evaluation of grants is based not only on spending criteria but also on the provision of services. We should be asking ourselves as MPs: How many food parcels have gone from our nutrition schemes to children who really need them? If not that many, what then are we going to do as MPs? Also, in respect of housing: How many RDP houses that have been delivered are going to real beneficiaries instead of going to people who are already in possession of homes? The committee is of the view that all MPs and civil society bodies must play a crucial role in exercising other oversight responsibilities in this regard.
We also recommend that the timing and release of the Bill be explored. We should also improve the design of grants, because that is crucial to the functioning of the entire system of conditional grants. Clear and perhaps simplified conditional requirements also have a bearing on the performance of such grants.
Consideration should be given to the transfer of the primary school feeding schemes from the Department of Health to the Department of Education, because that department has the existing infrastructure. All communities have schools, so if this project is given to the Department of Education, we think that this will solve the problem. We raised it with the Minister of Health when she was in the committee and she said that they would look into it.
We should follow up on negotiations between the Department of Social Development and the banking sector on the removal of the finance and interest charges for the beneficiaries of social grants. We need to invite the deputy director-general of the Asset and Liability Management Division of the National Treasury to address the committee on the impact of local government participation in the capital markets, because we think that might pose certain problems.
We think that the legislation that is proposed in the Budget Review and the discussion that the committee will host, will alleviate some of the problems. We should also have further discussions on the conditional grants and also further monitoring from time to time. The national departments and provinces are expected to comply with the requirements of the PFMA, with regard to the employment of the chief financial officers for the administration of conditional grants.
One of the problems which were cited was that junior staff or public servants are given the responsibility of managing grants. We think that appropriate people should be employed.
In conclusion, the committee wants to thank all the participants in the public hearing for their detailed and frank submissions. In addition, the committee wants to thank all participants for their contributions and looks forward to a long and beneficial association with them. More importantly, the committee also conveys its special word of appreciation to the directors-general of all the departments which I talked about earlier on, and is also grateful for the substantial contribution of the Minister. [Time expired.]
Mr P M MILLER (KwaZulu-Natal): Chairperson, the speakers’ list indicates that I will be addressing the Council in English.
Bendicela Sihlalo, ukuba undivumele ndithethe isiXhosa kancinci ngoba oosisi aba basithetha kamnandi yaye basithetha qho. [Uwelewele.] Kumnandi! Kuvakala kamnandi, kundikhumbuza ekhaya. [Kwahlekwa.]
Kudala ndahlala nawo amaZulu njengabahlobo. Bendihamba ndigubha ngathi ndingunogwaja. [Kwahlekwa.] (Translation of Xhosa paragraphs follows.)
[I would like to ask Chairperson, that you allow me to speak Xhosa a little bit because my sisters here, speak very nicely and they speak it all the time. [Interjections.] It is nice! It feels very good; it reminds me of home. [Laughter.]
I have lived with the Zulus as friends for a long time. I would walk around shaking like a rabbit. [Laughter.]]
I also do so in honour of the deputy captain of Team Finance, whom I know, the hon the Deputy Minister.
To get back to the matters of the day, clearly I rise to support the Bill, because, for all practical purposes, the Bill is a fait accompli.
As a member of the Budget Council, I can confirm that the Bill before hon members is a product of long negotiation and compromise.
I do not say that that is a particularly pleasing state of affairs for a
council such as this, but I am afraid it is a reality, and thus I intend to
discuss with hon members today what we can do about the state of affairs. I
believe that the only material contribution I can make today is to
highlight issues which we will have to address before next year’s Division
of Revenue Bill. For example, in the present Bill - I know it has been
explained, but it remains bad draftmanship in my view -there should be a
definition of Minister''. If an hon member can immediately tell whether
the Minister’’ in clause 5(1) or the Minister'' in clause 7(3) orthe
Minister’’ in clause 12(2) is the same Minister, then I would be surprised.
In two of those, at least, hon members would not be making a serious
mistake if they thought that they were speaking about the Minister for
Provincial and Local Government.
I also wish to draw attention to clause 8 in the Bill, which deals with the framework for grants. I want to suggest that the information that was required in terms of that clause was published far too late.
Provinces do not get an opportunity to engage on the issues which result from the information that might or might not be published in terms of that clause. In fact, I venture to suggest that the reasons given why such allocations cannot be achieved via the equitable share are provided after budgets are already law, precisely because such reasons cannot stand up to scrutiny prior to the various budgets becoming law. One of the interesting realities we must face here today is that I, and all my colleagues in all provinces, have already tabled budgets based on this Act, containing the information which is in this Act. In fact, in the unlikely situation, for example, of this Act being rejected by this House, it would create major constitutional and administrative problems for provincial governments throughout the entire country. Quite clearly I think there is validity in the hon chairperson of the select committee’s proposals that in fact the timing of this Act vis-à-vis the actual tabling of budgets should be looked at again in the future.
I also want to draw attention to clause 10. I want to say, particularly to the hon the Deputy Minister and the senior staff here from the Department of Finance, that this clause could be described as being very patronising. If the atmosphere in the Budget Council was not so good, and if the Budget Council was not possibly the best example of co-operative governance in this country, one could describe this particular clause 10 in much stronger terms.
I pose the question, and I really mean this sincerely: Does this House really suppose that the supplementary allocation would be withheld? I would propose to the honourable NCOP that the sooner this allocation becomes part of the equitable share, the better. Incidentally, I wonder how many national departments could in fact comply with criteria similar to those which provinces are required to comply with in terms of clause 10.
I turn briefly to conditional grants in the time available to me. Conditional grants constitute nearly 15% of provincial budgets. One only has to look at Schedule 1 to the Bill to see that figure. I submit that the long-term objective should be to collapse most of these conditional grants into the equitable share given to provinces. They are a remnant of a bygone era. They actually reflect a distrust by national Government of provincial capacity to deal with the money. I do not believe that this is justified any longer.
The hon chairperson of the select committee spent some time indicating underspending that was, or was not, caused by provincial inability or incapacity to spend money. I want to record that it is my experience that, in more cases than not, it is in actual fact the inability of the national department to make it timeously available to the provincial department that causes that particular underspending.
One of the interesting things about the division of revenue is that while it sets out to divide income collected nationally among the three spheres of government, it then goes on, except for Schedule 1, to really only deal with the rules and regulations that pertain to the money that is allocated to provinces, and the money that is allocated to municipalities. It simply makes a statement as to the lump sum that is going to national departments. I want to suggest that in a Division of Revenue Bill there should perhaps be some attention given to exactly how some of the national departments spend their allocations.
I am going to close with one example. One of the major spending priorities of all provinces is in the field of welfare, namely social and child support grants. I submit to this National Council that the best way of getting poverty relief to the communities where it is actually needed is via those particular grants. I would suggest, for example, that the R1,5 billion that is given to national Public Works for poverty alleviation programmes would alleviate a lot more poverty if it was given to provinces to add to the social grants that are given to the aged, to the infirm and to children. [Applause.]
Mr Z S KOLWENI: Hon Chairperson, Deputy Minister, members of this House, since the inception of our democratic dispensation, our Government had a primary objective and goal to pursue, that is to promote co-operative governance in all three spheres of government, as my hon colleague has already mentioned, as well as to consolidate a concept of participatory democracy.
While all this is being facilitated in many different forms of consultations, one must exclusively appraise the public hearing process, for it is through this process that we today have this balanced distribution, with the already mentioned few amendments. Of course, a few concerns have been registered. I need not repeat them.
The Division of Revenue Bill before this House today is a yardstick to transform the various provinces, municipalities and communities. This Bill is actually a well-prepared recipe for the translation of the state-of-the- nation address by our hon President, especially in terms of transforming the painful past that was never of our own making as a majority of this country. No wonder the remnants of the past ruling class, which is now called the DA, find it difficult to accept the allocation for addressing the poverty and misery experienced by the majority of our people.
The North West province has been erecting a number of road infrastructure projects, which have penetrated the rural areas. There are big plans to pursue this project at a larger scale with the advantage of the current allocation. May I further take this opportunity to encourage my colleagues, members of this House, to interact with our provincial counterparts so as to place as a priority the issue of improving infrastructure for our elderly people, such as pensioners’ paypoints and other associated issues.
The equitable share will be distributed directly to unicity metropolitan authorities and the category B municipalities. The division of powers between category B and C municipalities is crucial. While category C municipalities’ revenue base is largely the RSC levies, they will receive equitable shares if there is no category B municipality in the district and category C municipalities carry out the relevant functions. However, the committee was informed by Salga that sufficient progress has been made to ensure that category C municipalities are phased out within a year. The officials of the National Treasury did not endorse this view. They argued that much more time is required. The select committee will observe progress in this regard.
Having mentioned all this, I must stress the point that the allocation of this term has been found to be realistic across all disciplines. [Applause.]
Mnr J L THERON: Mnr die Voorsitter, adjunkminister en kollegas, my tyd is baie beperk en daarom wil ek by die probleme van hierdie wetgewing begin.
Die dienslewering of delivery'' van die ANC-regering is baie stadig. In
die eerste plek kan ons kyk na die voorwaardelike toekennings of
conditional grants’’ wat aan die provinsies gemaak word. Hier kan ons na
die onderskeie toekennings kyk waaronder bestee word. Na my mening het die
voorsitter ook baie objektief daarna verwys. Dié inligting is in die
Begrotingsoorsig, agb lede kan dit daar gaan lees.
Daar word onder sewe toekennings bestee. Dié kategorieë sluit in die rehabilitasie van hospitale - daar word onderbestee; die herverdeling van gespesialiseerde gesondheidsdienste - minder as 40% van dié toekenning word bestee; geïntegreerde voedingsprogram - slegs 68% van die toekenning word bestee; onderwys - onderbesteding van tot 50% kom voor terwyl agb lede weet hoe beperk die getal klaskamers in dié land is en hoeveel onderwysers ons nodig het om ons kinders op te voed; behuising - slegs 52% word bestee terwyl ons net in die vorige debat gehoor het hoe belangrik behuising is en sien hoe die plakkerskampe in die land al groter word. Tog word net 52% bestee. Waarom? Minder as 30% van die toekenning aan die loodsprogram vir menslike hervestiging en -herontwikkeling word bestee; subsidie vir die funksionering van waterdienste - teenoor dié programme word swak invordering van inkomste tot op datum aangedui.
Groot werk lê dus voor om die dienslewering op die regte standaard te kry en aan Suid-Afrikaners die dienste te lewer wat hulle toekom.
Nou wil ek by ‘n groter probleem kom waarna ons moet kyk. Dit is reeds algemeen bekend dat die Suid-Afrikaanse ekonomie onderpresteer. Die Suid- Afrikaanse ekonomie groei teen sowat 3% per jaar terwyl ons ‘n potensiaal van 6% tot 7% per jaar het. Waarom verwys ek hierna?
Ek wil graag die voorbeeld van ‘n gemmerkoekie teenoor ‘n lekker sjokoladekoek gebruik. As die ekonomie teen sy potensiaal groei, het ons ‘n sjokoladekoek wat ons onder die provinsies kan verdeel, maar op die oomblik kry ons ‘n klein gemmerkoekie wat verdeel moet word. Dít is die probleem wat ons ervaar.
In die MTBR, die driejaarraamwerk of ``MTEF framework’’, word begroot dat die ekonomie in dié tydperk van drie jaar teen 3,5% sal groei. Indien die ekonomie veel vinniger groei as die inkomste wat verdien kan word, soveel groter die koek en soveel meer wat verdeel kan word.
Ek meen die Minister behoort te verduidelik waarom die ANC-regering so sukkel om die ekonomie aan die gang te kry, waarom die ekonomie so onderpresteer en waarom die toekenning aan provinsies dus so beperk is.
Ek moet egter ook sê daar is baie positief in hierdie wetgewing en daarom ondersteun die DP dit. Daar is meer positief as negatief en daarom wil ek ook graag daarna verwys. In die Begrotingsoorsig van 2001 staan op bladsy 141, en ek wil dit graag vir agb lede aanhaal:
In order to improve service delivery, provinces are now targeting spending on infrastructure rehabilitation, construction and maintenance. Challenges include enhancing the efficiency and effectiveness of spending in education and health …
En so gaan dit aan. Hiermee stem ons saam, dat dit voorrange moet wees waaraan hard gewerk moet word. Verder word daar, in klousule 27 van die wetsontwerp waarin funksies aan die provinsies en plaaslike owerhede oorgedra word, bepaal dat die gepaardgaande geld na dié sfere moet vloei. Dit sal tot ‘n groot mate die kwessie van onbefondse mandate besweer.
