Department's Programme & Budget: briefing

Meeting report

PROVINCIAL & LOCAL GOVERNMENT PORTFOLIO COMMITTEE
14 March 2000
DEPARTMENT’S BUDGET AND PROGRAMME

Documents handed out:
Committee Programme
Budget and Explanatory Memorandum
Department’s presentation on Budget Vote 2000/2001
Financial & Fiscal Commission’s presentation on Municipal Finance

Department website

Legislative Programme
The Director General, Mr Zam Titus, referred to the Provisional Work Programme of September to November 1999 especially the section on “Overall Approach”.
The following are the Bills to be introduced to parliament during the first half of 2000 parliamentary session:

Local Government Municipal Systems Bill
This Bill will require input from stakeholders and will engage not only the Department of Provincial and Local Government but other government departments too such as the Department of Justice and Constitutional Development.  Invitations for submissions and public hearings will soon be announced. The Bill will be tabled on 20 April 2000.

Transfer of Staff to Municipalities Amendment Bill
This Bill will be introduced to Parliament on 20 April 2000.

Disaster Management Bill
This Bill is to be introduced in parliament on 28 April 2000.  The Director General  acknowledged the comments made by committee members at a previous meeting about the difficulties in defining ‘disaster’.

Local Government Property Rating Bill
There has not been a consensus yet as to the time frame of this Bill. Cabinet will only decide upon it in due course.

Promotion and the Protection of the Rights of Cultural, Religious and Linguistic Communities Bill
This Bill has already been drafted but stakeholders will be consulted on its content.  To that effect, a committee of individuals outside of government has been established to oversee the consultation process (consulting stakeholders on the content of the legislation) and will finally report to Cabinet.

Cross Boundary Municipalities Bill
This bill has already been drafted, but can only be attended to as matter of urgency once the relevant provincial provinces have voiced their opinions on this matter.

Municipal Election Legislation
The IEC recently submitted a draft to government.  Although the IEC draft identifies the Minister for Provincial and Local Government as the minister responsible for this Bill, the Director General commented that this legislation may need to be processed jointly with the Home Affairs Portfolio Committee.  The exact date for its introduction to Parliament is not known yet.

Remuneration of Public Office Bearers Second Amendment Bill
This contains the excised provisions from the first amendment bill (passed 14/3/2000) is ready to be attended to by the Portfolio Committee.

Traditional Leaders Amendment Bill was tabled on 10 March 2000.

Discussion
Ms M C Lobe (ANC) raised her concern about the practicality of ‘fast-tracking’ seven bills within a very short space of time – six months.  She said the Director General should be sensitive to the time factor.  Mr P Smith (IFP) concurred that the legislative programme is very tight and it may not be possible to finish all the bills in time. Apart from the fact that six months is a very short space of time to deal with these bills properly, in between, there will be a recess.

The Director General responded that the department is acutely aware of the question of recess and the short space of time that is available to deal with these bills.  But, in all that, the members should be alive to the fact that some bills are not entirely their responsibility.  To substantiate that, he mentioned the question of Municipal Elections legislation, which is more or less the baby of Independent Electoral Commission (IEC).  The Director General said that the only Bill that will need enormous work is Disaster Management Bill.

Ms Lobe commented disapprovingly that it is essential for the department to understand that the committee is not happy about the way the Director General has handled the budget process as a whole.  She said it is totally unacceptable that members debate the forthcoming budget prior to the submission of the annual report of the previous year.  Against what are the members supposed to judge the performance of the department and justifications for this year’s budget, she asked.  She warned that this might have serious repercussions in the future.  A fellow ANC committee member supported Ms Lobe’s argument and pointed out that it is not the first time that the department presented its budget prior to the presentation of the annual report.

As a way forward, Mr Y Carrim (Committee Chairperson) proposed that in future the department should ensure that it submits its annual report ten days in advance of the budget presentation.  Furthermore, the members should receive copies of the budget also ten days before it is presented and discussed.
 
Institutional Transformation: Provincial and Local Government and Traditional Institutions  [Key Focus Area (A)]
The Director General commented that this Focus Area of the budget (Consolidate, Develop and Sustain an Integrated System of Planning and Delivery) is the heart of the Department for Provincial and Local Government and it has as its focus the “sustenance of an integrated system and intergovernmental relations”.  To that effect, he mentioned the “sound relations” between his department and other departments such as the Department of Justice and Constitutional Affairs and Home Affairs.

Mr RK Sizani presented this section (see document).

