The Department of Defence briefed the Portfolio Committee on Defence and Military Veterans on its 2018 Annual Performance Plan and 2018/19 budgetary allocation. The brief focussed on aims, strategic overview, programme and sub-programme plans and links to other plans. The Department gave an update on the 2018 situational analysis. In doing so, the Department stated that it supported domestic, regional and continental security through the South Africa’s National Security Strategy (NSS) and resourced peacekeeping support operations both at United Nations (UN) and African Union (AU) level.
The Department expressed its concerns over decreased foreign investment, which might result in industrial strikes and national security, requiring possible SANDF support and which might have adverse impact on implementation of the National Policy on Defence (Defence Review of 2015). On the question of funding the South African National Defence Force (SANDF), the Department stated that internal funding initiatives to alleviate the burden on the national fiscus would be enabled through funding alternatives for the short-, medium-, and long-term defence trajectory through the Defence Funding Model. The Department would continue to execute its border safeguarding function by addressing security threats and vulnerabilities. Possible requirement for the conducting of offensive operations within applicable international legal framework might become a requirement of government requiring the SANDF to ensure deployed members were conversant with international standards regulating the use of force. Due to climate change, there might be increase regional flooding or drought, requiring government and SANDF to provide increasing humanitarian assistance and disaster relief during General Military Assistance (GMA) operations both domestically and in the SADC region in a supporting role, alongside governmental and non-governmental organisations.
The department further said that global and African tensions and conflict remained a possibility. These included hybrid threats, cyber, and terror attacks. As a result, SANDF members would be deployed in support of international peace support operation. Members might face armed groupings using heavy conventional weapons. The Department said that its focus had however been on corporate governance, financial audit, governance of risks, and governance of information technology (IT), compliance management, financial management, corruption and fraud, court decisions and stakeholder relations management.
With regard to financial performance, the Department stated that, in terms of the South African Defence Review of 2015, the Department’s 2018 MTEF reduced budget allocation would necessitate re-appreciation of a plan to reconfigure the Department to align with its available resources to enable the resources implementation of the National Defence Policy. The department further highlighted how the budget for the 2018/19 MTEF was allocated, i.e. R47 billion, R50 billion and R53 billion in the 2018/19, 2019/20 and 2020/21 financial years, respectively. In 2018, the Special Defence Account (SDA) reduction was R1.7 billion whereas the General Defence Account (GDA) (operating reduction) was R9.2 million. Budget reductions constrained the implementation of the Defence Review.
Members expressed their concerns over budget reduction which constrained the performance of the Department and felt that the Republic and its inhabitants were under threat. Members asked whether the Department should distance itself from consulting services and, rather, recruit the required skills in order to minimise expenditure; whether military hospitals could not be used to offer services to the public in order to generate income and whether the peace-keeping operations could be used to benefit South Africa economically.
Members stated that the Department should find ways to generate income in order to fund its activities. They further stated that the National Treasury should be invited to brief the Committee on the reasons of cutting the budget of the Department thereby placing South Africa at risk.
The Chairperson said the briefing will be on the Department’s 2018 Annual Performance Plan (APP), its 2018/19 budgetary allocation, and a summary of expenditure and performance for the fourth quarter of the 2017/18 financial year.
Briefing by the Department
Dr Sam Gulube, Secretary for Defence, DoD, said the presentation focussed on aims, strategic overview, programme and sub-programme plans and links to other plans. The APP was prepared in accordance with legislative guidelines and prescripts. On 2018 updated situational analysis, he said the Department supported domestic, regional and continental security through South Africa’s National Security Strategy (NSS) and resourced peacekeeping support operations both at United Nations (UN) and African Union (AU) level. Economically, decreased foreign investment might result in industrial strikes and impact national security, requiring possible South African National Defence Force (SANDF) support. This had an adverse impact on implementation of the National Policy on Defence (Defence Review of 2015), defence renewal programs, preparation of forces of internal and external commitments and to execute its constitutional mandate effectively. In an external context, the Department’s internal funding initiatives to alleviate the burden on the national fiscus would be enabled through funding alternatives for the short-, medium-, and long-term defence trajectory through the Defence Funding Model. The Department would continue to execute its border safeguarding function by addressing security threats and vulnerabilities. Possible requirement for the conducting of offensive operations within applicable international legal framework might become a requirement of government requiring SANDF to ensure deployed members were conversant with international standards regulating the use of force. Due to climate change, there might be increase regional flooding or drought, requiring government and SANDF to provide increasing humanitarian assistance and disaster relief during General Military Assistance (GMA) operations both domestically and in the South African Development Community (SADC) region in a supporting role, alongside governmental and non-governmental organisations (NGOs). In terms of technology, there are possible cyber-attacks against South Africa that would require the Department to implement robust network security architecture that might include offensive and defensive strategies.
