Hansard: NA: Unrevised hansard
House: National Assembly
Date of Meeting: 12 Jun 2012
Summary
No summary available.
Minutes
UNREVISED HANSAD
TUESDAY, 12 JUNE 2012
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PROCEEDINGS OF THE NATIONAL ASSEMBLY
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The House met at 11:03.
The Deputy Speaker took the Chair and requested members to observe a moment of silence for prayers or meditation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS – see col 000.
NOTICES OF MOTION
Mr P VAN DALEN: Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:
That the House debates the termination of the observer programme on fishing vessels by the Department of Agriculture, Forestry and Fisheries and its effects on Marine Stewardship Council certification.
Dr A LOTRIET: Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:
That the House debates the governance and fiduciary functions of the councils at higher education institutions and solutions to problems experienced at these institutions.
Mr J H VAN DER MERWE: Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the IFP:
That the House debates the lack of ongoing and transparent communication on service delivery issues with communities that are most affected by poverty and lack of services.
Mrs A T LOVEMORE: Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:
That the House debates making teaching an essential service in order to improve educational outcomes of learners.
Mrs H LAMOELA: Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:
That the House debates compensation for victims of abuse and domestic violence.
Ms M R SHINN: Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:
That the House debates government’s vision and strategy to revitalise and restore investor confidence in Telkom.
Mr D A KGANARE: Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of Cope:
That the House debates the high level of teenage pregnancy in our country and recommendations to curb it.
Mrs S P KOPANE: Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:
That the House debates the state of the procurement system in the Limpopo Department of Health that led to shortages of various medicines and solutions to improve the situation.
Ms M D NXUMALO: Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:
That the House debates working together to protect children in distress, who suffer neglect, abuse or exploitation and who live in extreme poverty.
Ms T B SUNDUZA: Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
That the House debates ways to balance the various rights, cultures and norms of our diverse country and uphold dignity, mutual respect and tolerance for all.
CONDOLENCES TO NIGERIA AFTER DANA AIR PLANE CRASH
(Draft Resolution)
The CHIEF WHIP OF THE MAJORITY PARTY: Speaker, I move without notice:
That the House -
(1) notes with great sadness the Dana Air plane crash in Nigeria's capital city, Abuja, on Sunday, 3 June 2012;
(2) further notes that the plane crashed into a residential area in the Lagos metropolis, killing the 153 people on board as well as 40 others in a two-storey building; and
(3) conveys condolences to the government and the people of Nigeria during this difficult time.
Agreed to.
CONGRATULATIONS TO OSCAR CHALUPSKY FOR WINNING MOLOKAI WORLD CHAMPIONSHIP SURF-SKI RACE FOR TWLFTH TIME
(Draft Resolution)
The CHIEF WHIP OF THE OPPOSITION: Speaker, I move without notice:
That the House -
(1) notes that Oscar Chalupsky, at the age of 49, won the Molokai World Championship surf-ski race for the 12th time on 20 May 2012;
(2) further notes that Chalupsky first won this 30 nautical mile race almost three decades ago, in 1983, and holds the record for the most wins in this competition; and
(3) congratulates Chalupsky on this incredible achievement and wishes him well for the future.
Agreed to.
CONGRATULATIONS TO MIMI COERTSE ON 80th BIRTHDAY
(Draft Resolution)
Mrs J D KILIAN: Speaker, I move without notice:
That the House -
(1) notes that internationally renowned opera diva Mimi Coertze celebrates her 80th birthday today, 12 June 2012;
(2) further notes that Ms Coertze returned to South Africa in 1973 after her acclaimed career at opera houses in Europe, including the well-known State Opera House in Vienna;
(3) recognises that since her return, she has set an example to all South Africans by investing her musical talent and time in the identification and development of musical talent amongst young South Africans, in particular people from disadvantaged communities; and
(4) congratulates Ms Coertze on her birthday and wishes her well in the future.
Agreed to.
CONGRATULATIONS TO LUDWICK MAMABOLO FOR WINNING COMRADES MARATHON
(Draft Resolution)
The CHIEF WHIP OF THE MAJORITY PARTY: Speaker, I move without notice:
That the House -
(1) notes with great pride the winning of the 2012 Comrades Marathon by Ludwick Mamabolo on Sunday, 3 June 2012;
(2) further notes that Mamabolo became the first South African in seven years to win the marathon title; and
(3) congratulates Ludwick Mamabolo on this great achievement and wishes him much success in his future endeavours.
Agreed to.
CONGRATULATIONS TO WINNERS AT ANNUAL AWARDS CEREMONY OF CRICKET SOUTH AFRICA
(Draft Resolution)
The CHIEF WHIP OF THE OPPOSITION: Speaker, I move without notice:
That the House -
(1) notes that South African cricket sensation Vernon Philander was recently named South African Cricket Player of the Year at Cricket South Africa’s annual awards ceremony held on 6 June in Johannesburg;
(2) further notes that Philander was also named Test Cricketer of the Year and Cricket South Africa’s Fans’ Cricketer of the Year;
(3) acknowledges that Philander was awarded this title for his outstanding performance in the 2011/12 season, which included Philander becoming the fastest man in 116 years of test cricket history to take more than 50 wickets in his first 7 tests;
(4) recognises that AB de Villiers was named One-Day International Cricketer of the year and South African Players’ Player of the Year;
(5) further recognises that Richard Levi was named Cricket South Africa’s T20 Cricketer of the Year;
(6) further acknowledges the current outstanding performance of South African cricketers in all formats of the game across the world as several of these individuals currently hold the number one position in various categories of the official International Cricket Council’s Performance Rankings; and
(7) congratulates all winners of their respective categories at the Cricket South Africa award ceremony.
Agreed to.
CONDOLENCES ON DEATH OF PROF PHILLIP TOBIAS
(Draft Resolution)
The CHIEF WHIP OF THE MAJORITY PARTY: Speaker, I move without notice:
That the House -
(1) notes that on Thursday, 7 June 2012, leading South African paleoanthropologist, Phillip Tobias, died after a long illness at age 86;
(2) further notes that Professor Tobias completed a medical BSc degree and lectured at the Wits Medical School before getting his doctorate in medicine, palaeoanthropology and genetics, an honorary doctorate at Cambridge University and in 1959 he became head of anatomy at the Wits Medical School;
(3) acknowledges that he shared a lifelong passion for the study of man and human ancestry with his colleagues at Wits University and the Cradle of Humankind World Heritage Site;
(4) further acknowledges that he started the current programme of excavation at Sterkfontein in 1966, which is now the longest continuously active palaeoanthropological dig anywhere in the world and has produced over 1 000 hominid fossils;
(5) recognises that this gentleman, great academic, revered teacher and prolific publisher has a huge regard for humanity and his active struggle against apartheid made him a true son of the South African soil; and
(6) conveys its heartfelt condolences to his family, friends and colleagues.
Agreed to.
ANNOUNCEMENT OF PRELIMINARY SQUAD TO COMPETE AT 2012 SUMMER OLYMPIC GAMES IN LONDON
(Draft Resolution)
The CHIEF WHIP OF THE OPPOSITION: Speaker, I move without notice:
That the House -
(1) notes that on 7 June 2012, the South African Sports Confederation and Olympic Committee (Sascoc) officially announced the preliminary squad to represent South Africa at the 2012 Summer Olympic Games to be held in London;
(2) further notes that the 112-member squad announcement falls together with the 50-day countdown to the opening ceremony of the Games on the 27th of July;
(3) recognises that the South African team includes individuals who represent an abundance of sporting disciplines including athletics, swimming, mountain biking and canoeing;
(4) further recognises that the team will increase in size as several athletes still have until the end of June to qualify for the Games;
(5) congratulates all those athletes who have made the preliminary squad; and
(6) calls upon all South Africans to rally behind the team.
Agreed to.
APPROPRIATION BILL
(Consideration of Report)
There was no debate.
The Chief Whip of the Majority Party moved:
That the Report be adopted.
Motion agreed to.
Report accordingly adopted.
APPROPRIATION BILL
(First Reading debate)
Mr E M SOGONI: Hon Speaker, hon members and esteemed guests, today marks the culmination of a process that was started by the Minister of Finance, when he tabled the Budget, that is, the Appropriation Bill [B3-2012].
The President set the broad principles of what the ANC-led government had to do to ensure that the five policy priorities of government were achieved. In other words, this Appropriation Bill gives effect to those priorities as identified in the ANC manifesto of 2009.
The ANC manifesto declared that:
These priorities will be tackled with all means at our disposal – the resources of government, the vision of the Freedom Charter, and the energy and commitment of our people. Our priorities will specifically target the needs of the youth, women, workers, the rural poor, the elderly and people with disabilities.
All these commitments find expression in this Appropriation Bill.
The Standing Committee on Appropriations invited the Public Service Commission, PSC, to advise as to whether the state had sufficient capacity to deliver on these responsibilities. The PSC informed the committee that, amongst others, in research conducted in 2009-10 they found that, while many departments were able to spend their budgets, there remained a gap between actual expenditure and performance on predetermined objectives. In other words, they found that, although the departments had spent their entire budget and some had received unqualified audits from the Auditor-General, the expenditure was not aligned to the annual performance plans or their measurable objectives.
Of the 13 departments that were sampled, the highest score achieved was 67%, while another department scored only 37%. This performance demands a close scrutiny of our in-year monitoring by Parliament.
The third quarter expenditure report will reveal that, although spending has improved, some departments had spent as little as 50% by the end of December, but were able to exhaust the budget three months later. That is called fiscal dumping, because, although the money had been spent, it did not achieve those predetermined objectives.
The PSC raised the failure by senior management to sign performance agreements and the lack of requisite skills. Their presentation concluded with the following observations.
Firstly, from the PSC’s analysis, managerial shortcomings emerge as being a major factor. The analysis reveals that managers focus on processes and their associated emphasis on activities and outputs, while neglecting outcomes and impacts. As a consequence, programmes do not achieve their intended results.
Secondly, the lack of clear consequences for nonperformance contributes to a skewed incentive structure that has distorted downstream effects on overall public administration.
Therefore, the establishment of the Department of Performance Monitoring and Evaluation, and the subsequent directorates of monitoring and evaluation in various departments, should go a long way towards addressing these challenges.
The committee also invited the Human Sciences Research Council, HSRC, to comment on the alignment between the Budget and government’s policy priorities. The HSRC viewed the Budget in a positive light with respect to broad principles, and mentioned the following.
Firstly, the Budget aims to shift investment from consumption to investments.
Secondly, the Budget reflects a commitment to bold infrastructure plans, serving the whole country through an integrated approach and speedy delivery.
Thirdly, the Budget provides increased support to the industrial policy action plan and the establishment of special economic zones.
Fourthly, the Budget invests in transport, resulting in the improved living standards of workers.
Fifthly, the Budget pays attention to rural development.
The HSRC appreciated the bold investment in education and the continual assessment of targeted grades. However, they highlighted the problem that our education system did not always result in the employment of black graduates, even those educated at the same universities as their white counterparts. Black graduates did not stand the same chances of employment as their white counterparts.
However, the investment in job creating programmes, amongst others the Expanded Public Works Programme, Working for Water, Working on Fire, the Community Works Programme, etc, were not always spent but redirected instead to other government activities. If we are to achieve the five million job opportunities over five years, Parliament must monitor the implementation of these programmes more closely.
The other important objective should be the constant review of the budgets of the new departments established in 2009. Some of these departments, for example the Department of Energy and the Department of Women, Children and People with Disabilities, have complained about their baseline budgets.
One of the achievements during this term of Parliament has been the introduction of the National Health Insurance, which will allow universal access to health care for everybody in the country.
The committee believes that the next Appropriation Bill will have to include a section that spells out clear plans for the infrastructure programmes to be introduced in the following financial year. This will avoid underspending and delays in the implementation of these programmes.
The ANC welcomes the undertaking by National Treasury in this Bill that Parliament’s appropriation committees will be consulted when funds are shifted in terms of section 43(4)(b) and (c) of the Public Finance Management Act, Act 1 of 1999, as amended by Act 29 of 1999.
The ANC also welcomes the establishment of the multi agency working group on supply chain management, consisting of National Treasury, SA Revenue Service, and officials from the Financial Intelligence Centre.
We also applaud other measures that are taken to improve financial management and to root out corruption within the public sector, especially with respect to supply chain management.
In conclusion, in the state of the nation address, the President declared:
We will begin to write a new story about South Africa – the story of how, working together, we drove back unemployment and reduced economic inequality and poverty.
I thank you. [Applause.]
Mr M SWART: Mr Speaker, in the debate on the Vote of the Presidency, the hon Deputy Minister, Jeremy Cronin, revealed himself to be an expert on body language. By merely looking at the more than 70 DA MPs, he managed to determine how each individual one of them enjoyed or didn’t enjoy a particular speech. However, his contribution was mainly based on race and he did not really discuss the Appropriation Bill. So, unlike him, I will discuss the Appropriation Bill.
The Appropriation Bill provides money to government departments to be spent on achieving governmental priorities. Spending of the budget on the priorities set by government must not only address injustices of the past but must also lead to reconciliation, better service delivery and job creation. The question then is whether these objectives have been met with the money provided. In the case of many departments, the answer unfortunately is no.
Unlike the DA-run Western Cape government, where all departments and the province achieved clean audits, we still find a continuous stream of qualified audit reports of government entities. Incurring irregular, wasteful and unauthorised expenditure continues unabated. In the main, many government departments are failing South Africa’s diverse population with service delivery.
Let us then look at the facts. At a presentation to the Standing Committee on Appropriations, the Public Service Commission informed the committee that many departments are spending their allocated budgets at year-end to fairly high levels, but fail to meet the predetermined performance objectives or outputs set by themselves in their own strategic and annual plans. I will highlight just a few of the departments mentioned by the Public Service Commission in this regard.
The SAPS, for instance, spent 100% of their budget, but only achieved 59% of their performance targets. The Department of Trade and Industry spent 93,6% of their budget, but met 51% of their targets. The Department of Justice spent 97,7% and 50% of their outputs were met. The Department of Basic Education spent 89,4%, but met only 47% of their outputs. The Department of Energy spent 97,9% of their budget, but only reached 47% of their targets. The Department of Public Works spent 89,8%, but only reached 44% of their targets.
Adv T M MASUTHA: Speaker, on a point of order: Is the hon member prepared to take a question?
Mr S N SWART: Chair, if the question was going to test my intelligence, then I would have answered, but I doubt it. [Laughter.] The Department of Labour spent 99,5% of their budget, but only achieved 43% of their outputs. The Department of Rural Development spent 97,7%, but only achieved 41% of their targets. The Department of Health spent 96,6% of their budget, but achieved only 37% of their targets. The Department of Agriculture spent 97,4%, but achieved only 35% of their outputs. Almost the entire budget of these departments were spent, but they failed dismally in achieving their predetermined outputs. They nevertheless keep asking for money time and again.
Many of the departments, however, seem to be satisfied with the results achieved, as they proceeded to award themselves and their staff with performance bonuses of note, this despite their dismal failure in achieving their predetermined outputs.
Luister hierna. Die Departement van Handel en Nywerheid bereik slegs 51% van hulle doelwitte, maar betaal bonusse aan 20% van hulle personeel. Die Departement van Basiese Onderwys behaal net 47% van hulle voorafgestelde doelwitte, maar betaal bonusse aan 24% van hulle personeel. En so kan ons aangaan. Die Departement van Arbeid bereik 43,4 % van hul doelwitte en bonusse word aan 28,9% van die personeel betaal. Die Departement van Landelike Ontwikkeling het 41% van hul doelwitte bereik en bonusse word aan 29,7% van hulle personeel betaal. Die Departement van Landbou bereik 35% van hul doelwitte en bonusse word aan 33,5% van personeel betaal. Die Departement van Energie bereik 47% van hul doelwitte en bonusse word aan 36% van die personeel betaal. Die Departement van Samewerkende Regering en Tradisionele Sake bereik 44% van hul doelwitte en bonusse word aan 45% van hulle personeel betaal. Die Departement van Openbare Werke, seker die swakste departement, bereik 44% van hul doelwitte en personeelbonusse word aan 48% van hul personeel betaal. Die Departement van Minerale Sake bereik 63% van hulle doelwitte, maar betaal bonusse aan 57% van hulle personeel, en laastens, die Departement van Gesondheid bereik net 37% van hul doelwitte, maar betaal bonusse aan 50% van hulle personeel. Dit is duidelik dat resultate behaal en finansiële aansporings verleen, geen korrelasie toon nie. (Translation of Afrikaans paragraph follows.)
[Listen to this. The Department of Trade and Industry achieved only 51% of their outputs, but they have paid bonuses to 20% of their staff. The Department of Basic Education achieved only 47% of their predetermined outputs, but they have paid bonuses to 24% of their staff. And so we can go on. The Department of Labour achieved 43,4% of their outputs and bonuses have been paid to 28,9% of their staff. The Department of Rural Development achieved 47% of their outputs and bonuses have been paid to 29,7% of their staff. The Department of Agriculture achieved 35% of their outputs and bonuses have been paid to 33,5% of their staff. The Department of Energy achieved 47% of their outputs and bonuses have been paid to 36% of their staff. The Department of Co-operative Governance and Traditional Affairs achieved 44% of their outputs and bonuses have been paid to 45% of their staff. The Department of Public Works, surely the weakest department, achieved 44% of their outputs and staff bonuses have been paid to 48% of their staff. The Department of Mineral Affairs achieved 63% of their outputs, but bonuses have been paid to 57% of their staff and, lastly, the Department of Health achieved only 37% of their outputs, but they have paid bonuses to 50% of their staff. It is clear that results achieved and financial incentives offered show no correlation.]
The departments advance a lack of capacity as reason for poor performance, yet they fail to fill the funded vacancies available to them. Instead, they often prefer to make use of consultants. In the few departments I have just mentioned, their consultancy fee payments amounted to nearly R870 million, yet very little skills transfer took place. It is an indictment that we have serious unemployment, yet departments fail to fill even the most basic of vacancies.
A major contributor to the problems we experience in this regard is the policy of jobs for pals, often leading to inefficient, unqualified staff members being appointed to and holding positions which they are incapable of handling. They are nevertheless protected by Cosatu at all costs, irrespective of the consequences.
Talking of Cosatu, they obviously claim constitutional rights for themselves which they begrudge everybody else. When they have protest marches, they do not only march, but also break down everything in their path and they claim this as a democratic right. When the DA marches peacefully and legally to protest about Cosatu’s obstructive attitude towards job creation by way of the youth wage subsidy, Cosatu obstructs this democratic right they claim for themselves. They then forget about the poor and jobless and prefer to start hurling rocks to protect their own selfish interests.
One shouldn’t be surprised, therefore, that they are not satisfied with the 5% salary increase proposed by government in this budget. They simply don’t care about the excessive salary bill of government, nor do they really care about job creation, and nowhere have they come up with proposals for productivity increases linked to their salary demands. In all likelihood, they will also contest the proposals contained in the National Development Plan, as this plan wants to have a relook at the powers of trade unions and has, like the DA in its 8% growth plan, the interests of the poor and jobless as well as job creation at heart. Had it not been for the obstructionist attitude of Cosatu, 423 000 jobs could have been created for young people over the next three years. They would have been enabled to gain the necessary on-the-job experience so vital for future job opportunities.
We are sitting on a time bomb as a result of a lack of job opportunities for the youth. The Human Sciences Research Council tells us that seven out of eight youths in the age group 16 to 24 are unemployed. According to the Department of Statistics there are 9,2 million youths in this age group. It means that 8,1 million youths in this group are unemployed. A time bomb, indeed, yet Cosatu’s solution to the problem seems to be to play the violin, whilst Rome is burning.
The question then is whether we should support the Appropriation Bill. If government institutions continue operating the way they currently do, it will become increasingly difficult. We must ensure higher gross domestic product, GDP, growth rates and get rid of everything that hampers economic growth. In particular, we should ensure that departments attain the predetermined outputs they have set for themselves.
This afternoon we will be considering the individual Budget Votes and my colleagues will then indicate the specific Budget Votes the DA will be opposing. I thank you.
Mr L RAMATLAKANE: Hon Speaker, if we have R101 billion for compensation of employees in an economic classification, it is an extraordinary budget in the context of value for money that taxpayers get from the Public Service.
In some instances the pay scales at senior management level surpasses that of equivalent private sector posts. The question I want to ask is whether, as a developmental state such as ours, we can afford an ever-increasing public sector wage bill, where we have huge leakages of funds to corruption. It was reported that in 2010 about R20 billion was lost through corruption, and in 2011 R25 billion was also lost through corrupt practices and, of course, poor services. We are not getting value for money.
As a nation, we invest about 20% of the government budget towards education. We spend more per capita GDP on education them similar middle-income developing countries, but our education system is a disgrace. Our education system is a high-cost, low-output system where there are systemic problems ranging from poor teacher salaries to poor teaching in general, underqualified teachers, poor school infrastructure and the declining quality of matriculants. Suffice to say that government has failed in this top-priority outcome. In the 2010 World Economic Forum rankings South Africa was ranked 130 out of 139 countries overall in education, and 137 out of 139 for Maths and Science education.
The Eastern Cape and Limpopo are the worst provinces in terms of provision of infrastructure and teaching. Only about 50% of learners who passed Grade 10 in 2009 made it through to the Grade 12 examination in 2011. The question is, what happened to the rest and what are we going to do about the rest? What marked improvement has the section 100 intervention had in the Limpopo education department? What has it done in the Eastern Cape education department? The Eastern Cape is in fact in deficit; there is a need to have a social partner agreement to make up the lost time in teaching during the strike period.
There is a need for life skills development courses for matriculants which will equip them with a portable skill, enabling them to compete for entry level jobs. Given the current unemployment crisis, we need to reintroduce the apprenticeship model to equip the learners for the knowledge economy.
In Limpopo, in Water Affairs, we are concerned about the scarcity of water, the water leakages and the investment in water. From Limpopo to the Free State there is a lot of uncertainty over weekends, particularly in terms of the provision of water, because the water is shut off over weekends and people don’t have water. The Department of Education and the Department of Women, Children and People with Disabilities do not provide value for money in respect of their own outputs and this is, of course, questionable. The use of a consultant to perform a core function that should have been performed by the Public Service is a cause for concern, because of the jobs that are not filled but were supposed to be filled.
In conclusion, it is essential that portfolio committees carefully analyse the performance plans since we cannot continue to have instances where there are seemingly high expenditure levels but defined measurable outputs that are not being attained by the department. I thank you.
Mr N SINGH: Hon Speaker, thank you very much. Hon members. The IFP will be supporting this Appropriation Bill of 2012, because we have a constitutional obligation to appropriate resources to national and subnational governments.
However, I think one wish that I have and all members of this House should have, is when we stand up to speak on the Appropriation Bill next year, we can say history has been made. History will be made when we as a committee consider the Appropriation Bill of 2013 in terms of section 10 of the Act. Section 10 of the Act requires the Appropriation Bill to receive amendments from portfolio committees to divisions or subdivisions so that we deal with those amendments, pass them on to the Ministers for comment and then come to this House and report exactly what the outcome of that was.
To a large extent, this budget - and for the last 18 years, in fact, to a total extent, I might say - has been a budget of the executive. It’s not a budget of Parliament. We in Parliament represent the people and I hope that by next year, we can take the wishes of the people on the ground and consider service delivery protests and other complaints that come from people on the ground and influence the budgets of various departments. We’ve heard other colleagues speak about lack of delivery in certain departments, and this is something that we as Parliament need to take cognisance of. Having said that, I think when we consider appropriation we must not look at political parties and manifestos, etc, but we must look at what the actual needs on the ground are and respond to those needs in terms of giving departments whatever budgets they require.
To the extent of considering the Bill and having received representations from various departments, one of the areas that I wish to raise, and I hope the Minister will have some time to respond, is that the Appropriation Bill makes provision for a 5% increase in salaries. As it is with negotiations, we see that even 6,5% is not enough and we probably would go up to 8%.We should consider the kind of impact this would have, because almost 40% of the appropriation goes to salaries and wages and we are giving more money. However the question we have to ask ourselves is whether we are getting more value for the money we are paying out in compensation of employees.
I think the second issue that arose in the committee is the Public Service Commission, PSC, report. Other members have referred to the Public Service Commission findings, but I think these findings are confirmed when we look at what happens in a province like Limpopo. We’ve had reports that there are vacancies in Treasury; the banking and cash management functions are not being performed adequately; and - this is a serious concern - the executive committee endorsed illegal procurement processes. I repeat, the executive committee of Limpopo endorsed illegal procurement processes, and this is a matter of serious concern. So, whilst we come here and we can hand out a trillion or two trillion rand, we have to make sure that the money is spent effectively and efficiently.
The last concern that we have is that an official of Treasury said that they were struggling to find resources for the infrastructure investment programme. Maybe, if the Minister has time, he can comment on this to find resources for the infrastructure investment programme.
The IFP, as I said earlier on, will support this Bill. Thank you.
The SPEAKER: I thank the hon member. I plead again with hon members to reduce the noise levels in the House. If people feel compelled, or you want to discuss things, please go outside and discuss them outside.
Mr S Z NTAPANE: Hon Speaker, the Bill before us presents us with an opportunity to reflect upon the general management and direction of government departments as reflected by the state of their finances.
We are disappointed that expenditure on infrastructure development, which is critical for job creation, has been riddled with persistent cost overruns and underspending. As we’ve highlighted many times before, it is concerning to see that of the R260 billion planned infrastructure spending for 2010-11, only 68% or R178 billion was spent. This clearly points to a lack of capacity on the part of government to appropriate allocated funds, and this negatively affects the job creation agenda. Government needs to capacitate relevant entities such as state‑owned enterprises, SOEs, and others to ensure that they are able to deliver on the 2012-13 infrastructure-led growth the country requires.
In conclusion, the huge public sector wage bill is a cause for concern. Compensation of public sector employees continues to outpace all other expenditure items on the Budget. Obviously, the excessively high public sector wage bill diverts resources away from service delivery.
What is even more depressing in this matter is the lack of returns on this investment. If we were getting good value for the money spent on the compensation of public sector employees, the many service delivery challenges and riots besetting South Africa today would be a thing of the past.
The UDM supports the Bill. Thank you.
Mr J P GELDERBLOM: Hon Speaker and hon members, today I take pleasure in reflecting on the 2012 Appropriation Bill. The 2012 Appropriation Bill was tabled in Parliament on 22 February by the Minister of Finance, hon Pravin Gordhan. In a nutshell, this Bill provides for the appropriation of money from the National Revenue Fund in terms of section 213 of the Constitution, together with section 15 of the Public Finance Management Act.
In 1965, Amílcar Cabral said:
Always bear in mind that the people are not fighting for ideas, for the things in anyone’s head. They are fighting to win material benefits, to live better and in peace, to see their lives go forward, to guarantee the future of their children.
A budget is a tool for transformation. The Appropriation Bill is a set of figures crafted to give effect to policy that is aimed at the incremental eradication of social and economic disparities of the past. It is a tool to develop infrastructure, grow the economy and create jobs.
Hon members, this is the Budget through which government reassures all South Africans of its commitment to change the lives of the people for the better. The 2012 Budget supports government’s objectives of accelerating the pace of economic expansion and job creation, ensuring that the benefits of growth are shared more equitably and that the quality of service delivery is improved. Building a future that expresses the will of the people who have placed their faith in us to deliver on their dreams as we build a better united, nonracial, nonsexist democratic and prosperous South Africa.
Having analysed the Bill in its broader context, allow me to delve into what will be my reflection and engagement on specific issues on the following votes: Agriculture, Forestry and Fisheries – Vote No 26, Rural Development and Land Reform - Vote No 33, and also climate change.
In speaking about the Department of Agriculture, Forestry and Fisheries budget I will focus on food security and poverty alleviation. This is the heart of the socioeconomic right to food enshrined in both the Freedom Charter and the Constitution of our beloved country. Food security and poverty alleviation is not just a subject for debate. This is the ultimate measure of the harsh reality confronting our people, the most impoverished of our people. These are the same people whose unquestionable patriotism since the 1994 voting processes assured us of the democracy that we all enjoy today.
It is in this context that we welcome the budget of R5,8 billion allocated to this Budget Vote. This budget is distributed through the following programmes: administration R612,9 million; agricultural production, health and food safety, R1,9 billion; food security and reform R1,4 billion; trade promotion and market access R212 million; forestry R1,3 billion; and fisheries R411,8 million.
I must remind the hon members that the agricultural sector, of which this department is the custodian, is the only source of employment for many poor rural communities. We need to remind ourselves of the extent to which the South African economy and its growth are reliant on this sector.
In our consideration of this Bill as the Standing Committee on Appropriations we noted with deep concern the findings by the Human Sciences Research Council, HSRC, suggesting that between 2000 and 2001 the agricultural sector had experienced a sharp fall in employment in primary agricultural farming, crops and livestock farming, mixed farming and forestry. The Human Sciences Research Council further observed that more households experienced food and nutrition insecurity.
Having said this, we welcome the positives mentioned by the Minister in her Budget Vote in which she mentioned that food processing and agro-industries have provided jobs demonstrating growth of over 25 000 agricultural jobs in the sector for the third quarter of 2011. A further 6 000 agriculture-related jobs were created in the fourth quarter of 2001, and this has brought total employment in the sector to 630 000.
We further welcome the noble plan by the Department of Agriculture and Forestry which will train 45 000 smallholder producers to enhance their productivity. We also welcome the Minister’s commitment to invest R50 million in the promotion of agro-processing businesses.
When it comes to rural development, about half of the South African population call rural areas home and many people in urban areas have strong ties with rural areas. However, rural areas bear the brunt of poverty, joblessness and gross inequality, particularly former homeland areas where over a third of South Africans still live - plus minus 17 million people.
In 2010 an estimated 57% of the rural population lived in poverty on a monthly income of less than R570. Employment levels in rural areas are very low, with just one adult in four employed, compared to two in four in the metros. Education levels are low and 31% of working-age adults have only primary education compared to 17% in the rest of the country. Rural infrastructure is inadequate; for example, schools are more likely to lack buildings, books, administrative staff and are often underqualified educators. The government committed itself to ensuring that the country has vibrant, sustainable rural communities. A number of targets were set to be reached.
The Department of Rural Development and Land Reform directly features among the five key priorities of government as declared by the President in his 2012 state of the nation address. Similar to the Department of Agriculture, Forestry and Fisheries, this department carries the hopes and aspirations of many rural communities. The majority of these communities are directly affected by the plight of food insecurity, landlessness, poverty and joblessness.
We are of the view that the budget of R8,9 billion for Budget Vote No 33, as reflected in the Appropriation Bill, supports Outcome 7, which focuses on the creation of vibrant, equitable and sustainable rural communities. Administration gets R1,1 billion; geospatial and cadastral services R561,9 million; rural development R934,8 million; restitution R3 billion; and land reform R3,3 billion. We are confident that this department will be able to turn around the fortunes under the leadership of Mr Nkwinti of many poor rural communities.
When it comes to climate change I can just mention that there will be harvesting of 200 hectares of maize and 200 hectares of soya maize. The ongoing harvesting of at least 400 hectares of commercial crops, and the growing of 100 hectares of lucerne crops in the Free State is also welcomed.
Having spoken at length about the two departments that are the key to the issues of food security, food production, poverty alleviation and sustainable agriculture and rural development, it is only fitting that I speak about the 21st century’s most fundamental issue - climate change.
