Budget Vote: Department of Housing

Meeting report

PUBLIC SERVICES SELECT COMMITTEE
8 May 2002
BUDGET VOTE: DEPARTMENT OF HOUSING

Acting Chairperson: Ms B Thompson (ANC)

Documents handed out:
Presentation on Public Services Budget 2002/3-2004/5
Budget Vote

SUMMARY
The Department of Housing presented their the budget for their housing programme for 2002\03-2004/05. The presentation highlighted the challenges facing Housing, their policy programme and their current priorities.

MINUTES
Presentation by Department of Housing
Ms Nxumalo: Director General, Department of Housing, explained that the Department is responsible for monitoring the implementation of the State's constitutional obligation to provide housing for the poorest of the poor. She divided her submission into the following: aims and vision, strategic overview, budget overview and the challenges ahead for the Department.

The purpose of the Department is to determine, finance, coordinate and monitor policy in respect of housing and human settlement. About five million people have been provided with housing since the 1994 White Paper. The delivery focused on quantity rather than quality housing. However, she pointed out they intend to focus on quality and quantity based on current achievements since the White Paper.

She argued that the challenge for the Department is to determine the quantum of houses delivered each year and to assess the implications of change in population demographics. Projections of the effect of HIV/AIDS on the housing budget must be assessed. The recent Constitutional Court case of Grootboom placed obligations on government to deliver on its housing mandate. The emergency relief housing was a direct result of the Grootboom case. The land invasions have a negative effect on planning regarding delivery of houses. Ms Nxumalo expressed concern over the sale of RDP-houses by beneficiaries; legislative measures are required to discontinue the practice. The Department sees itself as an active participant in the Urban Renewal Programme and cited Alexandria as a shining example of this. The Rural Housing Programme focuses on what needs to change in respect of people's needs. She argued that water and sanitation are a priority in rural communities. There is therefore a need to monitor policy to ensure policy review and amendments. A savings culture needs to be encouraged to reduce dependency on government subsidies. She mentioned that the Housing Warranty Scheme is extended to beneficiaries through the NHBRC.

The National Housing Trust needs to disband, as it has fulfilled its mandate. In this regard, the Community Reinvestment Bill has been submitted to Cabinet for its consideration. The Housing Amendment Bill attempts to address problems arising form Housing Act, 1997.While the purpose of Prevention of Illegal Evictions Act is to deal with arbitrary evictions, especially on farmland. In addition the Social Housing Bill seeks to speed up the delivery and introduce rental housing, which is affordable. These legislative instruments are meant to show the commitment of government in providing medium density housing.

She referred to Programme1 and said reduction therein simply reflects re-prioritisation in reduction of costs in general. Programme 2 deals with policy planning and mainly restructuring causes changes. Programme 3 deals with repayment plans and the reduction is mainly because the Project was meant to be a pilot project, which ended at expiry of three years. Programme 4 dealt with transfer payments and increase is caused by an increase in personnel. Programme 5 dealt with free flow of information between various departments and changes are influenced by staff capacity problems. Programme 6 dealt with management of housing fund and considers factors like homelessness, shacks as helpful guide in formulating funding policy.

However, a new funding policy for provinces has been created. In conclusion she remarked that due to the interrelatedness of housing, the delivery of houses is invariably linked to the performance of other government departments. This created the impression that there is no co-ordination between Departments and as such no integrated development strategy. Nonetheless the Housing Department is committed to work with other Departments to ensure speedy delivery of housing.

Please see the attached presentation.

Discussion
Mr Kgware (ANC) asked if there are incentives for provinces that perform well compared with others.

Ms Nxumalo said incentives were introduced during the period of huge backlogs in housing and were phased out when enormous progress was made in reducing the backlog.

Mr P Moatshe asked about communally owned land in regard to the Rural Housing Programme.

Ms Nxumalo explained that where beneficiaries have informal land rights, the Department will assist them with a subsidy.

Mr Sulliman (ANC) asked if there is cooperation between various Departments.

Ms Nxumalo responded that there is cooperation but that largely depends on the priorities of Departments. She mentioned that the Department of Education would normally build schools on the basis of the number of school going children in a given area. A Member asked if there is an explanation for varying amounts allocated to provinces.

Ms Nxumalo said that variations are influenced by geo-technical factors such as soil type and also income variation between different beneficiaries.

A Member asked if the savings scheme will not prejudice those unable to make contributions towards the scheme.

Ms Nxumalo said that although priority is given to those who contribute, the Department is mindful not to exclude the poorest of the poor.

Dr Nel (NNP) asked about the interest which accrues on the housing subsidy as result of under expenditure.

Ms Nxumalo replied and said that interest which accrued on the subsidy is allocated to the relevant provinces and to the additional subsidy for the following year. However she cautioned that interest which accrues on the subsidy is normally low as under expenditure is kept at minimal level.

The meeting was adjourned.