Defence and Military Veterans Budget Review and Recommendations Report

Meeting report

Draft Budgetary Review and Recommendations Report (BRRR)

The Committee considered its Draft Budgetary Review and Recommendations Report.

The Chairperson stated that the Report had been circulated to members and that members should have perused it. In the interests of time he suggested that the Committee deal with the section on Committee Recommendations. He noted that some of the recommendations were similar and suggested the Committee consolidate them.

Members agreed that subtle changes could be made to the recommendations in order to prevent repetitions.

Mr D Maynier (DA) complained that he had received the Report electronically late the previous night and had only received a hard copy ten minutes before the meeting had started. He hoped that next year members would be able to peruse the Report at least a week before its consideration.

He felt that the recommendations contained in the Report did not deal with the real issues of the Department of Defence.  It was a fact that the Department spent 54% of its budget on the compensation of its employees. Indications were that the budget of the Department of Defence was not going to increase over the Medium Term Expenditure Framework (MTEF) period. A cut in the MTEF was however envisaged. In the next financial year it was expected that there would be a shortfall in the compensation of employees of R1bn. He noted that the shortfall of R1bn was most probably going to be funded from the operational cost of the Department. He suggested that there were only two ways to deal with the dilemma. The first recommendation he suggested was that the Department downsize so that the expenditure on employee compensation should be brought down from 54% to 40%. The second recommendation was that the Department should cut its wasteful expenditure. The Committee should look at what Programmes of the Department could be cut. If the Committee was serious about the BRRR the budget of the Department should be scrutinised and recommendations made to downsize Programmes and to make cuts. If the Committee was not serious about its work then the BRRR should just be adopted and have absolutely no significance.

The Chairperson responded that the Committee could engage on the suggestions made by Mr Maynier.

He referred to page 18 of the Report and said that the first three recommendations were about resourcing the Department of Defence to meet its operational challenges. It would include securing border lines.

Mr Maynier agreed that the recommendations should be the point of departure for the Committee but the implications of what was being said needed to be considered in light of the fact that the Department’s budget was not going to be increased over the MTEF, and cuts in the MTEF budget was expected. He reiterated that there was an R1bn shortfall in the Department’s compensation of employees. All the Committee could do was to downsize the Department of Defence and to limit wasteful expenditure.

The Chairperson referred to recommendations made by the Committee to the Department of Military Veterans, there were many repetitions in the recommendations.

Mr S Esau (DA) said the Department of Military Veterans’ Annual Report for the last year was outstanding, and current quarterly reports were also outstanding.

Mr Maynier reiterated that the Committee had not received the Annual Report of the Department of Military Veterans. He asked that the Committee obtain legal advice as to whether the Committee could make recommendations to the Department of Military Veterans if the Committee had not scrutinised their Annual Report.

The Chairperson said that a recommendation could be made that an investigation on procedure needed to be done. He referred to the Committee recommendations made in relation to ARMSCOR as contained in the Report.

Mr Esau pointed out that ARMSCOR had wasted funds by cancelling contracts. The Chief Financial Officer had informed the Committee that the Special Defence Account (SDA) would cover the losses. He felt it to be totally unacceptable and supported the recommendation made in this regard as contained in the Report.

The Chairperson noted that the Castle had to be promoted as a tourist destination. What was lacking in the Report was the role of the Committee to promote the Castle as a tourist destination.

Maintenance or the state of facilities had been a concern for the Committee. He asked whether members were satisfied that the issue of maintenance was captured correctly in the recommendations.

Mr D Gamede (ANC) stated that some of the issues raised had been dealt with in the workshop that the Committee attended. He stressed that the State of the Nation Address had mentioned that the Department of Military Veterans should be resourced. There was agreement that resources were needed in order to have good quality equipment. The Minister had asked the Committee to visit the military barracks in Pretoria to witness the poor state they were in. It was evident that more resources were needed. He added that Memorandums of Understanding which the Department of Military Veterans had with other departments needed to be honoured. 