Dan is daar ook klousule 21 van die wetsontwerp wat voorskryf dat die ouditeur-generaal verslag sal doen in watter mate die direkteur-generaal, die provinsiale tesourie en verantwoordelike amptenare uitvoering aan die voorskrifte van die wetgewing gegee het.
Indien ons kyk na die beleidsraamwerk van die wetsontwerp op die verdeling van inkomste, is daar ook ‘n hele paar positiewe aspekte, naamlik die provinsiale belastingmagte wat uitgebrei word, provinsiale magte wat uitgebrei word sodat lenings aangegaan kan word vir kapitaalprojekte, munisipale lenings wat ondersteun word met belasting- en wetgewingshervorming, munisipaliteite wat ook nou in siklusse van drie jaar moet begroot, hervormings aan toekennings, ``grants’’ wat gemaak moet word en agentskapsbetalings wat in voorwaardelike toekennings omgeskakel moet word.
Dit is alles positiewe beleidsaspekte waarmee ons ons kan vereenselwig. Ons ondersteun ook die doelwitte wat in die wetsontwerp gestel word vir die verdeling van inkomste aan provinsies. Dit sluit in die belang van belegging … [Tyd verstreke.] (Translation of Afrikaans speech follows.)
[Mr J L THERON: Mr Chairman, Deputy Minister and colleagues, my time is very limited and I therefore want to start with the problems relating to this legislation.
The ANC Government’s delivery is very slow. In the first place we could look at the conditional grants that are made to the provinces. Here we could look at the various grants under which expenditure takes place. In my view the chairperson also made reference to this very objectively. This information is in the Budget Review, hon members can go and read it there.
Expenditure is divided into seven grants. These categories include hospital rehabilitation - where there is underspending; the redistribution of health services - less than 40% of this grant is spent; an integrated nutrition programme - only 68% of the grant is spent; education - where there is underspending of up to 50%, while hon members know how limited the number of classrooms is in this country and how many teachers we need to educate our children; housing - only 52% is spent, while we heard in the previous debate how important housing is and can see how squatter camps in the country keep growing. Nevertheless only 52% is spent. Why? Less than 30% of the grant for the pilot programme for the human resettlement and redevelopment is spent; subsidies for the functioning of water services - next to these programmes poor recovery of revenue is reflected to date.
Significant work therefore lies ahead so as to get service delivery in line with the correct standard and to render to South Africans the services that they deserve.
I now want to come to a bigger problem which we should look into. It is already common knowledge that the South African economy is underperforming. The South African economy is growing at about 3% per annum, while we have a potential of 6% to 7% per annum. Why am I making reference to this?
I would like to use the example of a ginger biscuit as opposed to a delicious chocolate cake. If the economy grows at its potential, we have a chocolate cake that we can divide among the provinces, but at the moment there is a little ginger biscuit that must be divided. That is the problem that we face.
In the MTEF framework, the three-year framework, it is budgeted that the economy will grow at 3,5% in this three-year period. If the economy does in fact grow faster than the revenue that could be earned, the larger the cake and the more that could be divided.
I think the Minister should explain why the ANC Government is struggling so to get the economy going, why the economy is underperforming and why the grants to the provinces are therefore so limited.
I must, however, also say that there is much that is positive in this legislation and that is why the DP supports it. There is more that is positive than negative and therefore I would also like to refer to that. In the 2001 Budget Review it says on page 141, and I want to quote this to hon members:
In order to improve service delivery, provinces are now targeting spending on infrastructure rehabilitation, construction and maintenance. Challenges include enhancing the efficiency and effectiveness of spending in education and health …
And it continues in this vein. We agree with this, that there should be priorities at which we should work hard. Furthermore, in clause 27 of the Bill in which the functions are transferred to the provinces and local authorities, it is provided that the concomitant funds should flow into all these spheres. This will combat the question of unfunded mandates to a large degree.
Then there is also clause 21 of the Bill, which prescribes that the Auditor- General will report to what extent the director-general, the provincial treasury and responsible officials have given effect to the prescriptions of the legislation.
When we look at the policy framework of the Division of Revenue Bill, there are also quite a number of positive aspects, namely the provincial powers of taxation that are extended, provincial powers that are extended so that loans may be made for capital projects, municipal loans that must be supported by taxation and legislation reform, municipalities that must now also budget in cycles of three years, grant reforms that must be made and agency payments that must be converted into conditional grants.
All of these are positive policy aspects with which we can associate ourselves. We also support the objectives of the Bill for the division of revenue to provinces. This includes the interest of investments … [Time expired.]]
Mr K D S DURR: Chairperson, hon Minister, I rise on behalf of the Western Cape to also support the Bill. I have some of the problems raised by the chairman and also by my hon colleague the MEC from KwaZulu-Natal. I cannot claim that there has not been a process of consultation. I think the consultation process has been far-reaching, comprehensive and excellent.
I want to thank the Ministry of Finance and Treasury officials for their courtesy, co-operation and sensitivity. They never at any stage tried to bulldoze us. Their door was always open and they were ready to advise and to delay, if necessary. We thank them sincerely. I have to say that it fills me with some confidence when I see the quality of the people that are being sent to our committees, and we want to thank them.
Nevertheless, we have a problem, and that is if we look at sections 214 and 215 of the Constitution - time will not allow me to go too deeply into them
- members will see that what the Constitution requires of us is a consultative process, and that after certain things have happened, ie after the Financial and Fiscal Commission has been consulted, for example, certain other things happen. We were doing things before those consultations took place. One can argue that we are now on a rolling cycle of three years and that it is therefore understandable, but I am still not convinced that it is constitutional. That is my problem. Therefore I think we should look at that.
There are a few other matters of detail that I want to raise. One, in particular, is that I think we are trying to do too much in this Division of Revenue Bill. I think it is the root cause of many of our problems. All we should be doing is the division of revenue, and nothing further. The Bill provides for financial management issues such as procedures, norms and standards and due dates which should rather be taken up in the PFMA - the Public Finance Management Act - the NTRS and the Treasury instructions to ensure legal certainty.
This Act is repealed each year. Therefore, for us to build these norms, standards and procedures into this Bill is, to my mind, not doing the wrong thing, but doing the right thing in the wrong place. This Bill should only seek to deal with the division of revenue.
The Bill could be improved considerably, or marginally, by being given a provision for delegating powers which would imply that not only the director-general and the MEC for finance in the province may deal with all the powers and responsibilities contained in the Bill, but that the powers can be delegated. It does not appear to me that there is any provision for delegation.
May I also say that we also have to take account of the fact - I think the Minister of Finance said, this before I did, so all credit to him - that we build fiscal division, this Division of Revenue Bill, on a whole statistical base. That statistical base is very suspect, I have to say. It is extremely suspect and, like a curate’s egg, I think it is good in parts, but there are parts that are not good. To do this really equitably, we at least have to define the problems correctly and that we can only do if we have a proper statistical base.
I want to implore the Minister to encourage his colleague the Minister of Finance, since that department is now under his jurisdiction and surveillance, to see to it that the necessary reforms and improvements are brought about so that we can be certain, as we stand here today, that we are making assumptions off a good statistical base. I cannot say that we in the Western Cape are always certain that we are achieving that.
In the Western Cape we are determined to place as much emphasis as possible on economic growth, because that is where we have any discretion of money. We raise only about 6% of our income ourselves, which gives us some 37% of discretionary income. This comes from our own income. Nevertheless, we are placing the emphasis on economic growth because of the spin-off benefits for all in our society. We are trying to get a virtuous circle going. Economic growth and capital expenditure suck in further development, also possibly from abroad.
Capital expenditure is growing. I am genuinely most impressed by the national Budget and also by the provincial budgets generally. I think they are fine documents, and a product of a consultation process we have never seen in this country before. I think that in most respects they are quite outstanding.
The good news after years of privation, which was the right thing for the Minister to do, is that we now find we can let go a little. He called it ``the fruits’’ of the Budget. That money is being directed also by us into capital expenditure, which is good news for the efficient delivery of services and for economic and socioeconomic stability. It will boost the creation of jobs without putting any strain on the balance of payments.
Dit is vir ons baie belangrik, want in die Wes-Kaap woon 88% van ons mense in stedelike gebiede. Die Wes-Kaap se bevolking is grootliks verstedelik en beboude gebiede is dus vir ons baie belangrik.
Kapitale uitgawes, as persentasie van ons totale uitgawes, sal vanjaar in die Wes-Kaap van 3% tot 6% groei en daarna 8% per jaar tot 2003-04. (Translation of Afrikaans paragraphs follows.)
[That is very important to us because in the Western Cape 88% of our people live in urban areas. The Western Cape’s population is largely urbanised and built-up areas are therefore very important to us.
Capital expenditure, as a percentage of our total expenditure, will grow from 3% to 6% in the Western Cape this year, and thereafter by 8% per year until 2003-04.]
For us this is the key element in future growth. We look forward to working with the national Treasury in doing more about that and reaching agreement on a provincial framework for borrowing. If we want to maintain and build our infrastructure, we will have to borrow for capital enhancement. We look forward to developing and giving definition to those talks. We are at the foothills of those discussions at the moment.
We continue to look forward, I hope not in vain, to developing our own sustainable tax base. As I have said, we are currently raising about 6% of our own income, but it does constitute 37% of our discretionary income and expenditure. We look forward to the day when the national Government gives us the tax room to institute provincial taxation, as envisaged by section 228 of the Constitution.
I understand that what we need now is to develop the procedures before tax can be instituted, and then from there we will go on to an allowed list for raising revenue. It is my hope that when we get to such an allowed list, it will go beyond what we have now. For example, I would have thought that sales tax would not form part of an allowed list. It is something the Minister could well look at as an efficient form of taxation which is suitable for a local, provincial, or even a city tax.
I would like to say that we are very blessed in the Western Cape.
Tot datum het ons ‘n groeikoers 4% hoër as die res van die land. Volgens prof Kantor het kleinhandelverkope in die Wes-Kaap sedert November verlede jaar met sowat 15% gestyg. Ons is, soos hy dit stel, amper in ‘n ``boom’’- situasie. As ‘n mens egter na die publiek luister, kan ‘n mens dit nie glo nie. Mense kla met die witbrood onder die arm.
Die Wes-Kaap se groeikoers is omtrent 1,7% hoër as die nasionale syfer. Dit bly egter ‘n uitdaging om bykomende werkgeleenthede te skep. Ons genereer tans bykans 13,7% van die nasionale ekonomiese groei. Dit is interessant, aangesien ons bevolkingsyfer byvoorbeeld heelwat laer is as dié van KwaZulu- Natal.
Hoewel ons hoofsaaklik klem lê op gemeenskapsveiligheid en ekonomiese groei, is dit nogtans waar dat sowat 82% van ons begroting vanjaar weer bestee gaan word aan die instelling van maatskaplike dienste, hoofsaaklik tot voordeel van die lae- en middelinkomstegroepe.
Ons bly optimisties, hoopvol en positief en dit is ons erns om die diepgewortelde probleme van ons tyd doeltreffend en doelmatig te benader. (Translation of Afrikaans paragraphs follows.)
[To date we have a growth rate 4% higher than the rest of the country. According to Prof Kantor retail sales in the Western Cape have risen by approximately 15% since November last year. We are, as he puts it, almost in a boom situation. However, if one listens to the public, one cannot believe it. People complain with a loaf of white bread in their hands.
The Western Cape’s growth rate is approximately 1,7% higher than the national rate. However, it remains a challenge to create additional jobs. We are currently generating approximately 13,7% of the national economic growth. This is interesting, as our population figure is significantly lower than that of KwaZulu-Natal, for example.
Although we primarily emphasise community safety and economic growth, approximately 82% of our budget this year will once again be spent on the introduction of social services, primarily to the benefit of lower and middle-income groups.
