Medium Term Budget Policy Statement: hearings

Meeting report

JOINT BUDGET COMMITTEE
14 November 2003
MEDIUM TERM BUDGET POLICY STATEMENT: HEARINGS

Chairperson: Mr N Nene (ANC) [NA]

Relevant documents
Department of Housing Submission
Independent Development Trust Submission
Department of Land Affairs Submission
Agrid South Africa Submission
Development Bank of South Africa Submission
Department of Provincial and Local Government Submission
Safety and Security Submission
Defence Submission
Justice and Constitutional Development Submission
Correctional Services: MTEF Presentation for Medium Term Expenditure Committee 2004-2007
Correctional Services: MTEC Recommendation, Joint Budget Committee 2004-2007
South African Local Government Association Submission [Contact info@pmg;org.za for document]

SUMMARY
Morning session
During the discussion on the Department of Land submission Members suggested the use of parallel approaches when dealing with claims and possibly expediting specific claims. Clarity was sought on the Department's plans to correct problems with the management of sectional title ownership, the comparison between the success of the implementation of programmes in both the rural and urban areas and whether the prevalence of financial settlements detracted from the Department's goal of alleviating poverty by restituting land.

The Committee sought clarity on criteria used by the Independent Development Trust (IDT) when deciding to focus its attention on the Eastern Cape, North West and Gauteng provinces, how the absorptive capacity would be linked to the project's outputs and whether the IDT's interventions actually improved the lives of people in the community.

Members requested the Department of Provincial and Local Government (DPLG) to clarify the core challenges facing that Department, whether DPLG envisaged a flow of people from urban areas back to their rural homes and clarity was sought on DPLG's efforts to co-ordinate local, national and provincial development programmes into a single effort.

The Committee requested the Department of Housing to indicate how big a market would be constituted by the new beneficiaries of housing subsidies and the increase in the Department's subsidy, and whether housing payments could be made in installments, rather than the up front payment of R12 000.

The South African Local Government Association representative was requested to indicate the extent of the funding received from both national and provincial government.

Afternoon Session
The Minister of Safety and Security noted that 2004 is an election year and that more pressure would be put on SAPS' resources. The Department had requested and had been allocated more funds to deal with this contingency.

The Committee expressed frustration towards the Department of Defence's plea for more funding when the responsibility it had been given outweighed its budgetary allocations. Security forces should be ready for combat at all times. The military required consistent and constant training to achieve acceptable level of combat readiness. The Committee heard that legislation was becoming more comprehensive and complex despite calls for simplicity and the use of plain language. To some extent the complexity was aggravated by the cross cutting nature of some of the new proposals. The Correctional Services priority was mainly funding of shortfalls on operational costs of prisons and enhancement of rehabilitative programs. Prioritization has resulted in personnel funds being allocated to programme, six and seven which had enabled the Department to fill vacant posts in its establishment.

MINUTES
Morning session
Introduction by Chairperson
The Chair stated that the morning session would deal with the first theme of these hearings: rural development and urban renewal. He cautioned departments not to view these hearings as a chance for a "second bite at the budget", as this was not the appropriate forum for such discussions.

Department of Land Affairs
Ms Sarah Choane, Department Chief Financial Officer, presented the submission (document attached) which outlined the Department's strategic framework, an overview of the Medium Term Budget Policy Statement (MTBPS), the contribution of land reform towards rural development and urban renewal and employment and economic growth.

Discussion
Mr D Hanekom (ANC) stated that the Department was making really good progress, but contended that the assertion in the presentation that the Department must redistribute 1,6m hectares per annum was not correct. Three years had already elapsed since 2000, and the 30% target over fifteen years would actually amount to 2m hectares per year. This would require R2,8b, on the Department's own figures.

Ms Choane said that these changes would be effected to the figures.

Mr Hanekom stated that these figures would not be realistic, and the Department would have to rethink this matter. The Department should instead focus on outcomes and real benefits, as government had promised a better life to South Africans.

Ms Choane replied that the Department appreciated that it had to look at the outcomes and assess whether it was really making an impact, and whether qualitative changes were being effected. A balance would have to be struck between qualitative measures and the outputs.

Ms Joan Fubbs, Chairperson of the Gauteng Province Standing Committee on Finance, stated that the Department did not offer any alternatives to the challenges faced by the Department.

Ms Choane said that the Department had not yet looked into this area, but it was about to engage in a strategic planning session over the weekend to identify options should it not receive the funding it required.

