The Secretary for Defence and the Chief Financial Officer of the Department of Defence briefed the Committee on the Annual Performance Plan for 2012 and the budget of the Department of Defence for the period 2012/13 to 2014/15 (Budget Vote 22.)
The total final defence baseline allocation for 2012/13 amounted to R37.5 billion (1.2% of Gross Domestic Product). The baseline allocation included approved additional funding of R638 million. The additional funding request was for salary improvements, strategic defence procurement, the Military Ombudsman and border safeguarding. The budget had been reduced by R516.5 million, mainly for the Military Skills Development System programme. The budget included provision of R51.2 million for the Department of Military Veterans. Details of the baseline allocation reductions since 2008/09, transfer payments and sources of revenue were provided.
The programmes of the Department were Administration, Force Employment, Landward Defence, Air Defence, Military Health Support, Defence Intelligence and General Support. Information was provided on the allocation per programme and per economic classification.
The briefing on the Annual Performance Plan for 2012 covered the vision, mission and the constitutional and legislative mandates of the Department. The key priorities were the enhancement of Landward Defence capabilities; maritime security; job creation; the peacekeeping capability of the South African National Defence Force; the National Youth Service, revitalisation of the Reserve Force; restructuring and support of the defence industry and the Department of Defence Works Capability. Public entities and organs of State reporting to the Ministry of Defence and Military Veterans included ARMSCOR, the Castle Control Board, the Department, the Defence Force Service Commission and the Military Ombudsman. An overview of the updated situational analysis and the Ministerial priorities were included. Legislation to be introduced to Parliament included the Military Discipline Bill, the Military Ombudsman Bill, the Defence and Related Acts Amendment Bill and the Defence Amendment Bill. The purpose, responsibility and outputs for the sub-programmes under the Administration Programme of the Department were provided. The risks that had been identified and the corresponding mitigating actions were summarised.
Members asked questions about the improvements to employee benefits, if salary increases were based on performance and what the impact had been on the morale of employees; the disposal of obsolete equipment and the control measures to prevent abuse of donated ex-SANDF equipment by other African countries; what the R5.2 billion allocated to the Special Defence Account would be used for; the impact of reduced funding on training; the number of vacant posts; the number of superfluous personnel; the staffing requirement for the border safeguarding function; the establishment of the Works division and the progress that had been made in carrying out repairs and maintenance of military facilities and the ownership of office premises occupied by the Department.
Members were concerned over the adequacy of the funding allocation to the Department. Questions were asked about the cost of the Defence Intelligence function; the cost of the VIP support function and the acquisition of a second Presidential aircraft; what was included in the budget provision for the Ministry; the media campaign to promote the SANDF; the impact of the reduced budget on operations; the adequacy of funding for anti-piracy operations and the cost of superfluous personnel. Members commended the Department for the progress that had been made, despite the limited funding available.
Due to time constraints, Members were requested to submit further questions in writing. The Department was requested to provide written responses to unanswered questions from the Committee. At the request of the Minister, the briefing on the report of the Auditor-General was rescheduled to the following week.
Ms N Mabedla was elected as Acting Chairperson of the Committee.
Mr M Mncwango (IFP) introduced Mr M Hlengwa, newly appointed alternate Member from the IFP.
Mr D Maynier (DA) objected to the limited time available for the briefing. He said that the time allowed was insufficient to allow the Committee to adequately deliberate on the budget of the Department of Defence, which totaled R37 billion.
Mr A Maziya (ANC) explained the procedure applicable to the Committee’s programme. Parliamentary Committees were not usually briefed on Budget Votes. The Committee had held meetings to discuss the budget of the DOD. Members could submit requests to the Committee to make more time available if certain matters required further discussion.
Mr M Nhanha (COPE) asked why certain delegates were not in uniform. The Secretary for Defence explained that civilian officials from the Department were not required to wear uniform. Delegates from the South African National Defence Force (SANDF) only were required to wear uniforms when on duty.
Briefing on the Budget Vote 22 of the Department of Defence (DOD)
Dr Sam Gulube, Secretary for Defence tendered the apologies of the Minister of Defence and Military Veterans. The Minister had requested that the Committee postponed discussions on the progress made in addressing the findings of the Auditor-General to a later date. He introduced the delegates to the Committee.