Discussion
Mr M K Lekgoro (ANC) registered his concern about what he termed “the department that contradicts itself”. If one scrutinises the budget, it seemed to be more concerned with salaries than the development that the department says it is focussed on.  Personnel expenditure (salaries) seems to be the main item of a large percentage of the budget.  Mr Ngubeni, agreeing with Lekgoro, pointed out that apart from the vagueness of development-related issues in the budget, it is not specified how traditional leaders will be able to develop rural areas. 

Chief Nonkonyane (ANC) advised the government to be very cautious and sensitive when dealing with issues pertaining to traditional leaders. He asked if the department has learnt any lessons from the ongoing tensions between traditional leaders and elected councillors.  That question is very fair, given the proposals that have just been submitted by the Demarcation Board that traditional authorities and elected councillors function as one, that is, they will co-exist.

Mr I Ntshangase (ANC) said the presentation is more academic than realistic.  It is this academic nature of the budget and the proposals that it puts forward that are sponsoring his doubts as to whether all stakeholders have been brought on board.  Mr P Smith (IFP), agreeing with Ntshangase, went further and questioned the process of auditing traditional leaders.  What concerns Mr. Smith most is the lack of clarity on how the “real” traditional leaders will be determined.

Ms M Lobe (ANC) questioned the formula that the department is currently using to fund municipalities – municipalities have to collect 95% of their budget from service charges and 5% from the government.  She said it is not a formula that can enable municipalities, especially those in poor areas, to alleviate poverty.  She branded it as a formula favouring the rich or big cities.  Ms Lobe also brought to the committee’s attention the fact that this year’s budget is approximately the same as last year’s in terms of  the proposals that it is putting forward.  That, according to Ms Lobe, points to some doubts as to whether the department has spent last year’s budget properly.  She mentioned, for instance, the proposals regarding the auditing of traditional leadership, saying it seemed as if there had not been any progress.

Mr J Kgali (ANC) enquired about the latest developments of the programme dealing with the Khoisan community, and about its budgetary allocation.

Ms G Borman (DP) asked if the department has already started working on its database to determine who are the poorest of the poor.

The Director General responded that all the points raised are indeed fair but that time constraints do not allow the Departmental team to answer fully all the questions.  However, it is essential for the members to note that as long as South Africa has a Constitution, issues pertaining to traditional authority will always be there.  The Constitution stands firm in its recognition of traditional institutions and elected councillors. He said it was not possible to agree with all the issues raised about the budget.  As much as debate is encouraged, in a meeting of that nature it is not possible to be frank about every thing.  He told the meeting how important it is to always have checks in the way in which the Department, himself included, conducts itself.  

The chairperson interrupted the Director General and asked if it is not possible to have a forum in which members or any official can talk openly and honestly about issues. Given time constraints, it was suggested that the team come again to give detailed responses to specific questions.

Budget and Explanatory Memorandum
There was a brief presentation by the Department’s financial manager, Mr Craig Clerihew.

Discussion
Ms Borman (DP) asked about the department ‘s thoughts on the formation of disaster management centre, especially given the magnitude of disasters that had afflicted the country in the past few weeks.

The Department’s financial manager said that a disaster management fund is not accommodated in the budget. It is only when a disaster takes place, that the department requests additional funding from the government for disaster relief. 

Mr P Smith asked what amount of R3 199 681 million allocated for 2000/2001 budget, would go to restructuring.  He also raised his concern about what he said is the “apparent under-funding” of local government.

The Financial Manager pointed that, contrary to the concerns of members about the budget allocation for local government, there is actually an increase in local government funding.  What he did agree with is the lack of funds allocated for restructuring.  However negotiations are still on at a ministerial level between the Department of Finance and the Provincial and Local Government.  The amount to be allocated for restructuring will therefore be determined by what transpires from those negotiations.

An ANC committee member registered her concern about the lack of clarity in the budget and the targeted programmes.

The financial manager agreed that there is a lack of clarity.  He promised that something would be done about this.
 
Chief N Mtikrakra (UDM) commented that the amount that is allocated for Local Government cannot ensure the promotion of local economic activity.  He said that one might wonder what wrongs local governments have done to receive this punishment.

The Financial Manager responded that to say the department is punishing local governments is not correct.  What should be blamed rather is the formula that is used to fund them and, fortunately, that is receiving the department’s serious attention.

Minister’s presentation
Mr S Mufamadi said that the predecessor to the Ministry of Provincial and Local Government was the Ministry for Provincial and Constitutional Development.  He reminded the committee members about this in order for them to acknowledge and appreciate the different focus or strategic vision that the present department has, as distinct to the previous one.  According to the Minister, the key focus for the Department of Provincial and Constitutional Development was the production of constitutional experts.  The focus for the Department of Provincial and Local Government is the promotion of intergovernmental relations and the decentralisation of government departments.