Ms Fubbs asked whether two parallel options could be followed with regard to the processing of the land claims. She proposed that specific approaches be used for particular claims, and that a specific approach be used for claims that could be expedited.

Ms Bev Jansen, Regional Land Claims Commission: Western Cape, replied that the claims negotiations in the rural areas were by far more difficult than the negotiations that took place in the urban areas. In certain instances, as was the case in the Eastern Cape, problems were experienced with unsurveyed land and no relevant documentation was provided, which was vital for the compilation of the family trees.

She stated that the Land Claims Commission had already been in a strategic planning workshop, where it looked at some of the difficulties. The Western Cape Regional Commission was now in the process of restructuring its office, and it was decided that a strong financial compensation unit would be established to expedite the claims. She admitted that financial compensation was not ideal, but it was an option for the elderly and indigent.

Ms Jansen stated that all provinces had a post-settlement unit which would work with claimants on a long-term basis but it did experience its own difficulties, especially in the rural areas. She stated that additional options could be explored at the Department's strategic planning workshop.

Dr E Conroy (NNP) [Gauteng] sought clarification on the classification of the Deeds Office, and asked whether it fell under administration, surveys and mapping or spatial planning divisions. He stated that this was important, and asked the Department to explain its plans to correct the management of Sectional title ownership.

Ms Choane responded that the Deeds Office fell under Programme 7, because it was operating as a trading account. She stated that it was thus self-funding and the Department did not augment its budget, and for this reason it might not be picked up in the programme structure. It would be disclosed in the Department's Annual Report when it would be tabled in Parliament.

She stated that she was not as familiar with sectional titles, and assured Members that a written response would be provided.

The Chair stated that these important matters, especially the manner in which the Department planned to deal with the rural claims, would have to be included in the Department's Annual Report.

Mr L Kgwele (ANC) [NA] requested a comparison on the success of the implementation in the rural and urban areas, because the presentation did not really explain the status in the rural areas.

Ms Choane replied that the presentation indicated that the urban claims constitute 80% of the claims lodged and, to date, the focus was placed on the settlement of those claims. She stated that the focus had now been shifted to the settlement of rural claims, but this was rather complex because they involved larger communities and greater hectares of land. The Annual Report contained detailed information per province on this matter.

Ms Jansen added that her experience had been that some of the support work in the rural areas that the Commission would like to be dealt with by the municipalities was not done, because the municipality would either not have the necessary infrastructure or the budget to perform some of these tasks. She stated that a destructive role was also played by some councilors in some of the rural areas, and this was not at all supportive of the work done by the Commission.

Ms C Botha (DA) [Free State] stated that she understood land reform and restitution to focus primarily on land, both symbolically and as central to poverty alleviation, yet the presentation indicated that many of the settlements had been financial in nature. She requested the Department to explain the impact of these financial settlements on the Department's goals of poverty alleviation and the symbolic value of the restitution of land.

Ms Jansen responded that it was accepted that financial compensation was not the ideal situation. Claimants do have an option, and the very poor claimants often chose the financial compensation. She stated that the Commission encouraged claimants to take the land, but the non-existence of support services did not always make this possible. Ms Jansen acknowledged that this was not the ideal situation.

Ms D Matloa, Chief Director: Office of the Chief Land Claims Commissioner, added that the Department was looking at focusing on restitution as a means to alleviating poverty, especially in the settlement of rural claims. She stated that it was for this reason that it was imperative that, particularly with regard to the primary commercial land, the Department must ensure that the claimants continue to maintain the land at the standard at which they received it. This required training and skilling of such persons, and for this reason the Community Based Projects (CBP's) were established to ensure that the land continued to be as viable, productive and sustainable. She stated that the Department had thus put measures in place to address this matter, and these were aimed at avoiding the situation in which land which had been re-allocated was now lying uncultivated. The focus was thus clearly on poverty alleviation.

Independent Development Trust
Prof Edith Vries, Independent Development Trust Acting CEO, presented the submission (document attached) which outlined the overview of the mandate of the Independent Development Trust (IDT), its opinion on some of the significant aspects of the MTBPS as it pertained to rural development, as well as some of the IDT's experiences in rural development.

Discussion
Dr G Koornhof (ANC) asked whether it would be correct to assume, based on the figures in the presentation, that the Eastern Cape, North West and Gauteng provinces would receive the bulk of the IDT's attention in 2003-2004. He stated that if this was the case, he sought clarity in the criteria used to select those three provinces.