The aim of the briefing was to present the Annual Performance Plan for 2012 and the budget of the Department for the Medium Term Expenditure Framework (MTEF) period 2012/13 to 2014/15 to the Committee.
Mr Mziwonke Dlabantu, Chief Financial Officer, DOD presented the briefing on Budget Vote 22 for the Departments of Defence and Military Veterans (see attached document).
The total final defence baseline allocation for 2012/13 amounted to R37.5 billion (1.2% of Gross Domestic Product). The baseline allocation included additional funding received for salary improvements (R283.2 million), strategic defence procurement (R150 million), the Military Ombudsman (R5 million) and border safeguarding (R200 million). The budget had been reduced by R516.5 million - R495.2 million for the Military Skills Development System (MSDS) and R21.2 million from savings on the Health and Protection function. The budget included provision for the Department of Military Veterans for 2012/13 of R51.2 million. Details of the baseline allocation reductions since 2008/09 were provided. A breakdown of transfer payments and sources of revenue was included.
The main programmes of the Department were Administration, Force Employment, Landward Defence, Air Defence, Military Health Support, Defence Intelligence and General Support. The briefing included details of the allocation per main programme and per economic classification as well as explanatory notes (excluding Defence Intelligence). The escalating fuel price and exchange rate fluctuations were identified as the main challenges. The estimates of defence expenditure were aligned with the strategic plan and annual performance plan of the DOD.
The funding requirements of the ten ministerial priorities and a summary of the defence policy proposals for additional funding were attached to the briefing document.
Briefing on the 2012 Annual Performance Plan of the Defence Secretariat
Dr Gulube presented the briefing on the Executive Authority’s Overarching Annual Strategic Statement for 2012 (see attached documents).
The briefing included an overview of the legislative requirements for the development of plans, the vision and mission of the DOD and the constitutional and legislative mandates. The Department’s key priorities were the enhancement of Landward Defence capabilities; maritime security; job creation; the peacekeeping capability of the SANDF; the National Youth Service (NYS), revitalisation of the Reserve Force; restructuring and support of the defence industry and the Department of Defence Works Capability. Public entities and organs of State reporting to the Ministry of Defence and Military Veterans included ARMSCOR, the Castle Control Board, the DOD, the Defence Force Service Commission (DFSC) and the Military Ombudsman. The annual performance plans for the DOD and for the Defence Secretariat for 2012/13 were tabled in Parliament on 7 March 2012.
Dr Thobekile Gamede, Chief Defence Policy, Strategy and Planning, DOD gave an overview of the updated situational analysis. The key factors that could influence the performance of the Secretariat were the impact of National Austerity Measures; the contribution to government’s Medium Term Strategic Framework (MTSF) outcomes; human resources; research and development capability; intangible capital assets; infrastructure and facilities; information management; the contribution to clusters; job creation; stakeholder engagement; corporate governance; strengthening regional and continental security organisations and the Defence Review.
The Ministerial priorities relevant to the Secretariat were job creation, the NYS and the restructuring and support of the defence industry. The Department’s proposals in support of the ministerial priorities were summarised. Legislation to be introduced to Parliament during 2012/13 included the Military Discipline Bill, the Military Ombudsman Bill, the Defence and Related Acts Amendment Bill and the Defence Amendment Bill.
The purpose, responsibility and outputs for the sub-programmes under the Administration Programme of the DOD were provided. The risks identified and corresponding mitigating actions were summarised.
Ms H Mgabadeli (ANC) asked which employee levels benefited from the expenditure on salary improvements. She was concerned over the increasing cost of the Defence Intelligence division as
Mr Maynier asked what budgetary provision had been made for the Presidential aircraft. He noted that the compensation of employees was the most significant expenditure item under the budget for landward defence (66%). He asked what was included in the budget provision of R64.7 million for the Ministry in 2012/13. Compared to the cost of maintaining the Office of the President and other Ministries, this appeared to be excessive and he wondered if the provision included the cost of the media campaign to promote the SANDF. The budget for maritime defence operations had been reduced and he asked if sufficient funding was available for the anti-piracy operations of the South African Navy. He observed that more than 50% of the budget for maritime defence was for compensation of employees and asked how many employees were superfluous. He wanted to know what the allocation of R5.2 billion for the Special Defence Account would be used for.