We remain optimistic, hopeful and positive and we are serious about approaching the deep-rooted problems of our time efficiently and effectively.]
The DEPUTY CHAIRPERSON OF COMMITTEES: Order, hon member.
Mr K D S DURR: Are you speaking to me, Chairperson?
The DEPUTY CHAIRPERSON OF COMMITTEES: Your time has expired, hon member.
Mr K D S DURR: With those few words, I say that we support the Bill. [Applause.]
Mr A MARAIS: Hon Chairperson, hon Deputy Minister, it is unfortunate that the hon MEC for KwaZulu-Natal is on his way now. I would like to caution him that before making utterances to the extent that he has done, he must take into consideration the horizontal disparities that currently exist. He must also ask himself whether what he is advocating is not perhaps too fast for some provinces, taking into consideration the historical reasons for such disparities.
On Wednesday 24 February 1999, the MEC for Finance announced that the province had applied to the national Government for national supervision of provincial administration in accordance with section 100(1)(a) of our Constitution. At that time an assurance was given that such an arrangement was essential to deal effectively with the structural provincial debt overhang. This assurance was based on the fact that fundamentals remained sound. Several initiatives were implemented effectively to reduce the debt, that is, without impacting negatively on service delivery, a bold undertaking indeed.
It gives me great pleasure to report to this House that we have gone full circle in establishing the financial position of our province. Not only did we manage to stabilise the budget of the social sector, but all spending departments now have credible budgets. This allows for greater functional mandate execution and greater predictability. A surplus was recorded on the 1999-2000 budget and it is projected that the 2000-01 financial year will also be closed with a surplus.
Today, however, we are faced with new challenges. The modernised system of local government, and the fact that our province has now been classified as the second poorest province in the country, are among those. The intention is not to provide or inundate the hon the Deputy Minister with a check list of challenges, but to draw to his attention the current realities and to implore him to reconsider such strategies. The division of revenue is an appropriate mechanism through which such considerations can be effected.
In the eastern Free State the poverty level stands at 85%. This means that 85 persons out of every 100 are basically poor. The aspect of latent penury has become a reality. Many people are entirely dependent on the social security grants for the elderly and the disabled. In the event of the passing away of such beneficiaries, their dependants become further distressed.
The dialectical link between poverty and impaired health, and between poverty and moral degradation, is well recorded. The high levels of poverty place an inordinate responsibility on municipalities and the province as a whole to effectively deliver quality services in a sustainable way. Some revitalisation of these distressed communities is of paramount importance.
The national Government needs to further assess whether the holistic conceptualisation of poverty as it relates to the Free State is an advance on the earlier concentration of poverty lines, both analytically and in terms of policy decisions.
More than 60% of our schools are situated in the rural areas. Strategically, this affects the budget for education negatively. As a result of this, our ability to become a national as well as global competitor is temporarily stymied. It is a common fact that education- related costs in areas with higher than average poverty trends tend to be greater. Furthermore, cities and provinces can help to relieve poverty only by creating opportunities.
The potential of public and capital investments is of two kinds. Firstly, it might greatly improve the economic conditions of individuals. By raising productivity, they can increase their income from working or investing. Secondly, they can reduce the time they spend travelling from point A to B, for instance.
It is our contention that, in line with the urban renewal and other similar economic restructuring programmes, especially the rural strategies, a need exists to reassess the capital investment plan.
Travelling to Parliament daily, I have observed a steady increase in the number of cars from outside the Western Cape. I am concerned that this observation will further be justified if patterns of ownership relating to property markets were to be studied.
Depopulation, expatriation of skills and expertise, expatriation of finances, and a decline in mining activities as well as agricultural activities have resulted in the province experiencing a negative growth in gross domestic product. This is a cause for concern, not to mention the impact of globalisation and the cooling down of the global economy.
It is our considered opinion that the facts that I have tried to present here today, also taking into consideration that provinces offer a veritable cornucopia of the infrastructure and economic growth data that allows for critical analysis, constitute an intelligible enough rationale to revisit and revise the provincial equitable share formula.
Particular attention should be paid to the poverty index, education, infrastructure backlog and economic activity components, especially the manner in which they relate to our province.
I think it is also incumbent on me as a representative from the Free State to reflect on some of the concerns which stem from our interaction with the Bill. During this process nobody could supply me with a definitive answer as to whether a junior official in one organ of state can cause that organ of state to take another organ of state to court without complying fully with the prescripts of the Public Finance Management Act. It would seem that such animation would occur automatically. We may want to ascertain whether the internal procedural arrangement of organs of state are commensurate explicitly with those of the Public Finance Management Act.
Fruitless and wasteful expenditure is replacing unauthorised expenditure. The former phrase is closely associated with criminal misconduct. It begs the question: Do these two acts of impropriety weigh the same, and are the recovery processes the same or do they differ? I think that this needs to be looked at very carefully. It also needs to be clarified in a very unambiguous manner in the imminent prescribed procedures.
Finally, on behalf of the province I would like to commend the hon the Deputy Minister, the Minister and all the staff of his department who work so diligently to ensure that the fundamental transformation of the South African society takes shape in an open, transparent and accountable manner. For us in the Free State the Division of Revenue Bill in this context remains focused on Batho Pele. [Applause]
Mr T B TAABE: Hon Chairperson, Deputy Minister, officials from the national Treasury, hon members, it is my pleasure to address this august House on behalf the province of Mpumalanga, particularly in the wake of Comrade Trevor Manuel and his extremely able Team Finance’s ``sweeter fruits of liberty’’ Budget.
The point, I think, has to be made, on the basis of what I have just said, that all of us must begin to understand the very nature and character of budgets, in that they are about choices, hard and somewhat difficult choices. They are choices about allocating finite resources to the infinite and often competing multiple and complex needs of our people.
In making these choices we should all be informed about the social, economic and political contexts in which our people find themselves. Above all, these choices have to be guided by our vision, a vision to build a better life for all our people.
Therefore, such budgets must always represent the ongoing and continual effort on our part to meet the overwhelming priorities of Government, which seeks to address and meet the socioeconomic needs of all our people, and, in particular, those in abject poverty.
Looking back on the past six years of our democratic rule, there is general consensus that we have made great strides as a country in our quest to translate this very vision into reality. Although we have made serious advances in the realisation of the goals of a better life for all, our complex challenges as a country are still far from over. We are still confronted with, among other things, sluggish economic growth, rampant poverty and colossal unemployment in our country. Therefore, as a country we need to consolidate our gains and add momentum to the process of change.
Before outlining the proposals for the upcoming fiscal year, I believe that it would be appropriate to make a few remarks on the performance of the 2000 Budget. Our province, Mpumalanga, has allocated 40% of our total budget to education in the current financial year. Given the backlog prevalent in this sector, we know and are conscious of the fact that the resources allocated were, basically, inadequate, but this was the best Mpumalanga could do in the circumstances. The point has to be made that despite the limited resources we have as a province relating to our equitable share, we must genuinely seek to make improvements in critical areas of work, particularly in the area of education.
The major social services departments, namely health, social services and population development, were allocated the largest slice of our budget; 75% of the budget was allocated to these departments.
A number of poverty alleviation projects were also funded during the 2000 financial year. Obviously including the services of NGOs, these services were able to assist social services, population and development areas to accelerate service delivery.
Looking at the Division of Revenue Bill for the coming fiscal year, Mpumalanga has been given an equitable share of R7,2 billion. Conditional grants amount to R599 million. In total, Mpumalanga receives R7,9 billion from the national Government. This also includes the housing subsidy that has since been devolved to the province.
In the coming financial year Mpumalanga will shift the resource allocation ratio from 75:25 to 83:17. This demonstrates, beyond any doubt, our unwavering commitment as a province to enhancing living standards and providing basic services, as provided for in the Constitution of our country. However, despite this quantum leap, one must point out that we have not as yet reached the national benchmark ratio of 85:15. What is encouraging, though, is that in the province we have committed ourselves to improving the current ratio in the later years of the medium-term expenditure framework.
In the coming financial year education will receive an increase of R340 million, health will receive an increase of R89 million, while social services and population development will receive an increase of R355 million. Mechanisms have therefore been put in place to ensure that these earmarked funds will reach their intended beneficiaries. This represents a decisive departure from past practices in the provinces. Departments are expected to account regularly for these funds and submit monthly reports to the provincial treasury, obviously in line and in compliance with the provisions of the Public Finance Management Act. The province is therefore on course with regard to the establishment of internal audits and internal audit committees. Some departments will share an internal audit in a clustered format, whilst the bigger departments are in the process of establishing their own internal audits.
The province is also migrating from the Newfin financial system, which has created serious problems in the past, to the basic accounting system, widely known as Bas, with effect from 1 April 2001. This again represents a genuine departure from past accounting practices which led to all sorts of problems in the province. The move to the Bas system will help the province, and is obviously in line with the provisions contained in this Bill and will, to a very large extent, help the province improve accountability and responsibility for public funds and therefore contribute to overall sound financial management through cost savings, revenue enhancement and cost avoidance.
With these comments, I wish to thank the Chair for the time given to me to address this House on the Division of Revenue Bill. Our province, Mpumalanga, supports the Bill with the necessary amendments. [Applause]
Dr E A CONROY: Mr Chairperson, hon Deputy Minister and colleagues, the principle of the Bill we are debating today is referred to by section 214(1) of the Constitution, and by the Intergovernmental Fiscal Relations Act of 1997, to provide for the following: the equitable division of revenue raised nationally among the national, provincial and local spheres of government; the determination of each province’s equitable share of the provincial share of that revenue; and any other allocations to provinces, local government or municipalities from the national government’s share of that revenue, and any conditions on which those allocations may be made.
In addition, section 214(2) of the Constitution requires that the Bill may be enacted only after the provincial and local spheres of government and the Finance and Fiscal Commission have been consulted, and after any recommendations of the FFC have been considered.
The role of the FFC in particular requires the provision of technical data and information, to better inform the political process, including considerations of the Budget Council, the Budget Forum, Minmecs, Cabinet and Parliament. The FFC confirmed its commitment to provide recommendations and criteria for the determination of the delivery of basic services.
Gauteng is of the opinion that it was a very good idea that the FFC had begun to develop an approach to basic services. We are awaiting with interest the outcome of this process.
The Constitution, in essence, sets out the necessary prerequisites for an equitable division of revenue based on broad intergovernmental fiscal arrangements within the principles of co-operative governance.
The Bill furthermore requires that the following issues be taken into account: the national interest; any provision that must be made in respect of the national debt and other national obligations; the needs and interests of the national Government, determined by objective criteria; the need to ensure that the provinces and municipalities are able to provide basic services and perform the functions allocated to them, the fiscal capacity and efficiency of the provinces and municipalities; developmental and other needs of provinces, local governments and municipalities; economic disparities within and among the provinces; obligations of the provinces and municipalities in terms of national legislation; and the desirability of stable and predictable allocations of revenue share and the need for flexibility in responding to emergencies and other temporary needs and other factors based on similar objective criteria.
The province of Gauteng has satisfied itself that the Bill addresses the constitutional requirements for an equitable division of revenue, taking cognisance of economic disparities and addressing the fiscal capacity and efficiency of provinces and municipalities. In its deliberations, it was also noted that the Bill complies with the requirements of the Public Finance Management Act.
With respect to shortfalls and excess revenue, it is clear that the national sphere of Government is more capacitated to manage risks from shortfalls. There also seems to be no reason why provincial and local governments should not benefit from the excess of revenue that may arise.
There may be a need to consider a legislative review of the existing fiscal framework, taking into account revenue escalation arising from increases in inflationary forces which also impact on expenditure. This view is informed by the principle of co-operative governance, equity, efficiency and effectiveness.
The cost of servicing all grants impacts directly on the vertical allocation of nationally raised revenue, and further distorts the horizontal equitable division of revenue.
Given that provinces have limited revenue-raising capacity, attempts to incorporate such costs into equalisation formulas would contribute to the fiscal equity and efficiency of the three-sphere system of governance.
The differences in demography and geography, as evidenced in the 1996 census, have added a further complexity and have opened the way to diluting fiscal integrity which is evident in the infrastructural backlogs and an incapacity, in some areas within provinces, to utilise the allocated financial resources.