Prof Vries replied that the IDT had two budgets: the first was the R2b grant allocated to establish the IDT in 1990, of which R1,2b remained. These funds were invested in a particular way, and the interest generated provided the IDT with its annual operational cost. These funds were employed in this manner so that the IDT could do the work it was commissioned to do by government free of charge.

She stated that the slide in the presentation referred to by Dr Koornhof dealt with the programmes which the IDT was implementing on behalf of national, provincial and local government departments. That slide indicated the provinces that have recognized the value in the service provided by the IDT, and have requested it to perform a specific task. The IDT's penetration has been particularly successful in the three provinces mentioned. It was hoped that the other provinces would follow in the near future.

Dr Koornhof sought clarity on how exactly the absorptive capacity would be linked to the outputs.

Mr Gavin Wyngaard, IDT, responded that the two could definitely be linked. As the IDT witnessed the increasing shift toward direct transfers to local government and rural municipalities especially, the extent to which the IDT was then able to apply its own internal resources to that was under threat. The question which then arose was the extent to which Treasury, in the manner in which Treasury was increasing its allocations to local government, was considering the issue of absorptive capacity on larger scale. This was important, because the IDT would not be able to be absorbed by the IDT, as was explained in the presentation.

Ms Fubbs requested the IDT to provide its projections for the financial year 2004-2005, especially in terms of the shifts it foretold.

Prof Vries replied that it would not yet be possible to provide those figures, because the IDT had only concluded two contracts with government departments which ensured that the IDT would perform a similar task for that department in the 2004-2005 financial year. The IDT would like to approach government departments, but the decision rested ultimately with the government department itself.

Ms Fubbs sought further clarity on the IDT's efforts to facilitate job creation.

Mr Wygaard said that every contract the IDT entered into with government departments included very specific Black Economic Empowerment (BEE) targets specific vulnerable groups in society, and these were reported on as part of the aspects of the outcomes for each programme performed by the IDT.

Mr R Mohlala (ANC) contended that the presentation did mention, when discussing the IDT's experiences in local development, whether economic rural development had changed the lives of the people in the community. He stated that this would explain the interventionist strategies that the IDT would have to implement.

Prof Vries replied that the view of the IDT was that the development of the appropriate process for the performance environment did not necessarily require additional funds, but it often required additional time and bringing the proper people together. Often the attainment of those sustainable development outcomes were focused on ownership and people-centered processes on this, and did not necessarily deal only with "new money".

It could possibly be viewed as a constraint, but it did afford the IDT the opportunity to perform different interventions that probably could enhance some of the development impact.

Agrid South Africa
Mr Palm, Agrid South Africa Marketing Manager, presented the submission (document attached) which focused on the provisions for infrastructure and enhanced spending on land restitution and land reform in the MTBPS, the need to build capacity in agriculture and outlined the key issues which would have to be addressed.

Discussion
Dr P Rabie (DA) [NA] requested Mr Palm to share his views on the increasing trend of subsistence farmers in the Eastern Cape to switch from mechanised vehicles to animal traction, because the latter was more productive.

Mr Palm responded that this was always an interesting debate. Draft animals were becoming increasingly expensive than former years, and for this reason very few projects were using draft animals these days.

Ms Botha sought clarity on the statement in the submission regarding the funding received from local councils.

Mr Palm replied that local authorities did have financial constraints for investing in agricultural equipment, and the funding required to place infrastructure on the ground had to come from private sponsorship.

Development Bank of South Africa
Dr Makura, Development Bank of South Africa Policy Analyst, presented the submission (document attached) which outlined the MTBPS issues, the focus placed by the Development Bank of South Africa (DBSA) on rural and urban development, the interventions made by the DBSA and the gaps and challenges faced.

Discussion
Ms Fubbs sought clarity on exactly how the DBSA would set about filling the financial gap with regard to the financial constraints in municipalities identified in the submission.

Mr A Mohammed, DBSA Executive Manager: Finance, responded that the Public Private Partnerships (PPP's) and the DBSA's relationships with other entities were exploited in an attempt to fill those gaps. For every R1 the DBSA has spent in trying to fill such gaps it has managed to leverage R3 from various other parties. The challenges were still huge, but steady progress was being made here.

Department of Provincial and Local Government
Mr Elroy Africa, Department of Provincial and Local Government DDG: Governance and Development, presented the submission (document attached) which outlined the Department of Provincial and Local Government (DPLG) objectives with regard to urban renewal and integrated sustainable development and the approaches it has followed, the progress made by DPLG since 2001, the key challenges that faced DPLG and its strategic interventions for the 2003/2004 financial year.

