Appropriation Bill [B6-2015]: Human Science Research Council comments

Standing Committee on Appropriations

13 May 2015
Chairperson: Mr S Mashatile (ANC)
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Meeting Summary

The Human Sciences Research Council (HSRC) gave a presentation to the Committee on the 2015 Appropriation Bill, under themes of education, health, HIV/AIDS, governance and service delivery and the economy.

In relation to education, the bulk of the budget was spent on salaries, but the effective delivery of education was controlled by the provinces, which required accountability measures at the national level. Instead of using international comparisons, a benchmarking had been done with Kenya, which showed that despite South Africa's high spending, Kenyan standards were better. Teacher salaries per province were highlighted, with Eastern Cape noted as spending 80% on salaries, reducing amounts available for other resources. Statistics were provided on the implications of the appropriations for student loans and bursaries, spending, and the importance of further improving the Student Financial Aid systems was emphasised.

On health, the trends in spending were set out, that included the fact that the focus on primary healthcare would see a disproportionate increase in district health services expenditure. Most resources were still hospi-centric and although health sciences and training was seeing more allocation, this needed to be doubled to meet the country's needs. Public funding priorities were to follow the NDP focus areas, with particular spending on HIV and AIDS prevention and management, maternal and child health, communicable and non-communicable disease and strengthening of health systems, by training, quality improvements, regulation of the private sector and the National Health Insurance. R36.46 billion was allocated for HIV and AIDS. Although there had been substantial increase in HIV/AIDS status awareness, condom use had declined and there should be renewed focus on prevention. Although funding was being given to NGOs working in the field, the allocations to the SA National Aids Council were inadequate. Other funding was allocated to this by the Departments of Higher Education and Training, Social Development and Science and Technology. Funding to each of those would need to be increased in the light of the drop of donor funding.

In the area of improving governance, the results of social satisfaction surveys were described. People indicated consistent results on social grants and electricity services, but low satisfaction on job creation, crime reduction and land reform. Generally, there was satisfaction on the way government was handling education.

Governance through traditional affairs was another focus area, because about 15 million people lived under traditional leaders, but the allocations were relatively low, and the traditional leaders were pushing for more. However, most of the allocations were going to their salaries and not to the people. Far more research was needed on the relationships between traditional leadership, traditional councils and municipal councils, to ensure synergy in local development. Allocations for rural development were intended to catalyse, initiate, facilitate and coordinate the implementation of a comprehensive rural development programme, leading to sustainable and vibrant rural communities. However, the allocated amount seemed low in comparison to the real needs for infrastructure, economic development and youth development.

The HSRC had also looked at the solidification of the Separation of Powers, by the formation of the Office of the Chief Justice, which entrenched independence of the judiciary and the Constitutional Court, provided strategic leadership, management and support services to the Department of Justice and Constitutional Development, secretariat and administrative support services to the Judicial Services Commission (JSC) and aided Judicial Education and Research. There were varying understandings of the principle of separation of powers, with some arguing for a flexible interpretation for public “Constitutional Dialogue” where all the arms of government and civil society could share ideas about how to create a better life for all. Civil society and NGOs funded most socio-economic rights cases and it was suggested that the mandate and capacity of Legal Aid to take on these cases should be increased.

In relation to the improved public service, the National Development Plan required a "capable State" and this would require improvement of investigations in corruption, with conscious support from the whole of government. The measures suggested to improve capability to implement infrastructure projects were outlined.

HSRC concluded that the budget appropriation encouraged fiscal consolidation and balance, although risks to this were posed by the public sector wage bargaining process outcome, particularly if it significantly exceeded inflation, implementation of the National Health Insurance (NHI) and the social security reforms announced in the 2015 Budget Speech. Performance monitoring and evaluation had improved. Dealing with the context of the economy, various observations on growth and constraints were made, and the need for private sector investment was highlighted. There had been a shift in the approach from recent counter-cyclical spending to modest tax rises and a slowdown in spending. Slowdowns were seen in public spending growth, freezing of the public sector headcount and a tougher approach to managing state entities. There was now a greater effort to encourage private investment in infrastructure projects. Emphasis on cities highlighted the need to manage urbanisation well with new approaches to infrastructure funding and public private partnerships.

Overall, HSRC concluded that the level of public expenditure had been contained but that the balance between investment and consumption expenditure was a challenge and quality of spending remained an issue, along with the need to encourage creativity and innovation, and curb abuse of public funds.