Today we cannot speak of fighting socioeconomic injustice in isolation of the fight against environmental injustice. The issue of food production and food security is clearly a case in point. The funds set aside for the training of farmers, particularly small farmers, should also go towards creating environmental awareness. The millions set aside for the preservation and management of water and land resources should factor in climate change-related issues.
The executive has applied its mind to the allocation of resources to achieve policy objectives of the state. Now, the responsibility for implementation rests with the administration and its capacity to translate policy and annual performance plans into measurable gains.
In closing, hon Speaker and hon members, I shall emphasise that it is our pleasure to welcome the Budget contained in the 2012 Appropriation Bill. For all 38 departments and their respective entities our message is clear: the foundation has been laid, the soil is fertile and it is time to deliver to our people.
I thank you. [Applause.]
Mr S N SWART: Speaker, hon Minister, the ACDP broadly supports the main thrust of the budget, which is about galvanising society behind a national effort to place the country on an investment-led growth path. This, as we know, resulted in a major shift from consumption spending to spending on the productive side of the economy. We are, however, living in dangerous economic times, as Minister Gordhan said in his Budget Speeh, with serious sovereign debt fears in Eurozone countries, which will have an impact on South Africa. Such uncertain times require boldness, courage and vision. Leaders are dealers in hope. We must bring hope to the unemployed, the poor and every South African.
It is also crucial, of course, to address wasteful and irregular expenditure and corruption, considering that government expenditure will, for the first time, reach the R1 trillion mark. An amount of R25 billion rand to R30 billion is estimated to be lost annually to procurement fraud and corruption.
The ACDP shares the concerns expressed by the appropriations committee in its report, particularly regarding the nonattainment of performance targets and capital underspending.
Lastly, however, it remains the responsibility of each of us to ensure that government departments spend their money efficiently and meet those performance targets. Let us, as parliamentarians, be vigilant on an ongoing basis to prevent fraud, corruption and irregular and wasteful expenditure. We can do this by monitoring quarterly expenditure patterns in every department. I thank you.
Nkskz L E YENGENI: Somlomo, maLungu ePalamente, Baphathiswa nooSekela-Baphathiswa, neendwendwe ezikhoyo, bhotani. Simothulela umnqwazi urhulumente welizwe okhokelwa ngumbutho wabantu i-ANC, nobhexeshwa ngunyana kaTata uMsholozi, uMongameli uZuma ukutsho, ngokuthi thaca iqhosha elingenantuja, imali ke ukutsho, engaphaya kwamakhulu amahlanu anamashumi amane anesithathu amawaka ezigidi-gidi zeerandi – R543,6 billion ngolwasemzini nto leyo ebonakalisa uchatha kuHlahlo-lwabiwo-mali lwanyakenye – 2011-12 financial year – ngolwamadlagusha. (Translation of isiXhosa paragraph follows.)
[Mrs L E YENGENI: Hon Speaker, hon Members of Parliament, hon Ministers and hon Deputy Ministers, visitors present here, I greet you. We commend the ANC-led national government, under the leadership of Mr Msholozi, meaning the hon President Zuma, for providing money, over five hundred and forty-three billion rand - R543,6 billion, something which shows an increase on the previous financial year’s Budget – in English, the 2011-12 financial year.]
We have noted that at least more than 60% of this budget has been allocated for transfers and subsidies; less than 39% for current payments; and only 2% for capital expenditure. The responsibility lies in the hands of these departmental officials to spend the available budget according to plans - efficiently, effectively and economically, and in line with the Public Finance Management Act, Municipal Finance Management Act and Supply Chain Policy.
We have noted the increasing trend of mismanagement of funds, which includes unauthorised expenditure, wasteful expenditure, fruitless expenditure and noncompliance with law and regulations. Unlawful expenditure has a direct impact on our appropriated Budget and affects the delivery of services negatively because the department is then unable to achieve all performance targets as planned.
We have noted the increasing trend of misalignment between the budget spent and the strategic plans of government departments. For instance, certain departments will spend 100% of their budget; whereas they will only achieve 60% or less on their performance targets. This needs urgent attention.
This does not give our government value for money. We have noted the cost escalation in some of the major infrastructure projects, like the Accelerated Schools Infrastructure Delivery Initiative, Asidi, project in the Eastern Cape, Public Works projects, newly built prisons in the Northern Cape, the revamped and maintained prisons, hospital revitalisation projects – which are the key programmes for us to be able to implement the National Health Insurance – to name a few, and we are concerned as the ANC component in that committee.
The escalation of major infrastructure projects is a major concern, taking into account the fact that the Supply Chain Policy provides for a three-quote process before the procurement can be made. It further provides for government to take the lowest bidder; still there is not much of a difference. Maybe we need to pose a question to National Treasury as to how this three-quote system helps the government to achieve its intended objective, with minimum costs and, at the same time, obtain value for money.
The reason why we need to ask this question is that most, if not all, projects are quoted and the lowest quote is taken, but surprisingly the lowest cost has become even much higher than the one which was the highest to begin with. These figures are manipulated intentionally by the private sector because there is no competition. They know that they are the only stakeholders that the government is using or that have the capacity to deliver in most of these major infrastructure projects, on behalf of the government.
Our government is always a loser or gets ripped off by these companies. That is a serious financial and economic challenge. I call upon Treasury and the government to look into this challenge as a matter of urgency, since this has been declared the year of infrastructure development by the hon President. Should this challenge be left unattended, monopoly capital will continue to make a 100% surplus or even more at the expense of our poor people.
In most instances these cost escalations are a clear element of corrupt tendencies by DA constituencies. It is also understandable why those peacetime politicians, who claim to be advocates of anticorruption, are mum and pretend to be blind when it comes to these corrupt tendencies. In fact, the word corruption has been selectively used and deliberately abused by antidemocratic forces of Helen Zille ... [Interjections.] [Applause.] ... in alliance with hon Mosiuoa Lekota, whose political reactionary posture resembles that of Hitler in Nazi Germany. [Interjections.] [Applause.]
For instance, issues of irregular and fruitless expenditure do not necessarily amount to corruption, but are issues of compliance. [Interjections.]
Kuyafuneka ke ukuba singenise isikolo koogxa bethu abasekunene, ingakumbi ngala magama ezopolitiko ... [Uwelewele.] ... igama lorhwaphilizo ... [We need to teach our fellow colleagues on my right, especially when it comes to political terms ... [Interjections.] ... the term corruption ...]
The SPEAKER: Order, hon members! Is that a point of order, sir?
Mr D A KGANARE: Speaker, is it parliamentary for the hon member to accuse another member of being a Nazi in Parliament? [Interjections.] I want you to make a ruling on that.
The SPEAKER: I will study the Hansard and come back with the ruling. Continue, hon member.
Mrs L E YENGENI: I said it resembles. [Interjections.]
Kuyafuneka ke ukuba ... [Uwelewele.] ... sibancedise aba gxa bethu basekunene ... [There is a need to ... [Interjections.] ... assist our colleagues on my right ...]
The SPEAKER: Order, hon members, order!
Nkskz L E YENGENI: Imizuzu yam ndiyifumane, Somlomo. Kufuneka sibafundise amagama opolitiko kuba kaloku le nto ilupolitiko bayibambe emsileni. Ingakumbi igama lorhwaphilizo kuba kaloku asisenakuzonwaya singenakuthimla; yonke into lurhwaphilizo. Nokuba kugqitha uhodoshe, lurhwaphilizo olo. [Uwelewele.] (Translation of isiXhosa paragraph follows.)
[Mrs L E YENGENI: Hon Speaker, I must get my minutes back. We need to teach them political terms because they are new to politics. This applies to the term corruption in particular; it seems that we can no longer have a relaxed moment or sneeze for that matter because everything is corruption to them. Even if a carrion fly flies by, that is also called corruption.]
We have observed some sections in the Public Finance Management Act that are in contradiction with some sections in the Appropriation Bill. Section 43(2)(a)(b)(c) does not authorise the shifting of virements of transfers earmarked for particular urgency, as well as allocations earmarked for capital payments to defray current payment. However, we have observed that section 5 of the Appropriation Bill comes up with opposite provisions, which makes our work very difficult. These contradictions compromise our oversight function.
Another important observation is that Parliament approves the Appropriation Bill, but when departments are doing shifting and virements, Parliament does not get involved. There are a lot of gaps and challenges, such as tight timeframes for Parliament to consider and pass legislation.
Coming to the Department of Education - I will take one department out of many. Whilst we applaud the Department of Higher Education and Training for the introduction of financial support schemes in technical colleges, and for dealing with the issue of access to education, there has been ongoing concern regarding the allocation of funds to universities and universities of technology.
According to the Appropriation Bill, allocations to former white universities remain high, whilst those that are earmarked for former black universities remain low. This calls for a review of the allocation formulae. Some of these universities have enough resources, to the extent that they can even run without government’s intervention or the National Student Financial Aid Scheme, NSFAS, while the former black universities still have a backlog of students who do not receive financial aid because of inadequate allocations. For instance, the allocation that goes to the University of Cape Town is R974 million versus the University of the Western Cape’s R570 million; the University of Stellenbosch receives R975 million versus the University of Zululand’s R306 million. I can go on; it remains the same.
Whilst a long, hard struggle took place in this country and resulted in a Constitution that upholds the noble principles of nonracialism and nonsexism, it is disgraceful to note that racism in the province of the Western Cape ... [Interjections.] ... is not only alive and kicking, but is growing at an alarming rate. The government of the DA in the Western Cape is busy promoting and entrenching the culture and politics of divide and rule. They are busy turning the wheel backwards, eroding all the gains of our struggle for freedom and justice.
How else do you explain the racist outburst of the premier of this province, Helen Zille, calling black South Africans in this province refugees? No one condemned those ... [Interjections.]
The SPEAKER: Hon member, hold on; there is a point of order.
The CHIEF WHIP OF THE OPPOSITION: The speaker is deliberately misquoting the Premier of the Western Cape. [Interjections.] She never, ever called black people refugees; she spoke about refugee students. [Interjections.]
The SPEAKER: Hon member, that is not a point of order.
Mrs L E YENGENI: No one condemned those potently racist comments, including the DA’s parliamentary leader, Ms Lindiwe Mazibuko. [Interjections.] Ms Mazibuko’s courage to stand up for her own people failed her at a crucial moment. [Interjections.] We all shudder to think what the DA’s future will be in the hands of hon Mazibuko. [Interjections.] This insult directed at all black people of this province must be rejected with the contempt it deserves ... [Applause.] ... and it must haunt Madame Zille until she takes it back and apologises unreservedly to all our people.
The delivery of services in the Western Cape is also done in a very skewed and racial manner. Those people who live in townships and squatter areas are given inferior, substandard service. In Grabouw we witnessed an ugly fight, with racial undertones, between two communities, where one community was given a good school, while the other was given an inappropriate and inadequate structure. [Interjections.] Instead of addressing ...
The SPEAKER: Hon member, just hold on; there is a point of order. What is your point of order, sir?
The CHIEF WHIP OF THE OPPOSITION: Hon Speaker, although these are political debates, there is a Rule that we should stick to the subject. [Interjections.] The subject is not the budget of the Western Cape; it is the Budget of this government, which has failed dismally.
Mrs L E YENGENI: Instead of addressing this massive backlog in housing delivery, squatter areas are, in fact, growing in this province. There are amatyotyombe [shacks] everywhere in this province. [Interjections.] This is not the working and successful province that we are made to believe by the DA, but a province ... [Interjections.] ... yamatyotyome [of shacks]. [Interjections.]
The SPEAKER: Order, hon members! Hon members, order!
Mrs L E YENGENI: In this cold, biting winter women and children are forced to live in squatter areas ... [Interjections.]
The SPEAKER: Hon member, hold on. Is that a point of order, sir?
Mr D A KGANARE: Is the hon member prepared to take a question? [Interjections.]
The SPEAKER: Hon member? The answer is no, sir. Continue, member.
Mrs L E YENGENI: There are amatyotyombe [shacks] everywhere in this province. This is not the working and successful province that we are made to believe by the DA, but a province yamatyotyombe [of shacks]. In this cold winter women and children are forced to live in squatter areas that are flooded with stagnant water from the notorious winter rains of this province.
The SPEAKER: Hold on, hon member. Yes, sir; what point are you rising on?
Mr J J MCGLUWA: Is the hon member aware that Premier Helen Zille is the best premier in the country? [Interjections.] [Applause.]
The SPEAKER: That is not a point of order. Order, hon members! Continue, hon member.
Mrs L E YENGENI: The absence of transformation and inclusiveness across all sectors in the Western Cape is a worrying factor that must be addressed frontally. Whilst the DA likes to boast about clean audits in its government, as they have done this morning, those clean audits have no bearing on the lives of those who are stewing in squalor and those in townships. [Interjections.] It is no exaggeration to say that living conditions in the black and coloured townships are really bad and devastating.
The DA government can no longer be allowed to make lame excuses ... [Interjections.]
Mr E M SOGONI: Hon speaker, that hon member there is making this gesture, and that gesture means that somebody is a baboon. I do not know who he is referring to. [Interjections.] Who is he referring to?
Mrs L E YENGENI: Listen. The DA government can no longer be allowed to make lame excuses for their failures. They must be held fully accountable by the voters and the poor masses of this province. [Interjections.]
The SPEAKER: Order, hon members, order!
Mrs L E YENGENI: The DA like to parade as fighters against corruption, but recently the Public Protector found out that ... [Interjections.] ... DA advisers, with their fingers, dip into the cookie jar. Madame Zille tried to intimidate the Public Protector by threatening her with a lawsuit. [Interjections.] We condemned outright the presence of DA advisers in the committee that awarded the contract in question. [Interjections.] [Applause.]
This kind of behaviour smells of corruption by the DA advisers. The full might of the law must be brought into play in its full role. [Interjections.] The DA must be made to appreciate and understand that this is South Africa, which is part and parcel of the continent of Africa. [Interjections.] Africans must be respected and treated with dignity, and not insulted. I thank you. [Applause.]
Mr G R MORGAN: Mr Speaker, the hon member is misleading the House. [Interjections.] There was no corruption found by the Public Protector.
The SPEAKER: That is not a point of order. Please take your seat. I now wish to invite the hon Minister to address the House.
Mr M WATERS: No, sorry. Mr Speaker, if someone misleads the House deliberately it is a point of order, and I would like you to make a ruling on that. [Interjections.] There was no corruption found in the Public Protector’s report. Will you please make a ruling on that? [Interjections.]
The SPEAKER: Please take your seat. Hon Minister, continue.
Mr M WATERS: Mr Speaker, sorry, I’m still standing.
Adv T M MASUTHA: Speaker, on a point of order. Whenever a member accuses another member of deliberately misleading the House, it has been ruled before that it amounts to accusing that member of lying ... [Interjections.] ... and that is unparliamentary, and that member must be forced to withdraw that statement. [Interjections.] I ask for your ruling, Speaker.
The SPEAKER: I will study the Hansard and come back with the ruling. Minister, you have the floor.
Mr M WATERS: Mr Speaker, sorry. On the previous point, the hon member deliberately misled this House by referring to the Premier of the Western Cape as being corrupt. There was no corruption in that report.
The SPEAKER: Hon member, I did say that I am going to study the Hansard and come back with the ruling. Please take your seat. Minister, continue.
Mr M WATERS: You did not, but thank you very much.
The MINISTER OF FINANCE: Hon Speaker and hon members, thank you for an exciting debate. Normally appropriation debates are very boring. I want to remind one of the hon members about what was said here on the platform. In the Budget we said that we are living in dangerous times. Well, six or four months later we are living in even more dangerous times. So issues of budgeting, appropriation, how we spend our money and how we prioritise for things that we want to prioritise are becoming even more important than they were during the time of the budget.
It is important for us as hon members, regardless of the political parties that we belong to, to understand very carefully and very clearly the developments that are unfolding around us, particularly in Europe and what potential impact they could have on our economy, job situation, growth prospects and indeed on the fiscal balances and frameworks that we have been trying to sustain going forward.
We might choose to play political football with these issues, but let me appeal that there must be some space created somewhere for us on a nonpartisan basis to understand these challenges and begin to act in the national interest outside of the political battles that we want to fight.
In the South African context we must continually ask these questions, as the appropriations committee has asked: What are our priorities; are we spending money on those priorities; are we spending that money effectively; and are we in the public sector, as the Public Service Commission asks, having a management cadre that both understands those priorities and has the capabilities to deliver and use the R1 trillion that we speak of as effectively as they should?
Mr Speaker, in the Budget we made it very clear that we want to change the composition of spending in South Africa. We’ve started that process, but there is a long way to go. Investment in infrastructure and in other capital projects still doesn’t get as much money as it requires, and even where we do have that money, regrettably we don’t spend it as effectively as we should.
Secondly, we’ve said that, given the crisis and our own structural constraints, we need to restructure our economy to overcome as quickly as possible the constraints that our economy faces and, more importantly, utilise our own creativity to take advantage of the opportunities that we have around us. But we are not doing remarkably well on that front, although there is some progress to be noted.
We’ve taken measures in the Budget to support the competitiveness of our economy and the manufacturing sector in particular and we have begun to see progress in terms of the allocation of those funds and the setting out of criteria.
As many hon members have pointed out, the essence of spending this money is to ensure that the appropriate level of service delivery occurs and that millions of South Africans are the beneficiaries of this service delivery. I am sure that a lot of that is happening effectively, but there is room for improvement, as all of us would acknowledge.
I want to thank the hon Sogoni and his team for the excellent work that they have done in preparing Parliament for this particular process. Their job becomes even more important as we go forward, as they are beginning to ask tougher questions to the departments. Are you actually creating jobs as a result of what you do? Are you delivering on a value-for-money basis? Are you ensuring that procurement happens in the right way? Is capital investment happening as it should happen and as many hon members pointed out, and as the Public Service Commission did? Are we able to reconcile expenditure with performance outputs? Clearly, there is progress in this particular regard, but we need to be tougher on ourselves to ensure that we do deliver what we promised to deliver in our plans.
Most importantly, the key focus, as I said earlier, needs to be an evaluation, as some of the hon members have pointed out, as to whether our spending of money results in a change in people’s lives for the better. That should be the sole criterion in terms of evaluating our performance. Secondly, whether we are adequately restructuring our economy, both in terms of infrastructure delivery and removing the bottlenecks in our economy and, more importantly, restructuring our economy so that we overcome our own history and lack of employment within our economy. Here again, the role of the appropriations committee and the various portfolio committees is an extremely important one.
I would certainly support all of you who indicated that we need to hold departments and officials to account on a much more rigorous basis than we do. We need to stop fiscal dumping and senseless spending just because we want to show that we have 100% spending taking place.
There is an interesting shift that happened over the last year or two in as much as we used to focus on the quantum of spending. We need to start asking questions about the quality of spending and what it is that we are actually achieving.
Again, all of us, regardless of our interests, need to ask some tougher questions about ourselves, particularly in an economic context where there could be further negative impacts on revenue collection in the coming year if Europe does not sort out its problems, as it is giving no evidence that it is doing so faster than it has been able to do up to this point in time.
We appeal to all of us in Parliament, various departments, to my colleagues and the executive as well to keep a more watchful eye on how money is being spent and on how we undertake more rigorous exercises to save more money and redirect our money in the best possible way.
We need to, of course, constantly remind ourselves that this is taxpayers’ money that we are talking about and that taxpayers are becoming impatient with the fact that we are not adequately providing value for money.
The criticism that is made of the private sector during the course of this debate is also a valid one. There is ample evidence that there are two sides to any transaction and that the business sector in South Africa needs to up its game. They need to come to the party in terms of the way in which costing takes place in relation to services and goods provided to government. Higher levels of integrity are required if we are going to meet some of the challenges that we face.
A number of hon members have talked about looking at the baseline budgets of new departments. We will certainly have a look at some of them in the new budget cycle. But I also think we have to get used to the idea that Europe and the European crisis, and the fact that there are lower growth patterns throughout the world today, does mean that we must have lower expectations about what our budgets could look like and how effectively we spend the money that we actually have available to us at this particular point in time. Several hon members have pointed out various leakage points in our fiscal system, and those are issues that we will certainly look at.
As far as changes in the composition of expenditure and the wage bill are concerned, as you know the negotiations are ongoing in the relevant chamber at this point in time and all we hope for is that we find the right balance between ensuring changes in composition and rewarding public servants in an appropriate way.
Hon Singh made reference to vacancies in the Limpopo Treasury. There is a very good turnaround process in Limpopo and certainly in Treasury. I cannot speak for the other departments, but those vacancies will certainly be filled in the near future.
Hon Gelderblom gave us an important reminder by quoting Amílcar Cabral that the masses are not fighting for ideas, they are fighting for material benefits. Our task as government, whether local, provincial or national, is to ensure that on a continuous basis this R1 trillion Budget is spent in a way in which ordinary folk on the ground can see a meaningful change in their lives as a result of the kind of service delivery that we undertake.
We would certainly take up hon Yengeni’s point that there needs to be a better alignment between spending on the one hand and performance targets on the other.
Let me conclude by thanking all the parties for their support for this Bill and for the various contributions that they have made to improve the way in which we spend funds within government. I thank the hon Sogoni and his team for their contribution as well.
Thank you, hon Speaker.
Debate concluded.
Bill read a first time (Democratic Alliance dissenting).
Business suspended at 12:24 and resumed at 14:04.
APPROPRIATION BILL
(Consideration of Votes and Schedules)
The DEPUTY SPEAKER: Order! Hon members, I wish to thank parties for advising staff regarding those Votes on which they will make declarations, those on which they will record their objections, and those on which they intend to call for a division. This information will greatly assist the process this afternoon.
I will put each question on the Vote fully, for decision and thereafter ask parties for declarations of vote as they have indicated. Members may make declarations of vote from the floor microphones if they wish. After this, I will put the Vote for decision.
I have been advised that declarations will be limited to two minutes each. The bells will be rung for five minutes for the first division, if any, but for only one minute on subsequent divisions.
Vote No 1 – The Presidency – put.
Declarations of vote:
The LEADER OF THE OPPOSITION: Madam Deputy Speaker, the Presidency budget demonstrated President Jacob Zuma’s failure of leadership to take South Africa forward. The President had an opportunity to define his vision to create opportunities and jobs and to give the country hope to overcome despair.
However, the budget was not the stuff of visionary leadership. Instead, Parliament was presented with an unfocused contribution, designed more to mollify the many factions of the governing party than to plot the course forward for the people of South Africa.
Moreover, his mean-spirited response was little more than reflections on the personal and the historical. It contained not a single substantive response to specific policy questions. Rather than pulling the nation together, the President abused and mobilised our troubled history and legacy of racism to open up wounds and spread division.
In real terms, the cost of the Presidency is growing at an ever-increasing rate, yet it is not matched by tangible improvements in job creation or economic growth. While the Presidency has grown in size by 256% since 2003, youth unemployment for those aged 25 and under stands stubbornly at 49%. The President failed to respond to the gathering storm, by treating youth unemployment as a national emergency.
He missed the opportunity to decisively stamp his authority on a weak government by standing up to Cosatu. The President lacks the will to implement the youth wage subsidy. It is South Africa’s young people who suffer as a consequence. The DA will not support the Presidency budget vote. [Applause.]
Mr M G P LEKOTA: Madam Deputy Speaker, President Nelson Mandela signed the Constitution in Sharpeville. In doing so, he symbolised the fact that we had paid with tears, sweat and blood for this Constitution. Therefore, it was sacrosanct. Section 165(4) of our Constitution requires that organs of state, through legislative and other measures, must assist and protect the courts to ensure their independence, impartiality, dignity, etc.
Yet, members of the executive, under the President, as hon Ngwako Ramatlodi has done, continue brazenly to attack the judiciary at every available instance. For instance, this past week, he said, and I quote, “I have seen now in our country, that the courts are being used to replace the executive.” Yet, the President, in his capacity as head of the executive, and the person who appoints these people, has not as yet taken a moment to repudiate them or call them to order.
This is a failure to keep his oath of office. Therefore, we will not support this Vote. I thank you. [Applause.]
Mr J J MCGLUWA: Deputy Speaker, under President Zuma’s government, the budget of the Presidency has doubled to more than R900 million. The budget of the National Youth Development Agency, NYDA, which falls under the Presidency, has become a vehicle for ANC Youth League support. This budget has doubled to R400 million.
Millions in state funds has been spent on the upgrading of the presidential official residence and offices. This is happening in the midst of the hon Minister of Finance’s plea to all of us to urge government to be more prudent in its spending.
The President has invited us to talk during his Budget Speech. But when he was asked to tell us in his response if the Presidency should be accountable to a Parliament that has oversight over them, the President and the ANC chose instead to slap opposition parties, wasting valuable time and energy, trying to lecture us on South Africa’s racist past.
Our proposal to make the President more accountable is nothing other than the establishment of an oversight committee. The ID would be abdicating its oversight responsibility by supporting a Budget Vote where no oversight structures exist. The ID does not support this budget. I thank you. [Applause.]
Rev K R J MESHOE: Deputy Speaker, media reports about the Department of Public Works spending R36 million on security-related constructions at President Zuma’s Nkandla estate, including a network of underground rooms, an escape tunnel, underground parking, 20 houses for security guards and a helicopter pad, raises many questions that must be answered by the Presidency.
Further reports are that, according to both government and ANC sources, the total budget for improvements and additions at the President’s homestead is between R69 million and R400 million. Because this is taxpayers’ money, the ACDP believes that it should be approved by a Parliamentary committee. The ACDP will be voting against this extravagant spending of taxpayers’ money that we believe amounts to wasteful expenditure. [Applause.]
The DEPUTY SPEAKER: IFP, did you have your hand up?
Mr J H VAN DER MERWE: Madam Deputy Speaker, no.
The CHIEF WHIP OF THE MAJORITY PARTY: Hon Deputy Speaker, hon Deputy President, the Presidency has discharged its responsibilities with distinction. [Applause.] It has lived up to the expectations of the founding mothers and fathers of our constitutional democracy. It recognised and acknowledged the primacy of the humanity of all South Africans and their inherent worth and dignity, their right to equality, freedom and justice for all.
The Budget Vote on the Presidency speaks eloquently to the commitment of this administration to improve the quality of life of all South Africans, both black and white. The commitment of this administration and its readiness to realise the vision of our founding fathers and mothers beyond doubt.
The priorities of your government, the resources allocated for their realisation, the National Development Plan and its co-ordinating structures leaves no one in doubt that this administration remains committed to the vision of our founding fathers and mothers. In particular, this administration is living up to what O R Tambo told us in 1981, when he said, and I quote:
The objective of our struggle in South Africa, as set out in the Freedom Charter, encompasses economic emancipation. It is inconceivable for liberation to have meaning without a return of the wealth of the country to the people as a whole. To allow the existing economic forces to retain their interests intact is to feed the roots of racial supremacy and exploitation, and does not represent even the shadow of liberation.
As the President told us that political freedom without economic emancipation is meaningless, this Budget Vote testifies eloquently to the fact that this administration is committed to ensuring that we achieve that. The ANC supports this Budget Vote. [Applause.]
The DEPUTY SPEAKER: Hon members, I now put the question. The question is that Vote No 1 be agreed to.
Division demanded.
The House divided.
AYES - 218:Abram, S; Adams, P E; Ainslie, A R; Baloyi, M R; Bhengu, F; Bhengu, N R; Bikani, F C; Bogopane-Zulu, H I; Borman, G M; Boshigo, D F; Botha, Y R; Bothman, S G; Burgess, C V; Buthelezi, M G; Carrim, Y l; Cebekhulu, R S; Cele, M A; Chabane, O C; Chiloane, T D; Chohan, F I; Coleman, E M; Cronin, J P; Cwele, S C; Dambuza, B N; Daniels, P N; De Lange, J H; Diale, L N; Dikgacwi, M M; Dlakude, D E; Dlulane, B N; Dubazana, Z S; Dube, M C; Duma, N M; Dunjwa, M L; Fihla, N B; Fransman, M L; Frolick, C T; Gasebonwe, T M A; Gaum, A H; Gcwabaza, N E; Gelderblom, J P; Gina, N; Gololo, C L; Gona, M F; Goqwana, M B; Gumede, D M; Hajaig, F; Hlengwa, M; Holomisa, S P; Huang, S - B; Jacobus, L; Jeffery, J H; Johnson, M; Kekane, C D; Kenye, T E; Kganyago, N M; Khoarai, L P; Kholwane, S E; Khumalo, F E; Khunou, N P; Koornhof, G W; Kubayi, M T; Landers, L T; Lekgetho, G; Lesoma, R M M; Lishivha, T E; Luyenge, Z; Maake, J J; Mabasa, X; Mabuza, M C; Madlala, N M; Madlopha, C Q; Mafolo, M V; Magagula, V V; Magama, H T; Magau, K R; Magubane, E; Makhuba, H N; Makhubela-Mashele, L S; Makhubele, Z S; Makwetla, S P; Malale, M l; Malgas, H H; Maluleka, H P; Maluleke, J M; Manana, M C; Mandela, Z M D; Manganye, J; Mangena, M S; Mapisa-Nqakula, N N; Martins, B A D; Maserumule, F T; Mashatile, P; Mashigo, R M; Mashishi, A C; Masutha, T M; Matlanyane, H F; Matshoba, J M; Maunye, M M; Mavunda, D W; Mayatula, S M; Maziya, M; Mbalula, F A; Mdaka, M N; Mdakane, M R; Mfundisi, I S; Mgabadeli, H C; Mjobo, L N; Mkhize, H B; Mkhulusi, N N P; Mlambo, E M; Mmusi, S G; Mnisi, N A; Mocumi, P A; Moepeng, J K; Mohale, M C; Mohorosi, M; Mokoena, A D; Molebatsi, M A; Moloi-Moropa, J C; Moloto, K A; Moni, C M; Morutoa, M R; Moss, L N; Motimele, M S; Motlanthe, K P; Motsepe, R M; Motshekga, M S; Motsoaledi, P A; Mpontshane, A M; Msimang, C T; Msweli, H S; Mthethwa, E M; Mthethwa, E N; Mtshali, E; Mufamadi, T A; Mushwana, F F; Ndabeni, S T; Ndlanzi, A Z; Nel, A C; Nelson, W J; Nene, N M; Newhoudt-Druchen, W S; Ngcengwane, N D; Ngcobo, B T; Ngcobo, E N N; Ngele, N J; Ngwenya, W; Ngwenya-Mabila, P C; Nhlengethwa, D G; Njikelana, S J; Nkwinti, G E; Nonkonyana, M; Ntuli, Z C; Ntuli, B M; Nxesi, T W; Nxumalo, M D; Nyalungu, R E; Nyekemba, E; Oosthuizen, G C; Oriani-Ambrosini, M G; Pandor, G N M; Peters, E D; Petersen-Maduna, P; Phaliso, M N; Pilane-Majake, M C C; Pilusa-Mosoane, M E; Radebe, J T; Radebe, G S; Ramatlhodi, N A; Ramodibe, D M; Ramokgopa, G; Schneemann, G D; Segale-Diswai, M J; September, C C; Sibiya, D; Sindane, G S; Singh, N; Sithole, S C N; Sizani, P S; Skosana, J J; Skosana, M B; Smith, V G; Smith, P F; Snell, G T; Sogoni, E M; Sonto, M R; Sosibo, J E; Sotyu, M M; Suka, L; Sulliman, E M; Sunduza, T B; Surty, M E; Thabethe, E; Thobejane, S G; Tinto, B; Tlake, M F; Tobias, T V; Tsebe, S R; Tseke, G K; Tsenoli, S L; Tshabalala, J; Tshwete, P; Tsotetsi, D R; Turok, B; Twala, N M; Van der Merwe, J H; Van der Merwe, S C; van Rooyen, D D; van Wyk, A; Williams-De Bruyn, S T; Xaba, P P; Xasa, T; Ximbi, D L; Xingwana, L M; Yengeni, L E; Zikalala, C N Z; Zulu, B Z.
