WEDNESDAY, 25 JUNE 2003 __

          PROCEEDINGS OF THE NATIONAL COUNCIL OF PROVINCES
                                ____

The Council met at 14:10.

The Chairperson took the Chair and requested members to observe a moment of silence for prayers or meditation.

QUESTIONS AND REPLIES - see that book.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS - see col 000.

The CHAIRPERSON OF THE NCOP: Order! Hon members, we shall proceed to deal with Questions as per the Order Paper. We are expecting quite a number of the members of the executive to be present during this Question time. This has been arranged well in time. I’m not certain of the reason for the absence of many of the Ministers who will respond, but we are going to proceed.

                          NOTICES OF MOTION

Ms B N SONO: Madam Chair, I hereby give notice that I shall move at the next sitting of the House:

That the Council -

(1) notes with great dissatisfaction -

   (a)   the  huge  underspending  on  capital  expenditure  by  various
       provinces to the tune of R2,5 billion for the 2002-03  financial
       year;


   (b)   that  the  shockingly  poor  expenditure  of   the   provincial
       governments, coupled with certain national  departments,  leaves
       much to  be  desired  considering  the  levels  of  poverty  and
       unemployment in the country; and

(2) commends the budget committee decision to undertake study tours to the affected provinces; and

(3) urges that further measures be employed to seriously address capacity problems at the different levels of government.

         ACHIEVEMENTS OF FEMALE AIR FORCE CANDIDATE OFFICER

                         (Draft Resolution)

Dr E A CONROY: Voorsitter, ek stel sonder kennisgewing voor:

Dat die Raad -

(1) met trots kennis neem van die prestasie van me Heybrech van Niekerk, ‘n 21-jarige lugmagstudent, wat as kandidaat-offisier die beste in haar klas presteer het om sodoende die eerste ontvanger van die Suid- Afrikaanse Lugmag se gesogte silwer Wilkinson lugeskaderswaard te word en ook twee ander lugmagtoekennings, naamlik die offisierskaptrofee en die leierskaptrofee te ontvang en so, weer eens, bewys het dat die skone geslag geen duim vir hul manlike eweknieë hoef terug te staan nie; en

(2) haar alle sukses en nuwe hoogtes in haar militêre vlieëniersloopbaan toewens. (Translation of Afrikaans draft resolution follows.)

[Dr E A CONROY: Chairperson, I move without notice:

That the Council -

(1) notes with pride the achievement of Ms Heybrech van Niekerk, a 21- year-old air force student who as a candidate officer performed best in her class to become the first recipient of the South African Air Force’s sought-after silver Wilkinson air squadron sword and also of two other air force awards, namely the officership trophy and the leadership trophy and so, once again, proved that the fair sex does not have to take a back seat to their male counterparts at all; and

(2) wishes her every success and new heights in her career as a military pilot.]

Motion agreed to in accordance with section 65 of the Constitution.

                      STRENGTHENING OF THE RAND

                         (Draft Resolution)

Mr G A LUCAS: Chairperson, I move without notice:

That the Council -

(1) notes and appreciates the report in the Cape Times about the decrease in basic food prices following the strengthening of the rand;

(2) further notes the good news about the continued strengthening of the rand to R7,76 relative to the American dollar as reported in the Financial Indicators report this morning;

(3) believes that a strong rand will further bring about positive spin- offs for all South African citizens;

(4) acknowledges the strengthening of the rand signals the sound leadership and effective management by the South African Government; and

(5) therefore calls upon all members of the Council to support the government in its efforts to alleviate poverty whilst at the same time efficiently managing the South African economy.

Motion agreed to in accordance with section 65 of the Constitution.

    HUMAN TESTING OF FIRST-EVER AIDS VACCINE FOR C-STRAIN OF HIV
                         (Draft Resolution)

Dr P J C NEL: Madam Chair, I move without notice:

That the Council -

(1) notes that -

   (a)  the Medicines Control Council has approved South Africa's  first
       Aids vaccine trial for human studies;


   (b)  this means that human testing of the  first-ever  Aids  vaccine,
       based  exclusively  on  the  C-strain  of  HIV,   which   occurs
       predominantly in Southern Africa, could start  in  South  Africa
       within the next two months;


   (c)  this is a triumph for the developing  world  as  resources  have
       previously been  concentrated  on  developing  vaccines  against
       European and North American strains; and   (2) further notes that -


   (a)  there are over 100 volunteers in Soweto waiting  to  participate
       in the initial trials; and


   (b)  Dr Reg Broekman, head of the Chris Hani Baragwanath Hospital  in
       Soweto, who is HIV-negative, has also volunteered to participate
       in the trial.

Motion agreed to in accordance with section 65 of the Constitution.

             UNPARLIAMENTARY CONDUCT BY DEPUTY MINISTER

                         (Draft Resolution)

Mr L G LEVER: Chairperson, I move without notice:

That the Council -

(1) notes that -

   (a)  this House had, until recently, maintained a  sense  of  dignity
       and decorum, which was envied by many in the National Assembly;


   (b)  the  hon  Deputy  Minister  of  Defence,  Ms  Madlala-Routledge,
       maligned my colleagues in the National  Assembly  in  a  fashion
       that was unparliamentary and not in keeping with the decorum  of
       this House; and


   (c)  this is rich coming from the hon Deputy Minister  as  there  are
       several  well-known  imbibers  in  her  party  in  the  National
       Assembly;

(2) that this House resolves to ask the hon Deputy Minister to apologise to this House and my colleagues in the National Assembly, failing which I give fair warning that we will give as good as we get; and (3) finally, that this House notes that this downward slide and its inevitable result was started by an ANC Deputy Minister.

[Interjections.]

The CHAIRPERSON OF THE NCOP: Is there any objection to that motion? There is an objection. The motion will therefore become a notice of a motion.

           INCREASING RATE OF CAR HIJACKINGS IN CAPE TOWN

                         (Draft Resolution)

Mr T RALANE: Chair, I move without notice:

That the Council -

(1) notes with concern the recent newspaper reports that hijackers may now be quitting the Gauteng province for Cape Town, thereby increasing incidents of car hijacking;

(2) further notes and supports plans by the acting Western Cape Provincial Commissioner to curb these acts of violent crimes which recently led to violent deaths of motorists in the province;

(3) calls upon car owners to be vigilant of these criminals and exercise caution when driving in hotspots identified by the Western Cape police; and

(4) calls upon communities in the Western Cape to support the police in their efforts of rooting out criminals in the province.

Motion agreed to in accordance with section 65 of the Constitution.

                      CHILD MOLESTER IMPRISONED

                         (Draft Resolution)

Mrs E N LUBIDLA: Chairperson, I wish to move without notice: That the Council -

(1) notes that Mr James McNeil has finally been put behind bars for abusing and molesting children whilst he was Father Christmas;

(2) further notes that some of his victims have since not recovered from this ordeal;

(3) believes that such acts of child abuse cannot be tolerated in our democratic South Africa;

(4) further believes that anyone, whatever age, who abuses children does not deserve to live amongst the communities; and

(5) therefore commends the police and the prosecution team for successfully putting Mr McNeil where he belongs, behind bars.

Mr A E VAN NIEKERK: Chairperson, I just want to propose an amendment please, in that this person who was referred to acted as Father Christmas, because we haven’t got the facts as to whether he really was Father Christmas. [Laughter.]

The CHAIRPERSON OF THE NCOP: The amendment whilst acting as Father Christmas'' is proposed, and notwhilst he was Father Christmas’’. Is there any objection to that amendment being put?

Amendment agreed to in accordance with section 65 of the Constitution.

Motion, as amended, agreed to in accordance with section 65 of the Constitution, namely:

That the Council -

(1) notes that Mr James McNeil has finally been put behind bars for abusing and molesting children whilst acting as Father Christmas;

(2) further notes that some of his victims have since not recovered from this ordeal;

(3) believes that such acts of child abuse cannot be tolerated in our democratic South Africa;

(4) further believes that anyone, whatever age, who abuses children does not deserve to live amongst the communities; and

(5) therefore commends the police and the prosecution team for successfully putting Mr McNeil where he belongs, behind bars.

ZIMBABWEAN POLICE COMMENDED FOR APPREHENDING CRIMINALS INVOLVED IN THE MURDER OF A SOUTH AFRICAN

                         (Draft Resolution)

Mr P D N MALOYI: Chair, I move without notice:

That the Council -

(1) commends the Zimbabwean police for successfully apprehending the criminals involved in the murder of Mr Conan Thomas, a South African tourist in Zimbabwe; (2) further notes that these criminals were arrested within a short space of time after committing this heinous act of violence and crime;

(3) believes that this is not an isolated incident of crime as it could happen anywhere in the world;

(4) further believes that these incidents have a potential of tarnishing the image of our country; and

(5) calls upon all South Africans to identify criminals involved in similar acts and report them to the relevant authorities.

Motion agreed to in accordance with section 65 of the Constitution.

         INSTITUTE FOR HIGHER EDUCATION OPENED IN KIMBERLEY

                         (Draft Resolution)

Mnr A E VAN NIEKERK: Voorsitter, ek stel sonder kennisgewing voor:

Dat die Raad -

(1) die Minister van Onderwys en die Noord-Kaap gelukwens met die opening van die Instituut vir Hoër Onderwys in Kimberley;

(2) van mening is dat dit duidelik is dat die instansie in die behoeftes van die Noord-Kaapenaars moet voorsien en dat daar dan met reg aanspraak gemaak word op Afrikaans as ankertaal van onderrig, sonder dat enige van die provinsie se ander amptelike taalsprekers uitgesluit sal word. (Translation of Afrikaans draft resolution follows.)

[Mr A E VAN NIEKERK: Chairperson, I move without notice:

That the Council -

(1) congratulates the Minister of Education and the Northern Cape with the opening of the Institute for Higher Education in Kimberley; and

(2) is of the opinion that it is clear that the institution must provide for the needs of the people in the Northern Cape and that Afrikaans is rightly claimed as being the pivotal language of education, without any of the province’s other offical language speakers being excluded.]

Motion agreed to in accordance with section 65 of the Constitution.

The CHAIRPERSON OF THE NCOP: Order! There being no further motions and before proceeding to the First Order, I return to the questions held over from Question time. We return to Question 8, held over from 3 June, asked of the Minister of Social Development. I note now that Minister Skweyiya is here.

                   INTERGOVERNMENTAL FISCAL REVIEW

                              (Debate)

Ms Q D MAHLANGU: Chairperson, hon members, special delegates present here and the Deputy Minister of Finance, on behalf of the Select Committee on Finance I would like to thank the Minister for tabling the Intergovernmental Fiscal Review early, so as to allow us as policy-makers to be able to do our oversight work.

Over the years the IGFR has been and continues to be a useful tool, which gives the provincial spending trends over the years and also highlights difficulties in some areas of service delivery. Amongst other things, the IGFR allows us, firstly, to make comparisons between provinces in terms of per capita spending as to how much each provincial government spends per person, per citizen, as opposed to the others, and the IGFR tries to do exactly that in making those kinds of comparisons. Secondly, it tries to give comparisons between municipalities, and further highlights problems and challenges faced by both the provincial and local government spheres.