Members were appreciative of the presentation, but asked that certain areas must be further unpacked. They asked, in particular, for more detail on the contestation between traditional leadership and civil society organisations, the global and regional comparisons on education spend, why the advertising on health had not been effective, and whether HSRC felt that the proportion of grants was low and required an increase. They enquired if Westernisation was increasing in relation to the role of traditional leadership, and found it worrying that more responsibilities were given to municipalities without concomitant increases in budget. They asked if the cost of servicing debt was affordable, and what mitigatory measures might be. A few Members asked that the Student Financial Aid schemes should be further investigated. One Member commented that the quality of healthcare was "shameful" and suggested that far more must be allocated to training and retention of human resources. Members wanted to know what non-core assets of state entities were being targeted for possible sales, how much that would realise and whether the interventions made to date were effective. Members wanted more figures to be provided on specific topics. One Member wondered if the judiciary was not encroaching on the legislative function and expressed concerns about the role of the Public Protector in relation to the judiciary. Skills research for civil servants needed to be done, and more information was also needed on affordable housing. Members wondered what proportion of the population, and the spread, that was covered by the satisfaction surveys. Communication campaigns should include social media. Members also raised a number of questions about government debt, its affordability, and whether conditional grants were the best method of delivery.


Meeting report

Briefing by Human Science Research Council (HSRC)

Professor Leickness Simbayi, Executive Director: HIV, STIs and STDs, HSRC, indicated that the Council (or HSRC) hoped that the research information would assist the Committee with its overview function. Professor Simbayi also tendered an apology from the HSRC Chief Executive Officer. The research findings were presented under various themes.


Dr Glenda Kruss, Research Director, HSRC, presented on Education. She explained that the HSRC would be examining each of the budget implications to illustrate the proportion of the financial resources allocated to key national departments. For education, the bulk of the budget was spent on salaries and the effective delivery of education was controlled by the provinces, which required accountability measures to be in place at the national level.

Dr Kruss explained that international comparisons are useless in benchmarking South Africa’s spending trends and indicated that South Africa showed high spends in education and government, but actually needed to interrogate performance measurements. It was disturbing that Kenya had outperformed South Africa on the SACMEQ III (a study on conditions of schooling and quality of education), and this had to be evaluated for the enhancement of social literacy and education.

Dr Kruss evaluated the proportionate estimates of teacher salaries per province and noted that Gauteng had the lowest proportion of spending on teacher salaries and that the Eastern Cape was spending 80% of the budget on salaries, which reduced resources for textbooks and Infrastructure. Teachers' salaries were significantly, which had a negative impact on the retention of teachers. Although the proportions for salaries were high, newly qualified educators and those with less than 5 years’ experience earned on average R115 thousand, and those with five to nine years’ experience had salaries between R124 038 and R146 087 per annum. She highlighted the relationships between budget spending on salaries and on achievement.

She noted that student funding in higher education would show the following trends:

- Over the medium term: R19.9 billion will be spent on student loans and bursaries to support 711 355 students in higher education institutions, and 844 842 students in Technical Vocational Education and Training (TVET) colleges
- Spending for 2015/16 would be R7.4 billion, down from R8.5 billion in 2014/15
- National Student Financial Aid Scheme (NSFAS) had a negative image, due to insufficient funds to meet the number of students and late payment to students
- NSFAS mechanisms for disbursing funds to students must be improved.


Prof Demetre Dlabadarios, Executive Director: Health, HSRC, explained that there had been an increase in the health budget and both the public and private sector contributed a large proportion to this funding. Provincial expenditure between 2009 and 2014 had indicated the following trends:
- Focus on Primary Health care (PHC) re-engineering should see a disproportionate increase in district health services expenditure
- Hospitals continued to consume significant proportion of resources – with hospi-centric resource allocations~
- Expenditure on health sciences and training had increased significantly but this needed to be more than doubled to meet the country’s HR needs 

Prof Dlabadarios explained that the overall expenditure had increased across all programmes except administration.

Public funding priorities were to follow the NDP focus areas, with the following areas being highlighted:
- Increasing life expectancy to 70 years by 2015
- Having a generation of under 20’s free of HIV and AIDS
- Reducing maternal and child mortality
- Significantly reducing the burden of diseases, both communicable and non-communicable
- Implementing the National Health Insurance (NHI) in phases, complemented by relative reduction in the cost of private healthcare, supported by better human resources and systems.