There is a need for norms and costs to be factored into the allocation of grants to provinces. As far as the so-called costed-norms approach is concerned, we made it clear last year that it is excellent as an analytical tool. We, however, are still of the opinion that, at this stage, we should not develop the division of revenue on that particular basis.
In terms of section 10 of the Intergovernmental Fiscal Relations Act of 1997, each year, when the Budget is introduced, the Minister of Finance must introduce in the National Assembly a Division of Revenue Bill for the financial year to which the Budget relates.
Gauteng, however, remains concerned, as was mentioned in previous years, about the timing of the Division of the Revenue Bill after the tabling of the national and provincial budgets. It is once more suggested that the timing of the division of revenue be reviewed and a mechanism be devised whereby the division of revenue can be considered prior to the Medium-Term Budget Policy Statement which occurs in September, preceding the forthcoming financial year.
That will enable provincial legislatures and this House to make a better- considered input and play a greater participating role. It will also make the legislation more relevant and give it the status it warrants. It might also enable civil society to play a greater participatory role in the whole process of dividing the cake on a fair and equitable basis.
Gauteng is not of the opinion that departments have not been given every opportunity, within the Act, to comply with the PFMA. Any special cases which they believe would hinder their compliance, or alternatively their stated delivery, would in fact be captured in clause 29, which is a kind of exemption clause, allowing departments to come forth. So, for example, under the national Budget Review, it is quite clear under the conditional grants that existing obligations will be met. It is also clear that if, in order to meet those existing obligations, it may be necessary to apply for an exemption, the Act includes such an eventuality.
Gauteng is therefore firmly of the view that there is no need to further dilute any of the other compliance clauses, because the opportunity to get an exemption does exist.
A difference between this and previous divisions of revenue is that previous ones gave an almost blank cheque on the expenditure of certain money. However, this time around, and because it has been developed within the Public Finance Management Act, the strong sanctions of the PFMA apply with the result that moneys are not simply handed out without procedures or reports being submitted, which will of course effectively contributed to accountability.
As far as the Auditor-General is concerned, Gauteng wishes to assure the AG that we respect his constitutional competency and that of the office of the Auditor-General and its authority and wishes to see that it is exercised vigorously. We do not think that the legislatures, and that includes Gauteng, should in any way try to perform the Auditor-General’s functions. However, with respect to clause 21 of the Bill, we are of the opinion that this was a very valid concern raised by the AG’s office. There was not a party in the Gauteng finance standing committee that disagreed on that.
Chairperson, allow me for a moment to put on my hat as a member of the Audit Commission.
Hon members are aware of the desperate financial situation of municipalities in particular and that there are various provinces and municipalities that owe the Auditor-General substantial amounts in unpaid audit fees. The AG is required in terms of the Constitution to audit these bodies on an annual basis and cannot refuse to audit them if they are in arrears with the payment of audit fees. This has placed the office of the AG in an untenable and unenviable situation. It would, however, now appear that relief for the tight situation in which the AG finds himself is at hand, in terms of clause 23 of the Bill, which enables the National Treasury to withhold an allocation or portion thereof to a municipality or a province if they commit a serious or persistent material breach of the measures contemplated in section 216(1)of the Constitution.
A failure to meet its statutory financial obligations, including the payment of audit fees, can be seen as such a serious breach and the AG will therefore be able to apply for the withholding of payments in extreme circumstances.
On that concluding note, it is my pleasure to declare that Gauteng supports the Division of Revenue Bill. [Applause.]
Mr N MATHEBE (Salga): Modulasetulo, ntumelle ke dumedise Deputy Minister wa Finance, ntate Mpahlwa, [Chairperson, allow me to greet Deputy Chairperson Minister of Finance, Mr Mpahlwa,Deputy Chairperson in absentia, special delegates and distinguished members of the NCOP. Salga embraces this opportunity to speak on the occasion of the debate of this important piece of legislation, the Division of Revenue Bill.
It is indeed our constitutional obligation that we speak to the NCOP on this particular Bill. We at Salga are very delighted that we have been part of the formulation of this particular piece of legislation and that we were consulted throughout the processes and debates that took place around the Division of Revenue Bill.
We have indeed participated in major forums of the division of revenue, including the workshop on the division of revenue, the Budget Forum and public hearings on the Bill organised by the Select Committee on Finance. We have used these occasions effectively and we are even looking forward to a constructive engagement with the National Treasury and other stakeholders in preparation for the 2001 and 2002 budget cycle.
It is in this regard that we sincerely support this particular piece of legislation, as amended by the committee. It is also our belief that there is no piece of legislation that can satisfy everybody all at once. With all the challenges currently facing our country and local government in particular, it is necessary that we join hands and begin to engage seriously over the challenges facing us.
The 1998 White Paper on Local Government initiated an extensive process of change in order to enhance municipal accountability, improve developmental impact, streamline systems and improve the delivery of services.
In 2000, the number of municipalities was reduced from 843 to 284; the categories and types of municipalities have changed; powers and functions are under review; and new systems, resource allocations and functional orientations will be introduced. After demarcation, five municipalities have operating budgets in excess of R5 billion; one in excess of R1,5 billion; four in excess of R700 million and 13 in excess of R200 million. In total, together these municipalities account for over 80% of operating expenditure in the local sphere of government.
New local governments face considerable challenges. Many councils experience financial problems, management practices are inadequate and institutional systems are often dysfunctional. Service delivery is often inefficient and operating costs, especially wage bills, are disproportionately large.
The new demarcations pose particular transitional challenges. Municipalities will incur relocation costs related to consolidation, integration, staff rationalisation and redeployment, asset and liability alignment, the alignment of agreements, contracts, bank accounts, investments, insurance, and IT systems integration. Furthermore, restructuring exercises typically impose significant costs on a municipality in the short term and only deliver benefits in the medium to long term.
Government has introduced a number of local government grants to meet these challenges. These include the local government restructuring grant, the local government support grant, the municipal finance management grant, the municipal systems improvement grant and the transition grant. The Constitution of the country guarantees local government an equitable share of nationally raised revenue. The division of the equitable share is based on a formula which, among other things, looks at poverty indicators, institutional capacity, population size, etc.
The local government equitable share has always been less or more than 1% of nationally raised revenue, and certainly not more than 2%. Given the mammoth task of transforming local government, the equitable share of local government has never been sufficient to meet at least the basic needs of our communities.
Although it is loosely assumed that local government generates a better part of its income, experience has shown the opposite. One notes that there is potential, but taking into cognisance various factors, it becomes unrealistic to assume that local government can generate its own funds.
With special reference to recent developments, a call for massive funding has dominated policy-setting forums, with the Local Government Budget Forum being a classic case. The motive for establishing additional funding is loosely based on the envisaged new system of local government provided for by the various legislations mentioned above.
The process of institutional restructuring of the system of local government is nearing completion. The promulgation of the demarcation and structures Acts established a framework for the realisation of institutional arrangements for a developmental local government system. These reforms are necessary to ensure that local government can deliver services efficiently to all its constituents.
One of the most important tasks of transformation is the drawing up of new municipal boundaries. Of course, new boundaries will not suddenly solve all the problems that municipalities face. Much needs to be done in addition to demarcation to ensure that municipalities have administrations that are properly organised, have stable and adequate sources of income, etc. Demarcation will set the structural conditions within which these other processes of transforming and developing local government can occur.
Almost all municipalities will have their boundaries redrawn or demarcated. Therefore local government will be completely restructured from its current format. New municipal boundaries will result in the reorganisation of service networks in different ways, the transfer of staff, the integration of administrations, the division of assets and liabilities, and the bringing together of different systems of budgeting, planning, development, etc.
The above-mentioned local government reforms will enable the creation of viable and sustainable local government in the long term. However, enormous pressure will initially be placed on municipalities during the restructuring process. The complexities of transformation will require massive efforts and resources from local government role-players. It becomes imperative to reposition local government through a conducive study policy environment to implement the broader mandate of local government and ensure a smooth transition to the new local government system.
We therefore wish to reiterate the following policy recommendations to the NCOP.
Firstly, with special reference to local government conditional grants, Salga recommends that the Division of Revenue Bill make provision for departments with grants to local government to furnish Salga with a fiscal framework which, among other things, will include, one, the rationale behind the grant framework; two, the amount dedicated for a particular function in local government; three, the implementation programme and spending timetable for monitoring purposes; four, conditionalities associated with grants; five, national and provincial accounting officers; and, six, principles of transparency in grant design.
Secondly, Salga effectively supports the rationalisation of conditional grants to local government and the proposed three-year allocations of grants to municipalities based on the National Treasury Medium-Term Expenditure Framework, in order to effect proper planning of municipal services.
Thirdly, Salga supports the concept of cross-subsidisation in tariffs, including a lifeline tariff for some of the services, especially water.
Fourthly, Salga recommends that the rendering of free basic services to the poor becomes a joint process between bulk suppliers of services and local government, and that strong links be formed between the parties concerned to address this urgently.
Fifthly, Salga further recommends that a national study with regard to free basic services to the poor be undertaken within all municipalities to determine the extent of the costs thereof.
Salga fully supports the Division of Revenue Bill. [Applause.]
The DEPUTY CHAIRPERSON OF COMMITTEES: Order! I now call upon the hon Ms Lucas from the Northern Cape.
Mr G A LUCAS: Chairperson, I am Mr Lucas, not Ms Lucas.
The DEPUTY CHAIRPERSON OF COMMITTEES: I beg your pardon, Mr Lucas.
Mr G A LUCAS: Chairperson, hon Deputy Minister, hon permanent and special delegates, I just want to express a word of caution regarding Mr Theron’s remarks. Mr Theron is a member of our committee, and he did not raise all these issues that he raised today in the committee. I think that is a bit disturbing, because if we want to get our fiscal issues into perspective, it is not appropriate to use our economy as a political point-scoring game. The impression that is being created is that we do not agree. But Mr Theron was quite satisfied with all the deliberations that took place in the committee and did not object to anything. I am therefore surprised that he is behaving in this way today.
The second issue I would like to raise is that the MEC from KwaZulu-Natal raised some very serious issues. I am surprised that he is not here to listen to what the Deputy Minister has to say in response to those issues. Either he disregards this House, or the issues that he has raised are not as important as he says they are. [Interjections.] Those are issues that we must really address.
Coming to what I have come here to say, our country, immediately after the 1994 democratic elections, broke through. The democratic Government elected by our people embarked on an ambitious economic recovery plan. This plan was, at times, sore and painful. Our people, at times, also felt that it was a harsh but necessary policy requirement to get our economy on a correct footing.
Out of that bitter past, we have begun to reap the rewards of the correct economic fundamentals that we set ourselves in 1994. We can say, without any fear, that we are on the correct path. A solid economic foundation has been laid. Accordingly, our province, which was neglected in the past by the apartheid regime, is also beginning to reap the rewards of our sound economic foundations.
We have been able to record economic growth, especially after the floods of last year. As all members will know, our major economic sectors in the province are agriculture and mining. These sectors, therefore, after this period of decline in the past, are beginning to recover.
Currently, farmers in the Benede Oranje and the mine owners around the diamond fields and other parts of the province, are grateful to our Government. They are grateful because, for the first time, they are able to market and sell their products internationally, without any major stumbling blocks. Especially grape farmers in the Benede Oranje, as Mr Van Niekerk would know because they have lost elections there again. [Laughter.]
Accordingly, our capacity to raise our own revenue at provincial level is also not very impressive. The reason is that, firstly, we are supposed to collect certain amounts from hospital fees, but patients are sometimes unable to pay because they cannot afford the payments of hospital fees.
We should also know by now that those with privileged medical aids prefer to use private hospitals instead of state hospitals, hence the dwindling of the resources of our public hospitals. I am not sure how many of our members here do use state hospitals.
An HON MEMBER: Where do you go to when you are ill?
Mr G A LUCAS: I do make use of public hospitals. One can go to Galeshewe. Secondly, due to the delays in the processing of the gambling licences, the three casinos earmarked for the province will only start to operate in the near future and, therefore, part of our revenue-raising capacity and part of the revenue intended for our province will begin to increase.