The Department remained committed to the establishment of a departmental strategic research capability that established a ready Defence Technology Base. In social domains, there were increased migration across borders, transnational terrorism and crime syndicates, and illicit activities contributing to instability and need to resource the NSS. High frequency of SANDF deployments might severely impact health service delivery. Global and African tensions and conflict remained a possibility, including, hybrid threats, cyber, terror attacks, where deployed SANDF members in support of international peace support operations might face armed groupings using heavy conventional weapons. Focus was on corporate governance, financial audit, governance of risks, governance of IT, compliance management, financial management, corruption and fraud, court decisions and stakeholder relations management.
Dr Gulube said the revision of Acts of Parliament or drafting of Bills included the Military Discipline Bill of 2017, the Defence Amendment Bill of 2017, and the Hydrographic Bill. In terms of the South Africa Defence Review of 2015, the Department’s 2018 medium term expenditure framework (MTEF) reduced budget allocation and this would necessitate re-appreciation of a plan to reconfigure the Department to align with its available resources to enable resources implementation of the National Defence Policy. With regard to the performance delivery environment, the Department contributed to national imperatives of government, including the National Development Plan (NDP) Vision 2030 and the 2019 Medium Term Strategic Framework (MTSF). The Department further contributed to the AU Agenda 2063, in particular its Chapter 4, in that it contributed to the UN and AU peacekeeping efforts with a view to ensuring a peaceful and secure Africa. It further contributed to the SADC Regional Indicative Strategic Plan.
Dr Gulube said budget allocation was R47 billion, R50 billion and R53 billion in the 2018/19, 2019/20 and 2020/21 financial years, respectively. In 2018, the SDA reduction was R1.7 billion whereas the GDA (operating reduction) was R9.2 million. Budget reductions constrained the implementation of the National Policy on Defence, requiring a possible amendment of the original Cabinet decision to move from a Green Planning Trajectory to a Red Planning Trajectory (i.e. plan with allocation), resulting in a reduced national level of ambition required of the Department, in particular, SANDF as from the 2019/20 financial year and beyond.
In linking performance to other plans, Dr Gulube stated that Armscor was mandated to manage the Department acquisition and technology project and Armscor allocated budget was R1.4 billion. Moreover, Castle Control Board was mandated to manage and protect the Castle of Good Hope on behalf of the Department. There was no budget allocation to the Castle as it was self-sustaining. The Department faced enterprise risks. These risks included deteriorating facilities and infrastructure, out-dated and non-integration of information communication technology (ICT) system, prevalence in fraud and corruption, high prevalence in litigation, emergence and prevalence of cyber warfare threats, forfeited rights on departmental properties and compromised defence corporate governance.
The Chairperson commented that the presentation provided indicators that would be used to check each and every quarter the speed the Department was driving on.