Certain areas were particularly strong cases for investigation, and these included:

- HIV and AIDS prevention and management
- Maternal and child health, to pursue the aim of reducing maternal and child mortality
- Communicable and non-communicable diseases
- Health systems strengthening including the following:

  • Human resources for health – training of health workforce
  • Quality improvement in the public sector- OHSC
  • Health infrastructure and management – new infrastructure and maintenance
  • Regulation of the private sector – for effective stewardship of the sector (Council for Medical Schemes (CMS) and National Department of Health (NDoH)
  • National Health Insurance (NHI) – scaling up pilot activities including testing resource mobilisation, pooling and strategic purchasing of services

Prof Dlabadarios emphasised the need for funding to be allocated to the Universal Health Coverage (UHC).


Professor Simbayi explained that the government must be commended for contributing approximately 80% of the cost of the national response until now to this, which was one of the highest levels of national contribution among the high priority countries for HIV/AIDS. A health budget of R36.46 billion had been allocated for the new financial year. This was an increase of 7.4% when compared to the previous financial year.

According to the National HIV Household Survey South Africa, 2012, the HIV prevalence in the total population was up to 12.2%, from 10.6% in 2008. Around 6.4 million citizens were living with HIV/AIDS. Although part of this was ascribable to the success of the antiretroviral (ARV) treatment programme, this also showed that there were still a large number of new infections, of around 400 000 still occurring at the time. The HSRC would be conducting another survey again to illustrate the progress on national prevention measures.

According to the ART rollout figures for South Africa, approximately 3 million citizens were receiving treatment. There had been mixed results, in terms of the progress that South Africa was making in the fight against HIV/AIDS. Coverage from this year onwards would increase by another 2 million or so South Africans due to the new ART guidelines which called for the increase in the threshold from 350 to 500 CD4 cells/mm3 for initiating treatment. These had been adopted since the start of this financial year. In order to accommodate this, one of the conditional grants aimed at assisting provinces to implement the Comprehensive Plan for HIV and AIDS had been increased by 45%, from R782 million in 2004/05 to R1.135 billion this year.

Professor Simbayi explained that although there had been substantial increase in HIV/AIDS status awareness, condom use in South Africa had decreased in the years between 2002 and 2012. He explained that there should be also a focus on prevention to reduce the number of infected citizens who required treatment. It was commendable that some funding continued to be provided to HIV/AIDS NGOs such as loveLife and Soul City. However, it was of great concern that the South African National Aids Council (SANAC) budget was R15.84 million, which was clearly inadequate, given the important role that SANAC played in coordinating the multi-sectoral national HIV response.

Professor Simbayi said that it was also pleasing to note that the Department of Social Development also provided funding for NGOs working in the HIV/AIDS sector. The Department of Higher Education and Training (DHET) had also allocated R7 761 000 to Higher Education AIDS (HEAIDS), although it did deserve a much higher allocation, given its mandate to coordinate the HIV response in universities and further education training colleges. Department of Science and Technology (DST) had also allocated some generous funding for innovation in HIV, STIs and TB research which was also highly commendable.

However, if South Africa was to win the war against HIV/AIDS, STIs and TB there was a need to increase funding to each of the departments, as donor funding would be reduced over the next few years due to the middle-income status of the country.

Improving Governance and Benefits to South African Society

Professor Daniel Plaatjies, Executive Director: Democracy, HSRC, explained that there had been an increase in social satisfaction of government performance between 2013 and 2012. There was consistency of satisfaction regarding social grants and electricity, but there was low satisfaction with job creation, crime reduction and land reform. He highlighted the following:
- Areas of social grants, electricity and education recorded the highest levels of satisfaction relative to the other indicators for both 2011 and 2012
- In general South Africans were satisfied with the way that the government is handling education. In 2012, 61% of all adult South Africans registered satisfaction with the government's management of education and only 27% indicated that they were dissatisfied with the state’s performance. This did, nonetheless, represent a 10% drop in satisfaction over the last two years
- Satisfaction levels in relation to electricity have been dropping since 2003, with 2012 showing a minor increase of 2% (61% in 2011 compared to 63% in 2012)
- Although satisfaction levels on HIV/AIDS treatment were slightly down in 2012 (56%) compared to 2011(61%), this still displayed a reasonable level of satisfaction, particularly in the last three years (2010 – 2012)
- Satisfaction levels with regards to water and sanitation; and refuse removal continued to receive consistent ratings since 2003 until the latest survey in 2012
- The level of satisfaction on access to health care was up by 6% from 2011 (51%) to 2012 (51%)
- The areas of greatest public concern continued to be job creation (14% in 2011 but now 7% according to the 2012 survey), crime reduction (32% in 2011 and 20% in 2012), and low-cost housing (32% in 2011 and 35% in 2012).