For the first time the IGFR has been able to provide information on the following areas. One, the IGFR provides very detailed information on personnel issues. This gives the total number of personnel employed in the public sector of the three spheres of government. Two, the IGFR is able to give information on water and sanitation. Three, it gives information on road and transport infrastructure in our country. Four, the IGFR is able to give information on electricity provision and therefore to the citizens at large. And, five, it deals with land and agriculture - the extent to which our policy intervention in terms of land restitution and others has enabled our citizens.

I will now focus on the personnel matters, because my colleagues from other select committees will deal with some of the other issues in detail. The public sector employs about 1,6 million people. Of that amount, 700 000 of those work at provincial level in different departments, and at the provincial level in the departments of education and health respectively.

It is important for us to note that 426 913 employees work in the Department of Education in the form of teachers and principals in the main. That on its own takes a big chunk out of the Education budget that goes to provinces. The remainder then is spent on all the other functions. Out of the 700 000 employees at provincial level, 216 092 of those people work for the Department of Health as nurses, midwives, doctors and so forth. These are the individuals who are at the cutting edge of service delivery, by which we shall be measured in the near future and also by history.

The figures above tell us that we can only spend a tiny portion of the country’s resources in the following areas: on building classrooms, where there are still backlogs; on providing quality textbooks and other learner- support-related material; on making sure that we have well-resourced libraries; and on properly equipped laboratories in order to produce young people who have the skills our country needs. We need to have resources in this Education budget, a big portion of which is spent on personnel, in order to be able to do these things if we are to address the lack of skills going forward into the future.

To address the issues I have just referred to means that we must continue to train teachers from time to time, but also, at the same time, seek other innovative ways of spending our resources on materials, other than spending our resources on personnel. Therefore the continual training of teachers and school managers, in particular, becomes more crucial.

The large concentration of numbers of professionals in the urban areas continues to be a challenge. This is in the form of dentists in the health sector, and all other specialists that you will find in the health sector. Therefore, personnel spending for the Department of Health must be geared towards ensuring that rural areas across the country are able to get professionals in the form of specialists, dentists, etc, in order to service the communities which do need these services.

The rural allowance might assist in changing the ratio of the population served in the public sector per health worker. If you look at IGFR table 5.6, it gives a clear comparison of the number of people who are served … [Inaudible] … by one doctor … [Inaudible] … few specialists who service … [Inaudible … and in the urban areas we have too many specialists who service a very tiny portion of people. Therefore, in redressing those kinds of inequalities and inequities that exist in our system we have to try, amongst other things, to use instruments like the rural allowance to be able to attract those people to the rural areas where we need them.

The relevant committees in Parliament must monitor the situation from time to time so as to ensure that policy measures and interventions that are currently in place are able to respond to these challenges. Where these policy measures are not able to work, we must as policy-makers be able to make the necessary recommendations.

Personnel issues at local government level continue to present us with serious challenges, in particular that of integration with the different municipalities which were in existence before the municipal elections in 2000, in which year the new demarcation took effect. Those municipalities had different structures, which continue to be a challenge for them today in delivering service. Among the challenges which existed then - before the 2000 elections - are different salary scales of benefits and grades for different personnel which came about as a result of that era. There are also lucrative employee benefits for these public servants, and also a lack of skills and an inability in rural municipalities to be able to attract skilled people and professionals to work in those rural areas, and so forth.

This problem has been compounded by the fact that some municipalities are now paying their senior managers, post-2000, at extremely high levels and this has been done at the expense of service delivery. So you find a municipality which is able to pay a city manager a salary which is higher than that of the President, but is unable to deliver basic services to people.

Therefore, in going forward in addressing these issues, we should be able, as policy-makers, to deal with these kinds of issues and make proposals. Also, municipalities on their own must put proper mechanisms and systems in place to address these kinds of problems. In our view, this situation will be corrected by moving towards having the single Public Service that is being talked about so that we allow easy movement of people between the different spheres of government without serious cost implications and broader issues of skills transfer.

On the issues of service delivery, the IGFR has reflected the extent to which some municipalities are having problems, firstly, with water and electricity losses as a result of leakage and old infrastructure. If you look at the IGFR, it will give you details as to how much money - in terms of rands and cents - and kilolitres of water Johannesburg municipality loses because of not having an adequate and proper infrastructure.

There is also the issue of inappropriate billing systems. Another reason is that there are a lot of illegal connections in some of the areas. Other problems are as a result of municipalities not submitting financial statements on time, and that a sizeable number of municipalities in our country have been given qualified opinions by the Auditor-General.

All these things, I think, clearly talk to the fact that there are serious capacity issues at the municipal level. The points mentioned above come about as a result of an inadequate revenue collection strategy and the lack of skilled people working at local government level.

The Local Government: Municipal Finance Management Bill may be able to address some of the problems, in particular those that relate to financial management issues and Treasury control measures. The skills levels will be addressed by continual capacity-building at this level. Also, the single Public Service currently under discussion is likely to support this objective.

In addition, section 154(1) of the Constitution clearly states that national Government and provincial governments must support and strengthen municipalities in order for them to manage their own affairs, to exercise their powers and to perform their functions. I think that national Government and provincial governments must try to assist municipalities in this regard. We are happy to hear that the Department of Provincial and Local Government is doing work in this regard so that some of these problems can be addressed.

The recommendations made by the committee after conducting public hearings are as follows. Firstly, the committee recommends that there must be closer co-operation between the different role-players, in particular around the delivery of water and sanitation, in order to ensure that in the near the future - if possible in the next two to three years’ time - there are no people in South Africa who do not have access to clean and safe water or to proper sanitation and, therefore, flushing toilets. I think we must try to see to it that this co-operation assists us. Therefore the relevant committees in the NCOP and Parliament in general, and in other provincial legislatures, must assist us in going forward to do this.

Secondly, a comprehensive study of the implications of the new distribution system, especially of the regional electricity distributors - Reds - is required to allow us to be able to see whether restructuring will help us or municipalities to be able to generate the revenue that there used to be and, if not, what other mechanisms there are of allowing municipalities to be able to gain the revenue that they would ordinarily be gaining from billing electricity.

Thirdly, the development of proper billing systems, including for the administration of water and sanitation, is critical to quality service delivery at local government level. Instead of continuing to bill people inappropriately, we must try to make sure that municipalities have proper billing systems so that when people are billed they do not query the billing and end up not paying, and continuing the cycle.

The committee also recommends that any consideration given to the increase of water or any other tariffs must take into account not only cost factors, but the need to support the broader Government objective of persuing inflation targeting, so that any tariff or rate that is increased takes this into account so that we try to make sure that the administered prices do not lead us to higher levels of inflation, which we are trying to contain.

The committee also welcomes the decision by Cabinet that there must be a national structure or agency established that will ensure that the payment of social security grants is improved. At the same time, we don’t think that having this body will be a panacea, or will resolve all the problems in existence. We think that a change of the mindset that exists at different levels - that of service providers or the different departments of social development - needs to be given serious attention, because having the agency is not only going to deal with the problems that are there.

The Intergovernmental Fiscal Review must not be used as a once-off exercise, but used throughout the year. The budget committee is currently busy with the quarterly report and the figures that are published in terms of it. Therefore we request members to utilise the Intergovernmental Fiscal Review throughout the year when they do their oversight work, because it can only assist us to measure where we are, where we are going, and what the problems are so that whatever policy interventions are made in future are informed by the work we are currently doing. The review can then assist us as a tool to measure and do our oversight work.

In conclusion, on 25 June 1955, men and women of this country adopted the Freedom Charter. Amongst other things, the Freedom Charter says that there shall be houses, security and comfort, wherein people shall be decently housed; a preventive health scheme run by the state; and the aged, the orphans, the disabled and the sick shall be cared for by the state.

In my view, the IGFR in its broader context, but also in its detail in terms of giving information … [Inaudible] … South Africa, in the old age pensioners’ grant and the child support grant and so forth, tries to give those details and live up to the noble goals these people set in 1955. It is up to us as policy-makers to stand up to these challenges and make sure that these things are achieved.

My sincere thanks go to my colleagues in the different committees who participated and held public hearings. I think that the work we have started with the IGFR must not stop here, but must continue.

I also thank the committee members of the Select Committee on Finance and the provinces who conducted hearings. Some of the contents of the report are as a result of those provinces which conducted extensive hearings.

My sincere thanks also go to our committee clerk Henry Eksteen, who continues to work very hard, and to Sue Brown, who assisted us in drafting the report. I thank the Treasury for publishing the IGFR from time to time, because I know that the Minister sometimes feels that we are not using the IGFR. However, it is our intention to use the IGFR to the letter. We can only improve our capacity, something we intend doing. I thank you. [Applause.]

The CHAIRPERSON OF THE NCOP: Order! I now call the hon Fubbs, the chairperson of the standing committee on finance of Gauteng legislature.

Ms J M L FUBBS (Gauteng): Hon Chairperson of the National Council of Provinces and also the … I’m just trying to figure out where to stand. Oh, now I’m fine. I think that in Gauteng the IGFR has always been a very rich resource document, and particularly this year the delivery of affordable, quality services underpins the Government’s imperative to push back the frontiers of poverty. The performance of the three spheres of government, which is analysed in the IGFR, we believe in Gauteng is integral to this particular imperative.

The principle of how the equitable share is divided and shared is enshrined in the Constitution itself, particularly in relation to the co-operative governance between the three spheres of government. Indeed, when we come to our recommendations, that will be one of them, because in Gauteng we have been able to come to grips with allocative efficiency. But we have not, perhaps, at this stage fully been able to come to grips with planned expenditure in all of the areas.

In terms of the provincial trends, we are very much the same as the other provinces here. There is a conservative approach to the estimate of this and perhaps, partly, this is due to the fact that if you overestimate, the view is that perhaps that could be more problematic than underestimating. Nevertheless, the finance committee did engage with the Gambling Board, and in other areas with the department of roads and public works to find out why there is this revenue gap.

To this end, we have now begun to address this. That department, with the department of finance, is busy developing a system to ensure that the gap in revenue for vehicle licences is closed. Also, the Gambling Board - although they did give a very fancy presentation - did accept that there was a need to review the estimated revenue, particularly in regard to casinos. We are happy to say that horse racing now is finally attracting a little bit more attention again.

In other areas, when one looks at the IGFR, it is quite clear that we share a lot of the positions in the urban provinces. Nearly 80% - 79,7% - of Gauteng’s budget is directed to social services spending: health, education and welfare. This compares very well to the national average of 80,8%.

In terms of how we do spend, though, it is quite clear that Gauteng is in the lead in terms of Capex. I shall speak a little bit about the Gautrain, which has been called the Shilowa Express, Rapid Rail, a number of things, but essentially it is the Gautrain - the Gauteng train. We have, over a period of years, particularly over the last two years, been dedicating funds to ensure that this project goes ahead.

With an average of 8,3% growth across provinces over the MTEF, Gauteng has a corresponding 6,1% growth. But it becomes important that during the microprioritisation stage, every committee in the province takes up this book, this resource, the IGFR, and appreciates the lessons that are learned from that and the current expenditure in our budget in order, perhaps, to give some guidance on the budget ahead.