NOES - 91:Adams, L H; Alberts, A D; Balindlela, Z B N; Bhanga, B M; Boinamo, G G; Bosman, L L; Coetzee, T W; Davidson, I O; De Freitas, M S F; Diemu, B C; Dreyer, A M; Du Toit, N D; Duncan, P C; Eloff, E H; Esau, S; Farrow, S B; Ferguson, B D; Gaehler, L B; Gcume, N P; George, M E; George, D T; Greyling, L W; Groenewald, P J; Hill-Lewis, G G; Hoosen, M H; Huang, C; James, W G; Kalyan, S V; Kganare, D A; Kilian, J D; Kloppers-Lourens, J C; Kohler-Barnard, D; Koornhof, N J J v R; Kopane, S P; Krumbock, G R; Lamoela, H; Lee, T D; Lekota, M G P; Lotriet, A; Lovemore, A T; Mackenzie, G P D; Madisha, W M; Marais, S J F; Marais, E J; Max, L H; Maynier, D H; Mazibuko, L D; McGluwa, J J; McIntosh, G B D; Meshoe, K R J; Michael, N W A; Mnqasela, M; Mokgalapa, S; More, E; Morgan, G R; Mosimane, C K K; Motau, S C; Mubu, K S; Mulder, P W A; Mulder, C P; Ngonyama, L S; Nhanha, M A; Njobe, M A A; Ntshiqela, P; Ollis, I M; Paulse, S; Rabie, P J; Rabotapi, M W; Ramatlakane, L; Ross, D C; Rwexana, S P; Sayedali Shah, M R; Schafer, D A; Schmidt, H C; Selfe, J; Shinn, M R; Smiles, D C; Smuts, M; Steyn, A C; Stubbe, D J; Swart, S N; Swart, M; Trollip, R A P; Van Dalen, P; Van Der Linde, J J; Van Der Westhuizen, A P; Van Dyk, S M; Van Schalkwyk, H C; Waters, M; Watson, A; Wenger, M.
Vote accordingly agreed to.
The DEPUTY SPEAKER: Hon members, I now put Vote No 2 – Parliament.
Vote No 2 – Parliament – put.
Declarations of vote:
The CHIEF WHIP OF THE OPPOSITION: Hon Deputy Speaker, the DA will not be supporting the Parliamentary budget on the grounds that it fails to capture what the institution needs in order to carry out its functions in the most effective manner possible and improve its democratic services to the people of South Africa.
The budget of Parliament, in fact, measures Parliament’s performance on indicators that give no sense as to the success with which the institution is actually performing. For example, it tells us the number of Bills passed per year, but not the number of Bills repealed or challenged in court. It tells us the number of questions put to the executive, but not the number of questions that remain outstanding.
As a consequence, on the one hand, the budget either underinvests or, in certain areas provides no investment in key areas that would support the improvements in Parliament’s internal functioning. On the other hand, the budget overinvests in initiating and organising events and programmes external to Parliament’s core constitutional mandate. The DA cannot support a budget that so inaccurately captures the two roles of this Parliament and what it actually needs in order for it to be the Parliament for the people. I thank you.
Mrs J D KILIAN: Madam Deputy Speaker, whereas Cope supports Vote 2, today we again emphasise our concerns about what we believe to be serious shortcomings in respect of our oversight role and authority as legislature in the national sphere of government.
Firstly, we need to refocus on our primary responsibility as enshrined in the Constitution and cut out expensive, wasteful activities, which have no impact on improving service delivery to the people. Section 42(3)of the Constitution states abundantly clearly that the primary role of Parliament is, namely, to elect a President; to provide a national forum for public consideration of issues; to pass legislation; and to scrutinise and oversee executive actions – and I emphasise scrutinise.
Section 55(2) of the Constitution reinforces Parliament’s role to keep the executive accountable, in that it must provide for mechanisms to ensure that all executive organs of state in the national sphere of government are accountable to it; and to maintain oversight of the exercise of the national executive authority, including the implementation of legislation.
Deputy Speaker, Cope believes that it cannot fulfil its constitutional role effectively without adequate legal advisers. In fact, a legal adviser assigned to each committee of Parliament. If it means reprioritising the budget, let us do that – let us make Parliament accessible but cut away wasteful expenditure and expensive public relations exercises.
Secondly, we have to heed the concern raised by hon Vincent Smith of the ANC when he questioned the fact that the executive – the very institution that Parliament has to scrutinise and oversee - determines the budget allocation to Parliament. Whether by accident or design, the financial deprivation of Parliament by the executive effectively undermines and inhibits Parliament in its execution of its constitutional mandate to effect proper and diligent oversight. [Time expired.]
Mr J H VAN DER MERWE: Madam Deputy Speaker, I think that we have canvassed practically all the points during the debate. As far as I am concerned, there are two matters that stand over: Firstly, the Questions - the fact that there are about 500 questions from Ministers that have not been answered. Secondly, there are some criticisms that the laws we make are being thrown back because we make bad laws. But, I just want to state that there was only one law that was overruled by the Cape High Court.
However, in the meanwhile, from 2010 up to now, we have passed 60 Bills and the President has assented to 57 of them. So, to have one mistake out of 57 I don’t think is that bad. I think that we tend to overcriticise Parliament and I think Parliament is doing well; and I think we should all help to make a bigger success of Parliament. [Applause.]
Dr C P MULDER: Hon Deputy Speaker, no! Parliament is not doing as well as the IFP thinks. [Interjections.] I said in my speech that Parliament has become dull and irrelevant and I stick to what I said. The fact of the matter is that the problem of Parliament is not that there are not enough funds. There are more than sufficient funds to run Parliament. It is not that we don’t have sufficient and very well equipped officials in Parliament; we have the best. But Parliament is not doing what it is supposed to do, and the problem with this lies with the ruling party that is sitting over there. That is the reason why Parliament is not functioning well.
One of the functions of Parliament is to discuss issues of importance in this country. We can never find time to discuss those kinds of things. We discuss every irrelevant little thing but the true issues in South Africa are never discussed. One of the issues that we must discuss is why the Minister of Health is not in this House this afternoon. It could, perhaps, be something to do with yesterday’s NEC meeting – I don’t know. But the fact of the matter is that real issues are not discussed in this Parliament. So, we cannot support this Budget Vote until that is set right.
The CHIEF WHIP OF THE MAJORITY PARTY: Hon Deputy Speaker, hon Deputy President, the ANC rises in support of Budget Vote No 2 on Parliament. We wish to congratulate the Speaker for his commitment to transform this institution, and his acknowledgement that there is a need to capacitate the institution and its organs. We also wonder why political parties were given ample opportunity by the Speaker in the Programme of Action, POA, and the Chief Whips’ Forum have failed to raise the things that they want improvement on. [Interjections.] So, it means that they are dishonest.
We are mindful of the challenges that we confront in the execution of our duties with regard to oversight, the quality of legislation we pass, our ongoing efforts to enhance the Rules of Parliament and the very practical challenges of implementing the Money Bills Amendment Procedure and Related Matters Act.
I think it is important to remind the hon Mazibuko that Parliament is not a place for wage negotiations, and the hon Lekota should understand that the Constitutional Assembly has long since completed its business. So, he must not be raising issues that belong to that Constitutional Assembly in this House.
The CHIEF WHIP OF THE OPPOSITION: Hon Deputy Speaker, I rise on a point of order: The Chief Whip is totally out of order. We are not discussing the Budget Vote of the President. We are discussing Parliament. [Interjections.]
The DEPUTY SPEAKER: Are you done, Chief Whip? [Interjections.] Order, hon members! Those were the declarations of vote.
Vote agreed to (Democratic Alliance, Freedom Front Plus and Independent Democrats dissenting).
PERSONAL AND DEROGATORY REMARKS
(Ruling)
The DEPUTY SPEAKER: Hon members, I wish to take this opportunity before I leave the Chair and Mr Frolick takes over from me at this point, to give a ruling on points of order that were raised in the House during the debate on the President’s Budget Vote on 30 May.
Before I do so, however, I wish to clarify the following: Points of order must be about the order of proceedings in the House, not about the content of members’ speeches, unless, of course, there are issues in a member’s speech that are viewed as unparliamentary. A point of order should be raised when the incident takes place, or immediately thereafter. A member rising on a point of order must indicate the alleged breach of procedure. Members should not raise spurious points of order to disrupt the member speaking, or in an attempt to respond to the member speaking. The Chair does not rule on points of debate. It is for the members to make their points of view known during their own speeches.
While members are allowed to ask questions of the speaker at the podium, a member must first obtain permission to do so. If the speaker at the podium declines to take a question, members should respect that and not become disruptive.
If the use of a word or phrase is challenged, and it does not fall into the category of expressions that are obviously unparliamentary, the Chair will, in the main, refer to the context in which it was used to determine whether the expression is unparliamentary. Members should always be guided by the fact that nothing is gained by using excessive language.
Members should pay attention to the manner in which they conduct themselves, as we all have a responsibility to ensure that the decorum of this House is maintained. More importantly, it is expected that the Whips will lead by example in this regard.
Personal remarks referring to a member’s physical appearance in a derogatory manner are always unacceptable.
HON MEMBERS: Hear! Hear!
The DEPUTY SPEAKER: Allegations of improper conduct on the part of another member are also unparliamentary. Such allegations may only be made by way of a substantive motion.
Having now studied the Hansard in respect of the points of order that were raised in the House on that day, I rule as follows: The hon Kalyan rose on a point of order asking me to rule on remarks that were made by the hon Deputy Minister Tobias-Pokolo during the hon Mazibuko’s speech. While the hon Mazibuko was at the podium, the hon Deputy Minister referred to the hon member as “the lady with the funny hairstyle”. [Interjections.] Order, hon members, please! Order! [Interjections.] [Laughter.]
As indicated earlier - hon members, I called for order - personal remarks referring to a member’s physical appearance in a derogatory manner are always unacceptable. Hon Tobias-Pokolo, your remarks were out of order, and I now ask you to withdraw them.
The DEPUTY MINISTER OF TRADE AND INDUSTRY (Ms T V TobiasPokolo): Hon Deputy Speaker, I rise to withdraw and to apologise unreservedly to the hon Mazibuko. [Applause.]
The DEPUTY SPEAKER: Thank you, hon Tobias-Pokolo.
I would also like to add ... [Interjections] Order, hon members! Really, this is not a laughing matter. [Interjections.] I would also like to add that the hon Van der Merwe’s question regarding hon Mazibuko’s hairstyle was inappropriate. [Laughter.] Members should refrain from making remarks that do not add value to the proceedings. Surely, you understand it did not add value? It definitely had the potential to be offensive. I am not asking ... [Interjections] because there is nothing to withdraw. You asked a question, but I think that is the ...
Mr J H VAN DER MERWE: Madam Deputy Speaker, I did not say what I said in a derogatory manner, but in a complimentary manner. [Laughter.] [Applause.] [Interjections.]
The DEPUTY SPEAKER: I did not ask you to do anything. Now you are worsening the situation!
Prince M G BUTHELEZI: Hon Deputy Speaker, on behalf of myself and the IFP, I apologise unreservedly to Ms Mazibuko. [Applause.] [Interjections.]
The DEPUTY SPEAKER: Thank you, Tata. Order, hon members!
MEMBERS ACCUSED OF HATE SPEECH
(Ruling)
The DEPUTY SPEAKER: I now proceed to the points of order that were raised during the hon Lekota’s speech. [Interjections.] The hon Kilian asked me to rule on the remark made by the hon Sunduza. During the hon Lekota’s speech, the hon Sunduza interjected and said, “Could the hon member please stop with the hate speech?”
Hon members, propagation of hatred or use of hate speech is illegal. Therefore, to accuse another member of using hate speech is a reflection on that member’s character. In fact, if a member were to be found guilty of engaging in hate speech, he or she would be in contempt of Parliament. Again, such allegations can only be made by way of a substantive motion.
Hon Sunduza, your contention that the member was engaging in hate speech is out of order, and I now ask you to please withdraw it.
Ms T B SUNDUZA: Deputy Speaker, I withdraw. [Interjections.]
The DEPUTY SPEAKER: Thank you. I am in the Chair, and I asked the hon Sunduza. Let us please have order.
REMARKS ABOUT VIOLATION OF OATH OF OFFICE BY PRESIDENT
(Ruling)
The DEPUTY SPEAKER: I now turn to the point of order raised by the hon Minister of Higher Education and Training, the hon Nzimande. The hon Minister asked me to rule on remarks made by the hon Lekota to the effect that the President has violated his oath of office.
In his speech, the hon Lekota said more than once that the hon President, or his Office, has violated the oath of office. The hon Lekota said:
With regard to the owners of the Goodman Gallery, their rights were violated. The Office of the President did not defend, again violating the oath of office.
Later on, the hon Lekota said:
And yet, we did not hear a word from the President, saying to our nation, saying to those who follow him and who work under him, “It is wrong for you to undermine the judiciary of our nation.” This is a violation of the oath of office.
Hon members, as regards the duty of members towards their fellow members, members should appreciate that their freedom of speech must, of necessity, be subject to the principle that they may not impute improper or unworthy motives or conduct on the part of other members, or cast personal reflections on their integrity, or verbally abuse them in any other way. This approach is in keeping with the practice in many other parliaments.
If such accusations made directly or by inference were to be generally allowed in debate in this House, they would not only seriously undermine members in the performance of their duties, but would also undermine the image and effectiveness of this Parliament itself. This is not to say that if a member has good reason to believe that another member may have acted improperly, such matter should not be brought to the attention of the House. However, there are proper ways of doing that.
In such circumstances, it is sound practice to require that a member does this by way of a separate, clearly formulated and properly motivated substantive motion, which requires a distinct decision of the House. At this point, I must indicate that when the President of the Republic takes his seat in this Chamber, the Rules of the National Assembly also apply to him.
Hon members, as we all know, when the President takes Office, he takes the oath of the office, in which he commits, amongst other things, to obey, observe, uphold and maintain the Constitution. As members will be aware, one of the grounds for removal of the President, in terms of section 89 of the Constitution, is a serious violation of the Constitution or the law.
Therefore, to accuse the President of the violation of the oath of office is a serious charge, indeed ... [Interjections.] ... which, if proven correct, could have serious consequences. The remarks that the President has violated the oath of office are, without a doubt, a reflection on the integrity and competence of the President. Except upon a properly motivated, substantive motion, as indicated above, such an allegation cannot be allowed in this House.
Hon Lekota, your remarks that the President has violated his oath of office are out of order, and I now ask you to please withdraw them.
Mr M G P LEKOTA: Madam Deputy Speaker, I have listened to you very carefully, and in terms of section 89 of this Constitution, I do think I did not violate ... [Interjections.] The rights given here under section 89 are that we are entitled and, in fact, we are obliged under the Constitution to scrutinise the performance of the President, and we must bring his failures to the attention of the nation. I continue to hold firmly that the points that you made and others which I made as to why the President, I contend, broke his oath of office, remain valid, in our view. I am therefore unable to withdraw what I said before this House. [Interjections.]
The DEPUTY SPEAKER: Hon Lekota, from the Chair, I am asking you to withdraw, because I am saying if you wanted to bring those issues to this House, you could only bring them through a substantive motion.
Mr M G P LEKOTA: Madam Deputy Speaker, with respect, this was not the occasion of a motion ... [Interjections.]
The DEPUTY SPEAKER: No, hon Lekota ...
Mr M G P LEKOTA: ... it was the occasion of a debate. No, I am sorry, I am unable ...
The DEPUTY SPEAKER: Alright.
Dr C P MULDER: Hon ...
Mr M G P LEKOTA: My conscience does not allow me to withdraw. [Interjections.]
Dr C P MULDER: Hon ...
The DEPUTY SPEAKER: Then, if you are unable, you know what to do, hon speaker.
Dr C P MULDER: Hon Deputy Speaker ...
The DEPUTY SPEAKER: You leave the House.
Dr M G ORIANI-AMBROSINI: Hon Speaker ...
Dr C P MULDER: Hon Deputy Speaker ... [Interjections.]
The DEPUTY SPEAKER: If you are unable to withdraw, you leave the House. [Interjections.]
Dr C P MULDER: Hon Deputy Speaker ... [Interjections.]
The DEPUTY SPEAKER: No, no, no.
Dr M G ORIANI-AMBROSINI: Yes, Speaker ... [Interjections.]
The DEPUTY SPEAKER: No other hands! No other hands at the moment. I am dealing with the hon ... [Interjections.]
Dr C P MULDER: Hon ...
The DEPUTY SPEAKER: Is that a point of order ...
Dr C P MULDER: Yes, hon Deputy Speaker!
The DEPUTY SPEAKER: ... to what I am saying?
Dr C P MULDER: Indeed! [Interjections.] Deputy Speaker, I want to address you on your ruling, and in terms of the Rules, I am entitled to do so.
The DEPUTY SPEAKER: No!
Dr M G ORIANI-AMBROSINI: Yes!
The DEPUTY SPEAKER: No! [Interjections.]
Dr M G ORIANI-AMBROSINI: Madam Speaker ... [Interjections.]
Dr C P MULDER: Hon Deputy Speaker, you have made ...
The DEPUTY SPEAKER: No! Hon members ...
Dr C P MULDER: Yes.
The DEPUTY SPEAKER: ... who are standing, can you please take your seats. [Interjections.]
Dr C P MULDER: Hon ... [Interjections.]
The DEPUTY SPEAKER: Hon members who are standing, can you please take your seats. [Interjections.] I have considered the ruling. I have considered the ruling. I am giving that ruling now. Whether you like it or not is another matter. I am giving that ruling now, and the ruling is saying the hon Lekota must withdraw, and if he is not able to withdraw, to please leave the House.
HON MEMBERS: Yes! [Interjections.]
Mrs J D KILIAN: Hon Deputy Speaker ... [Interjections.] ... may I ask you a question?
The DEPUTY SPEAKER: What language do you not understand? I am dealing with the hon Lekota now. Hon Lekota - all other questions will happen after he has acted – please leave the House. [Interjections.]
Dr M G ORIANI-AMBROSINI: Madam Deputy Speaker ...
Dr C P MULDER: Hon Deputy Speaker ...
Dr M G ORIANI-AMBROSINI: On a point of order, Madam Deputy Speaker ... [Interjections.]
The DEPUTY SPEAKER: Hon Lekota ...
Dr M G ORIANI-AMBROSINI: Madam Deputy Speaker, on a point of order, please! [Interjections.]
The DEPUTY SPEAKER: No point of order here. Please sit! [Interjections.]
Dr M G ORIANI-AMBROSINI: You are duty-bound to entertain a point of order. [Interjections.] You do not have the latitude not to take a point of order, Madam Deputy Speaker! [Interjections.]
The DEPUTY SPEAKER: Hon Lekota, please leave the House.
Dr M G ORIANI-AMBROSINI: Madam Deputy Speaker, on a point of order! [Interjections.]
Mr J H VAN DER MERWE: I am rising on a point of order ...
The DEPUTY SPEAKER: Hon Lekota, please leave the House. [Applause.] [Interjections.]
Dr M G ORIANI-AMBROSINI: Madam Deputy Speaker, on a point of order ... [Applause.] [Interjections.]
The DEPUTY SPEAKER: Hon Lekota, leave the House. [Interjections.] So, it is clear: there are many hon Lekotas. [Interjections.]
Dr C P MULDER: Hon Deputy Speaker ...
The DEPUTY SPEAKER: No, no, no. [Interjections.] Allow those who are leaving the House to leave the House and we will see if we are going to continue with the debate.
An HON MEMBER: She must take a point of order! [Interjections.]
The DEPUTY SPEAKER: I am waiting for the House to settle down first and then I will call you. [Interjections.] Can you close those doors? No, no, no, the hon member who stood up first from the FF Plus.
Dr C P MULDER: Thank you, hon Deputy Speaker. Hon Deputy Speaker, I need some clarity in this sense: Something happened in the House, and because of that, you were asked to make a ruling. Now you come back and you make a ruling. Is it not in order for you to be addressed on the ruling you are about to make, because there may be other arguments, for you to listen to as well, before you make the ruling. [Interjections.] Those arguments may be relevant before you ask a member to leave the House because of a ruling.
Or are you saying to us that we must just accept that you will make a ruling; it is not to be discussed; there is nothing to be said about that, and we just have to accept that? [Interjections.] That party says yes. I am of the opinion that we should be entitled, in terms of Rule 72, to address you on your rulings. That is our right in terms of the Rules of Parliament!
The DEPUTY SPEAKER: No. Thank you very much. Were you going to ask the same thing, hon Kilian?
Mrs J D KILIAN: Correct, Madam Deputy Speaker. I wanted to make sure that we understand exactly on what Rule you have based your ruling, because we are all guided by the Rules of Parliament, and obviously, the Constitution. [Interjections.]
The CHIEF WHIP OF THE MAJORITY PARTY: Hon Deputy Speaker, I rise on behalf of the ANC to confirm that you made the correct ruling, that you were not obliged by any Rule to open your ruling to discussion, and that you have correctly ordered the hon Mr Lekota, who is unruly, who does not understand the Rules of Parliament, to go out of this House, and we support you.
Mrs J D KILIAN: Hon Deputy ...
The DEPUTY SPEAKER: No, no, no.
Mrs J D KILIAN: Hon Deputy Speaker ...
The DEPUTY SPEAKER: Can I please ...
Mrs J D KILIAN: On a point of order ...
The DEPUTY SPEAKER: ... please can I close this subject? What is your point of order?
Mrs J D KILIAN: My point of order is: The hon Chief Whip of the Majority Party has cast aspersions on the integrity of the hon Lekota. [Interjections.] He accused him of bad conduct, which is not correct. [Interjections.]
The CHIEF WHIP OF THE MAJORITY PARTY: Hon ...
The DEPUTY SPEAKER: Hon Chief Whip, can you sit down? Can we ... [Interjections] Hon Van der Merwe, do you want to speak on this item?
Mr J H VAN DER MERWE: Yes.
The DEPUTY SPEAKER: You are the last one to speak on this item.
Mr J H VAN DER MERWE: Thank you for making me the last to speak. [Laughter.] Madam Deputy Speaker, we wish to place on record that we agree that you were wrong, but we will not walk out. [Laughter.]
Mrs S V KALYAN: Madam Deputy Speaker, on a point of order: I await clarity regarding on exactly which Rule in the Rule Book your ruling was based, because it is my understanding that we do have a right to respond to your ruling, and the DA objects to this because ...
The DEPUTY SPEAKER: No!
Mrs S V KALYAN: ... it flies in the face of freedom of expression.
The DEPUTY SPEAKER: Thank you very much. Hon De Lange?
Adv J H DE LANGE: Deputy Speaker, on a point of order: I do suggest that all the members go and read the law of procedures. The law of procedures is very clear. You make an input at the time when the objection is made. When the chairperson in any meeting makes a ruling – you can go and look at any rule of procedure; it says that ruling is final. You do not comment on it. If you want to comment on it, you bring a substantive motion in the House to change the ruling. That is the law of procedure, and it is absolute nonsense that once a ruling has been given, that you can then comment on it. That is not the idea. [Applause.]
Dr C P MULDER: Madam Deputy Speaker, may I address you on this point of order? That may be the case, and we can argue about that. These things are important. We are going into a subcommittee process where we are going to look at the Rules of Parliament. Then that procedure should be respected, where parties should be allowed – when the occasion happens – to debate the issue before the Speaker retires to make a ruling. That is not happening in this Parliament.
The DEPUTY SPEAKER: No.
Dr C P MULDER: We are not allowed to debate it because the Chair then rules that you will make a ruling at a later stage, and you do not allow debate when the issue happens.
The DEPUTY SPEAKER: No.
Dr C P MULDER: So, we need to address this.
The DEPUTY SPEAKER: No. Thank you very much.
Dr C P MULDER: It creates a problem.
The DEPUTY SPEAKER: Thank you very much, hon member. Hon members, you would not ask the presiding officer to make a ruling on a matter if, after making that ruling, that ruling is going to be challenged and be the subject of debate. Now, as was said earlier, and as I said, there is a precedent here.
As was said earlier - I think it was the hon Mluleki George – if a presiding officer makes a ruling, the responsibility that you have as members if you are not satisfied with that ruling, is to revisit that later. You cannot challenge a presiding officer at the time when the ruling is made and make it a subject of discussion. That ruling is final, as it is. Thank you very much. [Applause.]
Mrs J D KILIAN: Hon Deputy Speaker ...
The DEPUTY SPEAKER: There is no discussion on this. I have closed this chapter. [Interjections.]
Mrs J D KILIAN: Can we put it on record ... [Interjections.]
The DEPUTY SPEAKER: No. I have closed this chapter. [Interjections.] You can bring a motion. I have closed this chapter. [Interjections.]
Mrs J D KILIAN: Madam Deputy Speaker, then we would just like to place on record that we will certainly ...
The DEPUTY SPEAKER: No! No record!
Mrs J D KILIAN: ... take it on review. [Interjections.] Thank you.
The DEPUTY SPEAKER: No! No record! [Interjections.]
Order! Can we continue with the agenda of today?
Vote No 3 – Co-operative Governance and Traditional Affairs – put.
Vote agreed to (Democratic Alliance, Congress of the People and Inkatha Freedom Party dissenting).
Vote No 4 – Home Affairs – put and agreed to.
Vote No 5 – International Relations and Co-operation – put.
Declaration of vote:
Mr M B SKOSANA: Deputy Speaker, in light of the report which is at the United Nations at present, also arising from the Minister’s Budget Vote, and further arising from the support from the president of the IFP for the Nkosazana Dlamini-Zuma candidacy to the African Union Commission as chairperson, we would lead as follows: that the head of state, the executive of the state, Parliament, including heads of religion in our country, all speak in one voice in denouncing xenophobia or Afrophobia and also appeal to His Excellency the President to dedicate an existing deputy Ministry, not a new one at all, to focus on this particular issue and liaise with Parliament, which has been working on the issue of xenophobia. Thank you.
Vote agreed to (Democratic Alliance dissenting).
Vote No 6 – Performance Monitoring and Evaluation – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 7 – Public Works – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 8 – Women, Children and People with Disabilities – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 9 – Government Communication and Information System – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 10 – National Treasury – put.
Mrs S V KALYAN: Chairperson, please record the objection of the DA.
Mr A M MPONTSHANE: Chairperson, can you please record the IFP’s objection?
The HOUSE CHAIRPERSON (Mr C T Frolick): To Vote No 10: National Treasury?
Mr A M MPONTSHANE: Yes, National Treasury.
The HOUSE CHAIRPERSON (Mr C T Frolick): The IFP’s objection will be recorded. There is another member of the IFP on the floor. Yes, hon member?
Mr N SINGH: Chairperson, I rise because there are two Votes No 10 – one deals with Intelligence and the other with National Treasury itself. I don’t know which one you have put, because I have a list here which describes the two of them. According to my records, there were going to be objections to National Treasury, but we were going to support the Vote on National Treasury, so I just need some clarity on that, Chair.
The HOUSE CHAIRPERSON (Mr C T Frolick): Order, hon members. We will put Vote No 10: National Treasury first. Thereafter, we will put Intelligence. So, this one deals with National Treasury. To the IFP, just to make absolutely certain that the IFP has objected to Vote No 10: National Treasury, not Intelligence?
Mr A M MPONTSHANE: Chair ...
Mr N SINGH: We actually want to object ...
The HOUSE CHAIRPERSON (Mr C T Frolick): Can the IFP decide who is going to speak on the matter? [Laughter.]
Mr A M MPONTSHANE: Can I address you, Chair, on the statement I made earlier?
The HOUSE CHAIRPERSON (Mr C T Frolick): Yes.
Mr A M MPONTSHANE: Chair, during the debate, my president made a very important remark about the bugging of his cellphone by the “spooks”, the intelligence people. On the basis of that serious transgression by Intelligence, we are registering our objection. Thank you.
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon members, order! We are dealing with Vote No 10: National Treasury. I said thereafter I will put the Intelligence Vote separately. Hon Van der Merwe?
Mr J H VAN DER MERWE: Chairperson, we agree with National Treasury.
The HOUSE CHAIRPERSON (Mr C T Frolick): So, the Vote is therefore agreed to. I now put ...
Mrs S V KALYAN: Sorry, Chair. Has the objection of the DA been recorded for National Treasury?
The HOUSE CHAIRPERSON (Mr C T Frolick): The objection has been recorded, because I noted you before the IFP took the floor.
Mrs S V KALYAN: Thank you.
The HOUSE CHAIRPERSON (Mr C T Frolick): I now put the Vote on Intelligence. I now recognise the IFP.
Mr J H VAN DER MERWE: Chairperson, will you kindly record the objection of the IFP.
Vote agreed to (Democratic Alliance and Inkatha Freedom Party dissenting).
Vote No 11 - Public Enterprises – put.
The MINISTER OF FINANCE: Chairperson, thank you very much. I want to take you back to Vote 10. In the Appropriation Bill there is only one vote; Vote 10. There is no separate vote for Intelligence. So, if we could avoid the confusion, there is only one vote.
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon members, we will sort it out with the Table staff. We will continue with the rest of the votes and then we will return to it, hon Minister. Thank you.
Dr M G ORIANI-AMBROSINI: House Chairman, I did request an opportunity for declarations. You have not announced to the House how you will choose to deal with them.
The HOUSE CHAIRPERSON (Mr C T Frolick): Which Budget Vote are you referring to, hon member?
Dr M G ORIANI-AMBROSINI: Well, with both, in terms of Vote 10 and 11 respectively, the IFP had requested an opportunity to make a declaration.
The HOUSE CHAIRPERSON (Mr C T Frolick): We will come back to Vote 10, hon member. If you have a declaration for Vote 11, I have asked the question. Do you still wish to make a declaration, hon member? May I ask the political parties that want to make declarations to indicate so, otherwise we move on.
There have been changes to the schedule that has been given to us. Hon Van der Merwe, will you take your seat please! Can I kindly ask the parties who are still in the House to confirm the accurateness or not of their intentions in terms of the declarations that they want to make. Yes, hon member?
The DEPUTY MINISTER OF HOME AFFAIRS: Hon Chairperson, thank you very much. While they are considering your proposal, may I address you on a point of order? If I may, I just want to point out to you that now that all of the hot air has been expelled from this House, perhaps you might consider that we do not need the air conditioning anymore. It is rather cold!
The HOUSE CHAIRPERSON (Mr C T Frolick): On that point, Deputy Minister, I have received your note, and they are attending to the matter. We will take that into consideration.
Let us return to Vote 11, Public Enterprises, where the IFP has indicated that they do have a declaration.
Hon Kalyan, is it on this one?
Mrs S V KALYAN: No! Before you do that House Chairperson, may I address you on a point of order? Several members have left the House in a protest against the Ruling by the Deputy Speaker. I would like to have clarity as to whether we do have quorum in the House to take a decision on the Votes and Schedules. Thank you.
The HOUSE CHAIRPERSON (Mr C T Frolick): From the last count that we took when the members left the Chamber, we do indeed have a quorum in the House. We will ask the Table staff and service officers to continuously check the numbers that are there. As long as we have a quorum, we will continue. [Interjections.]