Governance through Traditional Affairs

Professor Plaatjies explained that provision was made for the promotion and coordination of research and information management and the development of policies and legislation on traditional affairs and the coordination of institutional development and capacity building programmes, to enhance efficiency and effectiveness within the institutions of traditional affairs.

He noted that, taking into account that about 15 million poor rural people live under traditional leaders, the allocation to traditional leadership is very low. The reality was that most of this funding was going to pay salaries and stipends for traditional leaders. These leaders were requesting additional and increased stipends, equal to people in the public service. This would place a huge pressure on the fiscus, and would leave less funding for development of traditional institutions of governance.

He also explained that there was a dire need for research on the relationships between traditional leadership, traditional councils and municipal councils, to ensure synergy in local development. Such research would partly resolve the contestation around traditional leadership originating from civil society organisations. Furthermore, extensive capacity building of traditional leaders required appropriate research and development with the local community context taken as a focus.

Improving Rural Development

Professor Plaatjies explained that the allocation for rural development was intended to catalyse, initiate, facilitate and coordinate the implementation of a comprehensive rural development programme, leading to sustainable and vibrant rural communities. However, the allocated amount seemed low in comparison to the real needs for infrastructure, economic development and youth development. Research had highlighted the need for increased integrated comprehensive rural development projects, and M&E systems to measure performance and develop appropriate models.

Solidification of the Separation of Powers

Professor Plaatjies explained that it was the first time in this Medium Term Expenditure Framework (MTEF) that the Office of Chief Justice had its own mandated budget, separate from the Department of Justice and Constitutional Development (DOJ&CD). He explained that it consequently entrenched independence of the judiciary and the Constitutional Court, provided strategic leadership, management and support services to the DOJ&CD, secretariat and administrative support services to the Judicial Services Commission (JSC) and aided Judicial Education and Research.

Prof Plaatjies explained that there were varying understandings of the democratic principle of separation of powers. Arguments were emerging that supported a flexible interpretation for public “Constitutional Dialogue” where all the arms of government and civil society could share ideas about how to create a better life for all. Most people agreed that courts should be independent and play a role in constitutional transformation, but courts could not implement their own judgments, and it was important that the legislature and the executive must comply. Furthermore, he noted that compliance was necessary to entrench respect for the rule of law in South Africa. He added that civil society and NGOs were primary funders in socio-economic rights cases. Donor funds were drying up and would be unsustainable unless Chapter 9 institutions such as the South African Human Rights Commission (SAHRC) could play a more supporting role.

He noted that some members of the legal profession made significant contributions to pro bono work but there were severe limitations in the current system. The mandate of the Legal Aid Board should be expanded to deal with socio-economic rights. Although alternative dispute resolution (ADR) offered potential for resolving disputes around service delivery, the results could not be used as enforceable legal precedent, and costs tended also to be high.

Improved Public Service

Professor Plaatjies noted that a "capable State" would be required, to achieve the goals in the National Development Plan (NDP), directed at infrastructure-led growth and development of the economic, physical and social infrastructure. This would require improvement of the investigative abilities of institutions to combat corruption. In this regard, he highlighted the recent release the Supply Chain Management Review, ongoing cost containment measures and various capacity building programmes. However, support from the whole of government was required for these initiatives to be fully implemented.

The Public Service Bill identified a number of measures to improve capability to implement infrastructure projects, such as:
- Built environment performance plans were introduced to incentivise integrated planning and implementation across built environment functions located in municipalities
- The focus should be on a more holistic approach to capacity building if infrastructure projects were going to succeed (such as single capacity support programme per municipality)
- There were a number of policy proposals in the Bill, to fund research to identify future skills gaps in the labour market
- It was important not to neglect demand-side factors,to encourage uptake of labour, especially among youth, and the forecasting of future skills required in the public sector

Fiscal Consolidation Risks

Professor Plaatjies explained that the budget appropriation encouraged fiscal consolidation and balance. There were potential key risk areas that may serve to unsettle the balance attained in the 2015 budget. He noted the main risks to be the public sector wage bargaining process outcome, particularly if the outcome significantly exceeded inflation, implementation of the National Health Insurance (NHI) and the social security reforms announced in the 2015 Budget Speech.