In respect of education, health, social development and housing we realise that the province has a key responsibility for delivery of these functions. We noted, with interest again, the comments and the date of the analysis in the IGFR in respect of housing. However, we are happy to say that now the plan presented by the housing department to the committee does indicate that, for the first time, Gauteng housing is factoring in lead time. This is very important for securing the land especially in relation to the EIA, the environmental impact study, which is designed, we believe, to protect people, especially the vulnerable and, in so doing, contribute to sustainable communities.

The other area that Gauteng has looked at - and, once again, the data here indicates that we should be doing so - are contracts. In health there was serious overexpenditure in the early years. This has certainly been curtailed. What we have realised is that unless contracts are robustly drawn up and legal expertise is engaged, that this can continue to lead to overexpenditure. So the establishment of the Gauteng Shares Services Centre, which will provide professional advice on contracts, is expected to improve this area significantly.

Another area is in respect of health professionals. This was another area in which we were not only losing expertise, but an area which may also have led to an element of increased expenditure. We have now put in place a system not only to recruit, but to retain such health professionals with scarce skills.

Personnel numbers in Gauteng have grown by 1,2% since 1999. The national average growth is -0,7%. The challenges facing personnel are noted and referred to in the IGFR, which include a need for appropriate performance- related pay systems and a need to decentralise personnel management, and have already begun to be addressed in Gauteng. This includes giving hospital managers real powers.

The other area Gauteng is also concerned with, as I said, is related to the Gautrain, that is, roads and transport. When you read the data in the IGFR it is quite clear that we need to contextualise it before rushing into decisions. The importance of contextualising the analysis of information in the IGFR is underlined in roads, which indicates that the Northern Cape at 20,5% accounts for the largest provincial network. Gauteng is standing at 2,2% as the lowest. But, again, Gauteng at 45,5%, as the most urbanised and industrialised province, has the highest percentage of paved or tarred roads. The Eastern Cape has the highest percentage of gravel roads.

The need for significantly higher expenditure on road maintenance in Gauteng is clearly evident from the number of vehicles per kilometre. The IGFR talks about less than 20 vehicles per kilometre for six of the nine provinces, whereas in Gauteng the figure is 341. This data underpins the differences in Gauteng’s road usage and the attendant challenges. Clearly, the decision to construct a rapid-rail link will take account of some of the nature of these challenges.

Capital expenditure grows very strongly in Gauteng over the MTEF and, indeed, is up by 26% this year. Gautrain is budgeted to spend R659 million this year, and, certainly, it is 44,8% of the Blue IQ which is standing at R1,5 billion.

However, we haven’t forgotten about water and sanitation. In fact, the chairperson of the Select Committee on Finance here at the NCOP - who is also, of course, a permanent delegate from Gauteng, the hon Dorothy Mahlangu - I’m sure was aware from her own visit to Gauteng that this is being taken seriously. Our own understanding of the situation is that it is related not only to the maintenance of the very old bulk infrastructure there, but also to the billing system itself.

I don’t want to run out of time before I mention the recommendations we came up with in our own House. We said that there was indeed a need for the development of billing systems - this is in relation to water - including administration around water and sanitation. We believe this remains critical to quality service delivery that will ensure increased accessibility, equity, effectiveness and efficiency factors. However, we also recognise the pressure to increase water tariffs, but the province would certainly not support any initiative to undermine the inflation targets set by Government. Thus, water tariff increases should not significantly exceed inflation. In short, there is a need to balance our decisions - as we always do in an ANC Government - to take account of all factors within the macroeconomic framework.

There is also a real need for a comprehensive study on the implication of Reds. We also believe that there is a need to focus on integrated delivery of housing with all spheres of government, and that this should expedite planned quality service delivery. The alignment of local government budgets and planning with provincial and national is an important factor in this regard.

We also believe that comprehensive performance-related measures should be developed so as to recruit and retain expertise and skills in the Public Service generally. Appropriate measures to retain quality educators in the classroom should be considered. This has been done in respect to health, as I indicated earlier.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M J Mahlangu): Hon member, your time has expired.

Ms J M L FUBBS (Gauteng): I’m so glad I was able to read the recommendations. [Laughter.] Thank you very much. [Applause].

Mr N M RAJU: Hon Deputy Chair, hon Ministers, hon special delegates and colleagues, I would like to seize this opportunity, first of all, to congratulate the hon Minister on his hole in one, which I read about some time ago. I know that that is quite a unique achievement for golfers. Congratulations, sir.

South Africa is a unitary state with a decentralised system of government of three spheres: national Government, nine provinces and 284 local municipalities. These three spheres of government are distinctive, interdependent, interrelated and subject to the principle of co-operative governance.

The central function of the IGFR is to provide consolidated information on the 2003 provincial and the 2002 local government budgets and trends for the key purpose of providing information on service delivery, which is so paramount in Government today.

The Constitution establishes rules for revenue and expenditure assignment, but with concurrent jurisdictional powers of national and provincial governments in such areas as education, health and welfare. The Constitution further establishes some government operational objectives through the provision of the Bill of Rights. The progressive realisation of these ``constitutionally mandated basic services’’ - the CMBS - is an important consideration for the FFC in developing its recommendations for the equitable division of national revenue.

In the intergovernmental system, the provinces get the biggest share of the Budget. The budgeted revenue of R280 billion in 2003-04 is divided as follows: national: R108,9 billion - 38,9%; provinces: R158,9 billion - 56,8%; local government: R12 billion - 4,3%. Provinces have little own revenue. They allocate national transfers of some 6,9% plus own revenue of 3,1%.

From the 2003 Budget, the largest piece of the cake went to the province of KwaZulu-Natal, that is my province, in the amount of R32 billion, and the smallest piece to the province of the hon Jan Horne, namely the Northern Cape, in the amount of R3,9 billion.

The IGFR covers the 2002-03 budgets of municipalities since their financial year only begins on 1 July. The local government sphere comprises Category A: Metropolitan authorities, six of which make up 62,7% of local government spending; Category B: Local authorities; and Category C: District authorities.

Two thirds of municipal budgets are self-funded from user charges for electricity, water and refuse removal. Other sources of revenue are property taxes, RSC levies and intergovernmental grants.

Conditional grants are the primary fiscal mechanism in terms of which national Government can influence the expenditure decisions of provinces and municipal governments. Many conditional grants are designed to be of limited duration, with the intent of incorporation into the equitable share funding mechanism. For example, the National Treasury makes conditional grants towards combating HIV/Aids, which has emerged as a major health hazard impacting heavily on the poverty of so many of our fellow South Africans. Government intervention in this aspect underlines the seriousness with which HIV-related programmes need to be funded.

Other areas needing similar national interventions are the plight of disabled persons, the revitalisation of clinics and hospitals, and such like. There is no doubt that the equitable formula needs to be constantly revised. Education is an important component of the PES formula used by by national Government to determine each province’s equitable share allocation. In its submission for the 2003-04 division of revenue, the Financial and Fiscal Commission proposed that financing of early childhood development, ECD, should be phased into the educational component of the provincial equitable share. Education spending is set to continue to grow strongly. The ECD programme is an important reform initiative aimed at providing a more efficient schooling system.

The national Department of Education envisages that the introduction of a reception grade will allow for greater school preparation of learners and, ultimately, a lower repeater rate and a more efficient education system. Here, we must recognise the unfortunate fact that passing matriculation with exemption is quite an important incentive. So, you will find that many of our students repeat their grades, and that is a reality that we have to face.

The share of secondary education spending is set to grow to 43,3% in 2004- 05, while primary education will receive 55% of school expenditure. As mentioned earlier by the chairperson of the select committee, the hon Dorothy Mahlangu, South Africa has 11,9 million learners, 354 000 teachers and some 27 000 schools. R58 billion is allocated to education in the 2003- 04 national Budget, making it the largest single component of provincial budgets, with a share averaging 35,6% of total budget which is the highest in Mpumalanga and in Limpopo at some 40%, and the lowest in the Western Cape at 33%.

Special focus is being placed on education management for transformation enhancement, on the retention of teachers, on developing capacity to manage capital expenditure and on the development of financial management in provincial education.

There are other key areas, such as the issuing of learner support materials, that is, school books, stationery and so on; Abet, in terms of which it is important that the adult illiteracy is addressed, because we cannot allow so many of our adults to still be in the position of not being able to read and write. Thank you, Chair. [Time expired.] [Applause.]

Mrs C NKUNA: Hon Chairperson, let me start by congratulating the hon Mr Raju on having refused this time to articulate controversies in this House. [Laughter.] Hon Raju, congratulations; together we are building this country.

Hon Chair, hon Deputy Minister of Finance, hon members, I thank you all. Amongst the areas that the IGFR addresses is the question of electricity, which is part of the public enterprises cluster, hence my input. With due apology, I was not aware that the hon Minister was in the House as well, so I am addressing both of you.

It is without a doubt that electricity plays a very fundamental role for individuals in any society and that it has a direct and critical impact on and implications for the lifestyle and wellbeing of those individuals and their households. It is no secret that we are living in the modern era of globalisation in which things are made possible by having access to electricity, in which electricity is central to the functioning of relatively everything in our society. A nation with no access to electricity in this global era will, without a doubt, be faced with drastic social and economic challenges.

Electricity is central to everything, from the proper functioning of our hospitals and our schools, to being a basic and necessary need for individual households. Thus, the necessity of electricity cannot be underestimated or taken for granted.

An amount of R300 million has been allocated to free, basic electricity for the poor households in order for them to have energy in the form of lighting, to be able to iron, etc.

It is true that when we obtained our democracy, our Government was faced with a number of challenges, in particular where the distribution and accessibility of electricity were concerned. The majority of households and vast areas in our nation, mostly those belonging to the previously disadvantaged people, did not have access to electricity. For instance, it is not foreign to hear someone tell a story of how difficult it was to study when he or she was child because he or she had to use candles, and, for instance, how difficult it was for a mother who had to breast-feed her child. At times, even a candle was not available; you had to try to open a curtain - if there was one - to be able to breast-feed the child.

This is a sad story often narrated by thousands of people, because the oppressive government made it such that the majority of our people did not have access to electricity. This was not a mistake as they were very much aware of the implications and the consequences of their actions.

We still have some products of the previous oppressive government in the form of human beings, and they are mostly found in the farming areas. When you approach some farms you will find that there are streetlights, and so you take it for granted that there is a better life for the farmworkers. In most cases, or on most farms, especially where I come from in Limpopo, farmworkers are not allowed to use electrical appliances. However, I am happy to say that with the Departments of Labour and of Land Affairs, through ESTA, we are looking into such irregularities.

It is with pride that I mention that the Government, in particular the relevant enterprise which is Eskom, has done well thus far. Between 1994 and 1999, some 2,8 million South African households received electricity for the first time in their homes. Therefore, this means that the people in these households are now able to read and study at night, to watch television, to access hot water, to get warmth through heaters, to cook on electric stoves and to store their food in their refrigerators. This means that our children will be able to study, and are able to study freely and comfortably because they have access to electricity. At this point, it would thus be appropriate for me to read a quote that I have. This quote brought some pride to me - it signifies how efficient and committed our Government is to the people. The quote reads as follows:

The electrification programme must rate as one of the most significant achievements by this country and is unprecedented internationally as 3,5 million homes have been electrified since 1994.