On the issue of intergovernmental relations, it is expected that the three spheres of government – National, Provincial and Local Government, though they may differ in other aspects such as their approach, are expected to co-exist and work together.  Within this co-existence, the national sphere has the responsibility to monitor both the provincial and local spheres, whilst the provincial is expected to both monitor and supervise the local sphere.

On the issue of inter-departmental relations, the Minister specifically emphasised his department’s good working relations with the Department of Justice and Constitutional Development saying that one of its sub-programmes – constitutional development – is still run by his department (Provincial and Local Government), though temporarily.  It is only when the Department of Justice and Constitutional Development is ready to take over this sub-programme that the Ministry will cease running it.

The Minister also touched on issues surrounding the institution of traditional leaders. As enshrined in the Constitution, the department has the responsibility to ensure that traditional leaders are integrated within the governance of the country.  What this means in practice is that integration between elected public representatives and traditional leaders is accelerated.  This is not only a matter of responding to the dictates of the Constitution but is also a way of responding to the dictates of a modernising society such as South Africa.  The Ministry is currently finalising a discussion document which may result in a white paper providing policy direction to this noble mission – integration of traditional institution and local councils.

On the question of the forthcoming local government elections, the Minister said members of this portfolio committee are expected to be at the forefront in encouraging voter registration, and finally wooing people to vote.

On the question of disaster management, the minister said there is a manifest need to create a more institutionalised disaster management approach, and to that effect, legislation is to be introduced.

Discussion
Mr Smith (IFP) commented that although the minister is stating the opposite, there is very much a strong threat to the institution of traditional leadership.  The Constitution is more frank in this regard as it says that upon election of local councils, some of the powers that traditional leaders have will be taken away (such as land distribution powers) and assigned to the newly elected local councils.  Mr Smith was strongly supported by Chief Nonkonyane of the ANC.

Mr Ngubeni (ANC) commented that when dealing with the institution of traditional authority what comes to mind should not be ‘power’, because that is not the fundamental issue.  The fundamental issue, according to Mr. Ngubeni, is the co-existence of traditional leadership with local councils and the necessary democratisation of rural areas.

Mr I Ntshangase (ANC) requested the Minister to share his thoughts with the committee on the audit of traditional authorities and how resources are to be shared between the elected local representatives and traditional authorities. 

Chief Mtikrakra (UDM) requested the Minister to reiterate the assurance he had given Eastern Cape traditional leaders on the 15 February 2000 that areas within the jurisdiction of tribal lands will not be affected by the demarcation decisions of the Demarcation Board.

The chairperson, speaking on behalf of the committee, informed the Minister that they think that local government funding is not enough.

The Minister responded to the above questions collectively as follows:
Firstly, the minister said it is very difficult for him, personally, to understand this supposed threat that elected local councils would pose to the traditional authority.  He said it becomes more difficult when one hears these concerns being raised by people who did not feel threatened before by local councils that were not even democratically elected.  He said, however, that it is advisable for committee members to be patient and reserve their concerns for the time being as the department is still busy with the discussion document.  Thereafter one would be able to have an informed concern.

On the question of funding for local government, the Minister said they are waiting for a report from the Demarcation Board.  It is on the basis of that report that the department will be able to ascertain what amount of additional funds local governments need.  For the time being, the Minister said there is no reliable source to rely on for information on additional funding.

On the question of disaster management, the Minister informed the members that the debate about disaster management is even “hot” at regional level (SADC).  He said SADC Local Government Ministers had resolved in July 1999 that such an institution is needed and that resolution was endorsed by SADC Heads of States.  It is expected that, given the recent flood disaster, the region will move faster towards ensuring that a disaster management centre is formed.

Municipal Finance
A presentation on this subject was given by the Chairperson of the Financial and Fiscal Commission, Mr Murphy Morobe (see document).

Discussion
Ms M Verwoed (ANC) asked what percentage of their revenue does Mr Morobe think municipalities will be able to raise.  Further is the Financial and Fiscal Commission doing something, in the form of training, to ensure that municipalities have the capacity to deliver.

Chief Nonkonyane (ANC) said, given the plight of smaller municipalities, especially those in poor rural areas, a division of revenue (cities sharing their revenue with poor municipalities) would be a good thing to think about.

Mr Morobe gave a collective response:
He said that when one talks about capacity, one has to be mindful of the following: availability of resources and the abilities of the councillors.  He told the members that the question as to what the Commission is doing is too hasty as everybody should wait for the political process (demarcation) to unfold.

In response to Chief Nonkonyane’s question, he said there is not so much that the Commission can do in terms of division of revenue.  It is only at the level of Cabinet and the provinces that such decisions can be taken and negotiations are in place already.