He explained that appropriations consolidated the fiscal position of direct service-delivery to citizens. Investment in infrastructure-led growth was considered to provide benefits and spill-overs into economic development and social development of citizens. He added that there had been improvements in performance monitoring and evaluation, through the various mechanisms such as the Presidential Infrastructure Coordinating Commission

The Economy

Professor Ivan Turok, Executive Director: Academic Performance and Development, outlined the context in which the current economy existed, referring to the following phenomena:
- The economic slowdown: 1.4% for 2014 and 2% for 2015
- Weak global economy with uncertain outlook
- High government debt with 24% of the GDP in 2009 up to 45% of the GDP in 2015
- Large budget deficit consisting of 4% of the GDP
- Growth of debt servicing of 10% p.a. since 2009
- Growth of public sector staff and wages (15% p.a.)
- Poor investment climate, weak business & consumer confidence, energy crisis
- Little room for manoeuvre

Professor Turok explained that there was a need for private sector investments, as there had been a lack of new contracts from the public sector. He explained that there had been a shift in the approach from recent counter-cyclical spending to modest tax rises and a slowdown in spending.

He noted some significant factors. Firstly, Personal Income Tax was now up 1% for those earning over R182 000, for the first time in two decades. The fuel levy was up by nearly R1 per litre. There had been a slowdown in public spending growth, with a 2% reduction in budgeted expenditure (R25 billion) and a freezing of the public sector head count. There was now a tougher approach to managing state entities. This was shown in the case of SAA, and it included sale of non-core assets such as property.

Prof Turok explained that there was now a greater effort to encourage private investment in infrastructure projects, yet major construction companies were complaining about lack of new contracts. He noted that there would be a conference held in July, on infrastructure opportunities, with more focus on infrastructure maintenance.

New Emphasis on Cities

Prof Turok highlighted the key areas of the HSRC with regard to the new emphasis on cities:

  • “Well-planned and well-managed urbanisation can accelerate economic growth”
  • “Realising the economic dividends of urban growth" required a new approach to providing infrastructure, housing and public transport services, while overcoming the spatial divisions of apartheid
  • A new approach to local government infrastructure financing was needed over the next 3 years – to support integration
  • Treasury would work with financial institutions to expand the municipal debt market
  • Support would be given to metros to do public-private partnerships

Prof Turok explained that the overall level of public expenditure had been contained but that the balance between investment and consumption expenditure was an existing challenge. He explained that the quality of public expenditure remained an important issue, and that the balance between national, provincial and municipal spending had illustrated increased municipal spending and transfers of responsibilities. He explained that encouraging creativity and innovation had remained a challenge, as had also the abuse of public funds, owing to bureaucracy and complicated procedures for compliance.

Mr N Gcwabaza (ANC) noted the comment that the bulk of the education budget was allocated to salaries and that this needed further examination, as the elements of employee compensation, such as varied salary scales and the nature of the salary levels would have to be identified as potential causes. He noted the comment that, in relation to government performance, citizens were not satisfied with public housing and enquired as to the level of satisfaction on the provision of RDP houses. He asked about the position of public servants who did not qualify for bonds or RDP housing.

Mr Gcwabaza sought clarity on the contestation between traditional leadership and civil society organisations and whether that contestation was based on leadership style, authority of traditional leadership or areas relating to the role of traditional leadership in terms of development in traditional areas.

Mr A McLoughlin (DA) referred to the salary allocations and enquired the reason for the discrepancy in the documentation provided to the Committee and the presentation slides.

Mr McLoughlin felt that the global comparisons had been confusing. He enquired what the 9% student statistics referred to. He asked what percentage of the population was reflected in the statistics in the presentation. He further noted other errors in the presentation of figures and statistics which required correction. Mr McLoughlin commented that clearly the advertising around use of condoms had been ineffective and may be the reason for complacency amongst citizens. He further noted that public satisfaction had in fact been reduced and not increased. He enquired whether HSRC felt that the proportion of grants was low and required an increase.

Mr McLoughlin was interested in the percentage of the population which believed in the traditional approach of leadership. He wondered if Westernisation was increasing and whether the role of traditional leadership is increasing or decreasing, and the aim for government on this. He asked if citizens had been given any choice as to whether they preferred traditional or conventional leadership and whether traditional leadership required further capacitation as a result.