Discussion
Mr Hanekom requested clarity on the core challenges that faced the DPLG because the submission placed much emphasis on the nodes, which were really created as catalysts or learning experiences used to ultimately effect actual development.

Mr Africa replied that government did not place a moratorium outside the 21 nodes that had already been identified. Very clear and differentiated objectives were set for the two programmes when those nodes were identified, and some of the municipalities had even identified their own rural nodes over and above those that were identified by national government. The first point to be made was that government was quite confident, generally, that it was tackling development in all 284 municipalities. He stated that Mr Hanekom was correct in asserting that it was the core mandate of DPLG to support all 284 municipalities.

The second point was that, when the President announced the 21 nodes, he also mentioned that government would be considering the introduction of additional nodes over and above those 21 identified initially. DPLG had thus been mandated to explore the possibility of the introduction of additional nodes, and work on this matter was in fact at a very advanced stage. The core challenge would probably be to speedily disseminate the lessons learnt in those 21 nodes to the other municipalities.

Mr Hanekom asked to what extent the Integrated Development Programmes (IDP) the planning framework was in place. If these were not in place the allocations could be made to municipalities on an ad hoc basis and could take advantage of these increased allocations for infrastructure. It must be ensured that municipalities could absorb and beneficially utilize the increased allocation. This was especially important for the incorporation of the land development objectives in those IDP's.

Mr Africa responded that the short answer was that such projects were ideally meant to be absorbed by the IDP's as part of the spatial development exercise.

Mr G Schneeman (ANC) stated that the Brazilian experience had shown, in the development of their rural areas, not only had it stemmed the tide of the flow of people into urban areas, but it had actually also helped to encourage the flow of persons from the urban areas back to their homes in the rural areas. He asked whether DPLG was confident that the same would happen in South Africa's nodes in the rural areas.

Mr Africa replied that this was a very difficult question. The short answer was that DPLG was presently working on a National Urban Strategy (NUS) for the country. This was not a policy document or White Paper, but a strategy document. The point to be made here was that the government had not taken an explicit decision as to whether it wanted to encourage or stop urbanization. Government was however enabling its citizens to decide for themselves as to whether they would like to reside in the urban or rural areas. This meant that, for the Urban Renewal Programme (URP) and the Integrated Sustainable Rural Development Project (ISRDP), was that the DPLG was mandated to ensure that all citizens had the basic needs and infrastructure in all areas in which they chose to live.

The National Spatial Development Perspective (NSDP) was not a national development plan, but was instead an indicative plan which attempted to understand the space economy of this country as well as the areas in which growth was taking place and those areas in which it was not. The importance of this document to the debate around urbanization was that it indicated the areas in the country that were beginning to grow and which thus exhibited potential, as well as other areas which were not growing but declining, for various reasons. National, provincial and local government spheres were thus meant to use that document as an informative tool when deciding where to invest.

Mr L Zita (ANC) asked which model of global experience had focused the South African thinking on its IDP.

Mr Africa replied that experiences in town planning internationally, and certainly in South Africa, has shown that planning by municipalities had by and large taken the form of physical or spatial planning. Classic examples would be Apartheid and Group Areas Act planning. He stated that DPLG had evaluated the strategic and development plans employed both in developing and developed countries but, at the end of the day, it was the South African model which had been heralded internationally as an innovative system of development planning at the local level.

The overarching features of the South African IDP was that it was, firstly, a strategic development plan. Secondly, it was not a sector-specific plan but rather an enabling management plan in which all sectors would find expression and a home.

Mr Schneeman asked whether any study had been conducted which would forecast the number of direct and indirect jobs that would be created not only by the projects but also by related events, such as the tourism industry.

Ms Fubbs contended that the submission did not appear to focus much on the delivery by DPLG, and questioned whether government would be able to deliver on this programme fast enough. She sought clarity on the efforts made by DPLG to co-ordinate the local, provincial, national government programmes, so that a single integrated programme was executed.

Mr Africa responded that this had been a major challenge. It would be generally accepted that, when the Local Government Portfolio Committee conceived of the legislation which created IDP's, they were at stage considered to be a local government planning instrument primarily. Two or three years down the line the thinking on this matter had matured, and Cabinet had decided that IDP's could not only be a local government planning instrument, but had to inform development planning across all three spheres of government. He stated that what this policy decision meant in practice had not yet really been internalised.

