Media Briefing by Minister on Human Settlements Budget


29 Jun 2009

Minister Tokyo Sexwale, accompanied by Deputy Minister Zo Kota and Director-General Itumeleng Kotsoane, gave a brief synopsis of his Budget Speech. He highlighted that housing was not just about building houses but also about transforming residential areas and building communities with closer access to work and social amenities. The Minister emphasised that anarchy will not be tolerated, even though they would engage with people, a line had to be drawn.


Q. About your partnership with the private sector, what are you envisaging there? What would you like to bring to the table?

A. I spoke about going the extra mile, I come from that sector, and I know there is a lot of commitment from private sector in terms of investment in social responsibility. I think in view of the economic crisis, developing countries are affected a lot. I understand the situation with bankers, therefore we understand that the situation will be more difficult. You might not see it when you are sitting at home with a cup of coffee in your hand, but people out there are slaving. It is for that reason with our global background that we would like to call upon the private sector, which I applaud, as they will play a positive role in coming on board. What shall be good for the private sector should also be good for our country. I indicated that there is a meeting with the private sector in the coming month as well as engaging with high level individuals. I do have a plan in mind, but do not want to speak of it before I meet with them. I have been invited by the Johannesburg Stock Exchange to discuss this plan. You will realise that my first meeting was at the JSE, where I made the call that I know how wealth has been created in the JSE. So there is a plan especially when dealing with the unbanked and those people who cannot take out loans from the bank.

Q. I wonder if we can talk about informal settlements because under your predecessors there were some statements about eradicating informal settlements by a certain date. Has there been a rethink, about what you will do about this. Are you going to be upgrading people where they are rather than relocating them?

A. I think we should all understand the challenges that we are confronted with here. These informal settlements have not just grown because there is an agreement for people to settle on that land. Some of the people are occupying land belonging to other people or to government. However many people have occupied that land for about 20 years, for example those alongside the N2. It is somebody else’s problem but it is our solution. If the economy is performing wel,l your question falls away, people would apply for bonds, However there are those people who have fallen through the cracks. So there must be some kind of a social net that carries them. It is very easy for us to say to them, well, you don’t belong there, go away. But where do they go to? While we expect that everybody who is creditworthy must have a bond, its okay, we will provide subsidies for those people who can’t. In the mean time we are going to find ways and means for taking care of those people. I know we are all in a hurry to see these squatter camps go away. But it won’t happen like that until we have sufficient means. Until the economy is performing well, this problem will persist. I was a prisoner for a long time, I know how to wait. I want to quote Nyerere to answer your question, people don’t ask for houses now, they don’t ask for jobs now, and I believe in that man, he says what people want is evidence that you are taking their demands seriously. I think what we want to show is the face, the feet and the hands of this Minister of Human Settlements. People get agitated when the queue is not moving. I was at the Confederations Cup, and you must see what people do in that traffic! What more when the situation is about life and death, poverty and alleviation and so on. We are committing ourselves to making sure that those queues are moving.

Q. Do you plan to do anything about the temporary relocation area because the people of Joe Slovo and Langa are quite unhappy about the resettlement to Delft? Is there going to be any kind of sensitivity from the Department towards the people who don’t want to leave their informal settlements? What is the kind of approach when it comes to these sensitivities?

A. We understand why people want to be where they are, they want to be close to their places of work, even though they’re occupying somebody else’s land. They want to be close to amenities. They want to have the kind of life that we are all having even though they are squatting. One of the things that needs to be rectified in terms of the spacial-development is we’ve got to take due care that where we build people houses they must trust us with those decisions. They also don’t want to be moved very far from where they are staying. Now the Delft area…the Slovo people were actually in town today demonstrating. There is that fear that when people are removed from land, they are not sure that when they come back that they will still be part of that community.

Director General Itumeleng Kotsoane: These are not evictions, these are relocations and they are intended to be temporary, so that we can allow work to be done on that portion of land, allocated for infrastructure to be built. But what we also say to people is it may happen that not all of you will come back and therefore we are bound to find alternative settlements and we will try by all means to make sure that we don’t uproot people far from places of work. So we are quite aware of that, the Department and the Province are providing additional transport for those people to go work, for their kids to go to school and so forth. There is some sensitivity about that issue.