We have instructed the Table staff to do a manual counting. In case we do have a problem where it drops below the quorum, we will ring the bells for five minutes, so that the members who are on the premises and who want to participate in the proceedings of the House can return to the House.
Mrs S V KALYAN: Sir, may I address you on that: we do have an electronic system. Why would we do a manual count, hon House Chairperson?
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, the situation is that we just had a manual count that was done. Once we make a determination that the numbers indeed are dropping below the required 200 members, we will do exactly that. We will ring the bells and have the presence of members recorded so that we can ensure the quorum. However, where I am sitting and based also on the previous vote that has taken place, we do indeed have a quorum in the House.
Declaration of vote:
Dr M G ORIANI-AMBROSINI: Thank you, Mr Chairman. We are objecting to this Budget Vote for a number of reasons, both structural and contingent. We do not believe that this department should exist. Each of the state-owned enterprises should be referred to each of the relevant line functions. There is a duplication of services and excessive bureaucracy, which renders the management of these public enterprises unwieldy.
There have been discussions for many years regarding bringing about exactly this, and very little progress has been achieved in executing it. The residual functions at the administrative level could very well go with the Department of Public Service and Administration.
On the basis of the specifics, we stand by the proposition that SA Airways has become a major hindrance to the development of our tourism industry, which is an essential industry, and it ought to be privatised.
The taxpayers are sick and tired of continuing to subsidise Denel, an arms manufacturer that continues to produce at a constant loss. We are very dissatisfied by the Eskom monopoly that we’re all paying for, and we feel that the opportunity has been lost and should be regained to break up Eskom into two competing companies according to what is the best international practice.
We are also equally dissatisfied with the Transnet monopoly, which also ought to be broken up, again in line with international practice, to have competing port authorities dealing in a competitive environment and providing services at competitive prices internationally, addressing what is one of the major hindrances in our economic development, which is the very high port and harbour costs. Across the spectrum we are dissatisfied with each and every one of these state-owned enterprises. There is no jewel amongst them. It is a never-ending story of failures and lack of achievements, and on that basis we cannot see our way clear to supporting this Budget Vote. Thank you, Mr Chairman.
Vote agreed to (Democratic Alliance and Inkatha Freedom Party dissenting).
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon members, in terms of Rule 26, the Deputy Chief Whip of the Opposition has brought to our attention that she is challenging that there is indeed a quorum in the House. So, in terms of the Rule, we will ring the bells for five minutes and thereafter we will record the number of members present. That will give us a clear indication whether we can proceed with the business or not. The bells will be rung for five minutes!
Mr J H VAN DER MERWE: But, Chairperson, are we not a quorum at the moment?
The HOUSE CHAIRPERSON (Mr C T Frolick): In terms of the Rules, the hon Deputy Chief Whip of the Opposition is questioning that, and that is why we want to make a clear determination before we continue.
Mr J H VAN DER MERWE: Thank you, Chair.
The bells were rung for five minutes.
The HOUSE CHAIRPERSON (Mr C T Frolick): Order, hon members! Please take your seats. We request all hon members to record their presence in the House by pressing the “yes” button.
In terms of the Rules, since we are taking decisions on Budget Votes, we need 201 members to be present in the House. In terms of the number of members who have recorded their presence, we have 226 members present. [Applause.] And we will thus proceed.
May I request hon members to ensure that a quorum for the duration of this session is maintained for us to complete the business of the House.
Before we proceed, I want to return to the point of order raised by the hon Minister of Finance in terms of Vote No 10. The hon Minister is indeed correct that there is one Vote No 10, and the Table staff apologise for the error in that regard. In order to do the process correctly and properly, we will return to Vote No 10 so that we can complete voting on that Vote and I will put the Vote once again.
Vote No 10 – National Treasury (including Intelligence) – put.
Declaration of vote:
Mr A M MPONTSHANE: As I have said, the IFP regards the bugging of our president’s telephones as a very serious matter indeed. There is a lot of talk of reconciliation between the ANC and the IFP. The question is, how can there be any reconciliation if, secretly, the ruling party goes on bugging our leader’s telephones? During the debate, our leader, in fact, asked the question whether or not he was a threat to the state, which he regarded himself as not being. But, we can still ask the question whether or not government still regards him as a threat, during this debate. Thank you.
The CHIEF WHIP OF THE MAJORITY PARTY: Is it really correct that in this House such a serious allegation be made against the majority party without any substantive evidence?
Mr A M MPONTSHANE: Chairperson, this was made during the debate and the Presidency did not respond to that statement made by my president. All I am doing now is repeating that very statement. That the Minister of Intelligence did not respond to the statement made during the debate either. So, it is not something I am just sucking out of my thumb. Thank you.
Vote agreed to (Democratic Alliance and Inkatha Freedom Party dissenting).
Vote No 12 – Public Service and Administration – put.
Mrs S V KALYAN: House Chair, may I just say, with regard to the declarations, that since the members have left the Chamber, we will now not be making any declarations. As and when I need to record the objections, I will do that. Will you please record the objection of the DA on Vote No 12? Thank you.
Vote agreed to (Democratic Alliance dissenting).
Vote No 13 – Statistics South Africa – put and agreed to.
Vote No 14 – Arts and Culture – put.
Mrs S V KALYAN: Please record the objection of the DA.
Vote agreed to (Democratic Alliance dissenting).
Vote No 15 – Basic Education – put.
Declarations of vote:
Mr A M MPONTSHANE: Chairperson, the IFP has always championed the cause of education. When some organisations misguidedly call for liberation now and education later, the IFP calls for liberation through education. When in government, in KwaZulu-Natal, the IFP used the education budget wisely and effectively. The challenge we are facing today is the handling of the budget by both the Department of Basic Education and the provincial departments. Eighty percent of the provincial budgets go towards personnel, yet we are burdened with weak administration in these provinces, the Eastern Cape being the example here.
As I speak, the Director-General of the Department of Basic Education has rushed to the Eastern Cape to put out fires there because, in spite of the intervention, the department remains at its weakest. There will be a point where the intervention will itself become invalid; where we will need to dissolve the department itself and reconstruct it because, as I have said, 80% of the budget goes to personnel, yet those people are failing in their duties. We recommend that these people who are failing our education system there should all be fired. Thank you.
Mrs H H MALGAS: Hon Chairperson, we, the ANC, support this Budget Vote. We see the budget as progressive and responsive to the challenges in the basic education sector. Our view is that the R16,4 billion budget is not diagnostic, but it intensifies interventions and also consolidates interventions that took place in the previous financial year.
The budget prioritises interventions, inter alia, on the planning and delivery oversight unit, which will effectively unblock all bottlenecks in the education system. The further R5,8 billion for the education infrastructure conditional grant, school infrastructure backlogs and the indirect grant of R2,3 billion will be used to eradicate improper structures in the Eastern Cape. The R4,9 billion will be used to intensify the antipoverty strategy through the National School Nutrition Programme, to effectively reduce the drop-out rate and increase retention of learners in schools. A further R811 million will be used to expand the distribution of workbooks to Grade 9, and R21,7 million for further systemic evaluation of the education sector.
Education, as we all know, is a basic human right and any party not approving this Vote is blocking progress rather than assisting. We, the ANC, support this Vote. Thank you. [Applause.]
Mr A M MPONTSHANE: We are reluctantly supporting this Budget.
Vote agreed to (Democratic Alliance dissenting).
Vote No 16 – Health – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 17 – Higher Education and Training – put.
Declarations of vote:
Mr A M MPONTSHANE: Chairperson, through the sector education and training authorities, Setas, the department has been given the opportunity to develop the skills the South African economy so desperately needs. The Department of Labour, under which the Setas fell before they were taken over by the Department of Higher Education, squandered millions and millions of rands through corruption and maladministration. Today, these Setas remain an unmitigated disaster. The IFP, therefore, calls for their dismantling. The department must look for a better model for the development of the skills we so desperately need, because we just cannot continue pouring money down the drain. Thank you.
Mr M I MALALE: Chair, on behalf of the ANC, I would like to express our support for Vote No 17. I think Ntate Mpontshane, who is a member of our committee and active in our deliberations from time to time, is aware that we have the National Skills Development Strategy III, which has turned around the Seta situation. As a committee, we have said to the department that there is a need for clear targets for training in respect of technicians, artisans and scarce skills in our country.
The nine billion that is in the system is geared towards attaining the goals for single co-ordinated issues of corruption that he is raising, as we never had any single allegations that hon Mpontshane advanced to the Minister or the committee, because if there were such allegations, they would have been raised properly and investigated. I think Mpontshane should be very honest and say that, in our committee, such matters had not been raised.
Mr A M MPONTSHANE: Chairperson, on a point of order: My chairperson alleges that I have not been honest. Is that parliamentary?
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, did you refer to the integrity in terms of honesty of the hon member?
Mr M I MALALE: Chairperson, I must apologise for saying “dishonesty”. What I am saying is that in deliberations, no allegations were raised by the IFP with regard to corruption ...
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, will you withdraw your remark of dishonesty, please?
Mr M I MALALE: I did so, Chair.
The HOUSE CHAIRPERSON (Mr C T Frolick): Will you withdraw it formally, please?
Mr M I MALALE: Withdrawn.
Vote agreed to (Democratic Alliance and Inkatha Freedom Party dissenting).
Vote No 18 – Labour - put.
Declaration of vote:
Mr J H VAN DER MERWE: Chairperson, the problem with Labour is that there are laws that prevent overseas investors from investing in South Africa. This is becoming a very big problem; for that reason, we are raising our objection. Thank you.
Vote agreed to (Democratic Alliance and Inkatha Freedom Party dissenting).
Vote No 19 – Social Development – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 20 – Sport and Recreation – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 21 – Correctional Services – put.
Declarations of vote:
Mr J H VAN DER MERWE: Chairperson, we are concerned about the rehabilitation programmes in our prisons. It is estimated that about 50% of criminals return to prison and we feel that more money should be spent on rehabilitation programmes to ensure that crime is properly fought.
Mr V G SMITH: Chairperson, the ANC is satisfied that the department has committed that the budget allocation going forward will focus more on rehabilitation, care and reintegration, which are the core business of Correctional Services. I think that will then address the concerns of the IFP. The ANC is also encouraged by virtue of the fact that inmates must work, study or do both whilst incarcerated. This ensures the triple objective of reskilling correctional facilities’ self-sustainability and preparation for reintegration into society.
We are the first to acknowledge that more still needs to be done. Opposing the budget is nothing more than grandstanding and walking out is plain childish. The more mature thing to do is to intensify oversight and accountability by the portfolio committee and thereby contribute constructively towards creating a safer South Africa. The ANC fully supports the 2012-13 budget for the Department of Correctional Services. Thank you.
Vote agreed to (Inkatha Freedom Party dissenting).
Vote No 22 – Defence and Military Veterans – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 23 – Independent Police Investigative Directorate – put and agreed to.
Vote No 24 – Justice and Constitutional Development – put.
Declarations of vote:
Dr M G ORIANI-AMBROSINI: Chairman, while we do not oppose the budget, we wish to take this opportunity to record our great concern on the fact that justice, the core aspect of this department, still remains something unaffordable to the overwhelming majority of the people of South Africa. Even though we see progress being made very slowly, and even though a Bill before us regulating the legal profession is a step in the right direction, it is nonetheless a small step.
Once again, we hope that in the next budgetary term urgent attention will be given to reforming the judicial processes and systems. If we do not make justice affordable, not only to people, but also to businesses and foreign investors, we are undermining our policies across the board. Thank you.
Mr L T LANDERS: Chairperson, if only for the record, we rise to explain why we support Vote No 24. We do so because of several bold initiatives and developments we have witnessed in the recent past. The signing of the proclamation putting into place the Office of the Chief Justice is an important step in the broadening of judicial independence. The creation of the Office of the Chief Justice is recognition of the constitutional imperative that the judicial authority is vested in the courts and that organs of state, through legislative and other measures, must assist and protect the courts to ensure their independence, impartiality, dignity, accessibility and effectiveness.
The ANC also welcomes the Minister’s zero-tolerance approach to qualified audits in his department, as well as the fact that this approach is shared by the top management of his department. We also welcome the proposed expansion of the jurisdiction of the Judge President to include magistrates’ courts within their respective division. Moreover, the widening of the justice footprint by the building of High Courts in Limpopo and Mpumalanga provinces is an important, albeit long overdue, development.
Finally, the ANC welcomes the fact that Legal Aid South Africa has recorded a 100% success rate in cases before the Supreme Court of Appeal in February and March of this year. For these and many other reasons, the ANC supports this Vote. Thank you.
Vote agreed to (Democratic Alliance dissenting).
Vote No 25 – Police – put.
Declarations of vote:
Mr J H VAN DER MERWE: Chairperson, we are all embarrassed by what is happening at the highest level of the police department and we sympathise with the Minister, who is trying his best to solve those problems. My president has indicated in Mr Zuma’s debate that when a new person is appointed as commissioner, it should be a competent police person. We are very concerned about the image of the South African Police, as I am sure the Minister is. The IFP has always been able to assist the Ministry of Police. We also feel that more money should be made available for inspection services where not enough investigations are being carried out, in respect of criminal trials.
So, when you appoint a new commissioner, Mr Minister, please appoint a good police person. Thank you.
Ms A VAN WYK: Chairperson, I rise to support this Vote on behalf of the ANC. There are challenges at the top management of police, but we are dealing with them, and the hon member has already raised that point. We, as Parliament, also have the responsibility to ensure that those challenges do not affect the work of the ordinary police officer at grass-roots level. The appointment of the National Commissioner is a prerogative of the President and we should leave it in his hands. We believe that the R62,5 billion budget that the police are receiving this year is more than enough for them to do an adequate job that we can all be proud of and that can take this country forward in the fight against crime. Thank you.
Prince M G BUTHELEZI: Chairperson, I would like to be guided whether it was wrong for me to ask His Excellency President Zuma not to appoint a cadre of the ANC, especially after the flops of Mr Selebi and Cele. We are not questioning the prerogative of the President, precisely because it is the prerogative of the President, which is why I put it to the President that he should not appoint a cadre of the ANC because of these two failures.
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon Buthelezi, we do not have a question and answer session during the discussion on the decision of the Schedule. However, you have a right to your opinion and I am sure that the relevant Minister will respond at the appropriate time if that question is put again.
Vote agreed to (Democratic Alliance dissenting).
Adv T M MASUTHA: Chairperson, may I establish a procedural point: Can the hon Kalyan assure us that she has the full mandate of her party?
The HOUSE CHAIRPERSON (Mr C T Frolick): That is a not a procedural point, hon member, please take your seat.
Vote No 26 – Agriculture, Forestry and Fisheries – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 27 – Communications – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 28 – Economic Development – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 29 – Energy – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 30 – Environmental Affairs – put and agreed to.
Vote No 31 – Human Settlements – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 32 – Mineral Resources – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 33 – Rural Development and Land Reform – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 34 – Science and Technology – put and agreed to.
Vote No 35 – Tourism – put and agreed to.
Vote No 36 – Trade and Industry – put.
Declarations of vote:
Dr M G ORIANI-AMBROSINI: Chairman, while we do not object to the budget, we feel nonetheless that we need to express our utmost concern about how our industrial policy is progressively being shaped under the leadership of this department. There are two components in this department, and we do not object to that being the case. However, one is becoming subservient to the other, and that is a matter of great concern.
The first component is that of promoting economic growth, trade and industrialisation; the second component is that of attaching social programmes and concerns of extended welfare programmes for industrialists to all that which promotes economic growth. By necessity, these two components are in tension, and possibly in conflict. We are now faced with a situation where the component from which the salvation of South African economic terms comes, is that of promoting economic growth, which is becoming completely subservient to the social component. The burden may become such that the state can no longer carry it.
We are very concerned that this pattern is identical to the pattern followed by Greece, Spain and Italy. We have often called on the Minister to have the courage in a time of harshness and difficulties such as this one to prioritise economic growth. We must have the courage of embracing austerity over the conflicting and concurring reasons which are attached to various programmes aimed at developing the economy and the industrial basis. The industrial basis is unfortunately shrinking, even though the inflation figures have been doctored to hide that very fact. Thank you.
Ms J L FUBBS: Mr Chairman, I have never heard such nonsense in this House. Let me say this to the hon Oriani-Ambrosini. This is not Italy; it is South Africa. We have every intention of reindustrialising South Africa. [Interjections.]
Mr A M MPONTSHANE: Chairperson on a point of order: I do not think it is parliamentary for hon Fubbs to imply that a member is not a South African citizen, and say to him that this is not Italy. I ask you to rule on that, Chair.
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon members, I request you to treat each other with the necessary respect and to refer to each other likewise. All members here are Members of the South African Parliament. However, the reference of the hon member to nonsense is not unparliamentary, and I will ask hon Fubbs to continue. Hon Buthelezi?
Prince M G BUTHELEZI: Chairperson, on a point of order: that was a xenophobic remark.
The HOUSE CHAIRPERSON (Mr C T Frolick) Thank you, hon member. I have pronounced on the matter and I ask that the decorum of the House be respected.
The MINISTER OF WOMEN, CHILDREN AND PEOPLE WITH DISABILITIES: On a point of order: the hon member is debating the issue of the economies of Italy and Greece, that was raised by the same hon member. There is no xenophobia in that statement. [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, please take your seat. I have dealt with the matter and we will continue. Hon Fubbs.
Ms J L FUBBS: Chair, I think we are all aware of the economic crisis in the Eurozone, which has been referred to as the PIIGS - Portugal, Italy, Ireland, Greece, Spain - crisis, not by me but by the economists. I am referring to Italy, which also dragged itself up after the Second World War and became a powerful economy in Europe. If there is anything wrong with that, I would like to know.
We are saying, as in South Africa, we wish to promote our small and medium industries in the same manner that Italy has done. [Laughter.] Secondly, we will not bow down to once again — simply being the hewers of wood and drawers of water - we want to be like those who manage, produce and create, as we can. Some of our most creative industrialists in the world over many ages came from Africa, as in Carthage, and I am sure the hon Oriani-Ambrosini is well aware of that historical event. [Applause.] The ANC supports this Budget Vote.
Vote agreed to (Democratic Alliance dissenting).
Vote No 37 – Transport – put.
Vote agreed to (Democratic Alliance dissenting).
Vote No 38 – Water Affairs – put and agreed to.
Schedules put and agreed to (Democratic Alliance dissenting).
APPROPRIATION BILL
(Second Reading debate)
There was no debate.
Bill read a second time (Democratic Alliance dissenting).
RATES AND MONETARY AMOUNTS AND AMENDMENT OF REVENUE LAWS AMENDMENT BILL
(First Reading debate)
Mr T A MUFAMADI: Hon Chairperson, hon Deputy President of the Republic, hon Ministers and Deputy Ministers, in particular Minister Pravin Gordhan and Deputy Minister Nhlanhla Nene; hon members, comrades and distinguished guests, the Rates and Monetary Amounts and Amendment of Revenue Laws Bill 2012 was introduced in Parliament on 13 March, together with the rest of the taxation laws amendment Bills for 2012. This legislation gives effect to the tax proposals announced by the Minister of Finance in the Budget Review of 2012, tabled in this House on 22 February this year. It is therefore my great honour and pleasure to stand before this House to deliberate and report back, as well as make recommendations on the Bill.
When the Minister tabled the budget and tax proposals earlier this year, he also reminded this august House that the global economic uncertainty will remain with us for a longer time to come. He also said that tax proposals before us seek to strike a balance between protecting the fiscus and raising revenue so that we can realise our social and economic infrastructure spend, to grow our economy, create decent jobs and narrow the growing distance between the poor and the rich.
Hon Minister, your predictions remain true and relevant to this day because, as matters stand at the moment throughout the world, large and small economies have come to realise that taxation or revenue collection is but the key and critical element that determines the independence or sovereignty of every state because it is through the budget that the aspirations of every citizen can be realised. Therefore, as we always say, a budget is nothing other than an expression of a political will and commitment to address the challenges of society at hand. It is through taxes that governments are able to meet their co-objectives and to promote the welfare of each nation.
The Bill, in a way, hon members, continues to tell a remarkable story of revenue collections under constraint and economic global conditions not of our own choice, since 2008. It is a remarkable story of good and extraordinary performance by the SA Revenue Service, Sars, a story of economic resilience that continues to weather the storm buffeting major nations - some of which are our own trading partners and major trading partners for that matter, such as Europe and the entire globe.
It is the proud story of our government’s careful approach and implementation of a prudent fiscal policy supported by a strong and emerging culture of tax compliance by many South Africans who continue to pay their dues to support the nation. Chairperson and hon members, these, to me, should be compelling reasons for us to appreciate the proposed changes in the Bill.
The Deputy Minister of Finance always reminds us that almost every single South African makes a contribution to the fiscus; be it through income tax or earnings; capital gains or interest; value-added tax when a child buys sweets; the fuel levy when we fill up our vehicles; or many other tax instruments designed to ensure that we all share the responsibility of our country’s future. It is the shared responsibility that contributes to our fiscal strength and stability, year after year.
Hon members, revenue correlates strongly with shifts in gross domestic product, GDP, and economic activity. Therefore, with this Bill, we seek to strike the balance between the fiscus and revenue, to achieve a better life for all, working together with the masses of our country to improve service delivery, eradicate poverty and eliminate socioeconomic inequalities in our society.
The tax statistics show that the impact of global recession on the South African fiscus amounted to an estimated R255 billion for the period 2008 to 2011. As Commissioner Magashula would always say to us in our committee, and I quote, “It is said that the definition of statistics is a science of producing unreliable facts from reliable figures.”
Therefore, I would not want to bore you with the statistics. Let me return to the Rates and Monetary Amounts and Amendment of Revenue Laws Amendment Bill, whose main thrust is the upward adjustment in personal income tax. Hon members, when we think of taxation in most instances, we think it is a very terrible, mundane subject. In reality, it is like life, and that is what makes it fascinating because life is complex and exciting.
If you know the position that a person assumes on taxes, you can tell their whole philosophy of life. Once you get to know the tax code - it embodies all the life of either great politics or goodness or charity - you would realise that everything is covered in the code. That is why it is so hard to get a simplified tax code because, just like life, it is not simple.
Chairperson, we must commend Commissioner Magashule and his team for steadily turning around the negative attitude of taxpayers, which has now resulted in tremendous growth in tax compliance in this country.
Statistics also reveal that there is growing gender equality in the workplace. The number of female taxpayers assessed grew by 163 000, or 9,5%, between 2007 and 2010 compared to an increase of only 44 000, or 1,5% of males. I think it shows that there is some economic progress in the field of gender transformation.
However, it remains a matter of serious concern that, currently, the biggest burden of personal income is being placed on taxpayers with taxable income in excess of R400 000 per annum, which constitutes only less than 10% of taxpayers but ended up being liable for almost 54,2% of the assessed tax for the year 2010.
Hon members, the statistics also tell a story of real tax relief for the South African taxpayers over the past few years. Of the R94 billion in tax relief for individuals granted over the past decade, the bigger portion of this tax relief has benefited the lower and middle income earners and has provided a major inflationary relief for the poor.
The Bill before us continues with being pro poor and lower income groups, in terms of taxation. The Bill also reflects, most importantly, on the small business corporation. It is an important amendment that we are supposed to support, for it is in the small business corporation that we can stimulate entrepreneurship, development and job-creation initiatives.
The dividend tax policy is separating the company financials from shareholders, and this separation of company tax from dividend tax falls in line with the international practices to enforce double taxation agreements we have entered into with other countries. Furthermore, the dividend tax is a true reflection of shareholders’ profits. Hon members and Chairperson, the ANC supports the Rates and Monetary Amounts and Amendment of Revenue Laws Amendment Bill 2012. I thank you. [Applause.]
Mr D C ROSS: Hon Chairperson, hon members, the Rates and Monetary Amounts and Amendment Revenue Laws Amendment Bill 2012 is an interesting piece of legislation. In his introduction to the Bill, Minister Pravin Gordhan suggested that the tax proposals before us – I think hon Mufamadi has also echoed that – should strike a balance between protecting the fiscus and raising revenue. Indeed, we agree that this will enable us to pay for the expansion of our economic activity.
The DA is largely in favour of the Bill, especially because of its attempts to offer relief to lower and middle income households on whose behalf the DA has been actively campaigning to bring down the most important issue of the cost of living.
Firstly, we are pleased to note that the tax thresholds have been adjusted to reflect inflation. The personal income tax rate and bracket adjustment, for instance, have moved from R59 000 in 2011-12 to R63 000 in 2012-13 for those under the age of 65. This is in fact slightly above official inflation.
Secondly, we were expecting the dividends tax to replace the secondary tax on companies from April this year. What we did not expect, however, was an increase in the rate from 10% to 15%. Research shows that the new tax could reduce your dividend income from a nonretirement investment by a total of 6,5%.
Treasury’s justification for this increase points to complex and competing issues as it claims that the increase is necessary to compensate for the projected R1,9 billion in tax loss. Minister, we are, however, pleased that investors in retirement funds, living annuities and preservation funds are exempt from the tax. We are indeed very pleased with this development.
We are, however, strongly opposed to the proposed increases in capital gains tax to an effective 13,3% for individuals and 18,6% for companies. Such increases in taxation unfairly target savings and investments in a country with a chronically low savings rate. For instance, higher capital gains tax discourages reinvestment, especially for small and medium-sized enterprises.
Capital gains tax increases will place a burden on these companies that may undermine the critical national goal of job creation. Moreover, there are several tax increases coming down the line. New tolls and increases in administered prices – the old story of increases year in and year out on administrative prices – are already too much for our economy.
Imposing a carbon tax, a local business tax and VAT, and imposing a payroll or income tax increase to fund the National Health Insurance will push us over the edge and do serious damage to our culture of taxpaying. Instead of speculating around what new taxes to impose, the national Budget should have promoted potential tax revenue by doing more to drive growth in South Africa.
If we accelerate growth from the 2,7% forecast for this year, to the 8% targeted by the DA, we will double the size of our economy and our tax revenue in 10 years. Escalating up dividends tax and capital gains tax were probably the last loads that could add to the taxation scales without tipping South Africans from heavily taxed to totally overtaxed. That is the concern. If new taxes are added, we cannot safely keep that distinction.
Our tax regime needs to target strategic tax reductions in order to drive growth. We need to be looking at places where we can lower taxes to stimulate investment and lower costs, especially for the smaller businesses. I am very pleased because a lot of emphasis was placed on the smaller businesses. The Minister himself made the salient point that it is well recognised that growth is the best way for government to generate funds.
South Africa’s tax as a proportion to GDP is now 25%. Let us compare it to other countries. Several countries with whom we are competing have rates well below that. As a point of interest, Zambia’s ratio is at 16%; Kenya is at 18,4%; Chile is at 18,6%; China at 17%; and India is at 17,7%. In order to compete with these nations, especially our African counterparts, we will have to become more tax competitive.
Finally, we have to be mindful of challenging economic conditions – your speech alluded to this, this morning – both globally and locally. Challenging conditions could weigh in on business confidence and discourage organisations from expanding production capacity. We have to be mindful to avoid tax shocks at a delicate stage of the business cycle.
The e-tolling debacle is such an example of increased costs to all South Africans. An update of the controversial e-toll project is awaited with a huge outcry in relation to cancelling the existing open road tolling contract, as well as further details on the funding options for the National Health Insurance scheme.
We have to be mindful of how to maintain a sound relationship between the increased welfare spend on the one hand and the limited tax base on the other. Not maintaining a sound relationship could tip the taxation scales in South Africa to totally overtaxed. Lower growth patterns in the world show that we need to spend money more effectively, as you indicated this morning. Thank you very much, hon Speaker, for the opportunity. [Applause.]
Dr M G ORIANI-AMBROSINI: Madam Deputy Speaker, we cannot support this Bill because it is inherently unfair. Firstly, the Bill purports to correct the fiscal drag but does so on the basis of doctored inflation figures which are much lower than the actual cost of living. You all know very well that the cost of living is now at 6%.
All the rebates and adjustments provided for in the Bill should be increased by at least twice as much to ensure that people pay today the same amount in real-terms taxes as they paid before. By failing to do so, this Bill imposes an unfair hidden tax on real-terms inflation, especially for those who are in the lower income bracket.
Secondly, the Bill increases capital gains taxes. These taxes are on after-tax saved money. These are taxes made on investments made with whatever is left in the hands of the citizens after all the other taxes have been paid. Effectively, this becomes an unfair tax on saving. These taxes are also made unfair by a great portion of what is really being taxed being inflation, even being future inflation figures which are below the cost of living.
Thirdly, the Bill brings about a package of regressive indirect taxes by increasing levies such as the fuel levies and the taxes on alcohol and all the consumables. These taxes are not tied to income and they are proportionally paid for more by the poorer than the richer. In addition, this Bill is probably unconstitutional because of the manner in which it was processed at the committee stage. The committee refused to entertain and vote on any amendment, acting on the erroneous legal opinion stating that the Budget Office has not yet been established when, in fact, as a matter of law, it had been established albeit not yet resourced.
The acting chairman refused to rule on whether the proposed amendments were out of order or in order. Transcripts of the recordings of the deliberations of the meetings will reveal that what took place there cannot be described as the process of deliberation. Thank you. [Time expired.]
Ms Z S DUBAZANA: Hon House Chairperson, hon Deputy President, honourable executives who are present, hon members, “sanibonani”. [I greet you.] The Rates and Monetary Amounts and Amendment of Revenue Laws Amendment Bill of 2012, which was introduced in Parliament on 13 March 2012, deals with the rate changes and other numerical matters and not with the more substantive tax proposals. Together with the rest of the taxation laws amendment Bills for 2012, this legislation will give effect to the tax proposals that were announced by the Minister of Finance in the 2012 Budget.
It is important to make this clear, because I am sure you have listened to the IFP, the most learned so-called hon Dr Oriani-Ambrosini and hon Ross, where they failed to differentiate between what we are debating now, which is the Rates and Monetary Amounts and Amendment of Revenue Laws Amendment Bill, and the tax proposals, which have been dealt with by the Minister during the Budget Speech.
I don’t know what hon Dr Oriani-Ambrosini is talking about when referring to unfairness because the reforms are indeed intended to improve fairness in the tax system and ensure that the income from capital is taxed more appropriately. Proposals are advanced to support small businesses and to encourage household savings. Personal income tax provides a foundation for an equitable, progressive tax system to ensure that the direct personal income tax burden on individuals remains reasonable. Personal income tax brackets and rebates are adjusted to take account of inflation or “bracket creep”, as well as to provide the limited real tax relief.
Studies have repeatedly shown that the best way to promote savings is to provide salary relief so that average workers have the discretionary funds to save. This relief for working employees has the added benefit of alleviating the wage burden on employers. Personal income tax relief should indirectly reduce the pressure on wage increases because taxpayers will have a greater level of after-tax income.
Governments all over the world recognise that small businesses are economically very important. The ANC-led government continues to recognise the importance of small business as an engine for wealth and job creation. To achieve the objectives of economic growth through competitiveness, on the one hand, and employment generation and income redistribution as a result of this growth on the other, South Africa’s small, medium and micro enterprises, SMMEs, economy has been actively promoted since 1995. Over the last few years, the growth in employment by SMMEs in South Africa has exceeded the growth in their contribution to the gross domestic product, GDP.