Work had been done on means to align IDP's with provincial growth and development strategies. All provinces were currently updating and revising their provincial growth and development strategies, whereas in former years all provinces would have been working from outdated Provincial Growth and Development Strategies (PDGS) which were not informed by IDP's or national priorities, but were instead simply crafted at provincial level. The IDP's were now an attempt to update and inform the growth and development strategies.

The URP and ISDP programmes had not been put in place at the neglect of delivery, and DPLG was of the opinion that it was making good progress with regard to implementation. The challenge which faced DPLG was the manner in which it would quantify the impact and outcomes within the 21 nodes. DPLG was thus struggling to quantify exactly how many jobs had been created by these programmes, as was asked by Mr Schneeman, and one of the reasons for this was that no single expression was used to quantify job creation within the professional fraternity.

In 2004 DPLG would be presenting the Intergovernmental Relations Bill to Parliament and, in the context of these programmes, DPLG had already indicated that the three spheres of government were able to work together in a tangible manner.

Mr Zita sought clarity on the "anchor projects" referred to in the submission.

Mr Africa replied that, in the urban nodes, many projects were focused on HIV/AIDS, social crime prevention and illiteracy, for example.

Mr Zita asked why exactly there appeared to be no support offered by the Department for attempts made by Members of Parliament to bridge the gap between government and communities. There was a failure to appreciate those kinds of initiatives.

Mr Africa responded that the short answer was that during 2002 DPLG convened a conference on ward committees, and all municipalities were invited. DPLG assessed the state of ward municipalities and it was not happy with the assessment. DPLG has now put in place a set of national guidelines as well as a national programme that would drive and support the establishment of ward committees throughout the country.

He stated that DPLG worked very closely with Community Based Organisations (CBO's) and Non-Governmental Organisations (NGO's) in an attempt to get the municipalities to set aside resources to ensure the pariticipation of communities. The National Assembly had just passed the Traditional Leaders and Governance Framework Bill, which DPLG viewed as part of its overall effort to formally involve those outside the State in matters of governance, especially in the rural areas.

Dr Rabie stated that some of the nodal development projects were co-ordinated by certain district municipalities, but it appeared that the skill levels at district municipalities were limited. The local municipalities would be able to provide that service much more effectively, and the skilled personnel could be seconded from the district municipality to the local municipality.

Mr Africa responded that DPLG had always understood district municipalities to play a particular role in rural areas, and one of its very important roles was ensuring that resources were spread within a district municipality area. The view was taken by DPLG that if local municipalities alone were to be focused on, it would probably lose out on the value added by district municipalities. This was the very short answer to the question.

Mr Zita asked whether the introduction of a single national IDP for the entire country should not be considered.

Mr Africa replied that the short answer that, ideally, the Medium Term Strategic Framework (MTSF) was meant to be that overarching policy statement of national government. Government was currently still debating its MTSF. He stated that, to his mind, the closest thing at the moment to a national plan was a national Medium Term Expenditure Framework (MTEF), regular Cabinet Makgotla, and a national planning framework, but there was currently no single national plan.

Department of Housing
Mr Louis Van der Walt, Director: Department of Housing, presented the submission (document attached) which outlined the Department's Urban Renewal and Rural Development programme, which specific reference to the Social Housing Policy and its main components, the Medium Density Housing Del Programme and the Human Settlement Redevelopment Programme.

Discussion
Mr Zita asked how big a market would be constituted by the new beneficiaries who did not benefit from the previous scheme.

Mr Van der Walt responded that market identification was rather difficult at this moment in time, because the Department was not sure how many people would respond to its rental environment. It was hoped that the IDP would indicate the needs of the people living in the urban areas who would like to live in rental accommodation. It was thus difficult to indicate the market and who exactly would qualify.

Mr Zita contended that he was not completely convinced that people in the rural areas needed housing support to the same extent as those in the urban areas, as some in the former homeland areas had far better houses than those currently living in Soweto.

Mr Van der Walt agreed that the Department needed to diversify its housing support in rural areas, and it also accepted the fact that the traditional housing and the houses built by persons themselves were of a better quality than the houses built by the Department. The Department was in fact working on a strategy that aimed at enhancing traditional building methods to ensure their sustainability on a long-term level. Efforts would be thus be focused on both the development of new housing, but also to include perhaps an upgrading of houses and services to ensure sustainability on a long-term basis.

Ms Fubbs asked whether the housing subsidies would be increased to R4 000.