Therefore, our only major revenue-collecting activity in the province is motor vehicle licensing and, to a greater extent, the hospital fees. This collectively amounts to about 2% of the total provincial revenue. Given this situation, it really means that our equitable share and the conditional grants that we are getting from national funding account for 97% of our provincial revenue.
As these allocations make it possible for our province to carry out its constitutional mandate in the struggle to create a better life for all and redress the inequalities of the past, we are grateful to the national Government for what it is giving us.
The MTEE cycle reflects that our equitable share allocations will continue to increase over this period. This is commendable, as it will ensure that we move speedily in the struggle to improve the living conditions of our people, especially the poorest of the poor.
Furthermore, the creation of a provincial infrastructure grant will greatly enhance our agenda to improve and address the infrastructural backlog currently experienced in our province. We have already started addressing this problem of the active participation of the private sector and local government. Therefore, this additional allocation is enthusiastically welcomed by our province.
Our continuous area of concern which, as a province, we have raised in previous engagements, is the difficulty we are experiencing with regard to conditional grants and especially their untimely allocation to the province.
We have, however, been given a guarantee during the public hearings that the respective departments managing these grants will be able to make sure, this financial year, that they are dispatched on time. We do hope that the situation will be corrected, for us to be able to use these conditional grants much more effectively.
Of concern also continues to be the existence of numerous grants at times having different conditions attached to them, thus making it quite difficult to access these conditional grants. It is our view that we should strive for the uniformity of the conditional grants, but also that we should move to a stage where some of these grants can be clustered, especially those whose aims are of a similar nature.
We are looking forward to the introduction of the provincial taxation Bill. Our province will seek to make a constructive input in the process of the development of such a provincial taxation Bill because, in a sense, it will give us the powers to raise more revenue for our province and, therefore, make us less dependent on national Government, but also so that our provincial financial situation is so sound that we are able to make real commitments with regard to capital expenditure and be able to make provincial borrowing in respect of the question of capital expenditure, in particular the improvement of our roads in the province, understanding the distances in between.
The last issue is the issue of municipal borrowing. We think that it is an issue that we need to sort out quite urgently, to make sure that our municipalities are key agents of delivery, are able to have the capacity to deliver and are able to access the necessary funds required to be able to deliver the basic services that we, as the ANC, have continuously said we will continue to deliver.
In conclusion, the voices of the prophets of doom and despair are deafening. They are ashamed because our fiscal position is quite strong. Their prediction of a bleak future for South Africa is no more. Therefore, they have made a very serious miscalculation. Like cowards, they are ashamed to openly credit the good work that our Government has done thus far. What a shame on their part.
We know that, silently, they are wishing that we should fail, so that they can start making noise again. [Applause.]
Mr M I MAKOELA: Chairperson, although there is still room for improvement, one has got to start by mentioning the fact that the budget process in South Africa, as many people would agree, is one of the most open and transparent budget exercises one can find, and is equalled in very few countries around the world.
One needs also to mention the fact that, as a vehicle to promote co- operative governance and intergovernmental fiscal relations as well as to encourage proper financial management by both provincial and local governments spheres, the Division of Revenue Bill goes a long way in meeting most, if not all, of its objectives.
While there may be grounds for the argument that the timing of the passing of the Bill, which is after the provinces have tabled their budgets, may be inappropriate, we should also keep in mind that budget allocations are, more often than not, estimates of anticipated income which, in the event of unforeseen shortfalls, are provided for in clause 6 of the Bill.
As for consideration of inputs from stakeholders, it should be recognised that the participants in bodies such as the Budget Council and the Budget Forum, as well as in the FFC recommendations process, are essentially representatives of stakeholders whose inputs can be made before the process in the above bodies has run its course.
The allocation of grants to address the infrastructure backlogs at provincial and, especially, local government level is appreciated, as it represents recognition of capacity-building and the need to eliminate unfunded mandates, as provided for in clauses 14 and 27 of the Bill.
While conditional grants like those for HIV/Aids and those for the provision of infrastructure are somewhat overlapping and sometimes even appear to duplicate across departments, and while the role played by each department is recognised, there nevertheless appears to be a need to improve co-ordination of programmes as well as consolidating and streamlining the grants, so as to enhance the achievement of maximum results while improving support for provinces and local government, in terms of their administration-monitoring capacity.
As the Northern Province, we feel that the 2001-02 allocation will go some way towards enabling the province to realise its objective of embarking on a wide-ranging series of programmes to alleviate poverty among the majority of its people.
It is hoped that the tendency of national departments to leave their planning late, thereby aggravating the situation of non-spending and, therefore, roll-overs at lower levels, will be looked into and improved - not forgetting to appreciate the fact that the provincial tax base may, in the near future, be widened by the introduction of the anticipated provincial tax regulation Bill, which is meant to give effect to section 228 of the Constitution.
In conclusion, lest we forget, a budget is a political tool for the government of the day to give effect to its aims and objectives, as contained in its policy statements. [Applause.]
The DEPUTY CHAIRPERSON OF COMMITTEES: Mr Makoela, you had a lot of minutes which you put aside. Perhaps you will utilise them sometime in the future.
The DEPUTY MINISTER OF FINANCE: Chairperson, hon members, I do welcome the opportunity to deal with some of the issues that have been raised by hon members in the course of the debate. Maybe I should, first of all, thank hon members for their participation, and particularly those hon members that have commended the work we do in the National Treasury.
Of course, we are now the National Treasury. We have just had a successful transition from a situation where we had two departments, the Department of Finance and the Department of State Expenditure, to a situation where we now have the National Treasury. Of course, there are advantages to that because there is now greater co-ordination of the work that we do.
What became clear over time was that as we were reforming the budget process, putting in place new structures and new processes, some of the issues migrated to one department or the other. So there was a bit of a disjuncture and we are, therefore, happy to report that we had a successful transition in the establishment of the National Treasury and we have appointed all of the senior managers, in terms of the structure of the new department. Mr I Momoniat, who is sitting over there, is now the Deputy Director-General for Intergovernmental Fiscal Relations. [Applause.]
Precisely because we are dealing with the Division of Revenue Bill, it is important in this context that one does not downplay or dismiss the issues that have been raised, particularly on the timing of the tabling of the Division of Revenue Bill.
However, I do want to draw our attention to some of the related issues. There can be no suggestion that what we are doing currently is not constitutional, because it flows precisely from the Constitution. The Constitution, in section 214, actually says that an Act of Parliament must be enacted to provide for all of these issues that we are dealing with here. But, in addition to the Constitution, there is legislation in place, namely the Intergovernmental Fiscal Relations Act, which also outlines the procedures that are to be followed. So I think that firstly we need to locate properly what we are doing: that it is in terms of the Constitution as it exists, and that it is also in terms of legislation as it exists.
If hon members are raising the issue of us reviewing that, that is fine. That is something we can talk about, that is something that can be looked at by the Budget Council. But there must be no suggestion that what we are doing may be illegal or unconstitutional.
An additional point that does need to be made is that while the Division of Revenue Bill gets tabled when the national Budget is tabled in Parliament, it is not the first opportunity for members of Parliament to have some sense of how the nation’s resources are going to be allocated. We do, three or four months ahead of tabling the Budget, table the Medium-Term Budget Policy Statement. In that budget policy statement there are very good indications of how we are going to allocate the nation’s resources.
A additional issue that does arise is the issue of how we, as Parliament, together, of course, with the executive, engage around the budget policy statement. I know that there is work that is going on to try and improve the way Parliament deals and engages with the budget policy statement. Last year was an unfortunate year because it was a short year. We had the local elections and a lot of things had to be done within a short space of time.
In addition to the work that is being done by the budget reform task team, of which, I think, the chair of the committee is a member, namely to look at how Parliament engages with the budget and how we get to meet the constitutional requirements for Parliament to pass legislation that enables it to amend the Budget, one would hope that one of the things that we would be able to do is to have really have meaningful interaction once we table the budget policy statement.
Concerning the issue that has been raised about the Division of Revenue Bill perhaps doing too much - perhaps this is valid - one of the things that we are going to be doing later this year is to accommodate some of the financial management-related issues in the Public Finance Management Act so that largely, one is dealing with allocations in the Division of Revenue Bill.
With regard to the issue raised by the hon the MEC for finance in KwaZulu- Natal, I think that the language used is rather strong. I think to use the term ``patronising’’ fails to recognise why we have these provisions. When we are beginning to be successful in what we are trying to do, we must not forget where we come from. So these provisions are a recognition of some of the difficulties that exist. Therefore we are trying to put in place mechanisms that ensure that in cases where certain provisions, which are either in the Constitution, in legislation or in the decisions of the Budget Council, are not honoured, one does not continue to pump resources into an environment where there is no proper financial management and where there is no compliance with the Constitution or legislation that is in place or the decisions and resolutions of the Budget Council.
This is the reason, I think, that a province that has made substantial progress - and KwaZulu-Natal has made a lot of progress over the past few years - may be justified in feeling that a provision like this is not necessary from their vantage point. But if I were to come to the address by the hon Taabe here, it is an address that we welcome, given the difficulties that were there in the Mpumalanga province. There were very, very serious problems there, and it is, therefore, quite pleasing to hear this kind of an update, something that says: ``These are the things that we are doing in order to improve the situation in Mpumalanga.’’
While KwaZulu-Natal may feel that it no longer needs these kinds of provisions, we have got to recognise that our provinces are not all moving in step. We have provinces that are lagging behind. So these are the kinds of issues we can deal with in a forum such as the Budget Council, which is a forum that functions very, very well.
I think that the Budget Council is, really, a testimony to the maturing of our democracy, because we are able to come together there as all the provinces and the National Treasury. As hon members know, not all provinces are under the same political party in terms of leadership, but we are able to come together in that forum and agree on most issues.
That sentiment, as was raised by the hon Miller, is acknowledged, but I think that it is a matter that we can grapple with in the Budget Council.
The issue that I will agree on with the hon Miller is the whole approach to poverty alleviation. He raised the issue of whether we cannot rationalise the resources at our disposal in order to strengthen the most effective mechanisms that we have to alleviate poverty. Quite clearly, child support grants and the welfare grants are some of the most effective instruments in our hands to alleviate poverty, because these are moneys that support families, that take children to school and are therefore effective social safety nets. I think that our effort has got to be that we need to make sure that we are able to strengthen it in terms of the amount of resources that we are able to allocate for those social safety nets. This is the most effective instrument in alleviating poverty, but also in terms of an approved mechanism for disbursing those grants.
Indeed, if we say that the welfare grants and the child support grants are an effective instrument, I think it is inexcusable that up to this day we cannot have a good system of disbursing these amounts. I think that one of the greatest challenges facing all of us, national and provincial government alike, is to improve the situation at the paypoints, precisely because, if for no other reason, it is elderly people that go there.
In the Eastern Cape there have been more arrests and prosecutions in the welfare department of people who are involved in fraud and corruption. One of the things that has been done in the case of Bizana, for example, is that they have brought in the police to play a role at the paypoints. It is a good initiative, but the unfortunate thing about it is that the police are not used to administering the system. Our delays tend to be longer, so we are indeed challenged to make sure that we can improve the functioning of our payment system.
In relation again to the issue of poverty alleviation and the rationalisation of resources, one of the things under way currently as an initiative of the national Government is a comprehensive social security review that is going on right now. It is led by the Minister of Social Development, whom we have always known as the Minister for Welfare and Population Development. The Minister of Social Development is leading this process of a comprehensive social security review. The idea is that we must have a full picture of all of the programmes, the funds and the resources that we have at our disposal. We will then be able to see where there might be gaps such that our social safety net is unable to protect some sections or members of our society. I think it will also go a long way towards trying to come up with a much more streamlined poverty alleviation process.
The issue around spending capacity in the provinces is one of the discussions that we had in the Budget Council. In recognition of the fact that we now have greater resources in real terms, from this year going forward, we have got substantially more resources that are going to the provinces. One of the things that we spoke about in the council was that the provinces should begin to consider hiring some high-level skills that are needed in the provinces and which they could not fill in a constrained environment. With more resources going the way of provinces, it should be possible for provinces. We cannot prescribe to the provinces, especially in terms of the equitable share that goes to the provinces.