There are examples of thousands of small and micro businesses which have taken the route of filling a vital place in our economy. In many instances, they have been supported by financing from both the private sector and programmes by the Department of Trade and Industry. For the small business sector, there are targeted financial and enterprise development programmes, and tax relief measures, which I am very sure the hon Oriani-Ambrosini is aware of, though he doesn’t want to talk about them because they were initiated and are implemented by the ANC-led government.
To encourage the growth of small incorporated businesses, the Bill contains relief for small business corporations with the current 10% rate dropping to 7%. Up to R350 000 of taxable income will also be eligible for the small business corporation rate, as opposed to the previous R300 000 maximum, while for taxable income above R350 000, the normal corporate tax rate of 28% applies. This relief follows last year’s changes to the micro business tax, which again sought to assist small businesses.
The manner in which SMMEs can be assisted is continually reviewed and tax thresholds are periodically updated, although not necessarily on an annual basis. The taxation of micro businesses has been simplified and the tax liability of qualifying small business corporations has been reduced in recent years. The simplified tax regime substantially reduces the compliance costs to submit tax returns and in some instances could result in a lower tax liability.
During the first term of the ANC-led government, the focus was primarily on putting in place a policy framework that would contribute to the overall objectives of fostering economic growth in the medium and long term, while at the same time addressing the backlogs in access to basic public services. In this context, the focus was understandably on establishing a sound macroeconomic environment and reprioritising government expenditure towards providing public services contributing to a meaningful improvement in the lives of all South Africans.
Income tax relief for the period 1994-2002 was close to R50 000 billion. The number of brackets has been reduced from ten to six and the primary rebate was increased annually. Moreover, there were continuous efforts to compensate for inflation by adjusting the tax brackets and the tax thresholds. Real tax relief was provided to low and medium income taxpayers. I am sure hon Oriani-Ambrosini is still in the House and listening.
Since the year 2000, the pace of fundamental income tax reforms with the distinct purpose of aggressively broadening the tax base was stepped up, thereby affording significant rate reduction in line with international trends.
Since the year 1994, tax policy - supported by deep structural changes to the tax administration, compliance culture and collection - have consistently delivered revenue growth that enabled the fiscus to reduce the deficit, while expanding public services. The programme of fiscal discipline, sound fiscal management, focused spending programmes and continual tax relief remain hallmarks of this government. Robust growth in tax revenue has contributed to the continued strong fiscal position that provides the platform for further tax reforms.
In conclusion, reforms and amendments of revenue laws will improve the fairness of the tax system and avoid overburdening taxpayers. The ANC wholeheartedly agreed with the hon Minister of Finance when he stated that, I quote, “the 2012 budget reflects the collective determination to address with energy the challenges of creating jobs, reducing poverty, building infrastructure and expanding our economy and that it sets out a sound and sustainable financial framework for implementing this vision.”
On that positive note, the ANC supports the Rates and Monetary Amounts and Amendment of Revenue Laws Amendment Bill of 2012. I thank you. [Applause.]
Dr Z LUYENGE: Hon Chairperson, the Deputy President, Ministers, and the hon members of this august House, on behalf of the ANC and in support of this Bill, I wish to reflect on the topic. The prime responsibility of government is to ensure that conditions are conducive to meeting the basic needs of the population. This will be achieved partly by a fairer, progressive and more efficient system of taxation and government spending.
The new dividends tax replaces the secondary tax on companies from 1 April 2012. The dividend withholding tax comes into effect at 15%, which is five percentage points higher than the previous secondary tax on companies. This change realigns the South African system for taxing dividends so as to be fully consistent with modern international tax practice.
One important benefit of the new dividends tax is to properly separate the tax from company financials, since dividends declared by companies better represent shareholders’ profits. Hon Chairperson, this regime also has the added benefit of allowing pension funds to receive tax-free dividends, thereby allowing for greater pension fund growth.
There has been an allegation that the introduction of the new dividends tax at a rate of 15% came as a so-called unwarranted surprise since only a 10% rate was previously indicated. However, it is common cause that revenue needs require to be reviewed on a regular basis and the decision to introduce the revised rate from 10% to 15% takes into effect the need to adjust for unanticipated revenue changes.
Given the latest revenue trends, it was determined that the revenue losses from the new tax required compensating adjustments. Therefore, the issue of revenue was clearly the overriding consideration in the decision to raise the dividends tax rate.
Some commentators have also taken issue with the proposed increased rate associated with the dividends tax, alleging that it will unfairly target savings, especially to the detriment of middle and lower income persons. However, what they fail to recognise is that the new dividends tax will cost the fiscus R1,9 billion. In order to replace these funds, it is necessary to raise the dividends tax rate to 15%.
The relief from increased capital gains rates is again being made available for lower- and-middle income groups so that their savings can be shielded from this change. There has also been a suggestion that the budget contains a significant overall increase in the tax burden. This is not true. As in prior years, additional revenues are expected as a mere by-product of reasonably anticipated growth. It is well-recognised that growth is the best way for a government to generate funds.
The effective dates for most of the proposals have been set either on 1 March 2012 or 1 April 2012. Caution has also been expressed against the changes being applied before the Bill is promulgated and that the retroactive treatment would adversely affect the taxpayer. There was a suggestion that the retroactive approach should be avoided.
The relevant commentators ignore long-established tax practices with regard to rate changes. Over the years, many rate changes have taken effect immediately after budget announcements. Otherwise, rate changes would be delayed for up to a year, which most taxpayers would find problematic because personal income tax rates change. These are typically in the form of reductions. In fact, provisions within the income tax domain have officially recognised this procedure of early enactment of rate changes based on ministerial announcements, followed by parliamentary ratification.
There is sympathy for concerns raised in respect of the breadth and depth of tax amendments. The issue of effective dates is, however, a complex one, often requiring different policies depending on the nature of the amendments involved. Moreover, taxpayers cannot disregard their role in this area as they often seek retroactive change for their own benefit.
As far as global practice is concerned, none of the European countries have an absolute ban on retroactive tax legislation. However, in countries like Poland, Portugal and Hungary, a near prohibition exists with regard to retroactive tax legislation which is unfavourable for taxpayers. Furthermore, the existing limitations are a matter of degree.
In Germany, there are neither official nor unofficial guidelines on the tax transition policy. The Ministry of Finance, who is drafting the tax Bills in Germany, decides case by case. While the French government pledged in 2004 to stop using retroactive provisions detrimental to the taxpayer, it is difficult to ascertain if this marks a deep change in legislative practice.
The global economy has entered a dangerous new phase. Global economic activity has weakened further and become more uneven; confidence has dropped; and downside risks are increasing. Against this background, it is clear that the more things go wrong abroad, the more South Africa must look at the efficacy of its domestic and, more specifically, its tax policies and responses.
After all is said and done, this ANC-led government reserves the right to make urgent changes from the date of announcement, especially to prevent large-scale avoidance. There can be no compromise on the basic principles of sound financial management in ensuring that resources are mobilised efficiently to serve our people.
Therefore, this Bill is appropriate in the current global context of ongoing economic uncertainty. It contains a carefully developed package which supports the ANC-led government’s objective of maintaining fiscal revenue for government priorities; provides for fiscal support for growth and job creation; and strives for fiscal consolidation in the medium-term. As a matter of fact, it creates financial stability and confidence.
Sekela-Sihlalo ohloniphekileyo noSekela-Mongameli, umbutho wesizwe i-ANC ithi mayiluphakamise ukhamnqo lwayo lwanamhlanje. Amalungu ale Ndlu ibaluleke kangaka athe xa bekuxoxwa umcimbi odla umzi nodinga iinkokeli ezithi zonyulwe ngabantu, zize zona ngenxa yokuba zivelana nezinye ezigqwethekayo xa zithetha, zibona naxa zisenza izinto kweli lizwe, suke nazo ziyishiye le Ndlu. Akwaba ke abantu baseMzantsi Afrika bangayibona into yokuba bakhona abantu ababathumele kule Ndlu ukuba benze umsebenzi, kodwa bona bakhethe ukup huma bayokuphunga iiti ngeerhafu zabo. Mandiyithethe icace into yokuba lo mgaqo-siseko
we-ANC ukhoyo uya kuhlala umile nokuba abekho. Enkosi. [Kwaqhwatywa.] (Translation of isiXhosa paragraph follows.)
[Hon Deputy Chairperson and hon Deputy President, the people’s party, the ANC, deems it fit to voice its great astonishment at what happened today. Members of this august House, while we were discussing a crucial issue which needed leaders who were elected to this House by the public, left it following and sympathising with those who easily lose focus on issues being debated, irrespective of the way in which they conduct themselves in this country. I hope South Africans see that the people they’ve sent as their representatives to this House choose to go and enjoy a cup of tea with their tax money. Let me emphasise the fact that the existing constitution of the ANC will remain effective even in their absence. Thank you. [Applause.]]
Mrs S V KALYAN: Chair, on a point of order: The hon member at the podium misled Parliament about the reasons for the DA leaving the House earlier in the debate. I submit that what he did was unparliamentary as it had nothing to do with the Bill at hand and in question.
The HOUSE CHAIRPERSON (Mrs F Hajaig): Hon member, do you have something to say?
Adv T M MASUTHA: Clearly, hon Chairperson, this is not a point of order, but a point of argument. There is no basis on which the hon member is actually raising it. I do not know which Rules she is rising on.
The HOUSE CHAIRPERSON (Mrs F Hajaig): I could not follow the last transcript. I am going to have to look at that.
Mrs S V KALYAN: Madam Chair, I was addressing you on a point of order that the member at the podium was misleading the House.
The HOUSE CHAIRPERSON (Mrs F Hajaig): I cannot say whether you have a point of order or not. I did not understand the last part of the transcript. So, I will have to look at that. Thank you. [Applause.]
The MINISTER OF FINANCE: Chairperson and hon members, this piece of legislation now legitimises all the tax breaks that you’ve had from the Budget announcement earlier this year. It records the different rates and monetary amounts that will now become part of law. Just to remind ourselves, when we made the announcement in February this year that this Budget provided R9,5 billion of personal income tax relief, which was R2 billion above inflation, this is something that will help South Africans both to meet their indebtedness on the one hand and to save money on the other hand.
The Budget also made a special dispensation for individuals under the age of 65 whose tax threshold now went up to R63 556, which means that below that amount you don’t pay any tax. Individuals from the ages of 65 to 74 are exempt up to R99 000, and individuals above the age of 75 are exempt up to R110 889. All of these are important steps which are made possible, as the chairperson of the committee, Mr Mufamadi, pointed out, as a result of the excellent tax compliance that we enjoy in South Africa.
Let me respond and firstly reinforce what the chairperson of the committee said, that our fiscal policy is a very carefully calibrated approach which ensures, hon Ross, that we don’t end up with any unsustainable situation. I can see that you are a bit alarmed about several of the issues, such as tolls, admin costs and the National Health Insurance, NHI, but we repeatedly provided assurances both to the committee and to the Chamber that we have a sustainable fiscal framework. This administration is very committed to working within that fiscal framework.
I also want to underline what Mr Mufamadi said in relation to tax revenues and tax compliance in South Africa. We are very privileged to have the kind of tax compliance we do, and we can see elsewhere in the world what lack of tax compliance does to fiscal sustainability and the welfare of nations. There are several examples to the north of us. The third point that he made, which is equally important, is that we often see much written in newspapers about only 5 million taxpayers contributing to the tax revenue in South Africa. He very importantly points out that tax is not just income tax. Income tax is about 30% of our total revenue, and every person who buys something pays VAT, every person who consumes something pays excise tax. Sometimes, of course, they consume wrong things and still pay excise tax. We have, indeed, a fairly broad tax base from that point of view, although, at the same time, we must acknowledge that we need to widen that tax base as the economy grows.
The hon Ross says that we are not doing much for growth. Well, disposable income in the hands of the taxpayers means we that are supporting consumption. There are any number of incentives in our tax system, hon Ross, which also support growth and support enterprises in various aspects, whether it’s the motor industry, the clothing and textile industry, or the more recent package announced by Minister Davies in relation to the competitiveness package as well. You also said that we are heavily taxed, and we are now crossing over the border into being overtaxed. I respectfully disagree with you. We can compare our numbers at some point in time. Our tax system is highly competitive, world-class in every respect and, certainly, South Africans cannot say that they are overtaxed.
Our tax-to-gdp ratio of 25% shouldn’t be an embarrassment; it should be a point of pride. Those countries that have tax-to-GDP ratios below 20% are countries that are not fully collecting taxes in their countries as they should. Tax-to-GDP ratios in Europe, because of social security contributions, go well above 35%, and I think it’s important that we compare apples with apples in this particular instance to get a proper perspective on the tax-to-GDP ratio, and you will recall that I have said on many occasions that prior to the recession, our tax-to-GDP ratio was closer to 28%, and we went down to just over 23%. We are barely recovering from the impact of the recession on the revenue intake of South Africa.
The hon Ambrosini, once again, has his own peculiar way of looking at taxation, which is a highly understandable matter, but I think he is a bit strong when he starts claiming that things are unconstitutional, and I am sure that if the chair of the committee had an opportunity, he would appropriately respond to that.
Let me thank the hon Dubazana and Luyenge for their contributions to this debate, and thank all of the parties for their broad support for the kind of taxation direction that we are taking, and let me also belatedly recognise the presence of the Deputy President. Thank you very much. [Applause.]
Debate concluded.
Bill read a first time (Inkatha Freedom Party dissenting).
RATES AND MONETARY AMOUNTS AND AMENDMENT OF REVENUE LAWS AMENDMENT BILL
(Second Reading debate)
There was no debate.
Bill read a second time.
The House adjourned at 16:48.
__________
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS
FRIDAY, 1 JUNE 2012
COMMITTEE REPORTS
National Assembly
1. FIRST REPORT OF THE COMMITTEE ON PUBLIC ACCOUNTS ON THE REPORT OF THE INDEPENDENT AUDITORS ON THE 2009/10 FINANCIAL STATEMENTS OF BOTSHELO WATER, DATED 18 APRIL 2012
The Committee on Public Accounts (the Committee) heard evidence on and considered the content of the Annual Report and the Report of the Independent Auditors on the 2009/10 financial statements of Botshelo Water. The Committee noted the qualified audit opinion, highlighted areas which required the attention of the Accounting Authority, and reports as follows:
1. Property, plant and equipment
The Auditor-General identified the following:
a) As disclosed in note 17 to the financial statements, the corresponding figures for property, plant and equipment has been restated by R3 264 714 in order to address a prior year misstatement. No supporting documentation was available for the restatement. Consequently, sufficient, appropriate audit evidence to verify the existence, rights, completeness, valuation and allocation of the property, plant and equipment corresponding to R 15 463 891 was not obtained.
b) The entity did not review the residual values and useful lives of property plant and equipment at each reporting date in accordance with Standard of Generally Accepted Accounting Practice (GRAAP), IAS 16 (International Accounting Standards 16), Property, plant and equipment, as evidenced by property, plant and equipment with a historical cost amount of R16 732 481 being included in the financial statements at a zero net carrying amount, whilst being used.
The Committee recommends that the Accounting Authority ensures that:
Policies and procedures are developed and implemented to ensure that regular asset counts/verifications and subsequent adjustments to financial records are performed and monitored and records relating to this exercise are safeguarded.
2. Investment properties
The Auditor-General identified that:
There was no sufficient appropriate audit evidence to verify the entity’s rights to investment properties of R2 620 000, included in investment properties.
The Committee recommends that the Accounting Authority ensures that:
a) The entity has an investment policy that will clarify and guarantees the properties that it has in place; and
b) Policies are developed, implemented and be made available for audit purposes.
3. Trade and other receivables
The Auditor-General identified the following:
a) The accounts receivable balance of R131 734 438, as disclosed in note 4 to the financial statements, does not correspond to the balance of R151 666 697 per the sub-ledger. The entity did not reconcile the difference of R19 932 259 between the financial statements and the underlying accounting records. Consequently, the accounts receivable balance is understated by R19 932 259. The effect on other account balances or classes of transactions contained in the financial statements was not determined.
b) The entity could not provide sufficient appropriate audit evidence to support the journal entries of R242 635 170 debited to trade and other receivables. There were no satisfactory alternative audit procedures that could be performed to obtain reasonable assurance that all trade and other receivables were recorded properly.
The Committee recommends that the Accounting Authority ensures that:
a) Policies and procedures are developed and implemented to ensure that regular debtor’s and bank confirmations and reconciliations are performed; and
b) Training and transfer of skills to employees are performed.
4. Inventories
The Auditor-General identified that:
Appropriate audit evidence considered necessary to support inventories of R1 276 001, included in the statement of financial position and note 5 to the annual financial statements could not be obtained. The entity’s records did not permit the application of alternative audit procedures. Consequently, sufficient appropriate audit evidence could be obtained to evaluate and allocate inventories.
The Committee recommends that the Accounting Authority ensures that:
a) Guidelines, policies and procedures are developed and implemented so that regular inventory counts/verifications and subsequent adjustments to financial records are performed and monitored and records relating to this exercise are safeguarded; and
b) Proper record keeping is in place.
5. Cash and cash equivalents
The Auditor-General identified the following:
a) The entity could not provide sufficient appropriate evidence to support the reconciling items totalling R1 543 444, between the project account of R2 184 419 as per bank statement and project account balance as stated in the statement of financial position at R640 975 (2009:R575 331).
b) The current account balance of R21 112 030 (2009:R8 096 304), as disclosed in note 6 to the financial statements, did not correspond to the balance of R286 529 confirmed by financial institutions. Furthermore, the entity did not reconcile a difference of R20 825 501 between the balance per the general ledger and the amount per bank statement. The entity’s records did not permit the application of alternative audit procedures.
The Committee recommends that the Accounting Authority ensures that:
Guidelines and procedures are developed and implemented to ensure that at least weekly bank confirmations and reconciliations are performed.
6. Revenue
The Auditor-General identified the following:
Sufficient appropriate audit evidence was not obtained to ensure that all receipts have been recorded. Furthermore, the entity did not perform readings of all the meters. The entity’s records did not permit the application of alternative audit procedures regarding the completeness, classification and cut-off of revenue of R115 280 387, as stated in the statement of financial performance and note 10.
The Committee recommends that the Accounting Authority ensures that:
Policies, guidelines and procedures are developed and implemented to ensure that regular debtor’s and bank confirmations and reconciliations are performed.
7. Cost of sales
The Auditor-General identified that:
Sufficient appropriate audit evidence could not be obtained to verify cost of sales of R3 982 337 included in the statement of financial performance. The entity’s records did not permit the application of alternative audit procedures.
The Committee recommends that the Accounting Authority ensures that:
a) Competent and skilled people are employed that have in financial management skills; and
b) Policies and procedures are developed and implemented so that management accounts are reviewed regularly.
8. Expenditure
The Auditor-General identified that:
Sufficient appropriate audit evidence to verify that all invoices have been recorded could not be provided. The entity’s records did not permit the application of alternative audit procedures regarding the completeness, classification and cut-off of R19 276 558 as stated in the statement of financial performance and note 15.
The Committee recommends that the Accounting Authority ensures that:
Guidelines, policies and procedures are developed that require regular review of management accounts and financial statements for validity, completeness and accuracy of disclosed or recorded amounts.
9. Employee cost
The Auditor- General identified that:
The employee cost amount of R39 988 555, as disclosed in note 13 to the financial statements, does not correspond to the balance of R37 589 322 per the payroll system. The entity did not reconcile the difference of R2 399 233 between the financial statements and the underlying accounting records.
The Committee recommends that the Accounting Authority ensures that:
Regular reconciliations between the payroll and the ledger are performed on a monthly basis.
10. Account payables
The Auditor-General identified the following:
a) The project advance balance of R4 641 510 included in accounts payables of R74 045 704 (2009: R13 214 702), as disclosed in note 8 to the financial statements, does not correspond to the balance of R1 882 157 per the reconciliation. The entity did not reconcile the difference of R2 759 353 between the financial statements and the underlying accounting records. Consequently, project advance account is overstated by R2 759 353.
b) The entity could not provide sufficient appropriate audit evidence to support the journal entries of R24 053 579 debited to accounts payable. There were no satisfactory alternative audit procedures that could be performed to obtain reasonable assurance that all accounts payables were recorded properly.
c) Treasury Regulation 17.1.2 requires the sources of the transactions in a clearing account to be readily identifiable, as well as monthly reconciliations to be performed to confirm the balance of the account. This information could not be provided for the accounts payable clearing account balance of R2 982 471 included in accounts payables of R74 045 704 (2009: R13 214 702), as disclosed in note 8 to the financial statements.
The Committee recommends that the Accounting Authority ensures that:
a) Policies and procedures are developed and implemented so that regular creditor’s confirmations and reconciliations are performed; and
b) Internal audit recommendations are monitored and implemented.
11. Irregular, fruitless and wasteful expenditure
The Auditor-General identified the following:
a) Section 51(1)(a)(iii) of the PFMA requires the entity to implement and maintain an appropriate procurement and provisioning system which is fair, equitable, transparent, competitive and cost effective. Payments amounting to R1 357 499 were made in contravention of the supply chain management requirements. This amount was not disclosed in the note to the financial statements as irregular expenditure, resulting in irregular expenditure being understated by R1 357 499.
b) Sufficient appropriate audit evidence for awards of R3 849 539 made in terms of the entity’s supply chain management policy could not be obtained. The entity’s records did not permit application of alternative procedures. Furthermore, it was impossible to quantify the resulting misstatement. Consequently, sufficient appropriate audit evidence could not be obtained to verify the completeness of irregular expenditure.
The Committee recommends that the Accounting Authority ensures that:
Policies and procedures are developed and that all employees comply with laws and regulations.
12. Conclusion
The Committee is displeased by the absence of policies and procedures that should guide the day to day operations of the entity and also the record keeping of important documents that should be used for audit purposes.
The Committee recommends that the Executive Authority submits a progress report on all the above recommendations to the National Assembly within 60 days after the adoption of this report by the House.
The Committee further recommends that the Accounting Authority submit quarterly reports on all the above-mentioned recommendations.
Report to be considered
2. SECOND REPORT OF THE COMMITTEE ON PUBLIC ACCOUNTS ON THE REPORT OF THE INDEPENDENT AUDITORS ON THE 2009/10 FINANCIAL STATEMENTS OF BUSHBUCKRIDGE WATER, DATED 18 APRIL 2012
The Committee on Public Accounts (the Committee) heard evidence on and considered the contents of the Annual Report and the Report of the Independent Auditors on the 2009/10 financial statements of Bushbuckridge Water. The Committee noted the qualified audit opinion, highlighted areas which required the attention of the Accounting Officer, and reports as follows:
1. Valuation of debtors
The Independent Auditors identified the following:
a) The estimated cash flow related to trade receivables were determined as R nil for the outstanding debt of R 167 630 525 and R26 478 120 owed by the Bushbuckridge Local Municipality and the disestablished Bohlabela District respectively;
b) The provision for outstanding debt is only R82 399 855 resulting in trade receivable being materially overstated.
The Committee recommends that the Accounting Authority ensures that:
a) Management considers and implements an appropriate basis for the preparation of financial statements;
b) An agreement between the Municipality and National Treasury is reached with regard to the debt owed to the Bushbuckridge Water Board; and
c) Impairment testing on all assets included in the balance sheet in accordance with International Accounting Standards 36 (IAS) (AC128) and IAS 39 (AC 133) are performed.
2. Going Concern
The Independent Auditors identified the following:
a) The Bushbuckridge Water Board experiences a going concern relating to the payment of water sold to Bushbuckridge Local Municipality.
b) During the year ending 30 June 2010 an updated service level agreement was signed which provided for a payment of only R5 000 000 (including VAT) per month for water supplies. This falls short of the monthly invoices issued which amounts to an average of R7-R8 million. A similar service level agreement was also signed in 2007-08 and 2008-9.
The Committee recommends that the Accounting Authority ensures that:
Bushbuckridge Water Board signs and enforces a service level agreement with the Bushbuckridge Local Municipality whereby the full invoice amount would be settled.
3. Fixed Assets
The Independent Auditors identified that:
Fixed assets were transferred to the Bushbuckridge Water Board during the 1999/2000 financial year without transferring the ownership there-of. In terms of section 73 (2) (a) of the Water Service Act 1997 ( Act 108 of 1997), no water services works owned by the Minister of Water Affairs and Forestry may be transferred without the approval of Parliament if its value exceeds an amount specified by notice in the gazette from time to time.
The Committee recommends that the Accounting Authority ensures that:
a) Ownership of fixed assets accrues to Bushbuckridge Water Board;
b) An asset register is developed and updated regularly.
4. Inventory
The Independent Auditors identified that:
Note 25 of the financial statements refers to the findings of the forensic audit whereby an amount of R644 655 was irregularly paid during the 2003/04 financial year. These amounts have not yet been recovered.
The Committee recommends that the Accounting Authority ensures that:
The Board together with the municipality and the Department of Water Affairs address the matter of non payment of water by the Municipality with the urgency it deserves.
5. Non-Compliance with Regulatory Requirements
The Independent Auditors identified the following:
a) As required by section 3.2.7 of the Treasury Regulations, Bushbuckridge Water did not have the following plans:
* A three year rolling internal audit plan;
* An annual audit plan for the first year of the three year rolling internal audit plan;
* Plans indicating the proposed scope of each audit in the annual internal audit plan; and
* A quarterly report to the audit committee detailing its performance against the annual internal audit plan, to allow effective monitoring and possible interventions.
b) Bushbuckridge Water did not have a procedures manual for the procurement of goods and services during the year under review as required by section 2 of the Preferential Procurement Policy Framework Act (Act 5 of 2000).
The Committee recommends that the Accounting Authority ensures that:
a) An internal and annual audit plan is developed and adhered to at all times;
b) The entity develops the scope of the audit plan and this should be included in the annual internal audit plan; and
c) Policies, procedures and procedural manuals that guide the day to day operation of the entity are developed and implemented accordingly.
6. Conclusion
The Committee recommends that the Executive Authority submits a progress report on all of the above recommendations to the National Assembly within 60 days after the adoption of this report by the House.
The Committee further recommends that the Accounting Authority submits quarterly reports on all the above-mentioned recommendations.
Report to be considered.
3. THIRD REPORT OF THE COMMITTEE ON PUBLIC ACCOUNTS ON THE REPORT OF THE AUDITOR-GENERAL ON THE 2009/10 FINANCIAL STATEMENTS OF MAGALIES WATER, DATED 18 APRIL 2012
The Committee on Public Accounts (the Committee) heard evidence on and considered the content of the Annual Report and the Report of the Auditor-General (AG) on the 2009/10 financial statements of Magalies Water. The Committee noted the qualified audit opinion, highlighted areas which required the attention of the Accounting Authority, and reports as follows:
1. Trade and other receivables
The Auditor-General identified the following:
a) The entity did not provide sufficient appropriate evidence to support the trade and other receivables balance of R101 884 626 disclosed in note 7 to the financial statements. The disclosed balance does not agree to the debtor’s age analysis.
b) Included in the trade receivables is R1 056 000 which constitute credit balances, and included in the trade payables is R1 722 551 which constitute debit balances.
The Committee recommends that the Accounting Authority ensures that:
a) Policies and procedures are developed and implemented to make sure that regular asset counts/verifications and subsequent adjustments to financial records are performed and monitored; and
b) Management monitors the implementation of the internal audit recommendation.
2. Investments
The Auditor-General identified the following:
The SCMB Zero Coupon Investment of R11 109 732 as disclosed in note 3 of the financial statements matures on 30 June 2011. South African Statements of Generally Accepted Accounting Practice, IAS 01, presentation of financial statements requires that an entity shall classify an asset as current when it expects to realise the assets within twelve months after the reporting period. Had the balance been correctly classified as a short term investment, the non-current asset for investments in the statement of financial position would be decreased and the current for investments in the statement of financial position would be increased by R 11 109 732.
The Committee recommends that the Accounting Authority ensures that:
Policies and procedures are developed to ascertain that management accounts and financial statements are reviewed regularly.
3. Property, plant and equipment
The Auditor-General identified the following:
a) The entity did not provide sufficient appropriate audit evidence to support property, plant and equipment of R 590 431 420 as disclosed in note 2 to the financial statements.
b) The disclosed balance for property, plant and equipment of R590 431 420 did not correspond to the balance of R590 321 705 per the asset register. The entity did not reconcile the difference of R 109 715 00 between the financial statements and the underlying accounting records. Assets of R144 980 were not recorded in the accounting records of the entity.
The Committee recommends that the Accounting Authority ensures that:
a) Policies and procedures are developed and implemented so that regular asset count/verifications are done; and
b) Subsequent adjustments to financial records are performed, monitored and records relating to this exercise are safeguarded.
4. Cash and Bank
The Auditor- General identified the following:
a) The entity did not provide sufficient appropriate audit evidence to support cash and bank of R301 214 disclosed in note 8 to the financial statements.
b) The entity did not provide sufficient appropriate audit evidence to support the reconciling items totalling to R1 676 329 between cash and cash equivalents stated in the statement of the financial position at R2 034 741 (overdraft) and the cash at banks amount stated on the year end bank reconciliation at R13 835 826; and cash at bank of R282 234 indicated on the bank reconciliation does not correspond to the amount of R27 700 330 confirmed by financial institutions.
The Committee recommends that the Accounting Authority ensures that:
a) Policies, guidelines and procedures are developed and implemented so that regular bank confirmations and reconciliations are performed;
b) Internal audit recommendations are implemented; and
c) Financial records are reviewed for completeness, accuracy and validity and that those records are safeguarded.
5. Reserves
The Auditor-General identified the following:
The entity did not provide sufficient appropriate audit evidence to support the revaluation reserve of R40 468 000 (2009: R 40 468 000) disclosed in note 9 to the financial statements. The entity’s records did not permit the application of alternative audit procedures.
The Committee recommends that the Accounting Authority ensures that:
a) Asset counts are performed and reconciling items are followed-up and monitored; and
b) Supporting documents are stored and are provided for audit purposes.
6. Expenditure
The Auditor-General identified the following:
a) The entity did not provide sufficient appropriate audit evidence to support operating expenditure of R198 045 000 disclosed in the statement of comprehensive income.
b) Included in expenditure is an amount of R8 449 548 (2009: R263 213) resulting from duplicate purchase orders. The South African Statements of Generally Accepted Accounting Practices Framework for the Preparation and Presentation of Financial Statements definition of expenses encompasses expenses that arise in the course of the ordinary activities of the entity.
c) Included in expenditure is an amount of R630 086 resulting in duplicated accruals. As above, the accruals recorded in the accounting records of the entity do not meet the definition of expenses. Had the accruals been correctly reversed, expenditure would be reduced, net profit would be increased and the liability in the statement of financial position for accrual of expenses would be reduced by R630 086.
The Committee recommends that the Accounting Authority ensures that:
a) Policies and procedures are developed and implemented so that regular reviews of management accounts are performed and monitored; and
b) There is leadership stability in the finance section.
7. Irregular, fruitless and wasteful expenditure
The Auditor-General identified the following:
Payments of R1 335 103 were made in contravention of the supply chain management requirements. R1 312 103 was not included in the irregular expenditure, disclosed in note 13 to the financial statements, resulting in irregular expenditure being understated.
The Committee recommends that the Accounting Authority ensure that:
a) Officials follow the Supply Chain Management processes when they procure goods and services so as to avoid recurring of irregular, fruitless and wasteful expenditure;
b) Monies are recovered from employees who were responsible for incurring such irregular, fruitless and wasteful expenditure; and
c) Disciplinary actions are taken against officials responsible for incurring the fruitless expenditure in line with section 51(e)(iii) of the PFMA.