This translates into over 435 000 homes per annum. That is something that cannot be scoffed at. It is evidence that the Government of the people is delivering for a better life for all. Indeed, the demons of the past will remain a thing of the past and our people will be empowered. There is no going back. We are simply moving forward, on board what hon President Thabo Mbeki referred to last year in his budget speech as a train of progress that is moving forward; indeed a train of progress the destination of which will be the achievement of a better life for all. The tide has turned. However, we still have those who are moving against the direction of the tide. [Time expired.] [Applause.]

Nksz P C P MAJODINA: Sekela-Sihlalo weBhunga leSizwe lamaPhondo, Sihlalo weBhunga leSizwe lamaPhondo ongaphakathi apha eNdlwini, Mphathiswa wezeziMali kunye noSekela wakhe, bandibulise kuni nakule Ndlu ibekekileyo. Ukungena kwethu eburhulumenteni ngonyaka ka-1994 kwacaca mhlophe ukuba imigaqo-nkqubo kunye nezinto esazifumana kurhulumente wangaphambili zazingonelanga ukuncedisa ekubeni simelane nentlaninge yezinto ezazingumceli-mngeni esagagana nazo.

Uthutho olusemgangathweni luncedisa ukuphuhlisa uqoqosho. Loo nto ke yenza ukuba wonke ubani afikelele kwiinkonzo ezingundoqo. Xa uhamba-hamba kwiilali zoMzantsi Afrika awungedingi sifundiswa ukuze sibe nokukuchazela ukuba kuhlala bani na apha naphaya, kodwa ubona ngemeko yeendlela nezithuthi ezihamba kuzo. Kodwa ukuba ungumntu ongazaziyo iindlela zasemakhaya nezothutho, uye ufane nenkokeli yombutho ophikisayo engafuniyo ukuba masithethe ngemvelaphi, ukuba sisuka phi na. Nokuba sithi siyatyiwa sisihlangu, ithi qhubani niye phambili kuba ayifuni kuzazi iinyani zamandulo. Le ke iba yimeko ecace gcaa: Wena wakhe wabona ikat’ emhlophe ehlungwini.

Ukhuseleko kwizithuthi zikawonke-wonke lukwinqanaba eliphantsi. Kufuneka ke zinyuswe iikawusi kuba asizi kukunyamezela ukubona abantu bakowethu besweleka begqitywa ziingozi ezindleleni nokhuseleko olungekhoyo, ngakumbi koololiwe. Makhe ziyeke ukukhunyushwa iindlela, zibizwe ngamaganyana esilungu kuba abavoti bafuna iindlela kuphela. Nokuba indlela ibizwa njengo- Access, Proclaimed, ngo-N okanye u-R, ayifuni bavote leyo, into abayifunayo yindlela elungisiweyo, indlela ehambekayo.

Makungajongwa umhlaba okanye igrabile kuphela, ngakumba kumaphondo ahamba adibane nezantyalantyala zeemvula: ooMpuma Koloni, iPhondo laseMntla, ekuthiwa yiLimpopo ngoku, kunye neKwaZulu-Natal. Masijonge iindlela ezizezinye zokuba ezo ndlela zimelane neemeko zezulu ezintsha ezikhoyo kuba kaloku ezi zinto zihamba ziphume nodlolwazana.

Enye into, makuyekwe ukuteketiswa imingxuma esezindleleni. Uthi uhamba ub’ uxelelwa ukuba kwiikhilomitha ezinga uza kudibana nemingxuma emikhulu kanga. Le mali ebhala ezi bhodi esilumkiso yimali emayisetyenziselwe ukuvala le mingxuma. Mayingathengiswa imingxuma esezindleleni.

Uthi uMqulu weNkululeko, ``Kuya kuba kho izindlu, ukhuseleko nobutofotofo.’’ Ewe sizakhile izindlu, kodwa asikangeni ncakasana phaya kubutofotofo. Uye watsho uMama uMahlangu xa ebethetha apha, wathi siyasondela ekubeni athi umntu xa esendlwini eve ubutofotofo elindele ukutya nobushushu ngaphakathi endlwini.

Amaphondo angayisebenzisi ngokwaneleyo imali kuza kufuneka ibe khona into eyenziwayo, Mphathiswa wezeziMali. Asina kuyinyamezela into yokuba abantu banikwe imali ukuze kuphuhliswe uluntu, kodwa bahlale bayigcine ezitasini loo mali ze kuthi ngomzuzu wokugqibela kuthiwe, ``Yiza, yiza nantsi imali. Yisebenzise uyigqibe kuba uManuel uyasifuna ngoMatshi.’’

Eyona nto, xa sithetha ngezothutho, iibhiliyoni zine esizibekele ecaleni ngokubhekisele kumbandela wokuphuhlisa ushishino, ngakumbi olweeteksi. Kodwa ke, siyavuma ukuba ikhona imingeni esijongene nayo singulo Rhulumente. Imingeni ke ihamba nathi, nathi ke sikulungele ukuba sijongane nayo.

Mandiyibandakanye ke eyokuba impumelelo kwezothutho imalunga nokhuseleko kwezothutho. Ngenxa yomkhomba-ndlela esithe sawuqalisa, kuthe emva koko sabona lisehla inani leengozi ezindleleni. Kanti sisendleleni yokumiselwa komlawuli wezokhuseleko phaya koololiwe.

Siphumeze nomthetho wothutho lwezendlela kuzwelonke. Sithe sangenelela ngokuthi siqinisekise ukuba phaya kushishino lweeteksi abukho ubundlobongela. Yiloo nto namhlanje sikwazi ukuba sihlale phantsi etafileni sithethe nabantu bolu shishino. Kanti ke siye sabonelela ngothutho lukawonke-wonke ngoba sisasilela kulo mba. Kwela Sebe leMisebenzi yoLuntu amaziko ezibonelelo apho kufika kume wonke umntu omele lo Rhulumente asebenze, siwabonile evelela eza ndawo zasemakhaya. Sithi ke: Huntshu!, kweli sebe. Mababe ngathi baqhubela phambili ukwenza umsebenzi. Akwanelanga apho.

Sinawo amaziko emveliso yoluntu. Ngokubhekisele kwiinkqubo zolutsha nokusingqongileyo, sifumana abantu abatsha ingabo abahamba phambili ekwakheni iindawo ezingathi zisetyenziswe ngabantu abakhubazekileyo. Kanti nokulo mcimbi kaGawulayo neNtsholongwane yaso, isebe eli libambisene namanye amasebe ukuze alwiswe lo bhubhane.

Ngokubhekisele kubonelelo lwezindlu, sithetha ngezindlu ezisemgangathweni. Kwaye siyikomiti ejongene nezezindlu siza kuhamba-hamba sijonge ukuba izindlu ezi kufanele zibe njani na. Thixo!, alabi lincinci nje ixesha. Ndivaliwe ngoku, Sihlalo? [Uwele-wele.]

Oo! Ukungafumaneki komhlaba khon’ ukuze siphuhlise sandise nezindlu ngowona mngeni ujongene nathi. Kwaye ke, iiprojekthi zezindlu maziphume emahlathini zisondele apho kukho khona iinkonzo khon’ ukuze sikwazi ukuhlangabezana nezothutho.

Kanti ke nokuvuselelwa kweendawo zasemakhaya nezasezidolophini ikwangomnye umngeni ophambili. Uxanduva ke esijongene nalo lolokuba wonke umntu waseMzantsi Afrika makazive ekhuselekile, azive ephuhliseka. Abo ke bangayithandiyo le nto sibaphethe singuRhulumente we-ANC. Nokuba umntu uyasivotela okanye akasivoteli na, simphatha esesesiswini simse ekliniki; simphathe sibhalise ukuzalwa kwakhe; simphathe simnike incwadi-sazisi; simphathe naxa sele elele kwakhe ngoba singuRhulumente ophetheyo. Amagunya okuphatha siwanikwe ngabavoti, basinika ama-60 ekhulwini, nani elo abaza kulangeza ibe likhulu ekhulwini kwezi voti siya kuzo. Enkosi. [Kwaqhwatywa.] (Translation of isiXhosa speech follows.)

[Ms P C P MAJODINA: Deputy Chair of the NCOP, Chairperson of the NCOP in the House, the Minister of Finance and his deputy, let me greet you in this august House. When we entered Government in 1994 it became abundantly clear that the policies and the things we got from the previous government were insufficient to help withstand the numerous challenges that we face.

Quality transport helps the economy. It enables everyone to access important services. If one walks around in the South African villages one does not need a learned person to tell you who stays here and there, but you can see from the quality of the roads and the vehicles that travel on them. But if you are someone who does not know the roads in the rural areas and the transport, you become like the leader of the opposition party, who does not want us to talk about our origins, where we come from. Even if one says the shoe is pinching one’s foot, he says we must go on forward, because he doesn’t want to know the truths of the past. This is a situation that is becoming abundantly clear, like a snow-white cat on a pitch - dark night.

Safety in public transport is at a low level. Socks must be pulled up because we are not going to tolerate seeing our people dying as a result of road accidents and the absence of safety measures, especially on trains. Let there be an end to using English references to roads, naming them in English, because voters only want roads. Even if the a road is called an access, proclaimed, N or R road, that does not concern the voter. What they want is a good road, on which one is capable of travelling.

Ground surface or gravel roads should not be the only thing that is looked at, especially in provinces that have heavy rainfall such as the Eastern Cape, the Limpopo province and KwaZulu-Natal. Let us look at other ways to enable those roads to withstand the existing new weather conditions, because these things have repercussions.

Another thing is that using baby terminology when referring to holes in the surface of roads should be stopped. One is told: ``Whilst travelling, after a certain number of kilometres you’ll come across big holes.’’ The money that is used to write these warning signs is what should be used to fill up the holes.

The Freedom Charter states that ``there shall be houses, security and comfort’’. But we have not entered the comfort zone completely. Mother Mahlangu said here, when she spoke, that we are approaching a situation in which a person, whilst in his house, will be comfortable as he is waiting for food and will be warm inside the house.

Something will have to be done about provinces that do not spend their money adequately, Minister of Finance. We cannot tolerate the fact that people are given money to develop society, but they sit and store the money in their coffers and, at the last minute, they say: ``Come, come, here’s money. Use it all because Manuel wants it in March.’’

Of most importance, with regard to transport, is that R4 billion has been set aside for the development of the industry, especially the taxi industry. However, we acknowledge, as this Government, that there are challenges that we face. Challenges are with us and we are prepared to face them.

Let me include the fact that the success is about safety in transport. Because of the guidelines that we are implementing, we saw the road accident toll dropping. On the other hand, we are on course towards the appointment of a director for safety for rail transport.

We have also passed a law on national roads transportation. We intervened by ensuring that in the taxi industry there is no violence. That is why we can sit down today around a table and talk to the people of this industry. On the other hand, we have made available public transport because we are still lagging behind on this matter.

In the public works department we saw the multipurpose centres, where everyone representing this Government comes, takes a position and works, and visits the rural areas. We say ``well done!’’, to this department. Let them proceed with doing the work. It’s not enough. We do have community harvest centres. With regard to youth programmes and the environment, we find the youth to be the ones who take the lead in building places that can be utilized by the disabled people. On the other hand, on the matter pertaining to HIV/Aids the department also collaborates with other departments in fighting this scourge.