Q. In your speech you had this line about the shortfall; the current trend in housing will lead to a shortfall of R102 Billion in 2012. Is that referring to the total budget deficit or the housing budget? Could you explain those figures? In that context, what is your proposal to the private sector?

A. It’s not that I am telling what the private sector should not do or do, we have a plan, we want to table it before them. It is good not to publicise that in the street because it will cause confusion about it. I am going to meet with them in our centres. However what is surprising is the number of people who have come to me ever since I made this declaration. For example one person said that they would like to provide me with swimming pools and another person said that they would like to give an x amount of houses.

In terms of the budget overdraft because of the backlog, there is a lot of money that is going to be required. Those figures just show you how this thing can accelerate.

Director General: The point that the Minister is making is that if indeed we are going to meet the millennium goals we going to need a lot of money. The budget that we have over the following year is in the region of R40 Billion, but if we had to live up to what we said we will do, we need R250 Billion. And every year it increases because of changes in costs, so more needs to be done for the country to meet its millennium goals or to address the backlog.

Minister: People must not be shocked by the numbers as there are many poor people in Africa. Housing is just a component of Human Settlement, so it could cost less if we were just building houses. However it does not mean that we must find that money now from Pravin, the project is going to be funded step by step.

Q. It does strike me that President Clinton’s idea of using dead equity or converting dead equity, is not being used in this country. How does one overcome this problem and does this department see the ownership problem as being a huge problem in South Africa?

A. It’s called red-lining. What President Clinton did when he had the White House, was that he went to stay in Harlem, to personally try and increase the value of those assets. And because of that he was referred to as the first Afro-American President. The problem is financial institutions red line certain areas. They will not give credit there. They don’t value those properties in Soweto, Nyanga, Gugulethu and so on. So until such time that red-lining goes, those will be dead assets. So we should find a way of giving life to these assets. Something must attract business to those areas. So I think it’s a question of ideas, give us ideas and we will work them. Apartheid has made it worse because some of these areas are in Timbuktu. They are daar by die buitekant. And as long as you have that distance, these houses will remain dead assets.

Q. Going back to the Joe Slovo question, concerning their marching. Are the people of Joe Slovo losing faith in this department?

A. Well, I don’t think it is matter of them losing faith in the department. But it is matter of them not taking the responsibility. Many of them are not paying rent. Remember when they got into those houses, they were work-shopped and screened to check if they could pay rent. So if they are not able to pay rent, they need to engage with the department, so that together we can find solutions. At the moment we think it is being unfair to the department, as they say that they are not going to pay rent.

Joe Slovo, Phase 1, is a social housing project, and the principle of social housing is that you pay rent. You don’t have ownership over the property. So this is done to provide options, if you are one of those people who do not qualify for housing. We can’t say that when people refuse to pay rent it is okay. Therefore what is being done now is that the Cape Town Housing Company has now been appointed to manage the property. Those who don’t pay will be required to get out of the houses. They don’t qualify for that type of housing as an option. The message must go out that government does not allow anarchy.

Q. I have been to those flats. The reason why people did not want to pay rent is because the flats were falling apart and there was one common lock for all the doors. And there were small children that had to be sent out to live with grand parents because of leaks at the flats. Will you fix those properties? I think you have admitted to poor workmanship yourselves.

A. We have to admit, it think there is a term that contractors use after you have contracted a house, you must wait for a period of time. Now what happened is that when they moved in, that agreement was not in place yet. But there are three categories of people who live there. There are people who legitimately acquired those houses, there are people who are subletting so the original person who signed the contract is no longer there, and they are receiving rent. There are also flats that are overcrowded. A flat that was supposed to accommodate four people, has six to eight people. So people themselves are destroying the property. Thus we are bringing the Cape Town Community Housing Company to regularise that.