Mr Van der Walt replied that the Department would finance 50% of the capital, and a diversity of options were available here. The calculations in 2002 initially pertained to a two-bedroom unit in a four-storey walk up, without services and land costs to the services, which amounted to approximately R60 000. This would surely be outdated by now but, based on those figures, the Department's subsidy would be R30 000, and it would have to identify who exactly would qualify for the remaining credit and operational costs of the unit on a monthly basis. The Department would thus be expanding its beneficiary target group in this regard.

Ms Fubbs suggested that perhaps people could be allowed to pay the deposit by way of installments, because the payment of R12 000 up front would be impossible for many South Africans.

Mr Van der Walt responded that the Department would not require persons to make up front payments, as those only pertained to ownership subsidies. The credit for the rentals would be part of the project development cost, and it would ultimately influence the rental that would have to be paid. Institutions would require rental deposits to be paid when they accessed the scheme, according to standard practice in the industry, and would be paid back when the lease agreement was terminated, subject to the deduction of any damages from that amount. There would be no further up front capital requirement in the rental regime apart from this deposit.

Ms Fubbs asked whether single men and women would be accommodated as well, because this matter was not addressed before.

Mr Van der Walt replied that single persons without financial dependents would be accommodated and would for part of what would be provided for in a complex, probably in the form of bachelor units. Some of these units could either have shared facilities or independent facilities, but this would be determined by the market within a particular area. The Department had to develop a policy that would cover all these opportunities and the needs of such people.

Ms Fubbs asked whether the accreditation of institutions included the co-op housing associations.

Mr Van der Walt responded that the majority of the social housing institutions at the moment were Section 21 companies and some were co-operatives, which would be accommodated as well. They also took the form of private companies that did not operate for profit-orientated development in a specific complex that would compromise the Department's investment. By and large most were Section 21 companies, because they received substantial tax incentives to provide low-cost housing.

South African Local Government Association
Mr Walter Shaidi, Programme Manager: Motherwell URP, presented the submission (document awaited) on behalf of the South African Local Government Association (SALGA) which outlined the SALGA's overall functions and activities, its vision and objectives and SALGA's perspective on nodes. He explained that SALGA was invited to conduct this presentation, and in turn delegated the task to his political champion. She was however unable to make it, and Mr Shaidi was mandated to address the Committee.

Discussion
Mr Zita requested Mr Shaidi to explain the extent to which funding was provided by the national and provincial governments.

Mr Shaidi replied that approximately R70m had been received from national government since 2001, but this figure should ideally increase slightly because the expectations in the community was so high.

Mr Zita sought clarity on the disjuncture between the favourable profile sketched in the submission and the clear infrastructural problems experienced on the ground.

Mr Shaidi responded that income generating projects were the central point of view, but the problem was that the infrastructure backlogs were so great that significant funds had to be invested to create environments conducive to LED projects. This pattern was not the norm and, although the current figures indicated that 60% of the funds were provided by national and provincial departments, this figure would continue to decrease in the future.

Ms Fubbs requested that SALGA itself address this Committee on the MTBPS.

The Chair stated that SALGA would be requested to address this Committee during the following week.

Afternoon Session
Mr. Charles Nqakula, Safety & Security Minister informed the Committee that Deputy National Commissioner Yallop would address the Committee on the adjustments of National Expenditure 2003. He noted that the following year, 2004, would be election year and that more pressure would be put on SAPS' resources. The Department had requested and luckily been allocated more funds to deal with this contingency.

Deputy National Commissioner Yallop
Comm. Yallop informed the Committee that an adjustment to the estimates was mainly necessitated by the cost of living salary adjustment with effect from 1 July 2003. The Department provided for an 8% salary increase according to the set guidelines in this regard. The agreement reached in the Public Service Coordinating Bargaining Council provides for an 8,5% general salary adjustment. Provision was made for an additional 0,5% in the 2003 adjustment Appropriation Bill as well as the carry through costs in the forthcoming MTEF cycle. The 2004 Medium Term Expenditure Framework (MTEF) would build on the policy priorities that were laid down in the 2002 and 2003 budgets. Other key elements of the growth strategy involve inter alia the reinforcement of crime prevention. The 2004 MTEF therefore prioritized the continued expansion of capacity in the safety and security sector to prevent and combat crime.

Discussion
Mr. Hanekom (ANC) concurred with the Chair that the presentation was on target and thereof in line with the Committee's oversight mandate. He asked the Department to confirm that with the current budget it was in a good position to make significant progress on its constitutional mandate. He also asked the Department to give a projection as to where it would be in 2006.

