Budgetary Review & Recommendation Report on Department of Tourism, Minute adoption


23 October 2012
Chairperson: Mr D Gumede (ANC)
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Meeting Summary

The Committee’s Content Advisor tabled and took Members through the draft Budget Review and Recommendation Report (BRRR). The highlights under different programmes were mentioned. These included the Department of Tourism (the Department) achievements in attracting more visitors in 2011 than in 2010, the creation of full time job equivalents, various training programmes and reductions in staff vacancies. There were, however, still challenges in regard to the failure to implement the International Relations Strategy, implementation and monitoring of Expanded Public Works Programmes, and the number of drop outs from programmes offered by the Department. Memorandums of Understanding had been signed with the relevant Sector Education and Training Authority, and there was consultation on professionalising and harmonising tour-guide services in the region. Local Government support was being promoted. In relation to spending, there was overall under-spending of 1.2% of the budget, or R14.7 million. Domestic tourism had received sufficient attention but there was a need for a further focus on the youth training. There was some concern that perhaps the targets were not accurately enough stated, and it was felt that more accurate budgetary costings were required before setting these targets.

Members noted that although the issue of land claims had been raised consistently to the Committee, it was not something that this Committee could address, and perhaps the Department of Rural Development and Land Reform should be asked to brief the Committee on its plans and comments. The Mpumalanga Regional Training Trust was commended for its efforts, and there would be a recommendation in the report that the Department of Higher Education and Training should look into the potential. Other issues that they felt needed to be addressed included small business support in the industry, issues of National Parks taking levies, increasing the budget to attend to the African market and the impact of the fuel price. Members debated the ideal site for the Tourism Indaba. They were concerned at the slow pace of transformation. The South African Local Government Association would be asked to address the committee. It should be mentioned that seven other departments impacted on the work of the Department of Tourism. Members had suggestions on the drop-out from Departmental courses, the need to monitor and evaluate projects, to speed up visas, and statements on how tourism contributed to the National Development Plan. Members asked for some points to be clarified and would adopt the Report once the amendments had been made.

Members adopted, with amendments, the minutes of 11 and 18 September.

Meeting report

Chairperson’s Opening Remarks
The Chairperson commented that in the 2011/12 financial year, and to date, the Department of Tourism (DOT or the Department) had been performing quite well and he hoped that this could be sustained. The Chairperson hoped to see better performance on domestic tourism, and expected tourism spread. This did not depend solely on the Department of Tourism but on a number of other players, so the Department had to create more relationships.

He tabled the draft Budgetary Review and Recommendations Report (BRRR) and noted that it would not be read word for word.

Draft Budgetary Review and Recommendations Report on performance of the Department of Tourism 2011/12
Mr Sibusiso Khuzwayo, Committee’s Content Advisor, noted that the Department was able to attract more visitors to the country, as seen from a comparison of the 2010 and 2011 figures, but more work needed to be done. The Department had also expanded communications initiatives with South Africans to raise awareness of the tourism sector, to encourage domestic tourism.

The strategic plans of the Department were to aim for increased investment in tourism, increased inbound tourism, deliver a world-class experience to the visitor, entrench a culture of tourism with South Africans and increase its contribution to job creation and economic growth. The objectives in the Strategic Plan were incorporated into the recommendations, so the Department would move towards fulfilling them. The local government support programme would need to be intensified and cover municipalities, to guarantee capacity to deliver on the tourism mandate at the local level. The tourism industry for the most part remained untransformed,  and transformation was slow. The Department needed to step up interventions aimed at implementation of the Tourism Sector Codes and monitor compliance.