However we should say that where things are broken, they must be fixed. But I should emphasise that there will be zero tolerance for anyone who wants to make any part of this country ungovernable, where authority does not work and where people want to occupy anything. There are limits to social and political activism. People should not take activism to the point that the texture of the government is undermined. Having said that, we are sensitive to people, we know about poverty, but sensitivity applies when there is reason on the other side. However, some people will abuse that and we are aware of that.

Q. We see there is a lot of unrest in the country, but what do you mean by saying that you have to step in? You have given an example of the situation at the N2 Gateway, Joe Slovo. So what would you do to stop this attitude?

A. We must continue to engage, because we can easily do things that will have an opposite effect. So we must sit down and talk with people. I have dealt with situations where people were holding bazookas and we sat down and talked to these people. But where the law has got to roll in, it is going to do that. Anarchy is anarchy and has to be dealt with.

Q. The N2 and the Cosmo City project were both pilot projects. How is Cosmo City doing? Are you going to rethink the model or educate people on how to look after their houses?

A. Cosmo is more successful, there are no problems there. We have to admit mistakes have been made with the N2 project. There are many things that happened and should not have happened. We would like to learn from some of those. However we must continue pilots, we can’t just stop. That’s normal good business practice.

Deputy Minister, Ms Zo Kota: Consumer education is critical, in the process of building human settlements. Areas like the N2 Gateway, if we don’t maintain those flat they are going to go down. We need the rents to maintain those flats. We have to make sure that we are partners in making systems work. The people must have a sense of ownership of the N2 Gateway.


Tokyo Sexwale -- Minister of Human Settlements, MP

Honourable Members
Invited guests
Ladies and gentlemen
Comrades and friends

Thank you for the opportunity to present our Budget Vote, Number 26, and in so doing to share our programmes and plans.

This human settlements budget vote presentation is still defined as the housing budget vote in terms of the MTEF. It consists of three parts:
First, the concept of human settlements.
Second, the current housing situation.
And third, the consequential challenges of our new mandate.

In understanding our approach, we need look no further than the Constitution of our own Republic, where the very first value referred to in the very first line of the first chapter is human dignity.

The concept of human settlements, which recognises the centrality of human dignity, may be a new one for many South Africans. Yet it has been part of the global developmental lexicon for many years, having been adopted at the United Nations’ global Habitat summit in Vancouver, Canada, in 1976.

Again, it gained ground at another UN conference, the World Summit on Sustainable Development, held in Johannesburg in 2002. 

The concept was taken further at the  52nd National Conference of the ANC in Polokwane in 2007, where several resolutions committed the new government to the promotion of human settlements and the building of cohesive, sustainable and caring communities.

Ultimately, in both  his State of the Nation address and his own Budget Vote, President Jacob Zuma formalised this concept with the establishment of the new Human Settlements Ministry.

In doing so the President explained: “Housing is not just about building houses. It is also about transforming our residential areas and building communities with closer access to work and social amenities, including sports and recreation facilities.”

Incidentally, the concept was also referred to by the last Housing Minister, Dr Lindiwe Sisulu, in the “Breaking New Ground” policy, outlining the need for a new human settlements plan with more appropriate designs.

But what is the letter and spirit of this concept? This is actually contained in the Freedom Charter, a historical document adopted 54 years ago by the Congress of the People -- long before Vancouver, the World Summit or Polokwane. That Congress demanded: “There shall be houses, security and comfort for all!

Clearly mindful of the consequences of apartheid social engineering, the Congress demanded that “all people should have the right to live where they choose, to be decently housed, and to bring up their families in comfort and security”.

Slums shall be demolished, and new suburbs built where all shall have transport, roads, lighting, playing fields, creches and social centres” .

In this respect, our task in terms of Government’s Medium Term Strategic Framework is clear: to restore humanity and dignity, to address spatial inequalities and to provide comfort and security for all.

This we shall achieve by planning and building human settlements in an integrated, coordinated and holistic way. These must be places where people can play, stay and pray. They should be green, landscaped communities -- pleasant places, where people live, learn and have leisure. 