Concerning the provision of houses, we are talking about quality houses. And, as the Portfolio Committee on Housing, we are going to make rounds, checking on what the quality of houses ought to be. Lord! It’s such a short time. I’m now prevented, Chair. [Applause.]

Oh! The unavailability of land to develop and to extend our housing is a major challenge facing us. And housing projects must come out of the bushes and be closer to where there are services so as to be able to reach those of transport.

On the other hand, re-engineering of the rural and urban areas is another major challenge. The responsibility that we have is that every individual in South Africa must feel safe and that they are being developed. To those who don’t like this, we are controlling them as the ANC-led Government. Whether someone votes for us or not, we control him before birth and take him to the clinic; control the registration of his birth; control the issuing of his identity document; control him even if he is sleeping at home, because we are the Government in control. We received the power to govern from the voters. They gave us 60%, a percentage which they are going to increase in the pending elections. Thank you. [Applause.]]

The DEPUTY CHAIRPERSON OF COMMITTEES (Mr M J Mahlangu): Now your time has expired. [Laughter.]

Dr E A CONROY: Hon Chairperson, the Minister of Finance, the Deputy Minister of Finance, special delegates and colleagues, this is the fourth Intergovernmental Fiscal Review to be tabled. The central function of the IGFR is to provide consolidated information on the 2003 provincial and 2002 local government budgets and trends. In my contribution to this debate I will, however, limit my comments to provincial matters.

In addition to provincial budgets and budget trends for the year 2003, the IGFR also covers four past and three projected budgets and enables us to make comparisons between provinces. The 2003 IGFR was published earlier than normal in the budget cycle, the main reason being to enable Parliament and provincial legislatures to take the information into account in the next few months and to assist in shaping the 2004-05 budget.

Die beginsels waarvolgens die billike aandeel van die nasionale inkomste toegedeel en uiteindelik aan dienste bestee word, word in die Grondwet vervat en die prestasie van die drie vlakke van regering in hierdie verband word in die Interregerings-fiskale Oorsig ontleed.

Hierdie vierde uitgawe gee ‘n oorsig van dienslewering, en die besondere waarde en belang daarvan is dat dit provinsies in staat stel om provinsiale vergelykings ten opsigte van die begrotings van lynfunksiedepartemente en aktiwiteite te tref.

Aangesien provinsiale dienste egter min of geen inkomste genereer nie, maar nogtans vir 95% van provinsiale uitgawes verantwoordelik is, moet hulle uit die aard van die saak deur middel van nasionale oordragte befonds word, en derhalwe ontvang provinsies die grootste aandeel van die toekennings uit die nasionale inkomstebronne, naamlik 56,8%.

Die grootste bron van provinsiale eie inkomste bly steeds padverkeerfooie wat in 2002-03 38,3% bygedra het en waarvan die aandeel in 2003-04 na verwagting 50,3% en tot 50,8% in 2005-06 sal wees. Perderesies, pasiëntetariewe, casino’s en rente is ander provinsiale bronne van inkomste.

Huidige bestedings- en begrotingspatrone dui daarop dat provinsies merendeels konsentreer op programme wat armes bevoordeel deur die konsolidering van maatskaplike dienslewering en die verhoging van kapitaalbesteding asook die gehalte van besteding. So byvoorbeeld toon provinsiale begrotings gedurende 2003-04 ‘n reële groei van 7,1% in maatskaplikedienstebesteding en ‘n reële jaarlikse groei van 5,5% oor die Mediumtermyn-bestedingsraamwerk vir 2003-04. (Translation of Afrikaans paragraphs follows.)

[The principles according to which the fair share of the national revenue is allocated and eventually spent on services are contained in the Constitution and the performance of the three levels of government in this regard is analysed in the Intergovernmental Fiscal Review.

This fourth edition provides an overview of service delivery, and its particular value and significance is that it enables provinces to draw provincial comparisons with regard to the budgets of line-function departments and activities.

As provincial services, however, generate little or no income but are nevertheless responsible for 95% of provincial expenditure, they should as a matter of fact be funded by means of national transfers, and therefore provinces receive the largest share of the allocations from national revenue sources, namely 56,8%.

The greatest source of provincial own revenue still remains road traffic fees, which contributed 38,3% in 2002-03, and of which the share in 2003-04 is estimated to be 50,3% and up to 50,8% in 2005-06. Horse racing, patient tariffs, casinos and interest are other provincial sources of revenue.

Current expenditure and budget patterns show that provinces are mostly concentrating on programmes that benefit the indigent through the consolidation of social service delivery and an increase in capital expenditure as well as in the quality of expenditure. Therefore, for example, provincial budgets are showing a real increase of 7,1% in social services expenditure and a real annual increase of 5,5% in the Medium-Term Expenditure Framework for 2003-04.]

Despite the trend that spending on personnel is showing a decline from 59,1% of total provincial expenditure in 1999-2000 to 51,6% in 2002-03, and is expected to decrease even further to 46,4% in 2005-06, expenditure on personnel in the social services sector is growing sufficiently to meet delivery challenges over the medium term. The rising share in nonpersonnel spending reflects the efforts of provinces to improve the composition of their expenditure and enhances the quality of services and efficiency of spending. It would, therefore, seem that there is a marked improvement in provincial spending patterns.

But the IGFR nevertheless identifies the need to ensure that growing budgets are spent efficiently and effectively and that the quality services are delivered, as key challenges facing provinces over the 2003-04 MTEF.

At a meeting of the President’s Co-ordinating Council in March of this year, where the report on the state of provincial finances was presented by the Deputy Minister of Finance and where the challenges facing provinces were noted, it was, inter alia, resolved that premiers must take corrective measures to improve spending capacity and to prevent fiscal dumping; that challenges with regard to low capital spending be investigated and private- sector participation be encouraged; and that necessary interventions need to be introduced for building capacity, developing skills and improving integrated planning to enhance capital expenditure.

The New NP expresses its appreciation to the National Treasury for the excellent, transparent and clearly understandable document and supports the adoption of the Select Committee on Finance’s report on the 2003 Intergovernmental Fiscal Review. Thank you. [Applause.]

Rev P MOATSHE: Hon Chairperson, hon Minister and Deputy Minister, hon chairperson of the Select Committee on Finance and hon members, the Department of Agriculture aims to lead and support sustainable agriculture and promote rural development through ensuring access to sufficient, safe and nutritious food, eliminating skewed participation and inequity in the sector; maximising growth, employment and income in agriculture; enhancing the sustainable management of natural agricultural resources and ecological systems; ensuring effective and efficient governance; and ensuring knowledge and information management.

The sharp increase in food prices during 2002 was one of the most important issues that faced the country owing to the impact it had on the poor and on food security in the Southern African region as a whole.

The Government’s response has centred on a package of relief measures to supplement the income of the poor, on containing price pressures on basic foods, and on strengthening the ability of the poor to grow their own food. These measures have helped to cushion the impact of inflation on vulnerable groups.

Social grants have been increased by an average of 15,2%, and the private sector has also responded through limited maize subsidies. The Government’s interventions were effected through the 2002-03 adjustments estimate which set aside R400 million for targeted food relief for the most vulnerable groups. The funds will go mainly towards food parcel distribution on the domestic front, that is R230 million, and 100 000 tons of white maize for affected Southern African Development Community countries worth R170 million.

The Government is also examining the feasibility of a longer-term food security programme to provide households with seeds and tools for subsistence agriculture. In addition, a food pricing monitoring committee has been established to monitor the prices of a basket of basic food items including maize meal, eggs, bread, milk and meat. I shouldn’t make you hungry, Chairperson. [Laughter.]

The committee will investigate any sharp or unwarranted price increases and will do a longer-term analysis of the link between food prices and the structure of the agricultural supply chain, including looking at the number of producers and processors, the extent of vertical and horizontal integration, and the level of concentration in the food supply chain.

The budget for the implementation of the land reform programme is included in the Vote of the Department of Land Affairs. Therefore the department’s budget for redistribution and restitution grants increased strongly from R0,8 billion in 2002-03 to R1,6 billion in 2005-06, or by 26% per annum. This is more than double the allocation between 1999-2000, when it was R440 million, and 2001-02. It is anticipated that the MTEF will assist with the finalisation of legal and administrative processes of the claim.

Water is also critical for the development of the agricultural sector for commercial, emerging and subsistence farming and other economic activities. As a water-poor country with erratic rainfall patterns, South Africa has to manage its water resources carefully if it is to meet social and economic needs.

To meet this challenge, the establishment of a coherent policy and regulatory framework appropriate to the physical realities of South Africa is essential. This must go hand in hand with establishing institutions capable of implementing the policy.

One of Government’s key objectives is the free provision of up to six kilolitres of water to all households. Municipalities appear to be making progress in implementing free basic services. The Department of Water Affairs and Forestry estimates that 76% of municipalities provided more than this.

The free basic policy does not extend to sanitation such as the ventilated improved pit toilet, the VIP, which has minimal operating costs. There is little information available on how municipalities are providing sanitation services to poor households. A sanitation policy for communities with access to waterborne sanitation is under development by the Department of Water Affairs and Forestry.

Chairperson, I want to greet you and thank you heartily. We are now going into recess. [Laughter.] [Applause.]

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M J Mahlangu): I must also thank you for working hard whilst you have been here, and go well with the recess. [Laughter.]

Mr T B TAABE: Hon Deputy Chairperson, the Minister and Deputy Minister of Finance respectively, and members of the NCOP, much has been said by members of this House in relation to the debate of this afternoon on the Intergovernmental Fiscal Review for 2002-03.

I do not want to repeat the issues which were were so aptly and succinctly raised by the chairperson of our select committee and also by hon member Comrade Joanne Fubbs from Gauteng. Therefore I want to deal with the issues which have not been raised with regard to this Budget this afternoon.

As you would know, this Intergovernmental Fiscal Review we are debating this afternoon covers the 2003 provincial budgets and discloses the detailed plans for all nine provinces. About 61% of the nationally raised revenue goes to provinces and local government. Provincial budgets would then prioritise, as is basically evident in this review, pro-poor social services and allocate 80,8% of total provincial spending to poverty alleviation.

It is clear that in this review for 2003, tremendous improvements have indeed been made precisely because, as you would notice, provinces now spend increasingly more on nonpersonnel expenditure. This is confirmed by the increased capital expenditure on construction and rehabilitation of public facilities and assets such as school buildings, hospitals and roads, and increased spending on housing and on critical items like textbooks and medicine.

Income support continues to be one of our weapons as Government for the offensive against poverty in the short term. Our Government, this very progressive government led by the glorious army of the African people, the ANC, has increased, as you would know, the number of social grant beneficiaries from 2,5 million in 1997 to 5,6% million in March 2003. When we extend the child support grant over the next three years to children until their 14th birthday, the number of beneficiaries will increase by 3 million.

The review further shows that the share of social development spending will then increase to 26% of provincial spending. It also for the first time provides consolidated information for the first time on municipal budgets for the period ending June 2003.