Mr Khuzwayo then addressed Programme 1: Administration. Its purpose included providing strategic leadership, corporate support and services. The Department was able to implement 100% of targets in relation to the organisational performance management system, and implemented 100% of internal protocols to achieve intergovernmental policy implementation. There was no baseline for the implementation of the Master Systems Plan (MSP) but the Department was able to review and implement 100% of phase 1. The Business Process Modelling and Structures also had no baseline, but the Department was able to audit all business processes, and model 45% of business processes higher than the 40% target. The efficient, effective and economic use of departmental resources had a 90% target of compliance and achieved 100%. There was a target of 10% set to reduce vacancy rate and 9.42% was achieved.

In regard to Programme 2: Tourism Development, the Department was able to establish full time equivalent jobs. There was a target of 5 270 jobs and the actual number achieved was 5 036. Full time equivalent jobs actually created by the Medium Term Expenditure Framework (MTEF) Baseline budget for the Tourism Enterprise Partnership (TEP) amounted to 5 093 jobs, higher than the goal of 5 000. The Department set a target of training 800 unemployed youth and graduates as chefs and placing them for experiential learning. There were 818 enrolled, but only 536 graduated, due to reasons beyond the control of the Department, which included candidates becoming pregnant, or moving into permanent employment. The Committee noted that the Department performed well on training programmes, including ones funded with Expanded Public Works Programme (EPWP) funding, but said the Department needed to intensify projects that dealt with skills training.

Mr Khuzwayo said that tourism projects funded through EPWP funding had a set target of 45 projects, but actual projects achieved numbered 76. In regard to the difference between targets and achievements, he noted that the Committee would be encouraging the Department to set targets according to its available budget and obtain proper project costings, in order to avoid the implications of over-achievement.

In Programme 3: Tourism Growth, the Department had noted the signature of Memorandums of Understandings (MoUs) with the Culture, Arts, Tourism, Hospitality and Sports Sector Education and Training Authority (CATHSSETA). This was done in order to ensure development of people in the sector. Young people were specifically targeted. With regard to the aim to professionalise tourist guide services, the Department had aimed to, and had consulted with four Southern African Development Community (SADC) countries on harmonising guiding standards. A draft framework was being development and Mr Khuzwayo believed it would take the industry forward.

The issue of local government support was very important and the Department had established a Local Government programme.

Overall, the Department under spent 1.2% of its allocated budget, which totaled R14.7 million. Administration spent 99.3% of its allocated budget. Tourism Development spent 97.8% of its allocated budget. Tourism Growth spent 99.4% of its appropriated budget. Policy, Research, Monitoring and Evaluation spent 94.4% of its allocated budget.

The analysis of the Department’s Annual Report and Financial Statements showed that domestic tourism received the kind of attention that would support its stature as the backbone for sustainable tourism, but more work still needed to be done. There was an intensified skills development focus on youth training.

The Committee was generally satisfied with the Department’s and South African Tourism’s work and the many achievements in the year under review. This included a reduction in vacancy, a number of training programmes, creation of full time equivalent jobs, 5 542 graded tourism establishments being noted on the database, and the hosting of various events.

However, the Committee had cited some challenges that needed to be addressed. This included the Department’s failure to implement the International Relations Strategy, and the need for more implementation and monitoring of EPWP, among others.

Mr Khuzwayo noted sixteen observations by the Committee in the report, which were made after various engagements. These related to the political relations, national gateways, intergovernmental relations, tourism budgets, marketing, safety and security of tourists, grading of tourism establishments, public-private-partnerships, the Indaba as premier African consumer show, National Convention Bureau, tourism as an economic activity, new cost drivers in aviation, SA Tourism levies, provincial statistics from SA Tourism, land reform claims, and tourism funds.

Mr Khuzwayo then reviewed the recommendations of the Committee (see attached presentation for details).

Mr Jerry Boltina, Committee Secretary, reminded Members that when the Committee visited Northern Cape, Limpopo, Eastern Cape and North West, the issues of unresolved land claims were raised consistently by tourism stakeholders, and only in Gauteng had it not be raised. He also noted that another issue of concern was the Millennium Development Goals, and he was not sure how the Committee was going to tackle this issue, since Parliament wanted departments to indicate how far they were on track to achieving these Goals.