Mr Nhanha noted that the budgeted amount for office accommodation amounted to R1.8 billion. He asked if the premises occupied by the DOD were owned by the Department of Public Works (DPW) or by private companies or individuals. He was most concerned over the reduction in the budget for MSDS and for Military Health Support. He asked why so little emphasis was placed on the training and health of service personnel.
Mr Maziya asked for an explanation of the reduction in the defence operations budget when the responsibilities of the DOD had increased. He understood that additional staff was required for border safeguarding activities. He asked if the SANDF was over-staffed and why the additional service personnel were not deployed to perform border safeguarding duties. He asked if the additional funding for salary improvements would address the previous dissatisfaction in the SANDF over salaries and avoid a recurrence of protest action by soldiers.
Mr Dlabantu explained that the budget made provision for the operational functions involved in Presidential air travel. The major portion of the budget for goods and services for the Administration Programme 1 was for office accommodation. Certain premises occupied by the DOD were owned by Government but others were owned by the private sector. Defence administration was not comparable to other government departments. The budget for the Ministry included the remuneration of the Minister, Deputy Minister and employees in the office of the Ministry as well as communication costs. The communication costs included media advertising to promote the SANDF but he was not able to inform the Committee of the amount involved. The promotion of the SANDF was an important objective and how much should be spent on a media campaign was a subject for debate. Discussions on the fiscal framework were underway to determine where certain functions and operations should be placed, for example the Military Ombudsman.
Mr Dlabantu said that much had been done to address the issues that had arisen from the protest action by soldiers in 2009. The DOD shared Members’ concerns over the relatively low expenditure on defence operations. The lack of funding affected all the divisions in the Defence Force. Critical maritime projects had to be cancelled because funding was not available but the National Treasury was considering the request for additional funding for approved policy projects.
Mr Dlabantu explained that scrap, waste arms and other decommissioned goods were disposed of through ARMSCOR in accordance with the applicable legislation. It was essential that obsolete materiél were decommissioned and disposed of so that the asset register reflected only usable items. A strategy for disposal of assets was in place. Some items were sold by auction or donated to other countries. Obsolete armaments were disposed of in accordance with the requirements for the disposal of dangerous materiél. The special defence account was used for the acquisition of military materiél.
Dr Gulube referred Members to the explanatory notes included in the briefing document, which listed the planned acquisitions for Landward Defence, Air Defence and Maritime Defence. The budget for the Defence Force’s VIP capability covered staff salaries, operations costs, technical support costs and the cost of training. The budget did not include provision for Presidential aircraft. More detailed information would be included in the annual report, which would be available on 31 May 2012. The media tended to ignore the good work done by the SANDF and it was important that the public was informed of the involvement of the Defence Force in programmes such as protecting rhino’s and fishing grounds. The transfer payment of R400 million to
Mr Dlabantu explained that the reduction in the available funding for MSDS was applied to the budgets of the various services. The reduction in funding had a negative impact on all the training programmes of the SANDF.
Dr Gulube explained that the major expenditure items for Defence Intelligence were employee compensation and operations. Details of the operations could not be provided in an open forum. The provision of Military Health Support services was challenged by the limited funding available. Provision was made for the renovation of military health care facilities but more funds were required to bring facilities and equipment up to standard. Salary benefit improvements were only applicable to Levels 1 to 12. The remuneration of management personnel was not increased.
Mr Mncwango related how the Committee had found during oversight visits to military bases that the facilities were in a bad state of repair. He welcomed the establishment of the SANDF Works formation. He asked what action had been taken to address the issue of theft of military and IT equipment. He asked how the SANDF prevented donated materiél from ending up in other countries. He agreed that it was necessary to promote the SANDF but said that there was a thin line between informing the public of the activities of the Defence Force and promoting the Minister.
The Chairperson was unsure of the advisability of donating military equipment to other African countries. She asked if the SANDF had any control measures in place to ensure that the equipment was not used to create further chaos on the continent.
Mr E Mlambo (ANC) said that
Mr Nhanha wanted to know what proportion of accommodation expenditure was paid to rent premises from the private sector. He asked how many square meters of office accommodation were rented from the private sector.