Mr S Marais (DA) remarked that he did not know where to start asking questions because the presentation provided the Committee with a big picture. A time ago, there were a number of meetings. In these meetings, the Department indicated that more money was a way to go to address the human resources related challenges. The Committee said it was not going to give more money and advised the Department to find another alternative to generate money, if not, re-structure and re-prioritise. As Treasury said, the Department could ignore all these. Members had seen this coming for a quite some time. It had been escalating at a high rate. He remembers that, after the budget, the Department had to work with R3 billion less. What index had the Department been using? He wanted to know the military index that had been used. In the past, speculations were used. In one of the meetings it was admitted that it was probably close to 15%. At one stage, the graph was used where it was projected that it would come down. At that time, he remarked the Secretariat was working with the CPI closing its eyes hoping tomorrow the sun would come up and now it was not coming up. The index was not a basket of food. At this stage, it was a dire situation. It was probably one of those things the Department never told Members. It seemed as if the Department was still busy with the shotgun approach - trying to please everyone at the same time. The Secretariat knew very well that that was impossible. He did not pick up from the presentation how the Department was going to make this work. It highlighted challenges and problems but it did not show what the solutions could be. There was no alternative on how the Department intended to rejuvenate its defence force. Anybody in the Defence Force would tell the Department that the Force had many old people. He would like to know how the commanding control was done. The Chief of Defence had never appeared before the Committee. He commented that Dr Gulube was a civilian and, perhaps, these military officers were showing him proverbial finger implying that “what did he know about military anyway?” On things that he (Mr Marais) communicated to him (Dr Gulube) nothing happened. People had him criticised for buying a high luxury car at the end of the financial year. It appeared that he had a major problem in terms of authority and there was impression that there was a faction in the military, i.e. Ramaphosa and Zuma factions. However, the discipline should be number one and should guide an army. Should he conclude that military was ill disciplined? On the question of DRC, the case of sexual exploitation should have been overstated and South Africa had to carry the guilt. Soldiers might not be earning enough. Some soldiers were taking holidays in DRC because commercial flights were so high and because they could not afford flights back to South Africa. Then they got into trouble. The UN told Members during their visit in the DRC that there was something wrong with the leadership. If South Africa closed its eyes to these wrong doings – even if they were perceptions – it would not be doing justice. He was incredibly concerned about these issues in which South African soldiers were implicated. It was not the way these issues were presented; it was the nature of what was presented that would give you sleepless night. Since he came from the DRC, he had been waking up in the night to think about these things. They give him sleepless night. He reminded Members that it was not about who was in government as this would lead to cheap politics. It was all about the interests of South Africa.
Mr Marais said that there were a couple of issues that he wanted the department to elaborate on further:
-Members requested reprioritisation and this had not been featured in the presentation;
-No summary of assets of the defence force was provided to indicate which non-negotiable movable and immovable properties. This should have included aircrafts and buildings.
-There was no progress report on the implementation of the Defence Review. This policy was an impressive and fantastic document but the question was whether it was needed to be reviewed and adjusted to make realistic and to meet the current challenges, circumstances and abilities.
-There was no brief provided in terms of coastal line protection. There was a letter from the Presidency stating that R127 million was allocated for such protection. The effect of such allocation ought to be seen and felt.
-On the dock yards, he asked where the Department was in terms of progress. There were vessels that were needed to be built for purposes of patrolling sea borders. The Department knew what initial budget was. Nothing had happened in terms of handing over the dock yards to start the constructions;
-Members had been in the DRC and there were some of things which they had identified such as transport, support services, and logistics. A soldier told Members that these mechanisms were unreliable. Helicopters had some technical problems that made them delay.
-If they were to prioritise the involvement in the DRC, the refund of the UN ought to be prioritised and ought to be used to support South African troops in the DRC. Members were advised that 80% of refund was due to effectiveness of helicopters. 20% came from the rest. Members had seen the number of hours that helicopters had flown compared to hours the UN had allocated to them. The question was what could be South Africa’s cash cow?
He further asked whether Members could get a letter sent to National Treasury for a refund. He asked further how the SANDF would get involved in 2019 elections and what would be its role. What the capacity and plan that you would put in place? Could the Department elaborate on the challenges relating to the funding model?
Mr G Skosana (EFF) welcomed the presentation. The picture painted was not good when it came to financial statements. There should be serious interventions. The Department was critical because if it was not sufficiently funded, the Republic and its inhabitants were not safe. Referring to the compensation of employees, he said he wanted to check whether they were within the 40% ceiling. The compensation of employees looked scary. If nothing happened, some would have to lose jobs. The Department should elaborate on the measures put in place to address this problem. On economic planning, he commented that he could see that SANDF had a good project that would help people in the rural areas and asked in which rural areas these economic projects were implemented.
Mr S Esau (DA) noted that the budgetary constraints had huge consequences. He wanted to pose questions relating to issues of political will, executive and financial governance and austerity measures. He did not see a funding model that was put together to respond these challenges. The Department had to cut money as much as possible. There were visible increases for example in travelling expenses. These trips were coming with a high cost. The Department should find a way of exiting higher costs. Those exercises should be done and there was no model put together to indicate how all this would be done. How would alternative funding could be identified and addressed? Should they turn hospitals into private hospitals in order to generate income? Could peacekeeping used to generate income? How could intellectual properties be utilised to generate money? There were a lot of intellectual properties that SANDF was sitting with. The Issue of continental peace was not being used to South Africa’s economic advantage. He said that he had 40 questions, that touched on advertisement, rejuvenation, restructuring, human resources strategies, military strategies, corruptions, fraud, defence attaches, military court and its decisions, food supply, cyber warfare, consultancy contracts, military vehicles, and maintenance budget.