The Chairperson agreed that the issue of land claims was a problem. There had been a lot of uncertainty around this but unfortunately it was not in this Committee’s mandate. He thought the Committee needed to call the Department of Rural Development and Land Affairs to brief this Committee on what plans it had to provide more certainty in this regard, as was indeed the role of every economic player in the country.

The Chairperson commented that the Committee needed to look into the institution of Mpumalanga Regional Training Trust (MRTT). He also thought that the Committee should apply its mind to whether there should be a MoU or relationship between MRTT and CATHETTA. There were also issues around small business support in the industry, issues of National Parks taking levies and using these levies themselves, a matter that was mentioned by the Minister around increasing the budget to attend to the African market, and the impact of the price of fuel.

The Chairperson also asked Members to speak to other issues if they felt that they had not been exhaustively addressed in the draft Report. He thanked everyone for the comprehensive work put into this process.

Ms C Zikalala (IFP) thanked the Committee Secretary for raising the matter of the Millennium Development Goals, and agreed that all the departments had been asked to participate in achieving them. There were eight goals and the Department of Tourism must be involved. She felt that the most important aspect was whether poverty was being addressed in places near to tourist attractions by empowerment and involvement of those communities. She also asked why the Tourism Indaba had, since inception, been held in Durban, and why it had not moved into Gauteng.

Ms M Njobe (COPE) expressed her concerns, as outlined in the document, that the tourism industry remained untransformed. She did not dispute this statement, but wondered if it should be specified how the Committee would consider that the industry could be or was becoming transformed, as there was a concession that there was a little progress on this. She was pleased to see the focus on Africa. She wondered if the Committee should add a comment, under the section on challenges, that the Department should start opening offices in Africa to help it develop the tourism industry.

Ms Njobe thought that the Committee should also ask the South African Local Government Association (SALGA) to address it.

Ms Njobe was pleased to note the Committee’s observation that there needed to be increased funding, saying that the budget for this Department was too small to allow it to achieve its platforms.

Ms Njobe asked what actually happened to the BRRR reports after all the work and research had been done.

Mr S Farrow (DA) said that there were seven other departments that had a direct bearing on whether the Department of Tourism would be able to achieve its mandate, and felt that this needed to be raised, in the introductory section.

The Chairperson agreed with him and also said that the recommendations should be mentioned in the introduction.

Mr Farrow said that the first bullet point under the heading “Measurable Objectives of the Department” did not make sense at the moment and needed to be worded more clearly.

Mr Farrow commented that in regard to dropouts from the Department’s training programmes, the average cost per student per year was R30 000, and he believed that if the Department was funding students to go through the course, then the students needed to sign a contract guaranteeing that they would finish the course, to avoid the situation of a loose-ended programme being offered.

Mr Farrow asked for the insertion of another bullet point in relation to the challenges with the monitoring and evaluating of EPWP projects. He believed that the Department should not allow projects to go ahead without its input.

Mr Farrow noted the Committee’s observations, as expressed in the section on Political Relations, that it was taking six to seven weeks to issue visitors with visas. That was why few visitors came to South Africa from these countries. He commented that quick visa processing was key to building tourism.

Mr Farrow said that nothing had been said about how tourism would contribute to the National Development Plan, although a number of jobs were created in South Africa by the tourism industry.

Mr Farrow wanted to insert a conclusion that the Committee believed that the Department should include as targets, its integration, contribution and alignment to the National Development Plan.

Mr Farrow also suggested that something on tourism levies be included in the Recommendations section of the Report.

Mr R Shah (DA) commented that there was no real problem with the content of the Report, but he felt that some corrections were needed on structure and language. He suggested some grammatical corrections, and drew attention to some typing errors. He commented, under the section containing the Committee’s observations about political relations, that there were “new” political relations with Brazil, Russia, India and China (BRIC). The relationship between these countries was not “new”, but the addition of South Africa was, and he felt that the Committee should make it more clear that it would like to see those relations supported and strengthened.