Comm. Yellop explained that the growth in police personnel was in line with the imperatives of sector policing which had been very successful in fighting crime. He noted that with these target interventions SAPS was able to reduce the response time to a minimal and that this strategy would form the basis of future policing.

Mr. Hanekom acknowledged the need for additional members but asked the Department to ensure that emphasis was not just on numbers but the quality of those deployed in line with the expectations of an enlightened populace.

Comm. Yallop informed the Committee that SAPS has adopted a new training program that would ensure its trainees regularly interacted with members of the public to sharpen their people skills. He added that training was structured in such a way that it specially tools the SAPS to adequately respond to modern crime methods and that this was where theory matched with practice.

Mr. Mahlangu (ANC) was happy to note the improved level of co-operation between departments. He however lamented the perennial problem of capacity, which he blamed for the porous borders that had encouraged all kinds of illicit activities to flourish.

Comm. Yallop acknowledged the volatility of the border issue but noted that it was a worldwide problem that affected even the most developed countries. He said that border policing was a huge challenge and that the problem was not confined to the unguarded areas but that even the guarded ones still experienced teething problems. He noted that there was a plan for SAPS to take over border policing in six years time and that this development called for additional personnel

Ms Thompson (ANC) asked for an assurance that the current budget would capacitate SAPS to deal with issues of women and children more efficiently.

Comm. Yallop replied that the current budget had enabled SAPS to fully fund special units that handled sensitive gender cases and that more units were being reorganized to make them effective.

Ms Thompson enquired whether the projected increase in personnel would reach a point where one could say there was sufficient capacity to deal with criminal elements.

Comm. Yallop said that although SAPS had experienced significant growth in personnel, it was not possible to say that there was a time when it would have attained enough people. He reported that training colleges were currently busting at the seams and that this had prompted the Department to look for other places where new training facilities could be set up. He reported further that new facilities had been identified and that Treasury made a firm commitment in this regard.

Ms Thompson expressed concern at the escalating attacks on police personnel and wondered whether SAPS had procured enough bulletproof vests.

Comm. Yallop explained that whenever SAPS secured funding it ensured that 78% was applied to personnel and 22% is allocated to equipment procurement noting that the balance sheet for 2003 was a healthy one.

Dr. Conroy (NNP) enquired whether there was any other organization that could marshal a fleet of 150,000 officers on the streets other than the SAPS.

Mr. Nqakula replied that in terms of the constitutional mandate SAPS was the only organization that was specifically entrusted with the maintenance of law and order hence it had the prerogative to deploy such number of personnel.

Mr. Botha (DA) enquired what plans SAPS had put in place to address security concerns in the outlining farming rural communities.

Comm. Yallop replied that SAPS had put in place area crime combating units in every locality and that more sector policing had been intensified to replace the reserve units which he said were very expensive to maintain. He however noted that the number of police personnel in rural areas was an issue that needed to be addressed as a matter of urgency.

Mr. Rabie (DP) said that shellfish poaching especially on the Western Cape coast was a matter of serious concern. He sought SAPS assurance that this problem is receiving adequate attention.

Comm. Yellop noted that shellfish poaching was normally conducted by organized syndicates and that SAPS had managed to implement a very flexible structure to deal with this crime.

Department of Defence
The Deputy Minister informed the Committee that SANDF deployment abroad was considered unavoidable since they were ordered by the President in the national interest. The assistance to SAPS was not foreseen by the Department during the preparation of the FY2003/4 budget but had subsequently been requested by SAPS. She emphasized that whenever the President ordered the assistance the related expenditure would be unavoidable. She noted that the Department of Defence (DOD) was expected to reprioritize its FY 2003/4 and FY 2004/5 activities to compensate for the shortfall in the funding for deployment of personnel. This would have an adverse impact on the provision of combat ready forces for replacements of further deployment. She called for the establishment of a practice where additional funds were provided to Defence for the added deployment costs or baseline. Government must determine the force level limits for deployments and not exceed such limits. She warned that failure to do so would lead to a risk of unauthorized expenditure or even erosion of force producing capacity with a risk to continuity.

The Chair said the Committee without question recognized the sterling work the National Defence forces had accomplished often under very difficult circumstances.