To achieve all this requires a new approach, a paradigm shift beyond housing. It is about homes. It is not just about a change of name from housing to human settlements; it is about a change of mindset, taking us from a new concept to concrete reality.

The current situation
Let us briefly reflect on the work of the housing department as it stands.

Some of the key developments are the following:
Expenditure on housing service delivery has increased from R4.8-billion in the 2004/2005 financial year, to R10.9-billion in the last financial year, increasing at an average rate of 23 percent. 
Funds allocated to national pilot projects for this financial year include R400-million for the N2 Gateway, R120-million for Zanemvula Housing Project and R1 50-million for disaster relief in KwaZulu-Natal.
Nationally, over 570 housing projects have been approved and a housing grant of R12.4-billion has been allocated for this financial year. This is allocated for expenditure on the construction of 226 000 new housing units  across all nine provinces.
In the first two months of this financial year – that is, from the 1st of April to the 31st of May 2009 -- provincial housing departments have already reported delivery of more than 22 000 housing  units.
This brings the number of subsidised homes delivered by government since 1994 to a total of 2,3  million, accommodating approximately 13-million people.
We are obviously also looking beyond the numbers, and are pleased to report that the homes being built at present are of a larger size and better quality, with more houses of 40 to 45 square metres being constructed.
Gradually, new housing projects are also beginning to take the shape and form of quality human settlements which enable people to live a better quality life.

Going forward, additional funds are being allocated to provide for large-scale upgrades of informal settlements and the alignment of the national housing grant with inflationary price increases. 

Although the housing grant allocation has been increased over the 2009 MTEF period, we remind you once again that the previous studies by the Department concluded that continuing with the current trend in the housing budget would lead to a funding shortfall of R102 billion in 2012 -- which could increase to R253 billion by  2016. This is of great concern.

Furthermore, we remain concerned about houses that are reportedly standing empty, especially in the light of the huge demand for housing of almost 2.1 million units. We have taken cognisance of the need for housing in urban pressure points around the country and are in the process of responding to this with alternative tenure options including affordable rental housing stock.

We have also strengthened our resolve to provide housing assistance to people living in shacks, who constitute the bulk of the housing backlog.

Significant strides have been made towards identifying those informal settlements that can be upgraded in-situ with essential services, and work in this regard is progressing satisfactorily, as long as we successfully arrest the spread of informal settlements. We have mapped all these informal settlements countrywide, and this area will be receiving serious ongoing attention.  

The rural housing programme remains a key housing intervention, and new initiatives are in the pipeline to accelerate the development of quality rural human settlements.

Let me now turn to the question of corruption. This remains a major challenge across the housing delivery environment. To ensure we identify and act against criminals, we have strengthened our partnership with the  Special Investigations Unit and taken stern action against offenders.

To date, a total of 772 public servants have been charged, of whom 554 have been convicted. More than 1  600 acknowledgments of debt have been signed in respect of non-qualifying government employees with a total value of R19.8m, and millions have already been collected by the SIU from non-qualifying illegal beneficiaries.

The department has signed a further Service Level Agreement with the SIU mandating them to investigate fraud, corruption and maladministration in low-income housing contracts. This is the focus for the current financial year, and will enable the department to understand the type of abuse giving rise to blocked projects and allow us to improve our systems and processes while getting rid of corrupt officials and contractors.

Much of this anti-corruption drive was spearheaded by the last Minister of Housing, and we commend her and Willie Hofmeyer’s team in the SIU for their endeavours to clean up the system. We will remain seized with this endeavour.

The consequential challenges
Let us now come to the question of the consequential challenges of our new human settlements mandate.

From the outset, let me emphasise that ours is effectively a brand new Ministry with, for the first time, a brand new deputy minister, Honourable Zou Kota-Fredericks, and much of what we are undertaking in terms of human settlements is brand new.

In addition, all the provincial MECs are also new to their portfolios. They are nonetheless a dynamic team of men and women, with whom we have already held two highly successful meetings/lekgotla in less than a month in what we call MinMECs. These meetings have played an invaluable role in shaping our thinking as Team Human Settlements, together with the senior management team in the Department, led by the DG, Itumeleng Kotsoane, and our partners in the various housing institutions. 