Mr Shah suggested that the entire introduction needed to be reconstructed. If there was a note that the budget of the Department needed to be increased, then the Committee needed to add the reasons into the introduction.

Mr Shah, commenting on the Indaba, noted that the Committee had some difference of opinion whether it was to remain in one city, or move.

Ms J Maluleke (ANC) noted that Ms Njobe had covered her points, and was satisfied with the report. 

Mr F Bhengu (ANC) was in agreement with the recommendations made by other members. He said that the Committee should deal with all the issues, and asked if the Committee would request an extension of time. He concurred with issues raised by the Chairperson regarding land issues and SALGA.

Ms V Bam-Mugwanya (ANC) said she concurred with most comments. She said that departments generally tended to make transfers, without monitoring people, hoping that they would do their job. If departments invested in something, it would be in their interest to follow up and monitor. It was a sign of irresponsibility when they did not. Start-ups would be supported, but monitoring strategies needed to be the top priority of government. She believed that no one had mentioned strategies to be put into the system.

Ms Bam-Mugwanya noted that the Indaba needed to be revitalised. If the Department was not coming up with new strategies, then the Committee needed to pump in new ideas. The relocation or circulation of the venue would do Indaba quite a lot of good, and would boost economies in those cities. She said the Committee needed to influence processes instead of waiting for SALGA, but she did not know if this was overstepping the mandate. 

Mr L Khorai (ANC) commented that, following the visit to Mpumalanga’s MRTT, there were some positives that could be implemented. He was also in favour of Mexico’s model when they took the tour as well.

The Chairperson talked about the National Trust Foundation Fonatur, in Mexico, and how it assisted in developing new resorts. He thought that it would be useful to create a similar institution in South Africa.

Ms Zikalala said that most of the points had been dealt with but wondered about the issue of national gateways. She recently had traveled to OR Tambo Airport, and there were only two people working despite very long queues. The same did not apply to Cape Town. She asked what were the norms and advantages of those norms.

The Chairperson said that only three cities could hold the Indaba and if it was shifted to a rural area, it would be beset by problems of lack of roads, accommodations and other issues.

Mr Shah said the issue was about branding. He felt that, similar to the Rio Carnival, the Indaba could happen in other places, but would not be the same, and if this was so, then it was best to retain it in Durban.

Mr Bhengu asked if the Committee  wanted to insert a specific recommendation on MRTT into the Report.

The Chairperson thought this would be useful. He noted that MRTT promoted skills and worked with universities of technologies and other institutions at even higher levels.

Mr Bhengu said he was cautious about singling out MRTT, although he was in agreement with expressing support. The Committee had not held a meeting with MRTT and he questioned why the Committee wanted to include a specific recommendation.

The Chairperson said it would be good to speak with the MRTT, and pointed out that its managers had showed passion for what they were doing.

Mr Bhengu said the MRTT indicated that it had a good relationship with the Department of Education and was getting funding from that department. He asked how the Committee recommendation would be worded.

Mr Shah said that the Committee had asked if the project had the capacity and drive to move on also to other provinces, and MRTT had responded that the prospects were endless, but it needed support from the Department of Education. The Committee was very impressed with the MRTT model and was therefore intending to recommend that there be further engagement on the principle in order to replicate the model in other provinces in the country. The Committee’s recommendation would be that the Department of Higher Education and Training should engage with it.

The Chairperson noted that the necessary amendments would be made, and the deadline for adopting the Report would be the following morning.

Adoption of Minutes
The minutes of the meeting on Tuesday 11 September were adopted, with the necessary grammatical and spelling corrections, and a further expansion on the Committee’s comments in relation to the MoUs.

The minutes from Tuesday 18 September were adopted, with grammatical and technical changes. There were also some amendments to the portion of the report dealing with concerns about gaps in legislation, and the need to address transit visas.

The meeting was adjourned.  


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