8. Conclusion
The Committee recommends that the Executive Authority submits a progress report on all the above recommendations to the National Assembly within 60 days after the adoption of this report by the House.
The Committee further recommends that the Accounting Authority submits quarterly reports on all the above-mentioned recommendations.
Report to be considered
4. FOURTH REPORT OF THE COMMITTEE ON PUBLIC ACCOUNTS ON THE REPORT OF THE AUDITOR-GENERAL ON THE 2010/11 FINANCIAL STATEMENTS OF THE DEPARTMENT OF CORRECTIONAL SERVICES, DATED 18 APRIL 2012
The Committee on Public Accounts (the Committee) heard evidence on and considered the content of the Annual Report and the Report of the Auditor-General (A-G) on the 2010/11 financial statements of the Department of Correctional Services. The Committee noted the qualified audit opinion, highlighted areas which required the attention of the Accounting Authority, and reports as follows:
1. Movable tangible capital assets
The Auditor-General identified the following:
a) In terms of Chapter 9 of the Departmental Reporting Framework guide non-cash additions represent the fair value of all assets received in kind or donated (non-cash items) from sources outside government during the 2010-11 financial year, and items transferred from another government department without payment. Furthermore, this guide states that the disposals indicate the cost amount as reflected in the asset register for all assets transferred to another government department or donated to another entity outside government.
b) Included in disclosure notes 30.2 and 30.3 to the financial statements, non-cash additions stated at R306.9 million and disposals stated at R290.5 million, were materially overstated by internal transfers of movable tangible capital assets between departmental stores. This is as the result of the accounting system (Logis) used by the department being unable to account separately for internal transfers.
The Committee recommends that the Accounting Officer ensures that:
a) The Department develops and implements a monitoring strategy that will address matters related to proper counting, verification, recording and documentation of assets as provided for in Section 10.1.1 of the Treasury Regulations.
b) There is continuous performance monitoring and reconciliation between basic accounting system (BAS) & LOGIS systems to ensure that all assets are captured.
c) All regions submit documentation supporting the transactions on the asset register.
2. Material losses
The Auditor-General identified the following:
The Department incurred material losses of R3 387 000.This was as a result of significant losses in state vehicles amounting to R2 922 000, claims amounting to R218 000 as well as from other sources amounting to R247 000.
The Committee recommends that the Accounting Authority ensures that:
a) Proper disciplinary measures be taken against officials who negligently use state vehicles; and
b) Theft and accidents of state vehicles are addressed as a matter of urgency so as to avoid losses.
3. Material underspending of the budget
The Auditor-General drew attention to the following:
a) As disclosed in the appropriation statement, the department materially underspent its total budget (vote). As at 31 March 2011, the underspending amounted to R728 622 000. The underspending was mainly due to the following:
* Compensation of employees: Savings as a result of lower than anticipated expenditure due to the appointments that did not materialise before the financial year-end as well as vacancies resulting from natural attrition.
* Goods and services: The net underspending was mainly due to the late finalisation of the State Information Technology Agency (SITA) service level agreements for the information technology projects for the financial year, which ultimately resulted in the delayed finalisation of payments.
* Buildings and other fixed structures: The net underspending was mainly due to lower than anticipated expenditure that arose from the slow progress and, as reported by the Department , poor workmanship by the Department of Public Works (DPW) contractors, delays in DPW tender process and appointment of contractors as well as a delay in the approval of a site valuation.
The Committee recommends that the Accounting Officer ensures that:
The Service Level Agreement (SLA) is signed and adhered to by all parties, and penalties should be applied for work not performed as stipulated in the SLA.
4. Expenditure management
The Auditor- General drew attention to the following:
c) In certain cases expenditure was incurred without the approval of a delegated official as per the requirements of section 44 of the Public Financial Management (PFMA) Act and Treasury Regulations (TR) 8.2.1 and 8.2.2.
d) Payment due to creditors were not always settled within 30 days from the receipt of an invoice as per the requirements of section 38(1)(f) of the PFMA and TR 8.2.3.
The Committee recommends that Accounting Authority ensures that:
a) Reports reflecting payments after 30 days from receipt of invoices are drawn and distributed to all the regions on a monthly basis;
b) All suppliers for payments of R1 million and above are verified on safety web (persal and BAS) ;and
c) Supporting documents are also checked after payments have been approved on safety web.
5. Unauthorised expenditure
The Auditor-General drew attention to the following:
As disclosed in note 9 to the financial statements, unauthorised expenditure of R483 million was incurred by the department as a result of implementing Public Service Co-ordinating Bargaining Council (PSCBC) Resolution No. 1 of 2007 on the improvement in salaries and other conditions of service for the 2007-08 to 2010-11 financial years.
The Committee recommends that the Accounting Officer ensures that:
The Department properly budgets for its salary increments and other conditions of service in line with Section 27 of the PFMA.
6. Conclusion
The Committee has noted the recurring qualification on assets since the 2005/06 financial year, and it is for this reason that it calls for progress report within 30 days from the Department to outline the steps taken to correct this situation.
The Committee further recommends that the Executive Authority should submit a progress report on all the recommendations to the National Assembly within 60 days after the adoption of this report by the House.
The Committee further recommends that the Accounting Authority submit quarterly reports on all the above-mentioned recommendations.
Report to be considered
5. FIFTH REPORT OF THE COMMITTEE ON PUBLIC ACCOUNTS ON THE REPORT OF THE AUDITOR-GENERAL ON THE 2010/11 FINANCIAL STATEMENTS OF THE DEPARTMENT OF COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS, DATED 18 APRIL 2012
The Committee on Public Accounts (the Committee) heard evidence and considered the contents of the Annual Report and the Report of the Auditor-General (AG) on the 2010/11 financial statements of the Department of Cooperative Governance and Traditional Affairs (COGTA). The Committee noted the qualified audit opinion, highlighted areas which required the urgent attention of the Accounting Officer, and reports as follows:
1. Irregular Expenditure
The Auditor-General identified the following:
a) The Department incurred irregular expenditure of R271 208 000, disclosed in note 27.4 to the financial statements, as the expenditure was in contravention of the Public Financial Management Act (PFMA) and Treasury Regulations (TR) relating to supply chain management.
b) Transfer payments amounting to R127 908 000, disclosed in note 27.2 to the financial statements, were made to municipalities from an amended payment schedule which was not approved by National Treasury, which resulted in irregular expenditure.
c) Transfer payments of R18 198 000, as disclosed in note 27.2 to the financial statements, were also made to the municipalities into the bank accounts other than the primary bank accounts approved by the National Treasury, which resulted in irregular expenditure.
The Committee recommends that the Accounting Officer ensures that:
a) Disciplinary action are taken against employees who were responsible for incurring such irregular expenditure as required by Section 51 (e) (iii) of the PFMA;
b) The Department strengthens its internal control environment in order to avoid incurring further irregular expenditure; and
c) All transfers and payments are made into the primary bank accounts as required by section 10(1) (c) of the Division of Revenue Act (DoRA).
2. Fruitless and wasteful expenditure
The Auditor-General identified the following:
a) The Accounting Officer did not take effective and/or appropriate steps to prevent irregular expenditure, as required by section 38 (1) of the PFMA and TR 9.1.1, 16A6.3(c) and 16A6.3 (e).
b) All payments due to creditors were not settled within 30 days from receipt of an invoice, as required by section 38(1) (f) of the PFMA and TR 8.2.3.
The Committee recommends that the Accounting Officer ensures that:
a) A Complete, accurate and valid register of irregular expenditure incurred be maintained throughout the year and be made available for audit purposes;and
b) Creditors are paid within the required time of 30 days in order to avoid penalties that might arise from late payment of creditors as required by Treasury Regulation 8.2.3;
c) Monies are recovered from employees who were responsible for incurring the identified fruitless and wasteful expenditure;
d) Disciplinary action are taken against employees who were responsible for incurring such irregular expenditure as required by Section 51 (e) (iii) of the PFMA;and
3. Non-compliance with laws and regulations
The Auditor-General identified the following:
(a) The Accounting Officer did not provide Parliament with the strategic plan at least 10 days prior to the discussion of department’s budget vote, as required by National Treasury Regulations 5.2.1 and 5.2.2.
(b) The Accounting Officer did not ensure that the Department had and maintained an effective, efficient and transparent system of internal control regarding performance management, which described and represented the how the institution’s processes of performance planning, monitoring , measurement, review and reporting was conducted, organised and managed as required by section 38(1)(i)and (b) of the PFMA.
(c) The strategic plan of the Department did not include measurable objectives, expected outcomes, programme outputs, indicators(measures) and targets for all of the entity’s programmes as required by National Treasury Regulation 5.2.3(d).
The Committee recommends that the Accounting Officer ensures that:
a) The Department improves its monitoring system so as to address challenges of poor financial reporting, compliance with legislation and the adequacy of performance information; and
b) The Department should have an adequate system in place to ensure compliance with strategic planning laws and regulations as required by Treasury Regulation 5.2.1 and 5.2.2.
4. Annual financial statements, performance and annual report
The Auditor-General identified the following:
The financial statements of the Department were not prepared in all material aspects in accordance with generally recognised accounting framework prescribed by National Treasury, as required by sections 40(1)(a)and (b) of the PFMA.
The Committee recommends that the Accounting Officer ensures that:
Financial statements are reviewed by appropriate delegated levels prior to them being submitted for the audit so as to comply with the PFMA and Treasury Regulations.
5. Investigations
The Auditor-General identified the following:
An investigation was conducted by an independent consulting firm at the request of the Department. The investigation was initiated based on the allegation of possible tender irregularities in different section of the department.
The Committee recommends that the Accounting Officer ensures that:
The findings of the finalised investigations are acted upon and action be taken against employees who are found guilty of contravening the provisions of the law.
6. Conclusion
The Committee recommends that the Accounting Authority submits a progress report on the implementation of the above recommendations to the National Assembly within 60 days after the adoption of this report by the House.
The Committee further recommends that the Accounting Authority submits quarterly reports on all the above-mentioned recommendations.
Report to be considered
MONDAY, 4 JUNE 2012
TABLINGS
National Assembly and National Council of Provinces
1. The Minister of Finance
(a) Government Notice No 309 published in Government Gazette No 35256 dated 13 April 2012: Allocations to Metropolitan Municipalities of General Fuel Levy Revenue, in terms of the Taxation Laws Amendment Act, 2009 (Act No 17 of 2009).
(b) Government Notice No R.311 published in Government Gazette No 35259 dated 20 April 2012: Amendment of Rules (DAR/103), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(c) Government Notice No R.350 published in Government Gazette No 35318 dated 4 May 2012: Imposition of provisional payment (PP/137), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(d) Government Notice No R.375 published in Government Gazette No 35338 dated 18 May 2012: Amendment of Schedule No 1 (No 1/1/1140), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(e) Government Notice No R.376 published in Government Gazette No 35338 dated 18 May 2012: Amendment of Schedule No 3 (No 3/1/681), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(f) Government Notice No R.377 published in Government Gazette No 35338 dated 18 May 2012: Amendment of Schedule No 3 (No 3/1/682), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(g) Government Notice No R.378 published in Government Gazette No 35338 dated 18 May 2012: Amendment of Schedule No 3 (No 3/683): Correction Notice, in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(h) Government Notice No R.379 published in Government Gazette No 35338 dated 18 May 2012: Amendment of Schedule No 3 (No 3/684): Correction Notice, in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(i) Government Notice No R.380 published in Government Gazette No 35338 dated 18 May 2012: Amendment of Schedule No 5 (No 5/96): Correction Notice, in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
2. The Minister of Rural Development and Land Reform
(a) Report and Financial Statements of the Commission on Restitution of Land Rights for 2011-12 [RP 154-2012]
3. The Minister in The Presidency: Performance Monitoring and Evaluation as well as Administration
(a) Mid-term Review Report of the Department of Performance Monitoring and Evaluation in The Presidency – March 2012.
(b) Development Indicators 2011 Report of the Department of Performance Monitoring and Evaluation in The Presidency.
4. The Minister of Water and Environmental Affairs
(a) General Notice No 233 published in Government Gazette No 35160 dated 19 March 2012: Draft national norms and standards for the remediation of contaminated land and soil quality: For public comments, in terms of the National Environmental Management: Waste Act, 2008 (Act No 59 of 2008).
(b) General Notice No 234 published in Government Gazette No 35161 dated 19 March 2012: Regulations for site assessments and reports: For public comments, in terms of the National Environmental Management: Waste Act, 2008 (Act No 59 of 2008).
(c) Government Notice No R.99 published in Government Gazette No 35021 dated 8 February 2012: Regulations: Proper administration of nature reserve, in terms of the National Environmental Management: Protected Areas Act, 2003 (Act No 57 of 2003).
(d) General Notice No 106 published in Government Gazette No 35020 dated 8 February 2012: Regulations: Biodiversity Policy and Strategy for South Africa: Strategy on Buffer Zones for National Parks: For general information, in terms of the National Environmental Management: Protected Areas Act, 2003 (Act No 57 of 2003).
(e) General Notice No 104 published in Government Gazette No 35016 dated 6 February 2012: Proposed regulations regarding fees for the provision of Aviation Meteorological Services, in terms of the South African Weather Services Act, 2001 (Act No 8 of 2001).
(f) General Notice No 114 published in Government Gazette No 35031 dated 17 February 2012: Amendment of Schedule 3, in terms of the National Environmental Management Act, 1998 (Act No 107 of 1998).
(g) Government Notice No R.268 published in Government Gazette No 35203 dated 30 March 2012: Regulations regarding fees for the provision of aviation meteorological services, in terms of the South African Weather Services Act, 2001 (Act No 8 of 2001).
(h) Government Notice No R.270 published in Government Gazette No 35206 dated 30 March 2012: Municipal Waste Sector Plan: Challenges with waste service provision in South Africa, in terms of the National Environmental Management: Waste Act, 2008 (Act No 59 of 2008).
COMMITTEE REPORTS
National Assembly
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2. REPORT OF THE PORTFOLIO COMMITTEE ON CORRECTIONAL SERVICES ON ITS 23 JANUARY 2012 OVERSIGHT VISIT TO THE BARBERTON CORRECTIONAL CENTRE IN MPUMALANGA - DATED 30 MAY 2012
1. INTRODUCTION
1.1. A delegation of the Portfolio Committee on Correctional Services (the Committee) visited the Barberton Correctional Centre on 23 January 2012. This visit followed an unannounced visit by a member of the Committee, Ms F Nyanda, undertaken on 18 October 2011.
1.2 The Centre is situated in the Barberton management area of the Department of Correctional Services’ (DCS) Limpopo/Mpumalanga/ North West (LMN) region. The visit comprised an orientation briefing by the area management, a tour of the facilities, interactions with sentenced and unsentenced inmates, warders, independent correctional centre visitors (ICCV) and Correctional Supervision and Parole Board (CSPB) chairpersons, and, finally, a debriefing session.
1.3 A series of observations and questions for clarity were forwarded to the DCS for written comment and response by mid-February 2012. The responses that were submitted have been included in this report.
1.4 Numerous allegations of, for example, misconduct, abuse of power and corruption were levelled against the management of, and officials at, the centres visited. Some of these are captured in the report, but have not been tested. The matters raised will be revisited once the DCS has had opportunity to investigate and report on them.
1.5 This report comprises a breakdown of the Barberton correctional centre’s inmate population and staff establishment, the visiting delegation’s observations and finally the Committee’s comments and recommendations. Given the recurrent nature of the DCS’ challenges, this report should be read along with previous reports. Though the Committee applauds the centre for its reported successes, this report will focus on challenges observed and reported by those interacted with.
2. BACKGROUND
2.1 The Barberton Management Area comprises Barberton Maximum, Barberton Med A, Barberton Med B, Barberton Youth Centre, Nelspruit and Lydenburg. At the time of the visit the area accommodated 3 653 sentenced offenders and 956 remand detainees. The Youth Centre accommodated 368 juvenile offenders. The Nelspruit and Lydenburg centres were not visited on this occasion.
2.2 The Area had a staff establishment of 1 303 funded posts, of which 148 had at the time of the visit not yet been filled. The area employed 1 025 centre-based officials, 76 non-centre based officials, and 54 professional staff. The professional staff comprised 28 professional nurses, 15 educators, 2 psychologists, 6 social workers and 3 artisans.
2.3 The area reported six critical challenges in the area of maintenance, inmate population, security, and the management of parole. These will be elaborated upon in our observations.
3. OBSERVATIONS
3.1 Administration
Management
3.1.1 In October 2011, the Area Commissioner had reported that challenges identified during a visit six months earlier, had largely been resolved. Although some were still experienced at the time of the recent visit, it was confirmed that there had been a vast improvement in both inmates’ conditions of incarceration and employees’ working conditions. During the January 2012 visit the newly appointed Regional Commissioner identified a number of LMN-related challenges to be addressed through a turnaround strategy to be implemented from 1 April 2012.
3.1.2 The Centre complained that its dairy-cow herd was growing old, and that therefore milk production was not as high as it could be. Requests to acquire a younger herd were repeatedly turned down, and had recently resulted in the centre failing to take advantage of lucrative transactions that could have boosted its self-sufficiency.
3.1.3 The unions reported that tractors at Medium A centre had allegedly been set alight, but that no investigation had been launched to determine the cause of the fire. Upon the Committee’s request, the region provided a report on the incident, reflecting that the incident had resulted in damage amounting to R216 194, 72, which had been written off.
3.1.4 The centre should provide clarity on how it had come about that its piggery was overstocked by 350 pigs, and particularly on how the excess would be managed responsibly and without raising financial-management and governance-related questions. Members were vehemently opposed to selling excess stock to personnel. The region explained that the breeding plan had not been implemented properly resulting in the excess stock. It was hoped that the recent appointment of a farm manager would result in an improvement. The DCS’ policy required that correctional centre farms produce according to their capacity, and to increase offender labour, not necessarily to meet needs. The policy allowed for surplus stock to be provided to government departments or parastatals as part of poverty-alleviation efforts. Stock may only be sold to DCS officials as a last resort.
Corporate Services
3.1.5 In October 2011 the area management had reported that officials resigned for better remuneration, and that some posts remained vacant for up to five years. Recruitment processes were slow and inefficient, with applicants seldom, if ever, receiving feedback as to whether their applications were successful or not. In January 2012 17 posts were reported as being at various stages of being filled or ‘translated’, with several vacant posts being “reported monthly to the Manager: HR provisioning (RC Office)”. Though DCS policy states that all posts should be filled within three months, it was reported that some officials had been acting in positions for as long as four years.
3.1.6 The discrepancies between centre-based and non-centre-based officials’ conditions of employment remain a source of frustration, as non-centre-based officials are paid less, have fewer benefits and have limited options for career development.
3.1.7 Officials expressed their frustration at the DCS’ lack of a promotions strategy. As the DCS did not promote officials, officials were reluctant to further their qualifications in the area of corrections.
3.1.8 The Regional Commissioner confirmed that at area- and centre-level there were still many areas of discontent between unions and managers. The use of suspensions as a punitive measure dated far back, but would be addressed. The unions appeared to have a poor understanding, and, if not that, little confidence in the structures created for engagement with area management. The mass dismissals of 2004, and the subsequent reinstatement of the dismissed officials, who now formed the majority of the union members, had caused a major rift, which has apparently not been mended by the Relationship Building by Objectives (RBO) facilitated to heal the relationship between Police and Prisons Civil Rights Union (POPCRU) and area management. The area management and labour unions provided the Committee with a detailed report on the challenges they experienced, as well as efforts to resolve these challenges.
3.1.9 Union representatives raised serious concerns about how disciplinary proceedings are managed and abused. It was claimed that precautionary suspensions were often used as punishment. Managers apparently did not read investigative reports properly and often called unnecessary disciplinary hearings. The shortage of disciplinary committee chairs and initiators caused delays. Barberton Management Area was accused of “outsourcing” the chairing of disciplinary cases, causing further delays.
3.1.10 Different interpretations of the RBO posed a challenge in particular. In addition, management identified poor discipline and an apparent desire by union members “to settle scores” as a major stumbling block to efforts aimed at strengthening the relationship.
3.1.11 During the debriefing session, area managers confirmed that the suspensions of all those being investigated were within the prescribed timeframes. The Committee’s further queries revealed, however, that the suspensions referred to during the visit had all gone beyond the subscribed period. The Regional Commissioner confirmed that all were reviewed and lifted after the Committee’s visit.
3.1.12 During the August 2011 visit, the area management acknowledged that corruption was rife at the centre. Widespread collusion of officials with inmates was suspected: officials are suspected of smuggling drugs into the centre and alerting inmates of impending cell-searches.
3.1.13 Though the need for gender equity was acknowledged, concerns were raised about the appropriateness of deploying female warders to centres accommodating male offenders. Female warders are particularly vulnerable in riot situations such as the one mentioned above.
Finance
3.1.14 The over-expenditure noted in relation to a number of programmes was ascribed to salaries that had to be paid due to the 6,8% salary progression (spent on compensation to employees). The DCS had not catered for this progression, but a budget adjustment would reportedly have taken place at the end of the financial year. The region conceded that the Barberton management area experienced challenges in its financial management, and that these would be addressed as part of the turnaround strategy to be implemented from 1 April 2012.
3.2 Incarceration
Maintenance
3.2.1 The area reported a number of ‘breakages’ resulting from poor workmanship by the Department-of-Public-Works-appointed contractor. The contract was terminated and a new contract, taking effect from 1 April 2012, concluded. The nature of the poor workmanship was not elaborated on, and action taken against the previous contractor not indicated.
3.2.2 Inspection of the nurse’s station at the Medium A centre revealed that it was nothing more than a small, dark and damp room, with hardly any ventilation or room for adequate consultation. The area reported that an air-conditioner had been ordered for the Medium A nurses’ station. An empty cell next to the nurses’ station would be converted to a sickbay. The area had applied to have the Medium A ‘clinic’ renovated, but instability at centre management level has resulted in delays in that process. The clinic in the Maximum centre exhibited the same dilapidation. The DCS was considering renovating the Medium A clinic, and the DPW would be approached to include this renovation as part of the RAMP project. The ARV clinic was being renovated at the time of the visit, and would have become operational again on 30 April 2012.
3.2.3 The centre had no perimeter fence. The Committee was informed that the tender process had been managed by the Independent Development Trust (IDT) in an effort to accelerate its completion, but that that process had to be halted owing to concerns raised by ‘other parties’.
3.2.4 Though the youth centre’s facilities and maintenance met the required standards, the delegation advised that the leakages observed at the D1 unit had to be addressed as soon as possible. According to reports received from the Regional Commissioner, the necessary maintenance had taken place by 31 January 2012.
3.2.5 The above-mentioned D1 unit used a corrugated-iron-roofed structure in the courtyard as a dining hall. Only in inclement weather were inmates accommodated in the foyer. The DCS’ undertook that it would consider extending the scope of the RAMP project to include improvements to the dining facilities.
3.2.6 The school at the Medium B centre was dilapidated, but, according to the area management, it would have been renovated by the end of March 2012.
3.2.7 Inmates incarcerated at the A section of the Maximum centre claimed that the centre had been without hot water for between 3 to 10 years. The centre explained that, as the Maximum centre was overcrowded, its boiler could not provide sufficient hot water for all inmates. The DCS, in response to the Committee’s recommendation that it would be inhumane to force inmates to use cold water during winter months especially, and that therefore the capacity of the boiler should be increased as part of the renovation plan, reported that such a request had been communicated to the DPW on 1 February 2012.
Security
3.2.8 The 21 August 2011 riot at the Maximum centre had resulted from a series of complaints which had allegedly not been responded to. These included: poor nutrition services, inadequate uniforms and clothing and poor distribution of medicines, particularly to those suffering from chronic conditions. Two hundred and fifty inmates were involved in the riot, two of whom were identified as the instigators and subsequently transferred to the Ebongweni Super Maximum Correctional Centre.
3.2.9 Inmates claimed that the above-mentioned riot occurred as a result of the HCC’s failure to attend to concerns raised, and that, on the day, he had attacked rioting inmates with a hammer. The Area Commissioner was accused of making empty promises. The DCS reported that the first phase of the investigation, headed by the Chief Security Officer (CSO), had been completed, but that statements from those who had been transferred to the super-maximum facility were still being awaited. In February 2012 the region reported that, during a surprise visit conducted by the National Commissioner and the LMN Regional Commissioner earlier that month, new information had been revealed, which would have been included in the final incident report.
3.2.10 On the day of the visit the Regional Commissioner had been provided with a recorded conversation between inmates and the HCC of the Maximum centre which allegedly provided information related to his role in the riot.
3.2.11 The Regional Commissioner confirmed that the Barberton centres had no means of blocking cellphone activity. Officials relied on information received from inmates about contraband, including cellphones. The prevalence of cellphone usage by inmates would be reported on in the report on the above-mentioned riot. The region was also in the process of developing a strategy for preventing the smuggling of contraband.
3.2.12 The Regional Commissioner identified an “emerging trend of gangsterism”. While the Barberton management area has reviewed and implemented a local gang management strategy, the CSO together with regional corrections managers, are developing a comprehensive gang management strategy to be implemented nationally.
3.2.13 The area reported that it suffered livestock-theft owing to poor fencing, and the mushrooming informal settlement surrounding it. One official has been implicated in livestock theft, and was dismissed following the finalisation of the necessary disciplinary proceedings. The official was appealing his dismissal. The newly appointed Head of Agriculture would have implemented a strategy for addressing the challenges from 1 March 2012, which would provide for 24-hour patrols of the perimeter.
Remand Detention
3.2.14 POPCRU reported that, at Nelspruit, the overcrowding resulting from the high number of remand detainees, has led to remand detainees and sentenced offenders in some instances being detained together. The Committee requested that the situation be addressed immediately. The DCS undertook to reconsider the distribution of sentenced offenders within the Management Area in order to ensure an even distribution.
3.2.15 The area reported that 20 of those remanded at Nelspruit Correctional Centre had bail set at between R100 to R400. One of those remanded at the youth centre had bail of less than R400. Assessments of remand detainees at both correctional centre and SAPS cells were done weekly. Some detainees did not qualify for bail because they had previous convictions, were foreign nationals with no monitorable addresses, or had committed serious crimes. The area further reported that the DCS held meetings with the regional court on a quarterly basis, and with lower courts on a monthly basis. Section 62(f) of the Criminal Procedure Act (CPA) was vigorously marketed. The DCS claimed that it tried to contact families to facilitate the payment of bail.
Offender management
3.2.16 At the time of the visit both the maximum and remand detention centres were experiencing high levels of overcrowding. An intervention team to support the case management committee (CMC) at the maximum centre with their maximum to medium reclassification processes, and to assist in ensuring that all those eligible for parole consideration are considered, would have been established by 1 March 2012. The region was also considering establishing, by 1 April 2012, a second maximum security facility in the Mpumalanga province. The region intended to deploy a team to assist the management area to review the capacity of all the centres within the area, and to assess how best to redistribute remand detainees.
3.2.17 Offenders across all centres complained that they were denied telephone-access during the week, and that they might only make phone calls at weekends from 08h00 to 12h00. Inmates claimed that they were informed that Parliament had issued this instruction. At the Maximum centre inmates claimed that if they made use of telephone privileges, they were denied visits. The region denied the allegations. HCCs could implement the telephone policy as they saw fit. Centres tried to strengthen control over telephone access by recording calls in a register, only allowing calls in the presence of an official, and enclosing all phone booths so that all users would have to request access to them.
3.2.18 The area reported six unnatural deaths at the Nelspruit Correctional centre, and seven at Barberton Maximum Correctional centre.
3.2.19 Offenders at the Medium A and Medium B centres made a number of allegations against female warders and the nurses at the centre. Their claims included that the nurse disregards their requests for medical attention and that female warders ill-treat them. Female warders allegedly often ignore requests for assistance.
3.2.20 Many offenders expressed frustration at queries and requests for transfers, for instance, remaining unresponded to, or simply being denied, without explanation. The DCS should provide the Committee with its policy for processing inmate request/grievances, and explain why this policy appears to be widely disregarded.
3.3 Rehabilitation
Offender Development
3.3.1 Inmates at the Medium B centre claimed that the area surrounding the school and the premises itself were snake-infested and that therefore they were afraid to attend classes there. The area management refuted this claim and reported that 102 offenders were attending classes at the time of the visit. The Agricultural Section had been instructed to “purchase repellents” to rid the grounds of snakes found there.
3.3.2 The Centre reported challenges as far as securing funding from the departments of Basic Education, and Higher Education and Training for the delivery of education and training programmes to inmates.
3.3.3 Information technology students at the Medium B centre complained that they had to use outdated software, resulting in them not being able to pursue relevant IT courses. This claim was refuted: those utilising the computers in the centre were not studying IT. NCV students used computers for Life Orientation which did not require sophisticated software. The oldest software used was Windows 2003 software and this did not interfere with practicals or exams. The centre did however need new computers, and provision was made for the acquisition of 38 new computers in the 2012/13 financial year.
3.3.4 Students complained that they had registered for the ICDL course only to be informed later that the course would not be offered owing to a lack of funds. The DCS explained that the Department of Communication initially funded the ICDL Programme but that that funding had since been withdrawn. The DCS learnt too late that it would have to bear the cost itself, and therefore the programme had to be suspended. It has however been budgeted for in the 2013/2014 financial year.
3.3.5 Students complained that it was difficult for them to order the textbooks they required for UNISA courses because they were not allowed to fax their order forms or to make use of telephones during the week. When they succeeded in placing their orders, officials allegedly stole the textbooks upon arrival. The centre responded that all parcels were opened upon receipt, and in the presence of finance officials and educators. The allegations of textbook theft would be investigated and no such reports had been received prior the visit.
3.3.6 Students complained of a general shortage of study material. At the time of the visit the Grade 10 study material had not yet been received. The region emphasised that, in terms of policy, it was only required to provide ABET Levels 1 to 4 with study material. The centre provided the detail of the service providers that still needed to deliver the textbooks and material for the new Grade 10 syllabus, and indicated that weekly follow-ups were being made. The school only catered for learners up to Grade 11; Grade 12 learners would still be classified as private learners in the 2012/13 financial year, and were still following the old syllabus. As they were private learners, they were required to fund their own study materials.
3.3.7 Inmates, who had participated in a plumbing programme, claimed that they had not received any certification for the course which they had successfully completed. It is a problem in general that some of the programmes funded by Department of Labour, which appointed service providers that were not necessarily accredited, resulted in situations where offenders underwent training that was not recognised. However, this problem should be addressed by the fact that the funding is now being handled by Department of Education. In addition, from this year, DCS has started training assessors and moderators to ensure that all courses being presented are accredited and recognised.
3.3.8 The youth centre reported an acute artisan shortage which impacted on custodial duties. Correctional officers with the necessary skills are being deployed to run workshops, rather than perform custodial duties. The youth centre only had two officials who were qualified to train artisans. The Medium A and B centres had no artisans. The welder had resigned in October 2011 and, as the DCS was unable to offer competitive remuneration, it was difficult to attract applicants. Efforts would be made to utilise the artisans who had earlier migrated to a centre-based dispensation. The Maximum centre had no production workshop, but management was considering converting some space for welding and woodwork activities. The region reported that advertisements had been placed in mid- February.