We all work together within the framework of the war on poverty that was reiterated by the President in his State of the Nation address, and which is already being waged under the leadership of the Deputy President, Mr Kgalema Motlanthe.

Internally, as the Ministry and the Department, we are examining the implications of the broader definition of human settlements in terms of our mandates, policies, procedures, programmes and capacity.

We are already well into a review of our Development Finance Institutions -- the National Housing Finance Corporation, the Rural Housing Loan Fund and the National Urban Re-Construction and Housing Agency -- to enhance their developmental coverage and impact.

We also have several legislative proposals in the pipeline, to accelerate the achievement of the ideal of true human settlements for our people and strengthen the legal environment. These include:
Amendments to the Housing Act, to align it to the ethos and principles that underpin the creation of sustainable human settlements.
The Sectional Titles Management Bill, to deal with the management and administration of sectional titles schemes; and
The Community Scheme Ombud Service  legislation, to establish a dispute resolution mechanism for all community housing schemes.
In addition, the Land Use Management Bill is being piloted by the Department of Land Affairs.
At the same time, we will be tabling a new National Housing Code, which is required in terms of the Housing Act of 1997. The 2009 Code was approved by MINMEC in February of this year.

We will also explore what other legislative impediments and/or disharmonies exist in the development of human settlements and seek Parliament’s support in resolving these. We must once and for all streamline legislation for the development of sustainable and integrated societies.

It must be clear by now that, much as we aim to address the housing needs of all South Africans, and build integrated communities, our chief focus is the needs of those South Africans who are on the receiving end of economic negativities – the poor, as well as the poorest of the poor -- where the former qualify for government subsidies, whilst the latter, who live in shantytowns, qualify for nothing.

Shantytowns exist throughout South Africa, where townships or “slaapdorpe” were built under apartheid far away from urban areas. This was taken to horrific extremes in many places, such as Ekangala, where people depart for the city of Tshwane as early as 4am, spending hours on the road. Only Heaven knows what time such people had to get up to travel to work.

We are seized with our central focus:  to ensure due care for human dignity. This means not only focusing on holistic and integrated planning, but also paying attention to the greening of communities and alternative energy sources such as solar and wind power and other environmentally-friendly technologies.

This government has made tremendous gains in breaking the housing backlog, and the number of new homes built is second only to China. But this must not mean that houses should be of poor standard, or that quality is compromised in the interest of chasing numbers.

Consequently, it is crucial that we work closely with the planning and monitoring ministries in the Presidency. In our department, we already have our own monitoring unit to assess the quality and quantity of new homes, as well as the National Home Builders’ Registration Council, and we will be collaborating with the Presidency’s monitoring unit to share our findings.

Together, we will obviously do more. This means maximum cooperation and coordination with other national departments, particularly those in the Social Protection and Community Development Cluster, as well as the Departments of Rural Development and Cooperative Governance.

Similarly, we will focus on heightening cooperative governance with provinces and municipalities to harmonise how national, provincial and local government can continue to work together. We will also work closely with the South African Local Government Association (SALGA) and the South African National Civic Organisation (SANCO).

Increased interaction with local government will, for example, enable us to redress existing developmental gaps in more established communities where apartheid spatial planners deliberately neglected the need for community services and facilities. It is important that we avoid perpetuating the same apartheid spatial development strategies.

A golden thread running through all our initiatives is consultation, and community involvement for community development. We plan to work closely with communities, contractors, regulators, and other stakeholders. This consultation will continue to focus on issues such as planning and design, and ensuring that all those involved – from the largest contractor to the smallest – are focused on quality, and that they follow the appropriate design models.

The corporate sector is a key partner in ensuring we meet our objectives. We will be engaging with captains of industry and high net-worth individuals towards consolidating new partnerships with the private sector, in recognition of the fact that working together we can do more. A consultative meeting will be held with business in the coming months to explore ways and means of addressing the dire situation of the unbanked and people who do not qualify for credit. It is well-known and appreciated that many corporate players are committed to social investment and responsibility, but our new engagement will be about going the extra mile, for the sake of our people. We trust and believe that they will come on board.