I must, however, make special reference to one of the critical issues which the FFC raised in its recommendations, particularly relating to poverty targeting. It refers to the cost of poverty targeting in order to minimise errors of inclusion and exclusion, and of inclusion weighed up against costs of universal coverage of free basic service provision. A recommendation by the FFC also refers to the impact of education and health user fees and the impact of tariffs for basic municipal services, considered in terms of the impact on poverty alleviation. These recommendations have considerable merit, because what is the point, the FFC argues, of raising user fees when residents do not have the means and capacity to pay for basic services?

Members of our committee would be keen indeed to hear what the views would be of National Treasury and those of the Minister and Deputy Minister in relation to the issue the FFC is raising on poverty targeting.

With respect to norms and standards, the FFC proposes the following. Norms and standards must take account of resource constraints and the need for policy flexibility in the event of emergencies and new policy challenges. It further proposes that norms and standards should be adjusted to resource availability, and must take cognisance of environmental factors and new policy imperatives. We are aware, as the Select Committee on Finance, of the kinds of responses that the National Treasury has provided when responding to the FFC’s costed norms approach, which responses were provided some time ago in which it argued that the lack of appropriate data imposes practical limitations on the FFC’s approach, and that many of the desired output measures, cost of inputs, do not currently exist and may be difficult, if not impossible, to obtain.

Moreover, the costed norms approach itself endorses the notion that provincial education, health and welfare budgets can be calculated at the national level by formula. The view has come out very strongly that this undermines the principle of provincial budgetary autonomy and limits the role of provincial executive committees in addressing provincial priorities, which then compromises accountability.

There is also the difficulty of applying a costed norms approach to national departments and local governments. The costed norms approach may appeal to some aspects of national Budgets, but for others, for example, justice, police and defence, constructing benchmark norms for such expenditure may not be possible. These are some of the issues that have come out very sharply.

With reference to provincial taxes and provinces that are pursuing additional sources of revenue in order to impact on the provincial economy, we are aware of only one province, the Western Cape, which is currently engaged in this process. We are aware that a consortium to study a fuel levy has been appointed in line with the requirements of the Provincial Tax Regulation Process Act. It would be interesting, and we are keenly awaiting the news from other provinces in this regard.

The FFC has made another proposal in relation to funding instruments, which could have a positive effect on our intergovernmental fiscal relations system. These proposals are as follows: firstly, the design of conditional grants should be negotiated between the transferring and recipient authorities; and, secondly, the role of conditional grants should be circumscribed to avoid distortions in the equitable share distribution.

These proposals, we argue, have practical relevance because the proposals for greater negotiation between transferring authorities and recipient authorities could facilitate an improvement in the spending capacity and ability of provinces. It is therefore not a cliché to say that the spending capacity of provinces needs to be dramatically improved.

Further additional recommendations were made, again, by the FFC in relation to governance and local government, which issues I had hoped the hon member Ralane would deal with, though some were dealt with at great length. However, I will just mention a few … [Time expired.] [Applause.]

Mr D M KGWARE: Hon Chair, hon Minister, hon Deputy Minister, mine is a very short comment. The Intergovernmental Fiscal Review is a major source of assistance to Parliament but, more importantly, to provincial legislatures

• I would like to emphasise that point: to provincial legislatures - in assessing, planning and debating their budgets and plans for critical services, particularly delivery.

Provincial governments are a distinct sphere of government in the sense that they make rules and orders concerning their business, with due regard to representivity, participatory democracy, accountability, transparency and public involvement. Hence, they are allocated large grants from nationally raised revenue, which they determine how to spend. We, the members of this Council, therefore appreciate the opportunity afforded to us today to scrutinise the performance of our legislatures, particularly at a time when we as South Africans are entering our first decade of freedom.

The ANC-led Government has made tremendous strides in dismantling the scaffolding of apartheid and Bantu Education, not just in the quantity and quality of education, but also in regard to alleviating the plight of especially poor learners from poor communities. It is important that we focus on these notable achievements in order to gain some perspective on the significant differences we are making in the lives of learners from very diverse backgrounds.

Since education has the largest average share of the total Budget, namely 35,6%, we are obliged in terms of our constitutional responsibility to discharge it commensurably. Hence our approach is aligned with the ideals set out in the seminal document, the Freedom Charter that we might be celebrating tomorrow, which states: ``The doors of learning and culture shall be opened … Education shall be free, compulsory, universal and equal for all children.’’

The fact that we now have 11,9 million learners enrolled in 27 000 schools, a net enrolment of 95% in primary education, and 364 000 educators, of which 86% are provincially based, can be linked to our policy of compulsory education which was adopted in 1996. When I say ``our policy of compulsory education’’ I am talking about the ruling party which is leading this Government.

Yes, our track record will, as we have said in the past and will repeat here today, remain unparalleled. In addition, our average expenditure per learner has increased from R3 234 in the 1999-2000 Budget to an estimated R4 437 in the 2002-03 Budget. That is an achievement. We are, however, concerned that the gap between learners in rich provinces and those in poor provinces is still wide. We are, nevertheless, mindful that factors such as greater administration expenditure, transport costs, high salaries, etc, determine expenditure at the end of the day.

We as the ANC are therefore encouraged by and, in fact, welcome the efforts of the Ministry of Education and the national department to address these inequalities through the Review of the Financing, Resourcing and Costs of Education in public schools, which has emerged as a result of Government’s concern with the high cost of education for all sectors of our population, in particular the poor in the poorest provinces. This mandate emanates from our Stellenbosch conference in December 2002, where we resolved that money meant for the poor must reach the poor.

The other measures that have been introduced that we welcome are the inclusive school policy and the implementation of a uniform budget, format and programme structure for education in all 2003 provincial budgets. In terms of the former, many learners with special needs will now be incorporated into ordinary public schools. To this end, the estimated expenditure on public ordinary schools for both primary and secondary schools of R44,3 billion, or 83,4% of the total Education budget, together with the provided dose of the MTEF, will ensure increased delivery.

With regard to the uniform budget format, the reclassification of historical expenditure now allows for comparison in our historic first Government. It is now in a position to present expenditure on primary and secondary education separately. More importantly, this will greatly enhance our capacity to effect equity redress and provide for timeous delivery of learner support material.

In conclusion, issues that inevitably provoked debate during the analysis of the Intergovernmental Fiscal Review and which are pertinent to education are the underspending on capital expenditure and the overspending on personnel expenditure. Although we are aware of significant Government spending particularly of capital budgets, the modus operandi of certain provinces leaves a lot to be desired, given that some provinces fail to submit spending plans with regard to personnel spending. If money is allocated to teacher efficiency, it must be utilised for this purpose and not spent on salaries. We believe that this component requires closer analysis and understanding. I thank you. [Applause.]

Mr Z S KOLWENI: Hon Chairperson, hon Minister and Deputy Minister, my colleagues, I indeed had to prune my speech so as to avoid monotony. I, therefore, in my capacity as a permanent delegate in this House, wish to align my contribution with trends in provincial budgets in respect of all eight sectors as reflected throughout by the IGFR document, but shall do so in a sifting manner so that I do not contaminate the flavour of the broth that members should be digesting now.

I need not overemphasise the importance of significant growth in national transfers with specific details on provincial budgets, sector by sector. In our times, challenged by the rampant, pandemic monster of HIV/Aids, one is left with a sense of hope in finding that spending on professional health personnel, medicine and drugs is growing rapidly, thus placing the health sector in a position to deliver better health care and ready to respond to the uncalculated and unrealistic pressures associated with this monster.

At some point it is necessary to remind our constituencies that the party in power now, the ANC, in fact made the health delivery issue one of its priorities when developing the 10 commandments in the Freedom Charter in

1. Therefore, it means that had the ANC assumed power during the early sixties, our country’s health state of affairs would be on a par with the health care systems you find in countries like the People’s Republic of China.

In fact, that country, having assumed power in the mid-sixties when its health care system was in a shambles, as early as yesterday surprised the world when it was confronted with the Sars virus. I am trying to indicate that we are getting to that level of capacity in terms of a health care system ``kancane kancane’’ [bit by bit.] For instance, the building of an additional 10 clinics and the upgrading of 49 clinics are in the pipeline in my province.

If you can positively take stock of our country’s firm and aggressive manner in which we responded to the outbreak of the foot-and-mouth disease, you will realise how serious our Government is about the agricultural sector in our lifetime in South Africa. In the North West, agriculture is our number two economic basket after the mining sector. Remember, food security is a major priority for our Government, given the large numbers of our rural and urban poor majority. This sector is supported by state agencies like the Land Bank, the Land Claims Commission and others. These agencies provide various services to provincial departments of agriculture with a chain of clients, like the National Farmers’ Union, emerging farmers, poultry community projects, tribal authorities, subsistence farming projects, etc. I am pleased to inform this Council that during the past provincial week, our delegation engaged these state agencies and interfaced them with their client base and the broader public.

Again, allow me on behalf of our delegation to proudly inform the Minister and the Treasury that these state agencies demonstrated a high degree of commitment and diligence in serving their client base and that they value the resources allocated to them.

Given that my province, the North West, is one of those provinces where agriculture is combined with other functions, such as conservation of the environment and land affairs, the percentage of total expenditure has been maintained between 2,6% and 2,7% since 1990 in the current 2003 Budget, whereas the allocation for land reform grants has increased significantly from R0,8 billion to R1,6 billion.

Some other key focus areas include improvement in learner support material expenditure per learner from R170 to R250 per annum. It is also reported that an amount of R71 million has been earmarked to build 140 additional classrooms.

Whilst investment in infrastructure development such as roads is indispensable to viable and sustainable economic spending, spending by all spheres of government on roads has exceeded the average for the past three years. The provincial budget for roads increases by 9,8% over the MTEF period.

It is important to note that it was at the request of the NCOP that a chapter on agriculture and land was been included in the review. The combined budget for the national and provincial departments of agriculture has been shown to increase by 13,5%.

In conclusion, I may say that life has not only become better, but there is also great confidence in the future, because all efforts are geared towards pushing back the frontiers of poverty. I thank you. [Applause.]

Mr M OZINSKY (Western Cape): Deputy Chairperson, hon Minister and Deputy Minister, hon members, on behalf of the Western Cape I want to welcome this review. It gives us an increasing amount of information, which allows us to assess what is happening in our province in comparison to other provinces. It allows us, hopefully, to make better decisions and to benchmark those decisions against other provinces. It is also a symbol of increasingly co- operative governance in the country.

Mark Twain said: ``Get your facts first and then you can distort them as much as you please.’’ The opposition is well known for doing that, but I think that this really gives us the facts to use in that regard. [Laughter.]

Our province is one of the most developed provinces. Historically we have benefited tremendously from apartheid and colonialism in terms of the facilities that have been built in our province, but not in terms of the actual development of the people. Also, 80% of the population is urban and the province is richly endowed with hospitals, schools, universities and so on.

Our province also manages to provide basic services to most of its inhabitants, but in many ways this wealth and relative development masks the poverty which does exist, both in the rural and urban areas of our province. In fact, the highest levels of poverty in the Western Cape are found in urban areas like Philippi and in the informal settlements of those areas.