Correctional Programmes
3.3.9 A concern was raised that in cases where inmates were transferred from elsewhere, courses completed at the centres of origin were disregarded, and they were forced to start programmes from scratch. The region reported investigation into the allegation revealed that a number of offenders, particularly those transferred from the Kutama Sinthumule private correctional centre, had been transferred without their sentence plans or profile reports. The DCS controller at the Kutama Sinthumule centre was informed that the matter “must be elevated as a discussion point on their agenda”. The DCS further indicated that all regions would be requested to ensure that all the relevant information is included in the case files of those that were being transferred.
3.3.10 Offenders at the Maximum Centre complained of lack of rehabilitation and skills development programmes. Inmates had no sentence plans and claimed that they had no interaction with outside service providers, and that this somehow hindered their reintegration. The centre management stated that all offenders who were required to have them, had sentence plans. The only external service providers working at the centres were South African National Council on Alcohol and Drug Dependence (SANCA) and the National Institute for Crime Prevention and the Reintegration of Offenders (NICRO); the majority of the programmes were provided by the DCS itself.
3.3.11 The area claimed severe challenges in attracting and retaining social workers. The Lydenburg and Tonga centres are small and therefore no social worker posts have been created for those facilities. The region explained that advertisements were placed by Head Office. The social worker post became vacant on 30 September 2011, and was sent to Head Office for advertisement, but had, at the time of the visit, not yet been advertised. The region indicated that adverts were eventually placed on 19 February 2012, but that attraction of candidates remained a challenge. As the DCS did not offer incentives such as rural and accommodation allowances it was even harder to attract social workers.
3.4 Social Reintegration
Parole Administration
3.4.1 The Correctional Supervision and Parole Board (CSPB) chairperson reported that the still vacant vice-chairperson’s position and the fact that the CSPB had no permanent secretary impacted negatively on its consideration of parole matters. In addition, there was a need for increased public education around the parole system, particularly victim participation in the process. This challenge notwithstanding, it was reported that the CSPB was functioning well, and that all its decisions were well-considered. Poor participation by Department of Justice and Constitutional Development and the South African Police Service (SAPS) representatives posed a challenge, and the region undertook to elevate this concern at the relevant national, regional and local justice, crime prevention and security cluster for attention.
3.4.2 CSPB decisions were informed by and communicated to CMCs, who in turn had to communicate decisions to the applicants. Although there was still room for improvement, initial challenges in the CSPB and CMC’s relationship have been addressed.
3.4.3 As was the case at other correctional centres visited, many inmates complained that those sentenced before 1 Oct 2004 were not being considered for parole in line with legislation in place at the time of their sentencing. The CSPB was adamant that it was guided by the relevant legislative requirements. Despite efforts to create awareness among stakeholders such as the DoJCD, traditional leaders, and communities, victim participation remained a challenge.
3.4.4 Although not all provinces responded to the advertisement for candidates to serve on the Medical Advisory Board that will consider medical parole applications, the Ministry had envisaged that the medical advisory board would be functional by 1 March 2012.
3.5 Care
Health Services
3.5.1 Offenders at Medium A complained of poor medical care. The waiting period for treatment was particularly long. It was also revealed that the one nurse allocated to the unit was often away on study leave, during which time the offenders had to be attended to by the medical staff at the Medium B centre. At the time of the visit the Medium A centre only had one nurse. The second post had been advertised. The management thought that the two posts were sufficient, as the Medium A centre provided primary health care only, and there were two nurses to attend to 200 inmates who were unlikely to fall ill at the same time. It was confirmed that, like at Med A, there was only one nurse at the Medium B centre. As from 1 February 2012, the maximum centre had two nurses and one operational manager. In terms of policy, the management area should have one doctor. The post was vacant at the time of the visit, but had been advertised three months earlier. Pending the filling of the vacancy, the area made use of sessional doctors.
3.5.2 The centres visited all claimed that they experienced challenges distributing medicines and providing health care after hours. The DCS found the allegations difficult to believe given that each centre had a standby nurse for distribution of medication after hours. The allegations would nevertheless have been investigated. The area should provide an update on efforts to improve the situation as soon as possible.
3.5.3 The DCS should explain the rationale behind employing only professional and not auxiliary nurses who might be easier to attract, and could alleviate some of the pressures associated with medicine distribution, and attending to conditions that did not need a professional nurse/a doctor’s attention. DCS has included Auxiliary Nurses as part of its proposal for the new structure. Approval of the new structure is being awaited.
Nutritional Services
3.5.4 Inmates complained that the meals provided by the centres were sub-standard. The DCS conceded that there was a meal-plan, but that no measures were in place to substitute foodstuffs that were not always available. A task team would have been appointed to determine the exact challenges by 1 March 2012. Following the assessment, an intervention strategy would be put in place.
4. RECOMMENDATIONS
The Committee requests that the Minister of Correctional Services (the Minister) ensures that the following recommendations are considered, and where possible, implemented. The Minister should further ensure that responses on their feasibility and/or implementation progress reports are submitted within one month of the adoption of this report.
4.1 Administration
Management
4.1.1 The LMN-turnaround strategy implemented from 1 April 2012 should be provided to the Committee, and updates on its implementation and effect should be included in the DCS’ quarterly administrative and financial reports.
4.1.2 Excess livestock and agricultural produce should only be sold to government departments, or donated in poverty-alleviation efforts. Under no circumstances should excess produce or livestock be sold to officials. If necessary the DCS policy should be amended accordingly.
4.1.3 Centre managers should not wait on the Committee to visit centres before addressing obvious deviations from policy and legislation. Managers were employed to manage correctional services, and should do so.
Corporate Services
4.1.4 Failing to fill funded posts frustrates all government efforts to reduce unemployment and alleviate poverty. The DCS should provide regular updates on efforts to fill vacancies in the LMN-region, the reasons for the delays in filling posts, as well as how the situation will be managed going forward to ensure that posts are filled in a reasonable time. Delaying recruitment in order to divert funds allocated to the compensation of employees will not be tolerated. The LMN region provided a breakdown of all its vacant posts and how long they had been vacant for. Though requested, the National office failed to provide the Committee with the details of when it received LMN vacancies for advertisement, when these vacancies were advertised or would be advertised, and the detail of what had become of the funds allocated towards the compensation of the employees who would have filled these posts.
4.1.5 The DCS should provide a report on the differences in the employment conditions and career-development options available to centre- and non-centre-based officials, and interventions for how these differences may be eliminated.
4.1.6 The DCS should provide a progress report on efforts made to ease the relationship between POPCRU-affiliated members and the Barberton area management. Failing to manage the relationship between the employer and union members, not only impacts on productivity, but also poses a threat to security.
4.1.7 Unfair administration of disciplinary measures and long delays in investigations do not only have financial consequences, but also impact on officials’ job satisfaction, and contribute to the DCS soaring staff turnover. The DCS should ensure that suspensions are legitimate, and that investigations are well-managed and concluded within the prescribed timeframes.
4.1.8 There is growing concern about the appropriateness of deploying female staff to centres housing male offenders, and male officials to those housing female offenders. The DCS has in recent years reported a number of incidents, not only of inappropriate sexual relationships between officials and inmates, but also of assaults on female staff by male offenders. The issue demands serious discussion in order for appropriate solutions that do not reverse strides made towards gender equity, to be found.
4.2 Incarceration
Maintenance
4.2.1 Despite the DCS’ continued complaints of the DPW’s failure to deliver services as per its mandate, the Committee has had no indication of the DCS’ commitment to ensuring that the DPW delivers, or that the working relationship is improved. At the time of the compilation of this report, the long outstanding DPW-DCS service-level agreement (SLA) had not yet been concluded. The DCS’ reasons provided for the delay were questionable, bordering on the Committee being mislead. While the Committee acknowledges the challenges experienced by the DPW in executing its mandate, it cannot be denied that the DCS has not done much to ensure that services are delivered. Given this, the DCS’ intention to have the DTI manage some of its projects, offers little comfort. The DCS should provide the Committee with a written report on the reasons for the delay in concluding its SLA with the DPW, as well as with the SLA it has concluded with the DTI for all projects the latter is to assist with.
4.2.2 The DCS should provide a report on why the project to fence the centre’s perimeter had to be halted, as well as when the project is to be recommenced, and completed.
4.2.3 The DCS should provide a detailed report on progress made in efforts to attend to the leakages observed at the youth centre, efforts made to have the youth centre dining-hall and medium B school renovated, as well as on efforts to have the capacity of the boiler at the Maximum centre increased.
Security
4.2.4 The report on the August 2011 riot, which should include a report on the recorded conversation said to implicate the HCC, and how inmates had been able to record it, should be provided to the Committee by 21 June 2012.
4.2.5 The DCS should provide a report on progress made in the development and implementation of an effective anti-smuggling strategy across regions.
4.2.6 The DCS should, during its report on its financial and administrative performance for the period 1 January to 31 March 2012, brief the Committee on the implementation of its anti-gang strategy.
4.2.7 The risk posed by the absence of a perimeter fence is a cause of major concern, as it not only exposes the centre to livestock theft, but, more worryingly, because it increases the opportunity for escapes, and poses a major threat to the safety of the surrounding community.
Remand Detention
4.2.8 Where the inmate population is allowed to balloon out of control, it has dire consequences for the conditions of incarceration, working conditions for officials, centre-level security and the DCS’ already stretched human and financial resources. While the DCS has no control over how many inmates are sentenced to incarceration, it should be at the forefront of any interventions aimed at keeping the inmate population at levels that are as low as possible. Reports should be provided on efforts to redistribute offenders to make better use of the available bed space, as well as on efforts to ensure that all those who could be diverted to correctional supervision sentences, were diverted.
Offender Management
4.2.9 While HCCs had powers to implement the telephone policy as they saw fit, these should not be abused in an effort to prevent inmates from lodging complaints with Parliament or any other body they might require assistance from. Where phone usage is restricted, at least one opportunity to call should fall within normal working hours.
4.2.10 The Committee had in the past recommended that serious consideration be given to the use of surveillance cameras in cells, and reiterates that recommendation here. While the right to privacy should be respected, the current situation in the vast majority of correctional centres poses a real threat to inmates’ safety and security. As the DCS’ core responsibility is the safe and secure detention of those in its care, inmates’ safety and security should be of paramount importance. The numerous sexual and physical assaults, deaths and acts of gang violence remain matters of grave concern.
4.3 Rehabilitation
Offender Development
4.3.1 The late delivery of textbooks and other training material impacts negatively on learners’ performance, and demotivates them. In addition to an update on the delivery of the Grade 10 material to the Barberton management area, the DCS should provide a report on the status at other centres, as well as on strategies in place to ensure that the challenges experienced currently, will be avoided in the coming academic year.
4.3.2 The acute shortage of artisans has a debilitating effect on rehabilitation, and, ultimately, reintegration efforts. Skills in trades will enable parolees and ex-offenders to create their own opportunities, making it easier for them to make a living in an environment that still greatly discriminates against even rehabilitated offenders. The DCS should provide an update on efforts to attract and retain more artisans, and particularly on ways in which the OSD for artisans may be re-negotiated.
Correctional Programmes
4.3.3 It is a cause for major concern that offenders were being transferred without ensuring that their case files were complete. What is even more worrying is that the matter was only addressed upon its being raised with the Committee during the visit, and that nothing had been done when the practice was first discovered. The DCS should provide a report on efforts made to ensure that no transfer takes place unless the inmate being transferred has a complete case file, reflecting his or her entire history while incarcerated. Forcing inmates to start programmes from scratch frustrates them, results in unnecessary expenditure, and impacts on their eligibility for parole and ultimately efforts to reduce the prison population.
4.3.4 The social worker shortage and the DCS’ inability to attract and retain their skills are often cited as major stumbling blocks to the delivery of correctional programmes. Disturbingly, the LMN region reported that, four months after having submitted requests for advertisements to be placed, social worker posts had not been advertised by the DCS’ Head Office. The DCS should indicate the challenges they are experiencing in ensuring that funded posts are advertised and filled within reasonable timeframes, and without impacting on its core business.
4.4 Social Reintegration
Parole Administration
4.4.1 Most sentenced offenders are confused about the parole process, particularly about when they will become eligible for parole consideration. This confusion causes unnecessary frustration among inmates. That CSPBs and CMCs appear to be as confused and therefore implement different ‘policies’ further contributes to the frustration and dissatisfaction. The DCS should ensure that all CMCs and CSPBs are instructed to adhere to the relevant legislative provisions governing parole.
4.4.2 All sentenced offenders are provided with a booklet explaining the parole process upon admission. To the Committee’s knowledge the booklet is available only in English. Given that so few inmates appear to understand the process, the Committee recommends that the booklet be simplified, and that each inmate is provided with the information relevant to the provisions in terms of which he or she was sentenced, only. The information should be provided in a language offenders understand. Those charged with admitting offenders should ensure that the process is explained to illiterate offenders.
4.4.3 The DCS should perform an audit of all those in their facilities sentenced before 1 October 2004, and eligible for parole consideration after having served a third of their sentence, as well as of all those who will be affected by the recent van Vuuren, and van Wyk judgments. The outcome of these audits should be provided to the Committee.
4.4.4 The DCS should provide a list of all inmates across all regions who had applied for medical parole by 1 May 2012, and the stage at which their applications are. A list of all inmates who may be eligible for medical parole based on any pre-existing medical conditions they suffered from at admission should also be provided.
4.5 Care
4.5.1 The DCS should brief the Committee on the proposed structure which will include auxiliary nurses, on progress made in its approval, as well as on the implementation strategy upon approval.
5. ACKNOWLEDGEMENT
The Committee expresses its appreciation to the regional management of the DCS’ LMN region, and especially the management and staff at the Barberton correctional centres visited, for their co-operation.
Report to be considered.
3. REPORT OF THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION AND TRAINING ON ITS SEMINAR WITH HIGHER EDUCATION SOUTH AFRICA (HESA) DATED 30 MAY 2012
The Portfolio Committee on Higher Education and Training, having conducted a seminar with Higher Education South Africa, reports as follows:
1. Introduction
The Portfolio Committee on Higher Education & Training in strengthen its relationship with HESA, conducted a seminar on 20 April 2012 at the Stellenbosch Institute for Advance Study (STIAS) Conference Centre, University of Stellenbosch. The seminar provided a platform for deeper insight into critical issues for consideration in the higher education sector. In addition, the briefing sessions of the seminar provided Members with an appropriate introduction to key concepts and terminology in the higher education sector.
2. Delegation
Adv I Malale (Chairperson) (ANC), Mr S Makhubele (ANC), Prof S Mayatula (ANC), Mr S Radebe (ANC), Dr L Bosman (DA), Prof A Lotriet (DA) and Mr N Bhanga (COPE).
Support Staff: Mr A Kabingesi (Committee Secretary), Ms M Modiba (Researcher), Ms F Kwaza (Communications Officer) and Mr G Mankay (Committee Assistant).
Higher Education South Africa
Prof A Bawa: Chairperson / Vice-Chancellor Durban University of Technology, Dr J Mabelebele: Chief Executive Officer, Dr S Badat: Vice-Chancellor Rhodes University, Prof I Rensburg: Vice-Chancellor University of Johannesburg, Prof R Botman: Vice-Chancellor University of Stellenbosch, Dr M Price: Vice-Chancellor University of Cape Town, Dr T Ellof: Vice-Chancellor University of North West, Prof M Nkomo: Deputy Vice-Chancellor Tshwane University of Technology, Dr I Machi: Executive Director University of Zululand, Dr J Smit: Director Vaal University of Technology, Prof N Grove: Registrar University of Pretoria, Mr H Amoore: Registrar University of Cape Town, Ms P Lenkabula: Director University of South Africa, Ms R Blom: Researcher, Ms J van Wyk Senior Manager, Mr D Thompson: Manager Communications University of Stellenbosch
Department of Higher Education and Training
Ms S Mampane, Branch Coordinator, University Education.
3. Objectives of the Seminar
The objectives of the seminar were as follows:
* To create a platform for HESA and the Committee to discuss and share each other’s perspectives on emerging Higher Education priorities and challenges;
* To proactively sensitise the Committee to projects initiated by HESA and the sector to enhance the Committee’s appreciation of Higher Education challenges;
* To enhance the recognition and the value of Higher Education in contributing towards national development, in order to ensure a comprehensive knowledge of, and respect for, the role and position of Higher Education in society; and
* To create a platform for the Committee to engage HESA on priority issues and challenges arising from its members’ own constituency work and broader parliamentary activities.
4. Summary of presentations
4.1 Overview of HESA as an Organisation (constitution, mandate, priorities and challenges)
Prof A Bawa, Chairperson of HESA, led the presentation which highlighted the following key issues:
* HESA was formed on 09 May 2005 and was the successor to the South African Universities Vice-Chancellor Association (SAUVCA). HESA represented 23 public universities and was a Section 21 company, non-statutory, and the membership of universities was voluntary.
* The board consisted of 23 Vice-Chancellors (VCs) and the Chief Executive Officer (CEO) and it met thrice per year. Its main role included the approval of strategic and operational plans, budget and higher education matters.
* HESA’s work was organised into three core functions, namely, policy analysis and strategic research, advocacy and stakeholder influence and sector support.
* The major projects and initiatives of HESA included; building the next generation of academics, the Rural Campuses Connection Project, and the contribution of Higher Education to the economy.
* The challenges of HESA included; developing a self regulation framework for the sector, developing HESA’s position on the differentiation of the HE sector and managing sub-voices within HESA for the common good of the sector.
4.2 Overview of the role, powers and functions of the Committee
Adv I Malale, Chairperson of the Committee, led presentation which highlighted the following key issues:
* Chapter 4 of the Constitution gave powers to the Committee to exercise an oversight responsibility over the executive (the Department and its stakeholders) on the utilisation of state resources. The Committee can call upon anyone to appear before it and acts as an intermediary between society and Parliament.
* The Committee was extremely concerned with the financial exclusion of poor students in HEIs. Some institutions forced poor students to pay upfront payment before they could register. The Committee opposed any HEIs that continued with this practice.
* The withholding of results with the objective of recouping money owed to the institution mostly affected poor students. HEIs should allow all students who have completed their degrees access to their results to enable them to make repayment after obtaining employment. Blacklisting of students owing to non-payment was not good practice.
* The abuse of the National Student Financial Aid Scheme (NSFAS) voucher system and refunds by students remained a concern for the Committee.
* Fee increment by HEIs should be in line with the current interest rate and all structures of the institutions should be properly consulted before matters are concluded by management.
* Institutional governance remains a serious concern for many HEIs. HESA should assist HEIs who were unable to manage their affairs accordingly.
* There was a need for openness and transparency into the financial statements of HEIs. The Committee would request audited financial statements from all HEIs with a view to scrutinizing them to ensure the proper use of public funds.
* The Committee was opposed to academics who conducted business with HEIs with the objective of enriching themselves. HEIs should adopt FET colleges and develop training programmes to capacitate FET college lecturers.
4.3 Legislative, policy and regulatory framework for Higher Education in South Africa
Mr H Amoore: Registrar of UCT led the presentation which highlighted the following key issues:
* The Higher Education Act No 101 of 1997 regulated the higher education landscape of the country. The roles and functions of the university council and management were articulated in the Act. The relationship between university council and management was critical for good governance of any public HEIs.
* The Auditor-General (AG) had a good working relationship with public HEIs. The AG was not solely responsible for the auditing of HEIs. All universities reported through the annual Higher Education Management Information System (HEMIS), a detailed report of all universities.
* The Higher Education Qualifications Framework (HEQF) had been under review for the past 24 months and was a very important regulatory framework to ensure a system of quality that provides proper articulation.
* Stipends paid to PhD students remained a serious concern in attracting more local black academics. The South African Revenue Service (SARS) also taxed the stipends paid to PhD and HESA’s view was that stipends should not be taxed as they are not salaries.
* The funding formula for universities was very important and HESA was waiting for the outcomes of the Ramaphosa Report. Universities differed in terms of their resource base and future funding should take cognisance of this norm.
* The low productivity in HE remained a serious concern for the sector. Factors such as drop-out rates, students’ under-preparedness for higher education, low throughput and graduation rate were negatively affecting the sector.
* The capacity of HEIs to accommodate the growing numbers of students registering for higher education remained a serious concern for the sector. The majority of the Matriculants who passed with university exemption expected an automatic acceptance to higher education. Unfortunately, this was no longer the case since HEIs considered top achievers for admission.
* In terms of the Central Applications Process, the Registrars Forum was working with the Department to look at the feasibility of this process. Although a National Applications Office may have many advantages for students, HEIs had to regulate their current registration systems in order to be efficient. There was a need to encourage students to apply in advance in order to solve the challenge of late registrations and walk-ins.
* It was unfortunate that the role of FET colleges was not properly articulated in the Green Paper for Post-School Education and Training.
4.4 Valuing Higher Education
Dr S Badat, Vice-Chancellor of Rhodes University, led the presentation which highlighted the following key issues:
* A changing world: The world was dramatically different from a few decades and even a few years ago, owing to globalisation. Globalisation has exercised an immense influence on the nature of institutions that impact on higher education, and on the ways and means of providing higher education. It also shaped education both in terms of content and that which was researched, both in student interests and university offerings away from broader academic studies and towards narrower vocational programmes. Public investment in higher education had come to be justified largely in terms of economic growth and the preparation of students for the labour market. Neo-liberalism had come to define universities as supermarkets for a variety of public and private goods that were currently in demand, and whose value was defined by financial value.
* The purposes of higher education: The first purpose of higher education was the production of knowledge which advances understanding of the natural and social worlds, and enriches humanity’s accumulated scientific and cultural inheritances. The second purpose of universities was the dissemination of knowledge, in ways that contributed to the formation and cultivation of the cognitive character of students as well as the wider public. The other purpose of universities was to undertake community engagement. Higher education should play at least five key roles, namely, the cultivation of highly educated people, research and scholarship, engagement with the intellectual and cultural life of societies, democracy and democratic citizenship and development needs and challenges.
5. The following formed part of the discussion
* The Central Application Office was already in operations in KwaZulu-Natal. This project was such a success that it was even adopted by FET colleges. The Committee was interested in being informed of the progress made by HESA in expanding this project to other provinces.
* University relations with their nearby communities was highlighted as a key concern. Most high schools especially in townships did not have a direct relationship with HEIs and this affected learners in these schools when choosing their career path.
* The notion of financial exclusion on the basis of being poor was detrimental towards the development of young black suitably qualified individuals. Financial exclusions in HEIs had always been the major concern of student leadership whom the Committee has met in its oversight visits and HESA had a critical role to ensure that HEIs abandoned this practice.
* Institutional governance, particularly in HEIs, was an ongoing concern to such an extent that the Minister had already placed three HEIs under administration and two Independent Assessors were sent to other HEIs. This was an indictment on the leadership of HEIs and HESA had a very important role in ensuring that HEIs complied with the regulation of good governance.
* The inadequate development of the next generation of academics was highlighted as a major concern for the HE sector. This resulted in an influx of foreign academics occupying senior positions in HEIs across the country. HESA had a critical role in ensuring that the future of the HE sector is sustainable and spearheaded by local academics.
* Factors such as inequalities, poor economic background and the language barrier remained the key challenges that delayed the growth of participation of the minority in higher education.
* HESA has engaged the Department on the issue of fee increment on numerous occasions. The main challenge was the declining funding allocated to HEIs by the Department. Universities spent 65% of their budget on salaries of academic staff. However, the resource base of HEIs was different.
* Students with good academic records were given an opportunity to complete their studies even if they owed the university and were also allowed to graduate. However, the results of the students were withheld as an incentive for repayment. The students’ employer, however, may contact the university to access the student’s results upon request.
* HEIs were aware of the situation of many poor black students who were in need of financial assistance. However, there was a shortfall of R80m from NSFAS for HEIs and this increased the pressure for HEIs to assist poor students. The student debt, for an example, at Durban University of Technology (DUT) was R280m and the institution could not afford to increase this debt.
* Institutional governance was the responsibility of the Councils as statutory bodies of the institutions with the statutory role of monitoring the performance of the HEIs, and HESA did not monitor HEIs performance as it fell outside its mandate.
* HESA was funded through a proportional income from its member body and universities had a right to withdraw their membership from HESA.
* Institutional autonomy was very important for universities although they still had to be accountable. Universities had no power to influence each other as they were independent institutions. The Department had a policy monitoring role over all HEIs. However, the main challenge was the capacity in the Department to exercise this function.
* The AG reached an agreement with HESA that, in future, universities would report on pre-determined objectives including human resources, supply chain management policies and compliance with the HE Act.
* The increase in the number of learners passing Matric meant that FET colleges had an important role to develop these young people into active participants of the economy, hence FET college should be elevated to the same level as HEIs and not as second choice institutions.
* The high unemployment rate was a broad social challenge and the role of universities was to produce qualified people ready for the market, rather than to create solutions to the challenge of unemployment.
* Universities needed R150m to start the next generation of academics project. Universities would recruit 300 young black talented students and be trained and developed into future academics of the country.
* It would be a challenge to source academics for the proposed universities in Northern Cape and Mpumalanga. However, there was a need to obtain appropriate candidates to lead those institutions.
6. Summary
The one day Seminar of the Committee with HESA was a very important gathering aimed at addressing the critical challenges that faced the higher education sector. The seminar was the first of its kind for the Committee whereby Members had an opportunity to express their views in the presence of Vice-Chancellors and other leaders of HEIs of the country. It was agreed that a Seminar of this nature would be necessary in the future and perhaps more time should be allocated for a thematic conversation.
The main issues which the Committee raised during the Seminar included; financial exclusion of poor students, inadequate institutional governance by HEIs, the withholding of results of students owing HEIs, fee increment, the implementation of the Central Application Process to address registration challenges, the development of the next generation of academics, the abuse of the NSFAS voucher system and refunds by students, the role of the universities in society and the challenges of merger.
From the proceedings of the seminar, it was clear that HESA, as a voluntary body representing HEIs, had a lesser role in terms of monitoring the performance of HEIs, since they evince a highly differentiated and diverse institution characterized by different missions, varied social and economic goals and different academic policies. The main concern of HESA was the decline in the funding of HEIs and inadequate income from tuition fees which resulted in an increase of student debt. The fact that R80m was unavailable from NSFAS to assist poor students was a constraint for HEIs. HESA’s view on the development of the next generation of academics was that the Department should allocate R150m to HEIs to begin with the project. Inadequate remuneration in the higher education sector was emphasised as a major concern in attracting and retaining specialist staff who were increasingly attracted to the better remuneration offered by the public and private sector.
7. Recommendations
The following formed part of the key recommendations:
* Given the fact that poor students were mostly affected by financial exclusion and withholding of results, HEIs should not exclude any academically deserving students on this basis, and students should be afforded an opportunity to access their results whether they were indebted to the institution,
* To improve career guidance, opportunities especially for learners from poor backgrounds, universities should undertake community engagement seriously and develop working relations with their nearby secondary schools,
* The development of the next generation of academics project should be prioritsed by the Department for the cultivation of highly educated academics, particularly in preparation for the proposed universities in Mpumalanga and Northern Cape.
* The role of universities in developing African languages as languages of tuition in HEIs should be given priority emphasis.
4. REPORT OF THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION AND TRAINING ON THE BUDGET AND STRATEGIC PLANS 2012/13 OF THE SERVICES SECTOR EDUCATION AND TRAINING AUTHORITY AND ENERGY AND WATER SECTOR EDUCATION AND TRAINING AUTHORITY DATED 30 MAY 2012
The Portfolio Committee on Higher Education and Training, having considered the Budget and Strategic Plans 2012/13 of the Services SETA and Energy and Water SETA, reports as follows:
1. Introduction
The Portfolio Committee on Higher Education and Training considered the Budget and Strategic Plans 2012/13 of the Services SETA and the Energy and Water SETA (EWSETA) on 16 May 2012. This report gives a brief summary of the presentations made by both SETAs to the Committee, focusing mainly on the 2012/13 Budget and Annual Plans and an overview of allocations per programme. The report also provides the Committee’s observations.
Portfolio Committee on Higher Education & Training:
Present: Adv I Malale (ANC) (Chairperson), Ms N Gina (ANC), Mr S Makhubele (ANC), Prof S Mayatula (ANC), Mr C Moni (ANC), Mr S Radebe (ANC), Ms D Sibiya (ANC), Dr L Bosman (DA), Mr A Mpontshane (IFP) and Mr J Dikobo (AZAPO).
SERVICESETA: Dr S Moon: Administrator, Mr R Naidoo: Manager, Ms L Bogoshi: Executive Manager and Mr S Wasa: Consultant.
EWSETA: Mr S Zokwana: Chairperson, Mr N Ngobese: Acting Chief Executive Officer, Mr K Lephoto: Chief Financial Officer and Mr T Mmotla: Chief Operations Officer.
Department of Higher Education and Training: Ms L Mbombo: Acting Director-General, Mr C Mtshisa: Acting Deputy Director-General, Mr M Macikama: Chief Director, Ms V Qinga: Chief Director, Mr H Hoon: Director, Ms N Nqaba: Parliamentary Liaison Officer and Ms P Sekgobela: Acting Parliamentary Liaison Officer DGs Office.
2. Summary of presentations
2.1 Services SETA
Dr S Moon led the presentation which highlighted the following key issues:
* The Services SETA was placed under administration for the first time on 21 April 2011. The initial period of administration was characterised by court battles, executives and senior managers resigning and the SETA programmes not being implemented during this period. The court battles were settled in July 2011 and the period of the administrator was extended to 07 July 2012. The Sector Skills Plans (SSPs) of the SETA were of poor quality and the administrator revised them to respond to the National Skills Development Strategy (NSDS III) goals. The budget and strategic plan of the SETA had not yet been approved by the Minister two months into the financial year.
* The Services SETA sector comprised of 16 sub-sectors including business services, property services, household and personal services. The SSPs attached to the strategic plan was work in progress and would be completed in August 2012.
* The strategic plan of the SETA included: restructuring the SETA into six Chambers serving the needs of 16 sub-sectors, the prioritisation of the scarce skills programmes, the increasing quality of Workplace Skills Plans (WSPs) and, most importantly, the establishment of a new board.
* Budget: The total budget of the SETA for the current financial year was R868 million compared to R856 million in the previous financial year. The inadequate submission of WSPs and ATRs limited the payouts of mandatory grants to companies and the majority of the sector was dominated by Small Medium Enterprises (SMEs). The net surplus of the SETA was R324 million.
2.2 Energy and Water SETA
Mr N Ngobese, Acting Chief Executive Officer (CEO), led the presentation which highlighted the following key issues:
* EWSETA experienced serious challenges in governance and the management of the SETA during the 2010/11 financial year, to such an extent that the Minister placed the SETA under administration on 17 September 2010.
* The SETA was currently in the performance phase, with a new Board being appointed on 01 April 2011 and, the key recommendations of the administrator were being implemented by the new board and the management team.
* Budget: The total budget of the SETA for the current financial year was R172 million which was insufficient. Some sic codes transferred to the SETA had not yet been paid owing to the insufficient budget. The levy income of the SETA was dominated by the energy sector (91% of levies 2011/12) and the water sector contributed (9% of levies 2011/12).
* The SETA targeted 500 unemployed learners to enter into training programmes this financial year. The target for the artisan training programme was 1375 learners. Partnerships with three FET colleges with relevant programmes had been signed to offer vocational course and work experience for learners. In relation to bursaries, 50 students were awarded bursaries in higher education institutions and a partnership with three universities was signed.
* The main challenges of the SETA included inadequate capacity in financial and human resource management, instability in governance and leadership roles.