In the current situation, the global economic downturn is of fundamental and critical concern, as it negatively impacts on our endeavours now and in the foreseeable future. This situation is worsened by the current economic recession in the South African business cycle.

As one developed nation after another begins to limp out of the hospital of the global economic crisis, the sad truth is that emerging markets and developing countries such as our own are more likely to be left behind in intensive care -- without much care. This prompted the World Bank and the International Monetary Fund to issue a rare joint statement in April of this year warning that: “The global economy has deteriorated drastically. Developing countries face especially serious consequences as the financial economic crisis turns into a human and development calamity”.

This does not paint a rosy picture. In revenue collection terms, this situation has had a serious effect on the fiscus – which could result in a decrease in budget allocations, with potentially harmful consequences for all departments in the future.

In our own sector, we are already feeling the impact of the recession on the property market, building materials, and access to housing finance. Many people have lost their jobs, or are in the process of losing their homes and household contents.

As this situation impacts on government’s ability to spend its way out of the recession, the consequences will be felt within the very human settlements we strive to develop.

On a broader level, an ongoing global slowdown in spending and investment is likely to impact on Government’s ability to meet some of the targets set for the 2014 UN Millenium Development Goals.

The other global phenomenon we need to factor into our planning is that of urbanization. The UN Habitat has pointed out that the 21st Century is in fact the Urban Century, when for the first time in history the world’s population will live predominantly in cities. We must be prepared for this urban eventuality, and plan accordingly. Whilst there may be problems, we should also identify the opportunities.

There must be no equivocation that the 21st Century must also be seen as the one in which South Africa must grow from being a developing country to a developed nation. There must be an active realization that this is what our government is working towards as we develop human settlements.

We must not, of course, overlook the tremendous contribution that the development of human settlements makes, and will continue to make, to the South African economy. Government’s efforts to address the housing backlog in the past year have, in addition to providing shelter to millions of South Africans, also provided work for more than 1.3-million people.

Every new home is an economic catalyst. Its construction stimulates the mining sector to explore for and mine more copper, iron ore, manganese, cobalt and other raw materials. Housing construction invigorates the manufacturing sector to produce more pipes, tiles, bricks, doors, taps, windows and so on. It activates the retail sector to sell more furniture, appliances, carpets, curtains, white goods, kitchenware etc. The economic multiplier effect should never be underestimated.

Lastly, but most importantly, let me emphasise that we will require the support of Honourable Members of Parliament,  as well as of the Portfolio Committee on Human Settlements in particular, if we are to succeed in our mission.

We have a long road to travel, and our people have great expectations. This Parliament has a vital role to play in ensuring that we meet those expectations.

Ultimately, our task is about social justice and economic democracy. The new homes that we are building within the context of human settlements are equivalent to a social wage. They are assets.

In this context, Parliament has a duty not only to hold this Ministry accountable  for the development of human settlements and budgetary expenditure; it must also join us in educating beneficiaries on the importance of taking care of and maintaining these assets and the environment within which they are located.

In doing so, we are asking Parliament to echo our message in addressing the pervasive and negative entitlement mentality that exists among some individuals, who only see government as something that gives handouts. It is important for people to assume responsibility as well.

To conclude: as Team Human Settlements, we know the difficulties that confront us. We understand our mission. We foresee the challenges. It is not going to be an easy task, particularly given the current economic constraints. And we know we have to be extremely careful with every cent we spend – after all, it is public money, contributed by South African taxpayers, both rich and poor.

We know and trust that we shall have the support of this House, both for our activities and for the expenditure that is outlined in our budget vote.

The commitment that we give in return is that as accountable political leadership, with the MECs and our management team, we will put our shoulders to the wheel – on the basis of sound principles and good governance -- to ensure success, knowing quite well that this calls for hard work, diligence and serious commitment. 

I thank you.


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