Mr S Esau (DA) asked about the morale of the members of the Defence Force. Most of the programmes extended over the METF period and he wondered how the Department would deal with the negative impact on morale if soldiers’ needs were not met. He asked if the DOD had a maintenance schedule for military facilities and if separate provision had been made for providing disability access facilities. The failure of the DPW to maintain military installations had seriously undermined the SANDF. He asked if the Department was satisfied with the progress that had been made by the Works division. There was a difference between savings and under-spending resulting from a lack of skills capacity. He asked if salary increases were general increments or based on performance. He asked what the policy was for the NYS and if the NYS was aligned with the MSDS programme. He asked what progress had been made with filling critical vacant posts, in particular in the internal audit capability. He noted that draft policy and legislative amendment frameworks had been completed but the relevant documents had not been submitted to the Committee.
Mr Maynier was not satisfied with the responses to his questions. He asked for more clarity on the additional funding requested for the VVIP capability. He agreed that the public had to be informed of the achievements of the SANDF and suggested that the Joint Operations Command held weekly media briefings, which was a far more cost-effective alternative to expensive television advertisements. It was not acceptable that the DOD was unable to advise the Committee how much had been spent on the media campaign during the previous financial year and what the budget was for 2012/13. He understood that there were 7,000 superfluous members in the SANDF and asked what the associated cost was. He pointed out that the Committee had to approve the Department’s budget and Members were entitled to know what exactly the R5.2 billion earmarked for the Special Defence Account would be spent on.
Mr Mlambo asked if the Works division was operational.
Dr Gulube advised that it had taken time to establish the Works division but this had been one of the Minister’s priorities. The DOD had collaborated with the private construction sector in developing the strategy for establishing the division. The DOD had been concerned over the effect of dilapidated Defence Force facilities on the morale of the members of the SANDF. It was clear that military facilities had to be upgraded. He reiterated that defence materiél were disposed of in accordance with the Arms Control Act, which required that licenses were issued subject to certain conditions that had to be adhered to and that there would be no deviation of end user certificates. The State Security Agency and Defence Intelligence monitored how donated materiél was used.
Dr Gulube was pleased to note Members’ support for the need to inform the public of the work done by the SANDF. Input from the Committee on the best way to proceed with the campaign would be appreciated. The Committee would be briefed on the report of the Auditor-General and the action taken to address instances of irregular expenditure in due course. Funding had been allocated for the Military Health Support function. Some savings had been achieved by transporting soldiers to military hospitals by military transport whenever possible. More cost-efficient methods to achieve the targets that had been set resulted in savings and were not considered to be under-spending.
Dr Gulube confirmed that the National Treasury had not approved the funding requests for the NYC and for the MSDS programme. The DOD had no alternative but to adjust its programmes according to the funding that was available. More information on the VIP support function would be provided in the briefing on the DOD’s annual report. The Cabinet had approved the acquisition of a second Presidential aircraft but funds had not yet been provided.
Major-General Memela Motumi, Deputy Chief Director: Human Resources, DOD advised that 95% of vacant posts on the DOD had been filled. The human resource strategy was under review and the Department was considering an appropriate exit policy. The improvement in employee benefits had resulted in an improvement in the morale of personnel. The introduction of a scarce skills allowance had improved the retention of personnel with scarce skills. The number of superfluous staff fluctuated as the strategy was to fill vacant posts internally in the first instance. Salary increases were based on the results of performance assessments and notch increases were not given. The number of recruits for the MSDS programme had been increased. The DOD was also recruiting graduates for executive positions.
Dr Gulube declined to provide details of the types of weapons that would be acquired from the Special Defence Account in a forum that was open to the public. He pointed out that mechanisms were in place that allowed the sharing of confidential information from the DOD to the Committee. The Committee’s oversight responsibility would therefore not be compromised.
Mr A Mlangeni (ANC) congratulated the DOD for the work that was being done, despite limited resources.
The Chairperson asked Members to submit further questions to the DOD in writing. She asked the Department to provide written responses to any unanswered questions from the Members by Monday, 14 May 2012. She thanked the delegates from the DOD for the briefing to the Committee. She commended the commitment displayed by the DOD for meeting its mandate. In spite of limited funding being available, it was clear that progress had been made. The briefing on the report of the Auditor-General had been scheduled for the following week.
The meeting was adjourned.
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