We do discuss the infrastructure grant, for instance, and we do try to say what the areas are where we think the infrastructure money can be utilised, such as schools, roads, health facilities. This is in support of the integrated rural development strategy. Broadly, those are the areas that we agreed upon as the areas for which we need to prioritise the use of the infrastructure money. We also discussed the issue that as a possibility, provinces can begin to hire some of the high-level skills that they need, for example in the management of hospitals, which we identified that as a particular example. Some of the issues around spending capacity could be met in that particular way.
The improvement of our economic performance as mentioned by Mr Theron is also important. One of the questions asked as we went on a variety of speaking engagements after the budget was: In the budget there is a projected growth rate of 3,5% this year and over the next two years. Is this not in conflict with the expressed view of the President that we should work towards achieving a growth rate of six per cent? What I really want to draw attention to is that one would have heard from the tone of the President and the tone of the Minister of Finance, just in which direction we are going. That direction really arises from our having managed to put in place an integrated economic programme that will see us overcoming a lot of the problems that face our economy.
It is an integrated framework that sees us looking at areas where we can intervene as Government, in order to improve the competitiveness of our economy. We identified energy, transport and telecommunications. These are areas where we have the ability to make certain interventions as Government, whether it is by way of policy initiatives or legislative initiatives or practical programmes. One such initiative is work that is going to be done this year to revamp the rolling stock which has been dilapidating over the past few years.
These are very specific interventions in areas where we can intervene as Government. We also identified a number of crosscutting issues that can support our programme for improved economic performance. We looked at issues of technology, as well as issues of human resource development, which is a key constraint in the South African economy. We also went further to identify growth areas. We identified exports as a growth area and within that we were able to focus on four key areas, namely agro processing, mining technology, automobiles and components, and clothing and textiles. In these are areas we intend to intensify our efforts towards greater and more diversified exports.
Another growth area that we have identified is the area of cultural industries such as our music and film industries, ensuring that we can market our country in an effective way as an attractive destination for foreign film shooting.
We also need to improve the quality and the marketing of our crafts. There are lots of crafts often made by rural people in South Africa. We need to provide the opportunity for them to access markets. We need to look at that in relation to our efforts in another growth sector, namely tourism. We will be investing in critical infrastructure for tourism, investing in training of people for service excellence and a whole range of other initiatives. These include entrepreneurship and the development of the growth of tourism enterprises, particularly black-owned tourist enterprises.
The other area that we have identified as a growth area is that of agriculture, where hon members are going to see substantial disposal of state-owned land for purposes of farmer settlement, etc.
We thus have this integrated framework, and the desired outcomes are to ensure that we can realise competitiveness, growth, job creation, black economic empowerment and the growth of small, medium and micro enterprises. These are the outcomes that we are looking for, and these are the things that we are putting up as key performance indicators against which our integrated economic programme will be judged.
While we may be saying that we project growth at 3,5%, we have higher levels in mind. But we also recognise that in order to reach those higher levels of growth, there are a lot of things that we need to do. For example, one of the constraints regarding investment in the telecommunications sector is that our policy environment does not provide certainty to a foreign investor who wants to come in and invest in this sector. [Time expired.] [Applause.]
Debate concluded.
Bill agreed to in accordance with section 65 of the Constitution.
CONSIDERATION OF SECOND REPORT OF SELECT COMMITTEE ON ECONOMIC AFFAIRS - CONSTITUTIVE ACT OF AFRICAN UNION
Order disposed of without debate.
Report adopted in accordance with section 65 of the Constitution.
CONSIDERATION OF REPORT OF SELECT COMMITTEE ON EDUCATION AND RECREATION - PROTECTION OF CULTURAL PROPERTY CONVENTION
Order disposed of without debate.
Report adopted in accordance with section 65 of the Constitution.
CONSIDERATION OF REPORT OF SELECT COMMITTEE ON EDUCATION AND RECREATION - CULTURAL PROPERTY (ILLICIT TRANSFER) CONVENTION
Order disposed of without debate. Report adopted in accordance with section 65 of the Constitution.
CONSIDERATION OF REPORT OF SELECT COMMITTEE ON EDUCATION AND RECREATION - ICCROM STATUTES
Order disposed of without debate.
Report adopted in accordance with section 65 of the Consitution.
The Council adjourned at 18:02. ____
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS
THURSDAY, 22 MARCH 2001
TABLINGS
National Assembly and National Council of Provinces:
Papers:
- The Speaker and the Chairperson:
Reports of the Auditor-General on the -
(a) Financial Statements of Mines and Works Compensation fund for
1999-2000 [RP 10-2001];
(b) Accounts of the Transkei Electricity Supply Corporation for 1994-
95, 1995-96, 1996-97 and for 1 April to 31 December 1997 [RP 184-
2000].
FRIDAY, 23 MARCH 2001
ANNOUNCEMENTS
National Assembly and National Council of Provinces:
- The Speaker and the Chairperson:
(1) The following Bill was introduced in the National Assembly on 23
March 2001 and referred to the Joint Tagging Mechanism (JTM) for
classification in terms of Joint Rule 160:
(i) Supreme Court Decree, 1990 (Ciskei) Amendment Bill [B 15 -
2001] (National Assembly - sec 75) - (Portfolio Committee on
Justice and Constitutional Development - National Assembly)
[Explanatory summary of Bill and prior notice of its
introduction published in Government Gazette No 22156 of 19
March 2001.]
- The Speaker and the Chairperson:
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 Portfolio Committee on
Finance and the Select Committee on Finance. The Report of the
Auditor-General contained in the following paper is referred to
the Standing Committee on Public Accounts for consideration and
report:
Report and Financial Statements of the South African Revenue
Service for 1999-2000, including Reports of the Auditor-General on
the Financial Statements of the South African Revenue Service:
Administered Revenue and Financial Statements of the South African
Revenue Service: Own Accounts for 1999-2000.
(2) The following papers are referred to the Portfolio Committee on
Trade and Industry and the Select Committee on Economic Affairs:
(a) Framework Agreement for the creation of a Free Trade Area
between Mercosul and the Republic of South Africa, tabled in
terms of section 231(3) of the Constitution, 1996.
(b) Explanatory Memorandum to the Framework Agreement.
(3) The following papers are referred to the Portfolo Committee on
Provincial and Local Government and the Select Committee on Local
Government and Administration:
(a) Report and Financial Statement of the Board for Municipal
Accountants for 1998-99.
(b) Report and Financial Statement of the Board for Municipal
Accountants for 1999-2000.
(4) The following paper is referred to the Standing Committee on
Public Accounts for consideration and report. It is also referred
to the Portfolio Committee on Public Enterprises and the Select
Committee on Labour and Public Enterprises for information:
Report of the Auditor-General on the Financial Statements of Vote
24 - Public Enterprises for 1999-2000 [RP 133-2000].
(5) The following papers are referred to the Portfolio Committee on
Education and the Select Committee on Education and Recreation:
(a) Government Notice No 1195 published in Government Gazette
No 21783 dated 22 November 2000, Education Laws Amendment Act,
2000 (Act No 53 of 2000).
(b) Government Notice No 1196 published in Government Gazette
No 21784 dated 22 November 2000, Higher Education Amendment
Act, 2000 (Act No 54 of 2000).
(c) Government Notice No 1355 published in Government Gazette
No 21783 dated 13 December 2000, Adult Basic Education and
Training Act, 2000 (Act No 52 of 2000).
(d) Government Notice No 73 published in Government Gazette No
22002 dated 22 January 2001, Amendment of Statute of the
University of Venda, made in terms of section 32 of the Higher
Education Act, 1997 (Act No 101 of 1997).
(e) Government Notice No 74 published in Government Gazette No
22003 dated 22 January 2001, Amendment of Statute of the
Technikon Free State, made in terms of section 32 of the
Higher Education Act, 1997 (Act No 101 of 1997).
(f) Government Notice No 75 published in Government Gazette No
22004 dated 22 January 2001, Amendment of Statute of the
Technikon Natal, made in terms of section 32 of the Higher
Education Act, 1997 (Act No 101 of 1997).
(g) Government Notice No 121 published in Government Gazette
No 22031 dated 9 February 2001, Item for inclusion as an
addendum to the National Policy on the Conduct of Senior
Certificate Examination: Supplementary Examination, made in
terms of section 3(4)(1) of the National Education Policy Act,
1996 (Act No 27 of 1996).
(h) Government Notice No 122 published in Government Gazette
No 22031 dated 9 February 2001, Item for inclusion as an
addendum to the National Policy on the Conduct of Senior
Certificate Examination: Memorandum, made in terms of section
3(4)(1) of the National Education Policy Act, 1996 (Act No 27
of 1996).
(i) Government Notice No 123 published in Government Gazette
No 22031 dated 9 February 2001, Item for inclusion as an
addendum to the National Policy on the Conduct of Senior
Certificate Examination: Meetings of Examiners and Moderators,
made in terms of section 3(4)(1) of the National Education
Policy Act, 1996 (Act No 27 of 1996).
TABLINGS:
National Assembly and National Council of Provinces:
Papers:
- The Speaker and the Chairperson:
Reports of the Auditor-General on the -
(a) Report of the Auditor-General on the Financial Statements of the
Refugee Relief Fund for 1999-2000 [RP 12-2001].
(b) Report of the Auditor-General on the Financial Statements of the
High School Vorentoe Disaster Fund for 1999-2000 [RP 13-2001].
National Council of Provinces:
- The Chairperson:
The President of the Republic submitted the following letter, dated 14
March 2001, to the Chairperson informing Parliament of the employment
of the South African National Defence Force:
EMPLOYMENT OF THE SOUTH AFRICAN NATIONAL DEFENCE FORCE IN COMPLIANCE
WITH THE INTERNATIONAL OBLIGATIONS OF THE REPUBLIC OF MOZAMBIQUE FOR
HUMANITARIAN ASSISTANCE DURING WIDESPREAD FLOODING.
This serves to inform the National Council of Provinces that I
authorised the employment of South African National Defence Force
(SANDF) personnel to fulfill the international obligations of the
Republic of South Africa towards the Government of the Republic of
Mozambique in providing humanitarian assistance during widespread
flooding in the Zambezia and Sofala Provinces.
This employment was authorised in accordance with the provisions of
Section 82(4)(b)(ii) read with Section 227(1)(d) of the Constitution of
the Republic of South Africa, 1993 (Act No 200 of 1993), [which
Sections continue to be in force in terms of Item 24(1) of Schedule 6
to the Constitution of the Republic of South Africa, 1996 (Act No 108
of 1996)], read further with Section 3(2)(a)(iv) of the Defence Act,
1957 (Act No 44 of 1957).
(a) Personnel
A total of 83 personnel have been be deployed to Mozambique: 1X Mission
Commander; 5X Mobile Air Operation Team (MAOT) Personnel; 3X Command
Post Personnel; 4X Translators; 8X Protection Personnel; 16X Air Crew;
16X Ground Crew; 5X Telecommunication Personnel; 1X Logistical Officer;
1X Media Liaison Officer; 1X Doctor; 6X Medical Personnel; 1X Petroleum
Oil and Lubricant Officer; 1X CJ Ops Liaison Officer and 6X Divers.
(b) Aircraft
4X Oryx Helicopters; 2X BK117 Helicopters; 2X C130 Transport aircraft;
1x C212 Light Transport Aircraft.
The SANDF members were initially deployed for a total of fourteen days
over the period 24 February 2001 to 09 March 2001. Due to the fact that
the actual deployment was only rendered on the 01 March 2001, the
period employment was extended until the 15 March 2001.
FINANCIAL IMPLICATIONS
The estimated financial implications are as follows:
(a) Direct Cost required for the periodR 2 632 659,46
(i) Personnel Cost (allowance, accommodations, etc)R 1 266
194,10
(ii) Medical CostR11 732,95
(iii) Diesel, petrol and fuel filtersR32 076,72
(iv) MapsR3 500,00
(v) Aircraft fuelR1 319 155,69
(b) Flying hour cost (excluding fuel)R11 392 599,00
(c) Total Marginal CostR14 025 258,46
The cost indicated above does not include landing, parking,
navigational ground support equipment and lighting surcharge fees.
The National Treasury is responsible for the costs of this Deployment.
I will also communicate this report to the Members of the National
Assembly, and wish to request that you bring the contents of this
report to the notice of the National Council of Provinces.