Our province is able - and the review shows this - to obtain 94% of its income from national revenue with the remaining 6% coming from our own revenue. We have been able to grow this own revenue in the last period to about R1 billion. Most of this income comes from the road traffic licence fees, which are the highest in the country. There is also a proposal from the province to look at a provincial tax on fuel, especially petrol, to fund the maintenance of the roads. Even though we have the highest road licence fees in the country, we are still not able to properly maintain roads at present.

The second source of income in our province is actually from interest on money that is received by the province. Special measures have been taken by the provincial treasury in the last year to ensure good cash management and to specifically increase the interest income, which increased by 38% in the last year.

The third area of income is patient fees and this has recovered from a drop in the period of the late nineties. Unfortunately, the increase in our patient fee recovery doesn’t actually come from better collection, but from the partial privatisation of certain wards in certain state hospitals which then guarantees an income from patient fees to the province, rather than forcing better income generation.

The fourth contributor is gambling taxes. This has increased in the last year, because a new casino came on line in the province. However, I must say that there is a very heated debate in the province about whether we should be expanding the income from gambling taxes at this time, especially with regard to the limited payout machines.

Our province also has the highest cost per person nationally of staff of the provincial administration at about R105 300 per employee of the administration. This is something of great concern in the province, and it is hoped that if the MTEF projections are followed in the next few years the increase in this cost per staff member will actually decline by about 4,2%. I wanted to deal with a few departments, starting firstly with the Office of the Premier in our province. There have been some articles in the press, spurred by the DA stating that this office has the highest expenditure of all premiers’ offices in the country. The DA is trying to say that this is as a result of the cost of the co-operation agreement between the ANC and the NNP. But, in fact, this is not true. The reason why there is such high expenditure in the Premier’s Vote in our province is because this Vote includes programmes in our province which are not covered by premiers’ offices in other provinces.

In particular, IT expenditure in the province falls under our premier’s office. The director-general’s office falls directly under the Premier’s Vote as does corporate services. The fact that these expenditures fall under that Vote is, in fact, a legacy of DA rule in the province. Some other programmes that did previously fall under the premier’s office have actually been shifted out in the last while of the ANC-NNP co-operation.

In terms of education, our province performs better than other provinces because of this historic advantage that we’ve benefited from. For instance, 20% of students who write matric in our province receive an endorsement for university versus the national average of 17%. However, this actually masks quite a number of serious problems in education in our province. Firstly, only 20% of learners who start in the education system reach matric in the province, and this is obviously worse in the black areas.

In particular, we also have serious problems with the number of matriculants who pass with maths and science on the higher grade, as do other provinces. It has been suggested to the department that the higher levels that we have of maths and science higher grade passes have a lot to do with the fact that many pupils are encouraged to write these subjects on lower grade and that then pushes up the higher grade pass rate.

We also have had a real reduction in the learner-teacher ratio in the province. In 2000 the learner-teacher ratio was 31:1 in the province when nationally it was 38:1. In the past year it was 32:1, which is the same as the national average. We are looking forward to a situation in which, together with the rest of the country, the number of learners to teachers drops significantly.

Our province still has a very high rate of noneducators to educators in the education system. Twenty-three percent of the employees of the department of education are not actually educators. This points to a very large number of head office staff and to certain schools, former Model C schools, having a large number of noneducators on their staff as well. This is something that needs to be looked at in order to improve education for all across the province. These figures actually mask the fact that there are still schools in our province, especially in Khayelitsha and Philippi, that have more than 50 and even sometimes 60 learners in a class.

Our province is also blessed with two teaching hospitals and the only specialised children’s hospital in Africa, and health expenditure is the second largest share of the provincial budget. But, again, these benefits mask some serious problems that we have. Our province has the lowest expenditure on nonpersonnel, noncapital expenditure in the health budget, which means basically medicines and other consumables. There has been a real crisis with regard to the supply of medicines in primary health care facilities.

My constituency is Athlone. At the one-day hospital, the Dr Abdurahman Day Hospital, there is an ongoing crisis because of poor management in the provincial administration of the supply of medicines to primary health care.

The last area I would like to highlight is the area of housing. In our province the number of subsidies granted actually declined in 1998 to 2000. This is largely due, again, to problems we inherited from the previous government in the province, to maladministration and to a lack of proper record-keeping in the province. One thing that we have been able to ensure, though, is that in the last year more than 100% of the subsidies have been spent, and that will take place again this year. The MEC is trying to sort out those problems.

I really welcome the opportunity to have contributed to this debate, and I hope that there won’t be a distortion of facts on the province in the future. [Applause.]

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M J Mahlangu): Order! I now call the hon the Minister of Finance, Mr T Manuel. [Interjections.] Hon member Dorothy, I am chairing this debate. [Interjections.] The next speaker is the hon Minister of Finance, Mr T Ralane. [Interjections.] [Laughter.]

The MINISTER OF FINANCE: Chairperson, may I express appreciation to all the members who have contributed to this debate and, perhaps more importantly, to all distinguished members of the NCOP who have been involved in taking the Intergovernmental Fiscal Review out of this room and into the provinces for discussion since it was tabled on 8 April.

We said previously that we would table the IGFR probably ever second year, allowing us to get more detailed discussion, and ensuring, also, that we have a lot more nonfinancial information of higher quality available, because that clearly facilitates the discussion.

Listening to the debate here this afternoon, I think that we were well advised to have done it in the way that we did. But I think it is important that we, again, contextualise the wider discussion. The wider discussion is one of intergovernmental fiscal relations. There are very sound reasons why we should develop the best possible systems, jealously guard them and ensure that we can match budget with outputs.

This is also to ensure that we can have available, certainly in this House, the best possible information and an early-warning system that will talk to us, because around the world now we are seeing that many of the difficulties faced - even in some of the world’s largest economies - are often less as a result of what happens at a central level than what happens in the other spheres of government.

The US has all manner of complex fiscal difficulties at a federal level. Whereas for years the states of the United States had been debt-free, deficit-free, this position now no longer obtains. One of the key questions that many analysts are asking about the United States is: How will the states be able to raise the revenues to deal with the services that they must deal with, because it is unlikely that the federal administration will have the resources to be able to make transfers? Because there has always been so much wealth in the US, it had not actually developed a system like our intergovernmental fiscal relations system, with an outside agency like the FFC, with a very clear formula and with systems that would inform decision-making in that country.

The Big Apple, New York, is in the throes of a deep fiscal crisis. It is interesting that you now have one of the most successful businessmen from New York, Michael Bloomberg, as the mayor and a city that is in deep, deep crisis.

Similarly, if one looks at the largest economy in Europe, namely Germany, the problems are not at the federal level nor are they, at this stage, in the Länder, the states. The problems are the problems of cities. The deep tragedy is that those parts of Germany which remained unscathed after World War II - the buildings with a rich history and so on - are being sold because the cities need revenue and there are no other revenue sources.

Now, if we step back from the IGFR, which is the subject of our discussion here, and observe trends elsewhere in the world, then, I think, this amplifies the importance of the work being undertaken by members of the NCOP in dealing with the Intergovernmental Fiscal Review in the way that they do. This is exceeding important.

Our system is young. We have to nurture it. I think that in the make-up of legislative oversight, the Constitution gives a very distinct role to the NCOP of being the custodians of provincial interests. Of course, it has organically developed to also provide custodianship for local government interests. Let me express appreciation here, because I think that custodianship exists and I think the debate here this afternoon is sufficient testimony to the fact that the NCOP is taking that role exceedingly seriously.

We tabled the IGFR, and I think it has been developed to ensure that we can strengthen accountability. But it now exists alongside a series of other documents, and the interrelationship, I think, is one that we need to keep alive.

The first of these is that in all of our functions we now publish Estimates of national expenditure. The Estimates must also carry along with them measurable objectives. Departments are required by the PFMA to table strategic plans, and that has now been developed into the provinces to ensure that their provincial departments also table strategic plans.

Now, we would ask, as we take forward this process of intergovernmental relations, that members of this House observe the alignment and talk back to us about the alignment or misalignment of those kinds of programmes. The same measurable objectives that we now publish as part of a contract at national level should be there in the provinces. May I add, going forward, that local government should be dealing with issues in exactly the same way. It is about accountability. It is about the executive creating a very special place for legislatures to be involved and to talk to these issues.

Similarly, one of the developments in terms of the PFMA is tied into the reporting in terms of section 32, which requires of us at a national level to publish monthly expenditures, actual expenditures for the month, for provinces to do the same in provincial gazettes, and for us to undertake this on behalf of national and provincial government together on a quarterly basis.

Now, in terms of the oversight - and I was hoping to speak after the hon Ralane - the budget committee is actually doing the analysis. I want to implore other committees in this House to draw on the work being done by the budget committee, because I think it strengthens the oversight in a very distinct way.

It would be remiss of me if I didn’t express our sincere appreciation to the hon Ralane and members of the budget committee for that work and also, at the same time from where I am sitting, to say to you, members of Parliament and members of the National Council of Provinces, that it helps us when other committees stream off the work done by the budget committee to improve on accountability, so that we don’t wait for the Auditor- General’s reports but can in fact see what is happening as we proceed.

The first issue is about strengthening accountability. Later we will come with statistics, as the IGFR does, but we don’t have to wait that long. It is very important that members of Parliament, as a very intrinsic part of that custodianship role, exercise that oversight by looking at the figures as they are published.

In respect of the oversight role, I think we need to hear - and let me be blunt because part of my job is to take a big spoon and stir trouble - that I hear more praise than concerns about the IGFR. Now, we listen very carefully. Even if the Deputy Minister and I are not in the House, we have very diligent officials - Shahied Khan and his team - who are around the place, who sit in committees, who sit in front of a television set and advise us.

The things we are looking for are the ways in which we can improve on the IGFR. We need to know what is not there and what would be useful for Parliament to have, because we want this democracy to work. We have come too far; we have sacrificed too much to be light-hearted about democracy. If we want democracy to work, then I think it will work because we as legislators together, as decision-makers together, know that it works. We will know that it works because our people tell us that it works. We will know that it works because we close the gap between that which we plan - and the budget is essentially a plan - and what the money buys. So what the money buys is informed by the quality of information that we can make available to our legislators at any given time, because for us democracy is about a contract with our people. The key element of that contract is to improve on the quality of life of everybody, but with a very special and affirmative focus on the poorest of our people. We must be unapologetic about that.

I’m glad that members referred repeatedly to the Freedom Charter, because it’s a tradition that we have to take forward. We aren’t first-generation democrats. This is a tradition that we must take forward. Even before the Freedom Charter, there was the African Claims which has an anniversary this year as well. We have to take those traditions forward, and we can only do so if our decision-making is well-informed.

We have heard this afternoon that, yes, we are in a much better place than many other countries. We have heard, encouragingly, of the discussion about the outputs reported on in the IGFR that have been taken into the provinces. I think, going forward, that we want the same quality of discussion in respect of cities and towns.

However, I didn’t hear enough this afternoon in the debate about the people’s skills. Members and delegates from the Eastern Cape may know about the fact that we need, I think, 6 440, staff in critical-skill areas in the Eastern Cape. The bulk of them, incidentally, would be in health services - doctors, specialists, physiotherapists, speech therapists, professional nurses, nursing assistants and people like those. At the same time, the province has about an equal number of people with very few skills. That is why we want to get these numbers right.