Mr L Mbinda (PAC) asked what the explanation Treasury was about the successive budget cuts was. His concern was that there was a huge amount which was cut. He asked whether the Department was not spending too much on consultation services.
Mr P Mhlobo (EFF) remarked that the report was dead. It was an understatement to say that the report gave a big picture. Rather, a dead child had been brought before the Committee. How could the Head of State use a jet owned by a wanted criminal to travel when there were in-house airlines. People were using defence airlines as a cash cow. Why are all airlines outsourced? Why should the Department not have human resources to recruit the needed skills instead of relying on the use of consultancy on everything? He stressed that the Committee should call all head of divisions or programmes to come and advise the Committee on what they were doing and on what they were planning to. For example, the audit division was dysfunctional. Each head of these divisions had responsibility towards the Republic and citizens. If the huge amounts allocated to consultations would be taken away, the Department would hugely cut on expenditure. He did not understand why the consultancy should be used to determine whether a person was sick or competent. National Treasury should be invited to advise the Committee on reasons for budget cuts. If the Committee did not call all these people, the Committee would not be doing justice to the people. The report of the secretariat could not be submitted to Parliament because it was dead. Its submission would merely serve to mislead Parliament.
The Chairperson stated that if the Department could not respond to all questions, the remaining questions should be responded to in writing.
Dr Gulube responded that the report was not dead as it provided crucial information. It stated programmes and sub-programmes of the Department. Heads of divisions could come and elaborate on these programmes, but no other information would be provided than those provided. The idea was not to come and read the report out paragraph per paragraph. The presentation summarised the report. Besides, the duty of the Committee was also to conduct an oversight and they should seek clarity from the report so that their concerns could be elaborated on. Otherwise invitation of heads of divisions would be unnecessary as they would say the same thing that he had presented.
Dr Gulube said that he understood the frustration of Members as it pertained to the budget cut. The Department was also frustrated. Members were aware of the budget constraints put forward by National Treasury in view of contributing to the growth of economy. The situation was that the financial projections were not for this year, but coming financial years. He further said that he was happy that Members appreciated that the budget cut had implications on the departmental performance. In November 2017, Treasury communicated what would be allocations in terms of the budget cut. In January 2018, Treasury called all departments and advised them that further cuts would be imposed because the cost of free tertiary education was so high. In terms of budgetary constraints, the Department was only presenting what the National Treasury had presented to it.
On the issue of the rejuvenation plan, Dr Gulube responded that there was no doubt that the plan needed to be updated so that it could be funded. Only frustration they had to implement the plan came from the absence of budget due to the budget cut. The Department was working with National Treasury. However, National Treasury and the Department of Public Services and Administration had to agree with the plan first. The plan could not be implemented by the Department alone.
He agreed that it was important to maintain discipline in the army. It was sometimes overstated that South Africa soldiers are involved this or that. Discipline was a major component of controlling an army and South Africa had a disciplined army.
On the question of listing assets, Dr Gulube agreed that certain information could be disclosed but others could be disclosed for the purposes of security because the capability of the army could not be disclosed. In the DRC, there were rebel groups that were eager to attack the South African army. On the South Africa Defence Review 2015, he said that the Review was not static, but was subject to be reviewed from time to time in accordance with the resources available. In order to safeguard South African borders, 22 companies were needed. Due to financial constraints, only 15 companies were utilised. The question relating to Armscor would clearly be elaborated on by the Minister in the Budget Vote. On whether military hospitals could be turned into private hospitals, he responded that it was common that all countries treat their own soldiers in military hospitals. There was no way injured soldiers could be exposed to the public. Therefore soldiers should be treated at military facilities. On the involvement of SANDF in general elections, he responded that from the dawn of democracy, SANDF had been involved by a way of assisting to secure certain areas or to move ballot boxes. SANDF involvement would be no different from previous elections.
Dr Gulube finally said that all questions asked by Mr Esau and Mr Marais were appreciated and some of these questions would be responded to in writing. He noted that the army was divided into division such as military police, military intelligence and military health and so forth. The budget was allocated to them sparingly.
The Chairperson thanked the Department for its presentation and stated that the Committee would be briefed by two entities (i.e. Armscor and Castle Control Board) that afternoon.
Meeting was adjourned.
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