Regards
T M MBEKI
MONDAY 26 MARCH 2001
TABLINGS:
National Assembly and National Council of Provinces:
Papers:
- The Speaker and the Chairperson:
Reports of the Auditor-General on the -
(a) Financial Statements of the Independent Development Trust for
1998-99 [RP 6-2001];
(b) Financial Statements of the Temporary Employees' Pension and
Provident Fund for 1997-98 and 1998-99 [RP 9-2001];
(c) Financial Statements of Refsa (Pty) Ltd for the period ended 14
July 1998 [RP 22-2001].
COMMITTEE REPORTS:
National Council of Provinces:
-
Report of the Select Committee on Education and Recreation on the National Council for Library and Information Services Bill [B 44B - 2000] (National Assembly - sec 75), dated 20 March 2001:
The Select Committee on Education and Recreation, having considered the subject of the National Council for Library and Information Services Bill [B 44B - 2000] (National Assembly - sec 75), referred to it, reports the Bill with proposed amendments, as follows: CLAUSE 5
-
On page 4, in line 23, after ``members’’ to insert:
, nine of whom must be representative of the different provinces, CLAUSE 9
-
On page 6, in line 19, to omit all the words after
for'' up to and includingappointment’’ in line 20 and to substitute ``a period of three years’’.CLAUSE 14 -
On page 8, in line 29, after ``Technology’’ to insert:
and the Select Committee on Education and Recreation
-
-
Report of the Select Committee on Public Services on the Housing Amendment Bill [B 7 - 2001] (National Council of Provinces - sec 76), dated 26 March 2001:
The Select Committee on Public Services, having considered the subject of the Housing Amendment Bill [B 7 - 2001] (National Council of Provinces - sec 76), referred to it and classified by the Joint Tagging Mechanism as a section 76 Bill, reports the Bill with amendments [B 7A - 2001].
-
Report of the Select Committee on Finance on the Division of Revenue Bill [B 11B - 2001] (National Assembly - sec 76), dated 26 March 2001:
The Select Committee on Finance, having considered the subject of the
Division of Revenue Bill [B 11B - 2001] (National Assembly - sec 76),
referred to it, reports the Bill with amendments [B 11C - 2001].
The Committee wishes to report further, as follows:
A. Introduction
The Committee held public hearings on Tuesday 6 March and
Wednesday 7 March 2001, in order to consider the Bill. The
following stakeholders participated: National Treasury; the
Financial & Fiscal Commission; the South African Local Government
Association (SALGA); and the Auditor-General. In addition, the
following national departments participated: Health; Education;
Forestry; Housing; Public Works; Social Development; and
Provincial and Local Government.
The Minister of Health and the Deputy Minister of Finance were in
attendance.
The Committee is mindful of the fact that South Africa's fiscal
environment and intergovernmental relations give priority to
servicing of the national debt. The costs of servicing debt are
met before resources are shared between the three spheres of
government. In addition, the Committee observes that the fiscal
system is maturing. Although the vertical division of revenue
between spheres is determined by the Cabinet (a political
decision), a process of extensive consultation within the
executive was adhered to, which included the MECs responsible for
Finance, organised local government, the Budget Council, the
Financial and Fiscal Commission, and the Budget Forum. After debt-
servicing costs and contingency reserves are deducted, the total
to be shared between the three spheres of government amounts to
R208,1 billion, R223,6 billion and R238,5 billion over the three
MTEF years, respectively.
The Committee also noted that the national share increases from
39,4 per cent in 2000-01 to 40,5 in 2001-02 and declines
marginally to 40,0 per cent in 2003-04. The share dedicated to
local government also rises from 3,0 per cent in 2000-01 to 3,3
per cent in 2003-04. The provincial share declines
correspondingly, from 57,6 per cent in 2000-01 to 56,4 per cent in
2001-02 and increases marginally to 56,7 per cent 2003-04. It is
important to note that this amount includes both equitable shares
and conditional grants. Equitable shares refer to the allocation
of revenue to the national, provincial and local spheres of
government, as required by the Constitution, while conditional
grants are transfers from the national budgets to subnational
governments. They are determined by the national government and
are earmarked for specific priority programmes. They are listed in
the Bill, which also stipulates the monitoring and reporting
requirements for all conditional grants. Conditional grants were
introduced into the intergovernmental system in 1998. The
objectives of conditional grants are as follows:
1. To provide for national priorities in provincial budgets.
2. To promote national norms and standards.
3. To compensate provinces for cross-boundary flows.
4. To provide specialised services and to effect transition by
supporting capacity building.
The combined conditional grants for provinces and local government
amount to R1,7 billion rands. 88,7 per cent of national transfer
to provinces constitute equitable shares, while the remaining 11,3
per cent flows through conditional grants. However, in the case of
local government, conditional grants constitute 60 per cent of the
total transfer. It is the contention of the Committee that the
administration and performance of conditional grants are in urgent
need of review. This urgent need prompted the Committee to host
the public hearings on the Bill and to invite affected national
departments. While the administration of conditional grants may
have improved, huge underspending on a number of grants is common.
This non-spending adversely affects the delivery of important
basic social services.
The division of resources between the three spheres is determined
primarily by the initial baseline allocation in the 2000 budget,
together with additional priorities identified for the additional
resources. New priorities identified over and above the existing
priorities are the following:
(1) Increasing child support grants.
(2) Counteracting the HIV/Aids epidemic;
(3) Poverty alleviation programmes, including social security and
provision of basic services to the poor.
(4) Additional costs arising from new demarcation of
municipalities.
(5) Increasing infrastructure spending in order to redress the
backlogs in maintenance; rehabilitate and to promote the
development of infrastructure.
(6) The need to improve the efficiency of the criminal justice
system.
B. Key issues for committee consideration
1. Conditional grants
(1) Conditional grants to provinces
In 2000 the National Treasury conducted a review of the
conditional grant framework. The review identified the
need to reduce the number of conditional grants in order
to rationalise the number of grants.
The Departments of Health and of Housing and the National
Treasury administer the largest proportion of conditional
grants to provinces.
Four small grants have been merged into the supplementary
grant administered by the National Treasury. These grants
are the Financial Management Grant on the Treasury
Budget, a capacity building grant on the Department of
Housing's Budet Vote, the National Land Transport
Transition Act Grant on the Department of Transport's
Budget Vote, and the R293 grant on the Department of
Provincial and Local Government's Budget Vote.
The R293 grant forms part of the Supplementary Grant in
2001-02, after which it will go into the provincial
equitable share. The Supplementary Grant also includes
R243 million over the MTEF period for pilot projects to
improve financial management in health departments and
hospital management.
New conditional grants introduced in the 2001 budget are
the Infrastucture Grants, the Pretoria Academic Hospital
Grant and the Early Childhood Development Grant.
Provinces required to repair flood damage and supplement
infrastructure expenditure in social services such as
roads, schools and health facilities, will use
Infrastructure Grants. The Pretoria Academic Hospital
Grant will support the construction of new buildings,
while the early Childhood Development Grant will fund
pilot projects in relation to early childhood and pre-
primary schooling. Previously the Department of Education
used donor funding to finance these projects. In
addition, these new grants were proceeded with much
sooner, considerable advanced planning and policies being
in place already. The availability of funds through
conditional grants is commensurate with the
implementation phase of the programme.
The Department of Health administers eight conditional
grants, the Department of Provincial and Local Government
five and the Department of Social Development two. The
Health grants comprise over 42 per cent of the total
conditional grants to provinces.
Gauteng raised the concern that conditional grants are so
conditional that they are extremely constraining and are
encouraging roll-overs.
(2) Conditional grants to local governments
The following are the new local government conditional grants:
(a) Local Government Restructuring Grant
This will assist large municipalities to undertake
complex institutional and budgetary restructuring
exercises. The costs imposed, are deemed to be short-
term but their yield is realised only in the medium
term. Municipalities with budgets of over R300
million are eligible for these grants.
(b) Local Government Support Grant
This will assist the smaller municipalities. It is
likely that this grant will merge with the Local
Government Restructuring Grant.
(c) Municipal Finance Management Grant
This will assist municipalities to reform their
financial management and budgeting practices.
Allocations are made for each year of the MTEF
period.
(d) Municipal Systems Improvement Grant
It will have a five-year lifespan and will be
allocated in terms of a framework determined by an
interdepartmental committee.
(e) Transition Grant
It has been established to assist municipalities to
meet the one-off costs incurred as a result of
merging of municipalities. The life-span of this
grant extends over two years; it will subsequently be
incorporated into equitable shares.
2. Municipal borrowing
The encouragement of a municipal debt market is a new
development for local government financing. While an active
debt market for municipalities will promote greater
responsibility, regulations will be in place to govern
municipal borrowing. This will establish requirements for
raising loans and put in place a framework unambiguously
outlining the positions of both borrowers and lenders.
The Committee will approach the Asset and Liability Management
Division of the National Treasury for clarity on the impact of
additional activity of municipalities in the bond market on
interest rates and on the level of state debt.
3. Issues raised during deliberations
(1) Underspending of conditional grants
Department of Education: With regard to education
conditional grants in respect of Financial Management and
Quality Enhancement, underspending has been noted for two
consecutive years. In the current year, reports reflect
that spending is still very slow, amounting to less than
50 per cent for the nine months into the financial year.
The public hearing was informed that only 37% of the
total allocation was spent as at 31 January 2001.
Department of Health: The Committee has observed that
serious underspending is being recorded in respect of the
Hospital Rehabilitation Grant, Redistribution of
Specialised Health Services Grant and the Integrated
Nutrition Programme Grant. The Committee was also
informed that at least 68 per cent of the Integrated
Nutrition Programme has not been spent in the current
financial year. Underspending has been recorded for at
least three consecutive years. In addition, with regard
to the Redistribution of Specialised Health Services
Conditional Grant, trends up to the end of December 2000
show that spending is still very low, at less than 40 per
cent of the allocated amount. However, the construction
of the Umtata Regional Hospital is proceeding as
scheduled and the national Department of Health has
already shouldered its share of the construction costs.
Department of Housing: With respect to the Housing Fund
Conditional Grant, the Committee learnt that
underspending occurred in the 1999 financial year while
current spending for is only about 52% of the budgeted
amount. With respect to the Human Resettlement
Redevelopment Pilot Conditional Grant, it is observed
that underspending also occurred in the 1999 financial
year, and that by 31 December 2000 financial spending was
less 30 per cent of the allocated amount.
The following explanations were offered for the poor
performance of conditional grants:
(a) We were informed that originally inexperience with
the conditional grants mechanism, coupled with delays
and uncertainty about the release of funds, made
proper planning very difficult.
(b) In subsequent years, inexperience and uncertainty
about how exactly the mechanism was supposed to
operate, continued to present some difficulties. In
addition, the capacity of the Department (both at
provincial and national level) was not fully geared
for optimal conceptualisation, management and
implementation of the conditional grant mechanism.
This led to late planning.
(c) Delays also occurred as a result of the
tender/procurement process (Departments of Housing,
of Education and of Health).
(d) Moreover, the unanticipated difficulties associated
with co-ordination of projects are a major cause of
underspending of conditional grants. Most projects
(Housing, Education, Social Development and Health)
involve negotiations at school, municipal, district,
provincial and national level, which is a time-
consuming factor. This is further aggravated by the
lack of capacity in some provinces and
municipalities.
(e) A crucial element of underspending is also the
availability of donor funds for similar projects
(Department of Education). The process of accessing
donor funds is a lot simpler and requires fewer
administrative hurdles.
(f) Some grants (for example HIV/Aids) were introduced
late in the financial year. Such grants were
introduced in the Supplementary Budget for 2000-01,
which was tabled in Parliament on 14 June 2000. The
transfer of funds was gazetted as late as 28 August
2000. These projects commenced in late 2000. However,
spending for such grants will increase substantially
in 2001.
(g) Natural phenomena such as floods and tornadoes
resulted in under-utilisation of conditional grants
(Department of Housing in the Eastern Cape, Northern
Province and Mpumalanga). Although the duration of
natural disasters was short, the periods of delay
were logically beyond the incidence of the disaster
itself. In addition, since municipalities and local
governments undertake construction of homes in the
Eastern Cape, the recent local government election
had an adverse effect on delivery of houses.