The Chairperson said that the establishment of the Defence Works Formation, which had an in-house repair and maintenance capability, needed to be monitored regularly.

Mr Esau pointed out that the Defence Works Formation currently had 1300 posts outstanding. There were supposed to be 2500 posts.

The Chairperson suggested that the Committee could recommend that the Defence Works Formation fill posts.

Mr Esau said that it was the lower ranked members of the Defence Force who bore the brunt of the bad state of the barracks. He asked where the reports were regarding the issue. There was also no updated report of the Military Ombudsman. None of the reports spoke to issues that affected the lower ranked members of the Defence Force.

Mr Maynier said that it was common cause that everyone wished for the Department of Defence to be operationally good and to have good equipment as well. Funds needed to be reallocated from compensation of employees to operational funding. The Defence budget was not going to be increased and was going to be cut. Downsizing was needed and wasteful expenditure should be cut. The aforementioned recommendation needed to be made to the Minister and the Appropriations Committee.

Mr Esau urged the Committee to encourage discussion on finances. He was disappointed that so many virements had taken place in the Department of Defence. People were being employed and getting paid to do their jobs. He noted that there were some hard issues. The Committee needed to decide where cuts could be made in the Department of Defence. Was the Committee interfering in the budget of the Department of Defence? In past years the Committee had not interfered. Cuts needed to be made as South Africa already had a 45% deficit. National Treasury had provided the Committee with a table that showed where cuts needed to be made. The biggest cuts were in employees of the Department of Defence.

It was important was that critical posts be filled.

The Chairperson referred to an exit mechanism and asked whether the Committee had been provided with information on it.

Mr Esau responded that the Committee had not received a presentation on it to date.

The Chairperson said that it was an issue that needed addressing.

Mr B Bongo (ANC) said that it was fine to have exit mechanisms. He was concerned that the issue of retrenchments was being considered and suggested that perhaps there could be other alternatives.

Mr Maynier once again urged the Committee to be serious about the BRRR. The DA rejected the Report in favour of more costed proposals on how to deal with employee compensation as well as costed proposals on how to deal with wasteful expenditure by the Department of Defence.

He pointed out that adopting the Report as amended was a lost opportunity. The Committee needed to properly fund the operations of the Department of Defence.

Mr Bongo proposed that the Committee adopt the Report with amendments. He noted that the defence review did deal with the issues of employee compensation and wasteful expenditure. The Report could not be rejected.

The Chairperson said that the Committee did have recommendations that members agreed on. The Committee needed to move forward; synergy was needed.

Mr Esau proposed that the Committee look at budget cuts on specific items such as advertising, the use of consultants etc. He said often the Department of Defence came to parliamentary meetings with huge delegations where only a few officials made meaningful input to the Committee.

Wasteful and fruitless as well as irregular expenditure needed to be addressed. Serious consideration should also be given to National Treasury directives.

Mr Bongo commented that the Minister had already made the same points as raised by Mr Esau,

Mr Maynier referred to the Department of Defence’s current defence acquisitions and defence international relations and stated that the intention was to open 40 Defence attaches. It would cost the taxpayer hundreds of millions of Rands per year. He believed that the number of attaches could be cut by 70% and it would not affect efficiency.

The Chairperson said it seemed as if the Committee was in agreement with broad recommendations of the Committee. The Committee would deal with specific issues at another forum.

Mr Maynier wished it to be placed on record that as far as the DA was concerned the feeling was that on the process no proper deliberations had taken place. Certain reports that should have been available to the Committee had not been available. One such report was the Annual Report of the Department of Military Veterans.   In addition, the Committee had not made any recommendations under section 5(3)(c) of the Money Bills Amendment Procedure and Related Matters Act.  It was furthermore felt that the Report was irrelevant to the Minister and the Department of Defence as no specific recommendations were being made. If the Committee wished to get serious, the process he had suggested could be followed. He felt that the Committee was not confronting the realities if it simply went through the motions. The DA hence did not support the adoption of the Report.

The Report was nevertheless adopted as amended.

The meeting was adjourned.