Mr McLoughlin commented that spheres of government had shifted responsibility to the municipality without increasing their budget, and wondered if the municipalities would not then require further capacitation to increase service provision and overall satisfaction. He explained that the municipalities cannot enforce work ethic in job creation and contract work and that measures needed to be implemented to increase the return on investment.

Mr McLoughlin was comfortable with the identification of risks set out in the fiscal constraints. However, he referred to the increase in government debt, and enquired whether the cost of servicing and the debt were comparable, and whether there had been an increase in the interest that the country was being charged, and what the possible mitigation measures may be. He noted that the Municipal Finance Management Act limited the amount that the municipality may incur, and that the municipalities were consequently under pressure.

Ms M Manana (ANC) asked that the comparison on international spending on education be unpacked. She wondered the reason for the low salary spending in Gauteng, given that the population was higher. Ms Manana referred to the administrative issues associated with NSFAS and enquired as to the reasons for the failure to administer these funds to students.

Ms Manana referred to mothers who do not attend pre-natal clinics and showed complications during delivery, saying that this would require attention.

Mr M Figg (DA) also referred to the comparison between South Africa and Kenya, and enquired whether the reading scores in Kenya were something towards which South Africa should be aspiring.  He further enquired which schools were used for the analysis.

Mr Figg referred to NSFAS funding and asked if the spending was proportional between VET Colleges and Universities. He further enquired as to the conditions of the bursary and the loans, and the loan recovery rate.

Mr Figg noted that the health care in the country "is shameful" and that the qualification of health care professionals was an issue, so that human resources should be emphasised. He was worried that the focus in this sector seemed to be on treatment rather than research and education funding.

He commented that more citizens had been provided with basic services, yet the satisfaction rates had decreased.

Mr Figg enquired as to the non-core assets of state entities that could be sold, and the total value which was available for disposal. He further enquired as to the equitable share and whether the 9% could be increase. He asked on what figures the provincial allocation was based.

The Chairperson asked the HSRC to note the government interventions currently taking place and to indicate whether these mechanisms were effective.

Dr Kruss explained that the global comparison of spending on education figures quoted related to the proportion of the GDP spent on education, per member of the population. She also explained that Kenya was deliberately chosen for comparison with South Africa, since often developed countries were used as the comparator for Southern Africa, and that this data also referred to public schools. She explained that the balance between senior and junior teachers needs to be further evaluated. She reported that the NSFAS was spending more on Higher Education, since the TVET colleges were established recently. Loan recovery systems were expensive to run, therefore affecting administration, in addition to issues of corruption.

Prof Dlabadarios explained that access to health care was indeed an issue, but so was education of the citizens, since many citizens were not aware of their rights and responsibility to utilise clinics and health services. He explained that there was not sufficient capacity for health care practitioners at this level.

Prof Dlabadarios noted that the majority of citizens in the public sector would not agree with citizens in the private sector and that public attitudes affected overall satisfaction assessments. He added that waiting times in the public sector had been identified a challenge, especially when compared to the private sector. He agreed that more attention was needed on the concept of care for young mothers and that the country needed investment to this effect.     

Professor Simbayi explained that there has been a decline in the levels of new HIV infections when compared to previous years and that this information needs to be contextualised. He explained that there have been improvements regarding numbers of infections amongst the youth. He agreed that advertising on a national level was a challenge and that over the past five years, the focus of treatment had been to reduce the emphasis on new infections prevention measures. The solution was to maintain a balance between these two areas.

Professor Plaatjies explained that the survey had not not targeted public servants and that the HSRC may speak on other surveys to this effect. Satisfaction was measured is in relation to the access to housing and the affordability of this provision. He explained that other income thresholds affected this research and that the state may play a greater interventionist role by attracting support from the private sector.

The aim of the research was to see the intersection of the Constitution and government and the interaction with traditional government, in addition to the nature and extent of public consultation. He explained that there was a renewed focus on introducing the traditional government into constitutional practices for a new manner of traditional leadership and authority.

Professor Plaatjies explained that capacity referred to the operational and financial resources and not solely to staffing. He added that the Constitution was clear when discussing the shift in functions and that there was a city-government approach which was being utilised.  Review of the institutional politics was important and there was a need to influence the training of public servants and administrators.