(h) In some provinces junior public servants without
appropriate skills are given the responsibility of
administering huge grants.
Key steps are taken to improve the management of these
grants.
(i) The participation of senior leadership (for example
HEDCOM - Head of Education Committee - and CEM
(Council of Education Ministers) in determining
priorities right through the sector.
(ii) A dedicated capacity and institutional
mechanism at Ministry level for realistic planning
and co-ordination at national and provincial level
have been established. These changes and greater
clarity on the part of the National Treasury and
national Departments on how the conditional grant
mechanism is to function, have created conditions
that should enhance performance.
The Committee and other relevant select committees in the
NCOP will closely monitor this spending pattern of
conditional grants, which has serious consequences for
delivery of services.
(2) Accountability requirements of conditional grants
Accountability concerns, with regard to conditional
grants, were raised by the Department of Water Affairs
and Forestry and the Office of the Auditor-General. The
Auditor-General argued that Part IV, V and VI of the Bill
could be more appropriately contained in long-term
legislation like the Public Finance Management Act,
instead of an annualised Bill. The Office of the Auditor-
General also argued that municipalities do not properly
disclose conditional grants in their financial
statements. Disclosures by municipalities and government
departments are inadequate because the prescribed format
of financial statements are inadequate to address them.
In addition, it is highly unlikely that municipalities
and departments will be able to comply with the
requirement of conditional grants since internal audit
functions are not functional yet. The Auditor-General may
not be in a position to conduct a full audit, especially
when audit fees are still outstanding. We were informed
that the transfer of provincial funds to suspense
accounts is also unconstitutional.
(3) Clustering of conditional grants
There are too many conditional grants in the system. For
example, there are three HIV/Aids grants which are
allocated to the Departments of Health, of Education and
of Social Development. While the purposes of each of
these grants are different, substantial opportunities
exist for the reclustering of conditional grants. The
purpose of the Health grant is to improve access to
voluntary HIV counselling, testing and community
mobilisation; the purpose of the education grant is to
deliver life skills and HIV/AIDS education in schools;
the purpose of the Social Development grant is to develop
home-based care programmes in communities. Similarly, the
Provincial Infrastructure Grants and the Consolidated
Municipal Infrastructue Programme could also be
reorganised.
(4) Specific clauses of Bill
Discussions on the following clauses are aimed at further
improving the Bill:
(a) Clause 15(2), which refers to the conversion of
conditional grants to unconditional transfers to
provinces and municipalities, weakens the financial
monitoring systems of the grants. However, the
National Treasury argues that this conversion is used
as an instrument to prompt national departments into
compliance with the reporting requirements of
conditional grants. The National Treasury further
argues that the conversion of grants to provincial
equitable shares do not compromise financial
oversight responsibilities because the Auditor-
General would still have to audit provincial
financial records.
(b) The Office of the Auditor-General also alleges that
Clause 31(3) of the Bill over-extends its brief
because the recovery of funds from negligent
individuals is not the responsibility of an external
auditor. This executioner function should reside with
the NCOP or the Legislator.
The Committee is of the view that, while the intention of
this clause is noteworthy, the Bill is not an appropriate
place for such a clause. The Committee is further of the
view that this must be dealt with in the PFMA. In
addition, if the government or the department has
intentions of extending the powers of the Auditor-
General, it must be undertaken in accordance with section
188(4) of the Constitution.
(5) Concerns of Salga
A concern was raised by Salga that, although the national
Executive issues proclamations on free basic services, no
consideration is given to -
(a) prior consultations with Salga;
(b) additional provisions of financial resources to this
sphere of government for the purposes of providing
free basic services. The National Executive
proclamation is tantamount to an unfunded mandate.
In addition, Salga alleges that -
(i) 2001 increases in equitable share are misleading,
because they were not new allocations but a mere
redistribution of grants from provinces and/or old
black local authorities;
(ii) equitable shares should not be used to provide
free basic services, but a specific fund should be
made available just to render this service.
Salga argues that the cost for the provision of basic
services was 300 per cent higher than the equitable share
made available to municipalities. However, this view was
strongly contested by the National Treasury, the
Department of Provincial and Local Government and the
Financial and Fiscal Commission. They all argued that the
increased equitable share of local government and an
internal subsidy system should be designed in such a way
that local government and municipalities should be able
to play their constitutional role in the provision of
basic services to the poor.
Since Salga receives its allocation from the Department
of Local and Provincial Government, instead of provision
being made for it in the Division of Revenue Bill, the
question raised is: To whom will it be accountable, and
when will it give clarity on utilisation of government
transfers?
(6) Timing and tabling of Bill
The contention is that, if MECs must release their
provincial budgets at least within two weeks after the
national Budget, it would suggest that the vertical
division, as stipulated in the Bill, has been accepted
prior to it having been passed by Parliament. This
questions the value of hosting public hearings on a Bill
whose contents have received acceptance by provincial
Legislatures without formal acceptance by the NCOP and
the National Assembly. The Intergovernmental Fiscal
Relations Act, 1997, provides the legal basis for the
simultaneous tabling of the Division of the Revenue Act
with the National Budget. This legal requirement should
be reviewed!
(7) Three-year allocation of conditional grants to
municipalities
The Department of Provincial and Local Government
understands the need to have predictability and certainty
in the allocation of grants to municipalities, and shares
their understanding with the National Treasury that a
movement to a three-year allocation for municipalities
will enhance planning. However, it will be extremely
difficult for the Department to provide three-year
allocations before the next financial period, but it will
honour its obligation to submit its report to the
National Treasury by 15 May 2001.
In addition, the Department expresses reservations about
instituting fixed allocations to municipalities whose
conditional grant needs may change over the MTEF period.
The Committee welcomes the Transitional Grant for the
purposes of restructuring municipalities. The life-span
of these grants is two years.
(8) Reporting by provinces and municipalities
Provinces and municipalities are expected to report to
the national department, which would then be able to
assess the performance of conditional grants. However,
little feedback is received from affected institutions.
Some departments (like Provincial and Local Government)
resort to drastic measures by withholding funds from non-
reporting provinces and municipalities. The National
Treasury is subsequently informed of such measures.
Without these reports, no assessment can be made of
whether objectives of grants have been met or whether
targets have been reached. The inappropriate use of funds
designed for re-registration of social security
(Department of Social Development) beneficiaries in the
provinces is a good example.
(9) Beneficiaries of social security grants and bank charges
The Committee was concerned that poor beneficiaries of
social securities are still burdened with bank charges if
their social grants are collected from the conventional
banking sector. This question was raised separately, both
to the Department of Social Development and to the
National Treasury. The response was that representations
have been made to the Banking Council with a view to
excluding bank charges and minimum balance requirements
for accounts held by beneficiaries of social security
grants. Discussion on such service agreements continues
and the Banking Council is amenable to such arrangements,
but these must be subject to transforming the pension
beneficiaries system.
(10)Classification of municipalities
Although the equitable share will be distributed directly
to ``unicity'' metropolitan authorities and category B
municipalities, the division of powers between category B
and category C municipalities is crucial. While category
C municipalities' revenue base is largely RSC levies, it
will be in receipt of equitable shares when there is no
category B municipality in the district and when that
category C municipality carries out the relevant
functions.
However, the Committee was informed by Salga that
sufficient progress has been made to ensure that category
C municipalities are phased out within a year.
Nevertheless, the Committee is of the opinion that this
transition may take much longer, and we will observe the
progress in this regard.
C. Recommendations
The Committee recommends the following:
1. Review of conditional grant mechanisms
Consideration must be given to the following:
(1) There are too many conditional grants in the system, and
they must therefore be consolidated and rationalised to
improve effectiveness.
(2) The institution of non-financial monitoring mechanisms, so
that the evaluation of grants are based not only on
spending criteria but also on provision of service.
Questions such as whether each undernourished child in a
school receives a food parcel and whether each RDP-funded
house is received by the very poor and needy rather than
those already in possession of homes in a another area,
are good examples of non-financial monitoring. Members of
Parliament and civil society bodies must also play a
crucial role in exercising oversight responsibility.
(3) Timing and appropriate release of grants. Grants should be
promptly released by the original source so that all
spheres of government may work in a single continuum.
This would result in a constant flow of funds through the
intergovernmental system, as required in Clause 27 of the
Bill.
(4) Improving the design of grants is crucial to the
functioning of the entire system of conditional grants.
Clear, and perhaps simplified, conditional requirements
also have a bearing on the performance of grants.
(5) The tabling of the Division of Revenue Bill together with
the National Budget on Budget Day should be further
explored.
(6) Consideration should be given to the transfer of the
primary school feeding scheme to the Department of
Education, because it has the necessary infrastructure to
provide such a service.
(7) Follow-up on the negotiations between the Department of
Social Development and the banking sector on the removal
of finance and interest charges for beneficiaries of
Social Security grants.
(8) Invite the Deputy Director-General of the Asset and
Liability Management Division of the National Treasury to
address the Committee on the impact of local government
participation in capital markets.
(9) Host further discussions on conditional grants and local
government financing.
(10)National Departments and provinces are expected to comply
with the requirements of the PFMA, with regard to the
employment of Chief Financial Officers for the
administration of conditional grants.
D. Conclusion
The Committee congratulates the participants of the public hearing
on their detailed and frank submissions.
In addition, the Committee thanks all participants for their
contributions and looks forward to a long and beneficial
association with them.
More importantly, the Committee also conveys its special word of
appreciation to the Directors-General of the following national
departments for their active participation in the deliberations:
Health; Education; Water Affairs and Forestry; Housing; Public
Works; Social Development; and Provincial and Local Government.
The substantial contributions of the Minister of Health and the
Deputy Minister of Finance are also appreciated by the Committee.
The Committee would make the monitoring of conditional grants and
local government financing one of its key features of activity
during the forthcoming financial year. We will continue with our
engagement with affected stakeholders in this regard.
TUESDAY, 27 MARCH 2001
ANNOUNCEMENTS:
National Assembly and National Council of Provinces:
- The Speaker and the Chairperson:
(1) The Minister of Public Enterprises on 22 March 2001 submitted a
draft of the Eskom Conversion Bill, 2001, and a memorandum
explaining the objects of the proposed legislation, to the Speaker
and the Chairperson in terms of Joint Rule 159. The draft has been
referred by the Speaker and the Chairperson to the Portfolio
Committee on Public Enterprises and the Select Committee on Labour
and Public Enterprises, respectively, in accordance with Joint
Rule 159(2).
(2) The following Bill was introduced in the National Assembly on 27
March 2001 and referred to the Joint Tagging Mechanism (JTM) for
classification in terms of Joint Rule 160:
(i) Eskom Conversion Bill [B 16 - 2001] (National Assembly -
sec 75) - (Portfolio Committee on Public Enterprises -
National Assembly) [Explanatory summary of Bill and prior
notice of its introduction published in Government Gazette No
22116 of 2 March 2001.]
National Council of Provinces:
- The Chairperson:
Message from National Assembly to National Council of Provinces:
Bill passed by National Assembly on 27 March 2001 and transmitted for
concurrence:
(i) Special Investigating Units and Special Tribunals Amendment Bill
[B 9B - 2001] (National Assembly - sec 75).
The Bill has been referred to the Select Committee on Security and
Constitutional Affairs of the National Council of Provinces.
- The Chairperson:
Correspondence received from the Minister for Justice and
Constitutional Development in response to a resolution of the National
Council of Provinces on 17 May 2000.
Copies of the correspondence are available from the office of Clerk of
the Papers.
TABLINGS:
National Assembly and National Council of Provinces:
Papers:
- The Speaker and the Chairperson:
Reports of the Auditor-General on the -
(a) Financial Statements of the President's Fund for 1999-2000 [RP 7-
2001];
(b) Financial Statements of the State President's Fund for 1997-98,
1998-99 and 1999-2000 [RP 14-2001].
- The Minister of Social Development:
(a) Report of the Ministerial Committee on Abuse, Neglect and Ill-
treatment of Older Persons, Volume 1 (Main Report).
(b) Report of the Ministerial Committee on Abuse, Neglect and Ill-
treatment of Older Persons, Volume 2 (Provincial Reports).