The same kinds of issues would apply in every province. There is no point in our having amongst the best policies on health and the delivery of primary health care anywhere in the world, but then we find that the poorest don’t have access because we can’t get doctors and professional nurses to work in the rural areas of Engcobo, Mqanduli, Mgwali and wherever else … [Interjections.] … and Whittlesea, of course. [Laughter.] The poorest of the poor are disadvantaged - they can’t get to big hospitals in Umtata and Bisho and King William’s Town. The premise of our health policy is primary health care. If we want primary health care then we must be able to deliver. This also means that part of our political work must be to convince our people to join the Public Service.

The Minister of Health advises that probably outside of the larger hospitals in the Eastern Cape there is an overreliance on foreign doctors. Now why aren’t we producing our own doctors? These are the issues, but they are the next-phase issues.

I am expressing appreciation for the work done, for the content, for the quality and for the depth of analysis. I would like to clearly express our appreciation. I speak on behalf of the Deputy Minister and myself to the hon Qedani Mahlangu, the select committee and also the budget committee, and to all the members for the work that they’ve done. This feedback is exceedingly important for us. We think that not only for us sitting in the Treasury, but for all South Africans that it enriches our democracy, but we say: ``Let’s do more.’’

Part of what we must do more of is to be advised about the way in which we disperse professionals across the country, and about the things we are not doing quite right, because I think we want to have a democracy that allows us to live up to the words that Amilcar Cabral used: Mask no difficulties, tell no lies and claim no easy victories. That should shape our democracy, that should shape our contract with the people, and the IGFR is but one piece in making that truthful democracy possible. Thank very much. [Applause.]

Debate concluded.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M J Mahlangu): Thank you, hon Minister. Hon member Dorothy, you now know why Mr Ralane did not speak. I hope that Treasury will not poach him. He is still a member of Parliament. Hon members, that concludes the debate on the Intergovernmental Fiscal Review.

                2003 INTERGOVERNMENTAL FISCAL REVIEW

                      (Consideration of Report)

Question put: That the Report be adopted.

IN FAVOUR OF: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.

Report accordingly adopted in accordance with section 65 of the Constitution.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M J Mahlangu): Order! I have the following notice. The chairperson of the Select Committee on Land and Environmental Affairs invites members who may be interested to view some photographs of projects from the Malaysia study tour in venue S12A immediately after adjournment of the Council.

The Council adjourned at 17:12. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. Bills passed by Houses - to be submitted to President for assent:

 (1)    Bill passed by National Assembly on 25 June 2003:
     (i)     Anti-Personnel  Mines  Prohibition  Bill  [B  44D  -  2002]
          (National Assembly - sec 75).

National Council of Provinces:

1. Messages from National Assembly to National Council of Provinces in respect of Bills passed by Assembly and transmitted to Council:

 (1)    Bill passed by National Assembly on 25 June 2003 and transmitted
     for concurrence:


     (i)     National  Road  Traffic  Amendment  Bill  [B  31B  -  2003]
          (National Assembly - sec 76).


     The Bill has been  referred  to  the  Select  Committee  on  Public
     Services of the National Council of Provinces.

COMMITTEE REPORTS:

National Assembly and National Council of Provinces:

1. Report of the Ad Hoc Joint Committee on Reparations, dated 24 June 2003:

 1.     Introduction


     The Ad Hoc Joint Committee on Reparations (the Committee) has  been
     established by decision of the Speaker and the Chairperson  of  the
     National Council of Provinces to consider recommendations  made  by
     the President in terms of section 27 of the Promotion  of  National
     Unity and Reconciliation Act (Act No. 34 of 1995).


     The Committee first  met  on  3  June  2003  and  elected  two  co-
     chairpersons, Mr A Mlangeni and Ms N C  Kondlo,  according  to  the
     Rule 55 of the Joint Rules of Parliament.  The  Committee  met  for
     the  second  time  on  10  June  2003  and  identified   four   key
     recommendations from the President's speech delivered to the  Joint
     Sitting of Parliament held on 15 April 2003, namely:


     (i) symbols and  monuments;  (ii)  rehabilitation  of  communities;
     (iii) medical benefits and other forms of  social  assistance;  and
     (iv) final reparations.


     The Committee also appointed a subcommittee  to  advise  it  on  an
     appropriate response by Parliament to  these  recommendations.  The
     subcommittee met on  11,  12,  17  and  23  June  to  consider  the
     recommendations, as well as written  public  comments  received  in
     this regard, and submitted a report to the Committee  on  24  June,
     which report was accepted and adopted as the final  report  of  the
     Committee.


 2.     Context


     The Committee proposes that the four recommendations identified  be
     grouped into two main categories, namely:
     *  Recommendations that seek to redress injustices of the  past  in
          a more holistic manner  by  focusing  on  gross  human  rights
          violations inflicted upon whole communities  and  the  broader
          society, on the one hand; and


     *   Recommendations  that  seek  to  redress  gross  human   rights
          violations suffered by individual victims  identified  through
          the TRC process by granting them some degree of relief.


     A view was expressed, but not carried, that victims as  defined  in
     the Act and the reparations due to them, as defined,  are  governed
     by sections 3, 4, 5, 25, and 26 of the Act, and  that  symbolic  or
     community recognition cannot serve as a substitute  for  inadequate
     individual reparations. Alongside adequate reparations, they  would
     be a welcome addition.


     The  Committee  rejects  the  assertion  that  the  Act  was  aimed
     exclusively at the granting of reparation to individuals  only  and
     not in granting redress to communities and the broader society  for
     harm suffered as a result of gross human rights violations  of  the
     past.


     In addition, the Committee rejects  the  contention  that  symbolic
     and community recognition  serves  as  a  substitute  for  what  is
     perceived to be inadequate individual reparation.


 3.     Recommendations


     3.1     Symbols and Monuments


          The Committee supports the President's recommendation  calling
          for systematic programmes to project the symbolism of struggle
          and the ideal of freedom through academic and informal records
          of history, cultural  and  art  forms,  erecting  symbols  and
          monuments that  exalt  the  freedom  struggle,  including  new
          geographic and place names.


          The Committee notes the work that  has  already  commenced  at
          various levels of government in  this  regard.  This  includes
          work-in-progress towards the establishment  of  Freedom  Park,
          the Garden of Peace and the renaming of streets and  towns  in
          various parts of the country.


          The Committee, having deliberated on the matter,  agrees  that
          the focus here is on the struggle  that  led  to  the  current
          democratic dispensation ushered in by the  new  constitutional
          order in 1994. In this regard, the Committee,  having  further
          deliberated on the matter, is  of  the  view  that  unity  and
          reconciliation should also be projected in such symbols.


     3.2     Rehabilitation of Communities


          The Committee supports  the  government's  commitment  to  the
          continued payment of special emphasis on the rehabilitation of
          communities that were subjected to intense  acts  of  violence
          and destruction. The Committee notes the work that has already
          begun in this area and endorses the  focus  on  a  partnership
          approach between communities and government in pursuit of this
          objective.


          The Committee, having deliberated extensively on  the  matter,
          agrees with the view that not only individuals but also  whole
          communities suffered and are still in distress.  It  therefore
          recognises the need for such communities to  be  rehabilitated
          through  various  programmes,  such  as  alluded  to  by   the
          President.


     3.3     Medical Benefits and other forms of Social assistance


          With regard  to  the  specific  cases  of  individual  victims
          identified by the Act, the Committee notes the assurance given
          by the President of programmes put in  place  to  provide  for
          medical  benefits,  education  assistance  and  provision   of
          housing as well as other social benefits to address the  needs
          of individual victims identified by the Act.


          In this regard, the Committee's attention  was  drawn  to  the
          assertion  in  the  TRC  report  that  "the  failure  of   the
          responsible  government  bodies  to   provide   the   required
          information,  combined  with  the  fact  that  victims  return
          constantly to the President's Fund and the  RRC  empty-handed,
          points to a complete breakdown in the agreement forged between
          government (inter-Ministerial Committee on Reparation) and the
          RRC". 1


          The Committee therefore proposes that Parliament, in line with
          its oversight  role,  be  provided  with  regular  reports  by
          government on progress made in this regard  at  least  once  a
          year.


     3.4     Final Reparations


          The   Committee,    having    considered    the    President's
          recommendations  regarding  final  reparations,  endorses  the
          commitment of the government to provide  a  one-off  grant  of
          R30,000 to those individuals or survivors  designated  by  the
          TRC, over and above the  other  material  commitments  already
          mentioned.


          The Committee notes, but does not accept, the contentions  put
          forward that the amount proposed is  inadequate  and  that  at
          minimum the 2 975 declared victims whose rights to seek  legal
          recourse against successful  amnesty  applicants  for  damages
          have been extinguished, are  entitled  to  assessment  of  the
          losses suffered and to commensurate compensation.


 4.     Conclusion


     The Committee therefore recommends that Parliament accept the  four
     recommendations made  by  the  President,  as  identified  in  this
     Report. Further, the Committee anticipates that all  the  necessary
     practical arrangements for the effective  implementation  of  these
     recommendations will be provided  for  in  the  regulations  to  be
     promulgated and implemented by the  President  in  accordance  with
     the provisions of the Act.


 Report to be considered.

National Council of Provinces:

1. Report of the Select Committee on Economic and Foreign Affairs on the National Small Business Amendment Bill [B 20B - 2003] (National Assembly - sec 75), dated 25 June 2003:

   The Select Committee on Economic and Foreign Affairs, having considered the subject of the National Small Business Amendment Bill [B 20B - 2003] (National Assembly - sec 75), referred to it, reports that it has agreed to the Bill.

2. Report of the Select Committee on Finance on the Appropriation Bill [B 8 - 2003] (National Assembly - sec 77), dated 25 June 2003:

   The Select Committee on Finance, having considered the subject of the Appropriation Bill [B 8 - 2003] (National Assembly - sec 77), referred to it, reports that it has agreed to the Bill.

3. Report of the Select Committee on Land and Environmental Affairs on the Protocol on Wildlife Conservation and Law Enforcement in the Southern African Development Community, dated 25 June 2003:

   The Select Committee on Land and Environmental Affairs, having considered the request for approval by Parliament of the Protocol on Wildlife Conservation and Law Enforcement in the Southern African Development Community, referred to it, recommends that the Council, in terms of section 231(2) of the Constitution, approve the said Protocol.

 Report to be considered.

1. Report of the Select Committee on Security and Constitutional Affairs on the International Convention on Prevention and Punishment of Crimes against Internationally Protected Persons, including Diplomatic Agents, dated 25 June 2003:

   The Select Committee on Security and Constitutional Affairs, having considered the request for approval by Parliament of the International Convention on Prevention and Punishment of Crimes against Internationally Protected Persons, including Diplomatic Agents, referred to it, recommends that the Council, in terms of section 231(2) of the Constitution, approve the said Convention.

 Report to be considered.

1. Report of the Select Committee on Security and Constitutional Affairs on the International Convention Against the Taking of Hostages, dated 25 June 2003:

   The Select Committee on Security and Constitutional Affairs, having considered the request for approval by Parliament of the International Convention Against the Taking of Hostages, referred to it, recommends that the Council, in terms of section 231(2) of the Constitution, approve the said Convention.

 Report to be considered.