Professor Turok explained that the housing policy had been narrow and that a wider range of responses was required to assist a greater proportion of the population. Shifting the burden on to municipalities should be combined with adequate resource allocations. However, the more capacitated municipalities should be funded differently, as these spheres were able to create local funding in addition to national funding.

He added that the Expanded Public Works Programme did not provide social grants and that the best programme was the Community Works Programme which had greater flexibility and local responsibility. There was a unit in the National Treasury which was focusing on certain schemes and maybe greater flexibility was required there.

Professor Turok explained that property assets of some entities had the potential to undermine urban interventions, if the sites were sitting vacant although they were ideally placed to be used for public housing. Government should be involved to create greater social utility.

Professor Turok noted that KwaZulu-Natal was not in fact receiving a disproportionate share of funding as there was a formula on which funding was calculated. He agreed that further evaluation of the government programmes was required to measure their effectiveness.

Ms S Shope-Sithole (ANC) felt that the information provided by the HSRC was valuable. She would like to see more figures and the balance sheet of entities such as Transnet and the reports on NSFAS.

Ms Shope-Sithole noted that the Constitution empowered law-making and that she believed that the Judiciary was perhaps encroaching on the capacity for law-making, and she also believed that the Public Protector was interfering with the independence of the judiciary.

She explained that the accountability of municipalities is the responsibility of Parliament and that this will be dealt with by the Committees.

Dr C Madlopha (ANC) noted that students’ complaints regarding NSFAS required more research by the Committee. She added that skills research for civil servants was another area to be evaluated. She believed that government debt posed a challenge and enquired whether it was felt to be at affordable levels.

Dr Madlopha sought further clarity on affordable housing and asked whether it was the responsibility of the government alone, and how this related to serve provision and public satisfaction. She further asked whether low cost housing was included in this research.

Dr Madlopha commented that she understood the grants to be conditional and designated for specific functions, and therefore they surely could not be unjustly appropriated. She had also understood the Expanded Public Works Programme, rather than being one separate programme, to be in the nature of an overall government concept providing skills training and jobs.

Mr Gcwabaza asked whether the methods of communication to the youth should not perhaps be revisited, in regard to HIV/AIDS prevention, and proposed the use of social media. He further enquired what the budgetary implications and the role of service providers would be if this strategy were to be implemented.

Mr Figg enquired as to whether the government debt depended on a number of factors, such as the sources of debt, and indicated concern that this had not been addressed.

Professor Plaatjies explained that conditional grants were used to offset payments to maintain municipalities. He explained that the performance of conditional grants needed to be related to the fiscal arrangements. The grants were not always sufficient to meet the commitments of the municipalities, especially in the rural areas because of a lack of fiscal capacity and the funding model. Performance in using those conditional grants differed from one city to another. Cities often preferred the borrowing mechanism. A differential approach was required to respond to these areas.

Professor Turok noted that the Housing Development Agency was conducting a study and may provide the research based on their study. He explained that municipalities should also be jointly accountable for locally raised taxes. He further added that the country was paying R126 million for debt administration and that realistic projections on this debt depended on the economy in the future.

Professor Turok explained that the survey had been done by taking a sample of 5 000 people around the country, including some RDP recipients, and it was apparent that there was some resentment from people who did not benefit from RDP housing. He noted that the equitable share was a more flexible approach, but appropriation of this was a challenge.

Professor Simbayi noted the initiative to utilise social media as a form of e-Health to target the youth and thanked the Committee for the suggestion. He also noted the request for reports and indicated that the Auditor-General may have the reports sooner.

Ms Shope-Sithole asked what the HSRC would advise in regard to the current approach of the Minister, especially in relation to unspent funds sitting in the Departments over the last three years. She asked if the HSRC could do any research on this so that Parliament could use the information to promote the development of spending capability and budgetary skills.

Professor Turok explained that the country was still in an economic crisis and authority required interrogation as to the mechanisms to stimulate economic growth through government organisation and coordination. He did agree that government spending needed to be more effectively aligned. The late transfer of resources from provinces posed a challenge to effective spending and said that the spending compliance procedures needed evaluation. He added that officials were nervous about the consequences of making decisions and committing actively to their delivery functions.

Prof Dlabadarios explained that research capacity had been reduced owing to the system.

The Chairperson noted that the need for borrowing by government translated into how debt was handled. This should be related to the capacity of the economy to grow.

The meeting was adjourned.

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