Mr. Mahlangu expressed frustration at the attitude towards the DOD's plea for more funding when the responsibility it had been given outweighed its budgetary allocations. He reminded members that the mission SANDF was running abroad was not a fruitless exercise and that quite to the contrary SANDF was a very important ambassador for the country. He made the point that whether the threat to security was eminent or not security forces had to be combat ready at all times. He added that the military required consistent training to achieve acceptable level of combat readiness. He decried the fact that SANDF was an aging force and called for urgent measures to prepare for transition to younger personnel.

Adv. Smith agreed with Mr. Mahlangu that SANDF should be supported especially in view of the complicated and costly operations it was currently undertaking. He called for personnel exit mechanisms to bring in younger people. He also called for asset reorganization to evaluate the state of equipment most of which was obsolete.

Department of Justice and Constitutional Development
Mr. Gordon Hollamby - Chief Director - said that legislation was becoming more comprehensive and complex despite calls for simplicity and the use of plain language. To some extent the complexity was aggravated by the cross cutting nature of some of the new proposals. Some draft legislation not only imposed roles and responsibilities on the horizontal level but also imposed roles and responsibilities on the vertical level. The issue was further complicated when roles for civil society such as NGO and FBO were prescribed in the legislation.

Mr. Hollamby praised the role played by the Integrated Justice Sector Budget Review Team which gave the Department an opportunity to interact with other departments from the Correctional Services, the IJS and the National Prosecuting Authority on cross-cutting budgetary issues. Such interface offers an excellent platform for better budget planning, co-ordination and prioritization. Given the linkage between poverty, unemployment and crime, the broadening of the IJS network to include the Department of Social Services was most welcome. He made a plea for an even greater synergy in the budgeting process noting that without an increase in the capacity of court services delays in the finalization of court cases was inevitable. He voiced strong support for the concept of joint planning and budgeting. He congratulated the Committee for demonstrating what ought be done at the highest level.

Discussion
Mr. Hanekom reminded the Department that the Committee's mandate was not to make additional budgetary allocation but merely to assess progress on the programs that were outlined in the financial estimates. He asked for a statement on the biggest challenge for the Department in view of the budgetary constraints.

Mr. Hollamby explained that the Department operated in business units and that the human resource branch was outside these units. He lamented that the Department often struggled to retain senior personnel in various units a situation that greatly constrains service delivery.

Ms Thompson asked about the main challenge the Department faced in its endeavor to deliver on its core functions.

Mr. Hollamby noted that Department was unable to computerize all courts due to the fact that most rural courts had no telephone connection.

Adv. Smith wondered what happened to the computerization program that was left by the Department of Justice.

Mr. Hollamby replied that the program was cut short due to funding problems and the constraints of service demand elsewhere.

Correctional Services
Mr. Watson Tshivhase, CFO, Department of Correctional Services informed the Committee that the aim of the Department was to contribute to the maintenance and protection of a just, peaceful and safe society through the enforcement of sentences that were imposed by courts. To detain people in safe custody and promote the social responsibility and human development of all prisoners and persons subject to community correction. The Department's priority was mainly funding of shortfalls on operational costs of prisons and enhancement of rehabilitative programs. Prioritization had resulted in personnel funds being allocated to program, six and seven which enabled the Department to fill vacant posts in its establishment.

Mr. Tshivhase noted that the Department benefited from two sources of donor funding in the year ending 2002-03.The Rollins School of Public Health of the Emory University embarked on a R80, 000 research on a Post-Apartheid study of Prison Health in South Africa. The Foundation for Human Rights donated R161, 000 to monitor and ensure that prisoners were afforded the basic right to lodge complaints with prison authorities as required by the Correctional Services Act and the UN Standard Minimum Rules for the Treatment of Prisoners. The Department had applied for further donor funding to finance its research projects.

Discussion
Ms Fubbs (ANC) noted that the Department had slightly under spent this financial year and questioned the quest for additional funds.

Mr. Tshivhase explained that the incident of under spending was caused by the sudden exit of senior personnel which created many vacancies that took time to fill noting that 80% of the budget went to personnel remuneration.

The Chair noted that significant amounts had been spent on fighting corruption in the Department and sought clarity on the specific cases of the campaign.

Mr. Tshivhase explained that the terms of the Jali Commission were among other things to investigate mal-administration noting that the Commission was tasked to complete its work in five months but that this term had since been extended. He added that the greater portion of the Commission's work was to identify corrupt practices and help built capacity.

The Chair sought assurance that the Department was currently running programs to ensure that unrehabilitated persons were not recycled back into communities.

Mr. Tshivhase replied that after the prisoner was classified the Department ran various skills development programs. This however only benefited those serving two years upwards.

Meeting was adjourned.