3. Observations
From the interactions with the above mentioned SETAs, the Committee observed the following:
3.1 It was noted with concern that the strategic plan, annual performance plan and budget for 2012/13 of both SETAs that appeared before the Committee were not yet approved by the Minister two months into the new financial year.
3.2 Both SETAs had previously been placed under administration owing to the serious challenges they faced and, they were both in the recovery stages. EWSETA appointed a new board and was in the process of appointing a new permanent CEO during the course of the year. The contract of the Administrator of SERIVCESETA would expire in July 2012.
3.3 The Committee noted with concern that there was inadequate information on the number of bursaries awarded or to be awarded to deserving students in critical skills in the annual performance plan of both SETAs. Most importantly, the number of University of Technology, FET colleges and university graduates placed or to be placed in employment or work integrated learning programmes were not reflected in the annual performance of both SETAs.
3.4 The over-reliance by the SETAs on the private skills training consultancy industry and the continued neglect of the easily accessible public FET college sector remained a serious concern for the Committee. This was further viewed to be in direct contrast to the spirit of growing and developing FET colleges so that they could respond to local, regional and national skills priorities.
3.5 The lukewarm response by the SETAs to government policies such as the Industrial Policy Action Plan (IPAP), Human Resource Development Strategy South Africa (HRDSA), NSDS III, and National Growth Plan (NGP) which seek to address the lack of skills and the growing concern of unemployment among young people remained a serious concern to the Committee.
3.6 The notion of disbursement of mandatory grants to companies with inadequate Work Place Skills Plans (WSPs) and insufficient plans for growth imperatives to transform the challenges of society remained a concern for the Committee.
3.7 The declaration of South Africa as an arid region coupled with the growing concern of the deteriorating drinking water quality and inaccessible clean running water, particularly in rural areas, were some of the concerns highlighted by the Committee to EWSETA.
3.8 The delay in issuing of certificates to learners that completed their training programmes remained a serious concern of the Committee. The challenges in the transfer of sic codes from EWSETA to the Construction SETA was affecting both sectors negatively.
4. Conclusion
The Committee agreed that it would find it very difficult to consider any Budget and Strategic Plans of SETAs that have not yet been approved by the Minister in future. Of serious concern to the Committee was the “business as usual” approach in the work of SETAs that had been a trend over the past few years, despite the deliberate transformation driven by the Minister, which sought to magnify the theme of work placement, integrated learning, rural development, RPL and the transformation of the entire post school education and training system to respond to the growth imperatives of the country.
The Committee emphasised the importance of public higher education and training institutions in advancing the work of the SETAs. This was not new to the SETAs as the Committee raised this concern in the previous financial year and, this year SETAs were expected to bring about substantive and qualitative changes identified in the NSDS III to increase employment opportunities for young people. The Committee further proposed that the mandatory grants paid to companies should be reviewed and, if legislation required to be amended to ensure that companies adhered to the notion of increased opportunities of employment for young people, it would initiate this process.
TUESDAY, 5 JUNE 2012
ANNOUNCEMENTS
National Assembly
The Speaker
1. Membership of Committees
(a) The following changes to Committee membership have been made by the Congress of the People:
Portfolio Committee on Woman, Children and People with Disabilities
Appointed: Mosimane, Ms C*
Joint Standing Committee on Defence
Appointed: Nhanha, Mr MA
TABLINGS
National Assembly and National Council of Provinces
1. The Minister of Water and Environmental Affairs
(a) Government Notice No 304, published in Government Gazette No 35248, dated 10 April 2012: Norms and standards for the marking of rhinoceros and rhinoceros horn, and for the hunting of rhinoceros for trophy hunting purposes in terms of the National Environmental Management: Biodiversity Act, 2004 (Act No 10 of 2004).
2. The Minister of Labour
(a) Strategic Plan of Productivity SA for 2012/2013.
WEDNESDAY, 6 JUNE 2012
ANNOUNCEMENTS
National Assembly and National Council of Provinces
The Speaker and the Chairperson
1. Classification of Bills by Joint Tagging Mechanism (JTM)
(1) The JTM classified the Spatial Planning and Land Use Management Bill [B 14 – 2012] (National Council of Provinces– proposed sec 76) as follows:
(a) Joint Rule 161(1)(b) provides that a Bill is constitutionally out of order if it is in breach of section 73(3), in that the Bill was introduced in the wrong House. The Spatial Planning and Land Use Management Bill was introduced in the National Council of Provinces in terms of section 76(2), despite it including provisions that deal with an exclusive provincial competence. Parliament may only pass legislation dealing with an exclusive provincial competence if the requirements of section 44(2) are met and according to the procedure set out in section 76(1).
(b) The introduction of the Bill in the NCOP does not comply with the procedural requirements of the Constitution and the Joint Rules of Parliament. Accordingly, in terms of Joint Rule 160(4), the Bill is constitutionally out of order. In terms of Joint Rule 162(1) the Bill may not be proceeded with.
(c) The Bill may, however, in terms of Joint Rule 162(2)(b), be re-introduced in the National Assembly in accordance with the procedure set out in section 76(1).
2. Draft Bills submitted in terms of Joint Rule 159
(1) Road Accident Fund (Transitional Provisions) Bill, submitted by the Minister of Transport.
Referred to the Portfolio Committee on Transport and the Select Committee on Public Services.
National Assembly
The Speaker
1. Membership of Committees
(a) Rules Committee
Discharged: Terblanche, J F (DA)
Appointed: Waters, M (DA)
TABLINGS
National Assembly and National Council of Provinces
1. The Minister of Water and Environmental Affairs
(a) General Notice No 840, published in Government Gazette No 34781, dated 25 November 2011: Draft National Environmental Management: Integrated Coastal Management Amendment Bill, 2011: For general comments.
(b) Government Notice No 344, published in Government Gazette No 35306, dated 4 May 2012: National Waste Management Strategy, in terms of the National Environmental Management: Waste Act, 2008 (Act No 59 of 2008).
(c) General Notice No 382, published in Government Gazette No 35343, dated 14 May 2012: Prohibition of trade in certain Encephalartos (cycad) species, in terms of the National Environmental Management: Biodiversity Act, 2004 (Act No 10 of 2004).
(d) Government Notice No 371, published in Government Gazette No 35344, dated 14 May 2012: Prohibition of trade in certain Encephalartos (cycad) species, in terms of the National Environmental Management: Biodiversity Act, 2004 (Act No 10 of 2004).
(e) General Notice No 395, published in Government Gazette No 35337, dated 18 May 2012: Fee structures for consideration and processing of applications for environmental authorisations, in terms of the National Environmental Management Act, 1998 (Act No 107 of 1998).
(f) General Notice No 396, published in Government Gazette No 35337, dated 18 May 2012: Fee structure for consideration and processing of applications for Waste Management Licences, in terms of the National Environmental Management: Waste Act, 2008 (Act No 59 of 2008).
(g) General Notice No 867, published in Government Gazette No 34811, dated 9 December 2011: Draft National Action List for the screening of dredged material proposal for Marine Disposal, in terms of the National Environmental Management Integrated Coastal Management Act, 2008 (Act No 24 of 2008).
(h) General Notice No 1002, published in Government Gazette No 34809, dated 9 December 2011: National List of Ecosystems that are Threatened and in need of protection , in terms of the National Environmental Management: Biodiversity Act, 2004 (Act No 10 of 2004).
COMMITTEE REPORTS
National Assembly
1. REPORT OF THE STANDING COMMITTEE ON FINANCE ON THE RATES AND MONETARY AMOUNTS AND AMENDMENT OF REVENUE LAWS BILL [B10 - 2012] (NATIONAL ASSEMBLY- SECTION 77), DATED 06 JUNE 2012.
The Standing Committee on Finance, having considered and examined the Rates and Monetary Amounts and Amendment of Revenue Laws Bill [B10 - 2012] (National Assembly – section 77), referred to it, and classified by the JTM as a Money Bill, reports that it has agreed to the Bill.
Report to be considered.
THURSDAY, 7 JUNE 2012
ANNOUNCEMENTS
National Assembly and National Council of Provinces
The Speaker and the Chairperson
1. Bills passed by Houses – to be submitted to President for assent
(1) Bill passed by National Council of Provinces on 7 June 2012:
(a) Criminal Law (Sexual Offences and Related Matters) Amendment Act Amendment Bill [B 19 – 2012] (National Assembly – sec 75).
COMMITTEE REPORTS
National Assembly
1. Report of the Portfolio Committee on Arts and Culture on the South African Languages Bill [B23 - 2011] (National Assembly – Sec 75), dated 6 June 2012:
The Portfolio Committee on Arts and Culture having considered the subject of the South African Languages Bill [B23 - 2011] (National Assembly – Sec 75), referred to it and classified by the Joint Tagging Mechanism as a Section 75 Bill, presents the Use of Official Languages Bill [ B23B - 2011].
Report to be considered.
2. REPORT OF THE STANDING COMMITTEE ON APPROPRIATIONS ON THE APPROPRIATION BILL [B3-2012] (NATIONAL ASSEMBLY – SECTION 77), DATED 6 JUNE 2012
Having considered the Appropriation Bill [B3 – 2012], referred to in terms of Section 10(a) of the Money Bills Amendment Procedure and Related Matters Act No. 09 of 2009, the Standing Committee on Appropriations reports as follows:
1. Introduction
Section 27(1) of the Public Finance Management Act No. 29 of 1999 (PFMA) requires that the Minister of Finance (the Minister) tables the annual budget for a financial year in the National Assembly before the start of that financial year or, in exceptional circumstances, on a date as soon as possible after the start of the financial year, as the Minister may determine. Section 26 of the PFMA requires Parliament and each provincial legislature to appropriate money for each financial year for the requirement of the State and the province, respectively. In executing this mandate, the Standing Committee on Appropriations, herein after referred to as the Committee, was established in terms of section 4(3) of the Money Bills Amendment Procedure and Related Matters Act, No. 9 of 2009, herein referred to as the Act. In line with section 10(1)(a) of the Act and after the adoption of the Fiscal Framework, the Standing Committee on Appropriations has a responsibility to consider the Appropriation Bill, herein after referred to as the Bill, and report thereon to the National Assembly. In terms of Sub-sections 10 (5) and 10 (6) of the Act, Parliamentary Committees may advise the Appropriations Committee on the appropriated funding. No formal submissions were received from Committees in terms of Sub-sections 10 (5) and 10 (6) of the Act. The Bill was referred to the Committee on 22 February 2012 for consideration and reporting.
The budget for the 2012/13 financial year was tabled by the Minister of Finance in the National Assembly with the Appropriation Bill (the Bill) on 22 February 2012. The Bill was tabled together with the Division of Revenue Bill, Estimates of National Expenditure (ENE), Budget Review and the Budget Speech. Given the fact that Committees on Finance and Appropriations have different mandates derived from the Act, the Appropriation Bill was therefore referred to the Standing Committee on Appropriations.
In the process of dealing with the Appropriations Bill, section 9(7) (a) of the Act requires the Committees on Appropriations of both Houses to consult with the Financial and Fiscal Commission (FFC). In addition, on 20 and 22 April 2012, an advertisement was published in national newspapers inviting general public inputs and one submission was received from Mr Frans Reyneke. The stakeholders who were invited by the Committee and that made submissions to the Committee were as follows:
* Public Service Commission (PSC); and
* Human Science Research Council (HSRC).
In addition to the National Treasury which briefed the Committee on the Appropriation Bill in its entirety, the following departments were invited for hearing on their respective budget allocations:
* Department of Water Affairs;
* Department of Women, Children and People with Disabilities; and
* Department of Communications.
2. The Review of the Overall Allocations for the 2012/13 Financial Year
The national budget for the 2012/13 financial year has allocated R543.6 billion to national government departments. This allocation excluded the direct charge which does not form part of the Appropriation Bill. This showed an increase of R44.1 billion or 8.8 per cent compared to the allocation of R499.5 billion in the 2011/12 financial year.
3. Economic Classifications Allocations
Table 1: Economic Classification Budget Allocations for 2011/12 and 2012/13 Financial Years
Budget Allocations
Economic Classifications
2011/12
2012/13
Rand Change (Increase)
Percentage change
(%) Increase
Current Payments
R145.3 billion
R155.7 billion
R10.4 billion
7.2
Transfers and Subsidies
R342.2 billion
R370.9 billion
R28.7 billion
8.4
Capital payments
R11.2 billion
R15.2 billion
R4 billion
35.42
Payments for Financial Assets
R750.1 million
R1.6 billion
R980.6 million
118.7
TOTAL
R499.5 billion
R543.6 billion
R44.1 billion
8.8
Source: National Treasury (2012)
As shown in Table 1 (above), an amount of R155.7 billion was allocated for current payments for the 2012/13 financial year. This showed an increase of R10.4 billion or 7.2 per cent compared to the allocation of R145.3 billion in the 2011/12 financial year. For the 2012/13 financial year, the allocation for current payments comprised of:
* An amount of R101 billion or 64.9 per cent for compensation of employees; and
* An amount of R54.7 billion or 35.1 percent for goods and services
For the 2012/13 financial year an amount of R370.9 billion was allocated for transfers and subsidies. This showed an increase of R28.7 billion or 8.4 compared to the allocation of R342.2 billion in the 2011/12 financial year. Capital Payments were allocated an amount of R15.2 billion for the 2012/12 financial year. This showed an increase of R4 billion or 35.4 per cent compared to the allocation of R11.2 billion in the 2011/12 financial year. Payments for financial assets were allocated a budget of R1.6 billion for the 2012/13 financial year. This showed an increase of R980.6 million or 118.7 per cent compared to the allocation of R750.1 million in the 2011/12 financial year.
4. The Five Priorities of Government
The hearings with invited stakeholders were more focused on the five government policy priorities, which were as follows:
* Job creation and infrastructure;
* Education and skills development;
* Improving health care and services;
* Rural development and land reform; and
* Justice, crime prevention and security.
The above-mentioned priorities were reflected in the 12 national outcomes adopted by Cabinet. These outcomes were high-quality basic education; improved health and life expectancy; greater public protection and safety; more rapid employment creation and inclusive growth; a skilled and capable workforce; efficient economic infrastructure networks; vibrant rural communities and food security; sustainable human settlements and improved quality of household life; responsive and accountable local government; protection of environmental assets and natural resources; international cooperation for a better and safer world; and a development-oriented public service and inclusive citizenship. The allocations related to the five priorities of Government for the 2012/13 financial year are provided in the sections hereunder.
4.1 Allocation for Job Creation
An amount of R1.2 billion was set aside for job creation during the 2012/13 financial year and R6.2 billion over the medium term expenditure framework (MTEF). The aforementioned allocation will be spent as follows:
* R590 million for the Community Works programme (R3.5 billion over the MTEF) for the creation of over 250 000 jobs;
* R230 million for the Working for Water and Working for Fire programmes (R1.1 billion over the MTEF);
* R50 million for the Mzansi Golden Economy in the Arts and Culture Sector (R300 million over the MTEF);
* R200 million for the national rural youth services corps which forms part of the Economic Competitiveness and Support Package (Rxxxx over the MTEF); and
* R145 million (R1.1 billion over the MTEF) for the other job-related programmes
4.2 Allocation for Investment in Infrastructure
An amount of R844.5 billion has been set aside for public-sector infrastructure expenditure over the MTEF. Table 2 (below) depicts how that amount is divided amongst the different sectors:
Table 2: Allocations for Infrastructure for the 2012/13-2014/15 MTEF Period
Sector
Allocation for 2012/13
R billion
2013/14
2014/15
Total
(over MTEF period)
Percentage in relation to the total (%)
Economic Services
211.7
228.3
237.1
677.1
80.2
Energy
91.7
100.2
104.3
296.2
35.1
Water and Sanitation
25.5
24.7
25.0
75.2
8.9
Transport and logistics
81.2
88.6
92.3
262.0
31.0
Other economic services
13.3
14.8
15.5
43.6
5.2
Social services
38.5
48.4
53.1
140.2
16.6
Health
8.1
13.1
14.8
36.0
4.3
Education
10.9
14.5
15.3
40.7
4.8
Community facilities
17.7
18.9
21.0
57.6
6.8
Other social services
1.9
1.9
2.0
5.9
0.7
Justice and protection services
3.4
3.5
3.7
10.6
1.3
Central Government and administrative services
7.9
3.5
2.8
14.2
1.7
Financial services
0.7
0.7
0.9
2.4
0.3
Total
262.2
284.5
297.6
844.5
100
Percentage of GDP
7.9
7.9
7.4
Source: National Treasury (2012)
Reference was made to the amount allocated towards infrastructure investment and concerns were expressed that there were capacity challenges within South Africa which would limit the effective expenditure of that funding.
The Committee noted with concern the disparities in respect of the contents of Programme 1 (Administration) of the budgets of national departments, despite the guidelines that were issued on an annual basis by the National Treasury. Even more concerning was the fact that this issue has been raised by the Committee with the National Treasury before. There were cases in which Programme 1 (Administration) received higher budgetary allocations relative to programmes that dealt with the department’s core functions.
5. Allocations for Selected National Departments
5.1 Department of Water Affairs
The Department of Water Affairs (Budget Vote 38) was allocated a total budget of R8.8 billion for the 2012/13 financial year. The budget comprised of six programmes, i.e. Administration (R883.1 million), Water Sector Management (R618.9 million), Water Infrastructure Management (R2.3 billion), Regional Implementation and Support (R4.9 billion), Water Sector Regulation (R114.7 million), and International Water Cooperation (R25.8 million).
The Department recorded an expenditure of R8.2 billion or 91 per cent of an adjusted allocation of R 9 billion at the end of the 2011/12 financial year. One of the reasons for the under expenditure was unfilled vacant posts, including Organisation Specific Dispensation (OSD) posts which represented R169 million or 21 per cent of the R784 million under expenditure. The Committee expressed concerns in this regard. The vacancy rate of the Department stood at 22.4 per cent which was a cause for concern and raised questions on the Department’s ability to effectively perform on its mandate.
The Committee expressed concern at the capacity of the Department to deal with water licence applications to which the Department responded that it did not have sufficient capacity to deal with applications. The backlog in respect of the water licence applications stood at 1 085 but the Department was in the process of developing a new model to address the matter.
The Committee expressed concern at the ability of the Department of Water Affairs to spend the R230 million allocated towards the Working for Fire and Working for Water programmes. This was due to the fact that the Department had spent zero percent as at the end of the third quarter of the 2011/12 financial year.
Clarity was sought in respect of the capacity of the Department to spend its budgetary allocation. In response, the Department indicated the following measures taken by it to improve the situation:
* Budget analysts have been appointed to each programme;
* Monthly meetings would be held with each programme manager to monitor expenditure trends;
* A Budget Committee has been established;
* A demand management planning concept has been introduced; and
* Contract and project management capabilities would be improved.
5.2 The Department of Women, Children and People with Disabilities
The Department of Women, Children and people with Disabilities (Budget Vote 8) was allocated a total budget of R172.2 million for the 2012/13 financial year. The budget comprised of four programmes, i.e. Administration (R63.8 million), Women Empowerment and Gender Equality (R79.5 million), Children’s Rights and Responsibilities (R13.5 million), and Rights of People with Disabilities (R15.4 million).
Concerns were expressed that the Department employed staff at higher levels than the approved salary structure by the Department of Public Service and Administration (DPSA). The Department responded that no staff member had been appointed outside of the approved DPSA Salary Structure. The Department explained that certain staff members had been appointed on higher notches than the entry level of the salary band due to lateral transfers from other departments. Concern was expressed that the Department made four appointments that were at the Chief Director level which were outside of the approved organogram. The Department reported that it was in the process of seeking approval from the National Treasury for the shifting of funds from goods and services to compensation of employees. It was reported that the following unfunded critical posts needed to be filled to ensure optimal operation during the 2012/13 financial year and beyond:
* Risk Manager;
* Office Manager in Director-General’s Office;
* Deputy Director: Supply Chain Management;
* Deputy Director: Internal Audit;
* Records Manager;
* Web Master;
* Deputy Director: Information Technology;
* Senior Network Controller;
* Senior Legal Admin Officer (MR-6);
* Deputy Director Labour Relations;
* Health & Wellness Manager;
* Deputy Director: International Coordination
* Director: Advocacy and Mainstreaming (WEGE)
* Director: Institutional Support and Capacity Development (WEGE)
* Director: Monitoring and Evaluation (WEGE)
* Chief Director: Institutional Support and Capacity Development (CRR)
* Director: Advocacy and Mainstreaming (CRR)
* Director: Monitoring and Evaluation (CRR)
* Deputy Director: Institutional Support and Capacity Development (CRR)
* Chief Director: Advocacy and Mainstreaming (RPD)
* Director: Institutional Support and Capacity Development (RPD)
* Deputy Director: Monitoring and Evaluation (RPD); and
* Branch Coordinator (RPD).
The Department indicated that it needed additional funding of R78 million for the following:
* R19 million for Compensation of Employees;
* R58 million for Goods and Services; and
* :R1 million for Capital Expenditure.
The National Treasury reported that it was in the process of discussing the matter relating to the Department’s budgetary constraints with a view to negotiating an underlying agreement. It was further reported that the Department needed to define the outputs that were consistent with the additional allocations requested in order to avoid any under expenditure. The approved establishment of the Department is for 195 personnel of which 105 had already been recruited. The Department needed to prove that it had the capacity to spend the additional requested funding efficiently, effectively and economically.
The Office of the Minister of Women, Children and People with Disabilities received an allocation of R6 million whereas the Deputy Minister’s Office received an allocation of R12 million. The National Treasury reported that the Deputy Minister’s funds were transferred directly from the budget vote of Public Works.
The Department further reported that it had instituted an investigation following allegations of nepotism and financial mismanagement particularly in areas relating to supply chain management.
The Committee expressed concern at the quality of engagement by the National Treasury in respect of the departmental budget allocations and stated that ongoing engagements were needed in that regard.
5.3 The Department of Communications
The Department of Communications (Budget Vote 27) was allocated a total budget of R1.7 billion for the 2012/13 financial year. The budget comprised of six programmes, i.e. Administration (R152.6 million), Information Communication Technology International Affairs and Trade (R38 million), Information Communication Technology Policy Development (R88.7 million), Information Communication Technology Enterprise Development (R1.1 billion), Information Communication Technology Infrastructure Development (R280.2 million), and Presidential National Commission (R30 million).
The Committee acknowledged the Department’s Turn-around Strategy, but remained concerned at the performance of the Department in relation to Information Communication and Technology (ICT). It was noted that the Department was underperforming on its ICT function, and that this has led to other government departments having to use service providers for ICT related functions.
The ICT Enterprise Development programme was the Department’s largest programme and constituted 65.6 per cent of the total budget allocation for the 2012/13 financial year. Expenditure on consultants increased from R53.1 million in the 2008/09 financial year to R213.3 million in the 2012/13 financial year, at an average annual rate of 58.9 per cent. It was reported that this was due to the fact that consultants had been used for infrastructure planning and for the establishment and operation of the 112 Call Centre project. Expenditure on consultants was however expected to decrease over the medium-term to R117.3 million as the 112 Call Centre project becomes fully capacitated and operational.
The largest proportion of the Department’s budget was for transfer and subsidies in the amount of R1.1 billion or 66 per cent out of the total budget allocation of R1.7 billion. The Committee expressed concern at the capacity of the Department to monitor the effective, efficient and economic expenditure of transferred funds to the different State-Owned Entities (SOEs). The Committee also noted a trend by the Department to transfer high amounts during the fourth quarter of a financial year. The overall expenditure of the Department increased from 46.1 percent as at the end of December 2011 to 89 per cent at the end of March 2012. The main reason advanced by the Department was that the bulk of the entities required funding in the fourth quarter only. The Committee expressed concern in this regard and clarity was sought on how the SOEs could spend the transferred funding in that short space of time and whether that expenditure contributed to service delivery or not. The budget allocation of the Public Entity Oversight sub-programme that dealt with the oversight on SOEs, has received R1.1 billion for the 2012/13 financial year resulting in a reduction of R1.1 million as compared to the 2011/12 financial year.
6. Summary of submissions by invited stakeholders
6.1 The Public Service Commission
The Public Service Commission (PSC) was requested to brief the Committee on whether the current skills capacity within national departments would be able to deliver on the five priorities of Government.
With regard to the overall skills capacity in national government departments, the Public Service Commission made the following observations:
• High levels of expenditure in a context where performance targets were not reached indicated that resources were being ineffectively used, with the obvious conclusion being that skills shortages were an obvious cause of this situation;
• High vacancy and turnover rates were indicators that skills retention strategies were not effective;
• The sustained use of consultants to provide core services was evidence that the need to build internal capacity was not being addressed in government departments; and
• Skills acquisition and development, while much spoken about, were still not adequately addressed.
The PSC observed that there were disparities between budget expenditure and the achievement of predetermined objectives. The PSC identified the lack of skills capacity and the lack of culture of reporting on performance as the major reason for the non-achievement of predetermined objectives. The Committee expressed concern in this regard.
With regard to turnover and vacancy rates, it was reported that there was a high turnover rate in respect of professionals and Senior Management Staff in national departments. It was further observed that, although the vacancy rates were high, organograms were not always fully funded. The Committee agreed to the sentiments raised by the PSC that it took long periods of time to fill vacancies and this had negative impacts on service delivery.
6.2 The Human Science Research Council
The Human Science Resource Council (HSRC) was requested to brief the Committee on whether the Appropriations Bill was in line with the five priorities of Government for 2012. The following inputs were made by the HSRC:
* There needed to be an increase in the budget of the health care sector in order to improve the health care and related services. This was due to the fact that since 1997, there has been stagnation in the funding allocations for the public health care sector which together with an increasing disease burden had put the public health care system under severe pressure;
* There was a need to evaluate the quality and impact of training in government; and
* There was a need for better coordination in the manner in which the post-schooling institutions worked with each other in building stronger links between training and the needs of the economy.
7. Committee Findings
After deliberations with the identified departments and other stakeholders, the Standing Committee on Appropriations made the following findings:
7.1 An amount of R230 million for the 2012/13 financial year (R1.1 billion over the MTEF) allocated towards the Working for Fire and Working for Water programmes was a cause for concern given the fact that the Department of Water Affairs has spent zero percent on the said programmes as at the end of the third quarter of the 2011/12 financial year.
7.2 The vacancy rate in the Department of Water Affairs stood at 22.4 per cent which raised questions on its ability to perform on its mandate.
7.3The Department of Women, Children and People with Disabilities made four appointments that were at the chief director level which were outside its approved organogram.
7.4 The Department of Women, Children and People with Disabilities requested an additional amount of R78 million for compensation of employees (R19 million), goods and services (R58 million) and capital expenditure (R1 million).
7.5 The Department of Communications has under performed on its Information, Communication and Technology (ICT) function, and that this has led to other government departments having to use service providers for ICT-related functions.
7.6 There were disparities in respect of the contents of Programme 1 (Administration) of the budgets of national departments, despite the guidelines that were issued on an annual basis by the National Treasury.
7.7 The high levels of expenditure by national departments did not necessarily result in the predetermined outputs being met.
8. Recommendations
The Standing Committee on Appropriations, having considered the briefings and comments by departments and invited stakeholders on the Appropriation Bill for the 2012/13 financial year, recommends as follows:
8.1That the Minister of Finance should ensure that the National Treasury investigates the necessity for increased funding for the Department Women, Children and People with Disabilities.
8.2 That the Minister of Finance should ensure that the National Treasury engages with national departments on an ongoing basis preparation for the Appropriation Bill.
8.3 That the Minister of Public Service and Administration should ensure that the Department of Public Service and Administration collaborates with relevant departments and other stakeholders in addressing lack of skills that was reported by the Public Service Commission.
Notwithstanding the above recommendations and due to the fact that no formal amendments were proposed by Parliamentary Committees, the Standing Committee on Appropriations further recommends that the National Assembly adopts the 2012 Appropriations Bill for the 2012/13 financial year.
Report to be considered.
FRIDAY, 8 JUNE 2012
ANNOUNCEMENTS
National Assembly and National Council of Provinces
The Speaker and the Chairperson
1. Classification of Bills by Joint Tagging Mechanism (JTM)
(1) The JTM in terms of Joint Rule 160(6) classified the following Bill as a section 75 Bill:
(a) Labour Relations Amendment Bill [B 16 – 2012] (National Assembly – sec 75).
National Assembly
The Speaker
1. Introduction of Bills
(1) The Minister of Justice and Constitutional Development
(a) Prevention and Combating of Torture of Persons Bill [B 21 – 2012] (National Assembly – proposed sec 75) [Explanatory summary of Bill and prior notice of its introduction published in Government Gazette No 35412 of 1 June 2012.]
Introduction and referral to the Portfolio Committee on Justice and Constitutional Development of the National Assembly, as well as referral to the Joint Tagging Mechanism (JTM) for classification in terms of Joint Rule 160.
In terms of Joint Rule 154 written views on the classification of the Bills may be submitted to the JTM within three parliamentary working days.
(2) The Minister of Transport
(b) Road Accident Fund (Transitional Provisions) Bill [B 22 – 2012] (National Assembly – proposed sec 75) [Explanatory summary of Bill and prior notice of its introduction published in Government Gazette No 35426 of 6 June 2012.]
Introduction and referral to the Portfolio Committee on Transport of the National Assembly, as well as referral to the Joint Tagging Mechanism (JTM) for classification in terms of Joint Rule 160.
In terms of Joint Rule 154 written views on the classification of the Bills may be submitted to the JTM within three parliamentary working days.
2. Appointment of commissioners to Commission on Gender Equality (CGE)
(1) A letter dated 5 June 2012 has been received from the President of the Republic, informing members of the National Assembly that in terms of section 193 of the Constitution and on the recommendation of the House, he has appointed the following people to the Commission on Gender Equality (CGE):
(a) Mr Mfanozelwe Shozi, as full‑time commissioner and Chairperson of the Commission with effect from 1 June 2012 to 31 May 2017;
(b) Ms Thoko Mpulwana, as full‑time commissioner with effect from 1 June 2012 to 31 May 2017;
(c) Ms Janine Hicks, as full‑time commissioner with effect from 1 June 2012 to 31 May 2016;
(d) Ms Sylvia Desirée Stevens Maziya, as full‑time commissioner with effect from 1 June 2012 to 31 May 2014;
(e) Mr Wallace Amos Mgoqi, as full‑time commissioner with effect from 1 June 2012 to 31 May 2014;
(f) Ms Ndikela Eumera Portia Loyilane as full‑time commissioner with effect from 1 June 2012 to 31 May 2014;
(g) Ms Nondumiso Maphazi Ranuga, as full‑time commissioner with effect from 1 June 2012 to 31 May 2014;
(h) Ms Lulama Nare, as part‑time commissioner with effect from 1 June 2012 to 31 May 2014; and
(i) Prof Amanda Gouws, as part‑time commissioner with effect from 1 June 2012 to 31 May 2014.
TABLINGS
National Assembly
1. The Speaker
(a) Report No 1 of 2012‑13 of the Public Protector on an investigation into the alleged improper procurement of communication services by the Department of the Premier of the Western Cape Provincial Government.
(b) Report of the Public Service Commission (PSC) on the Assessment of the State of Professional Ethics in the North West Provincial Government – September 2011 [RP 12-2012].
(c) Report of the Public Service Commission (PSC) on Measuring the Effectiveness of the National Anti-Corruption Hotline: Third Biennial Report – June 2011[RP 269-2011].
COMMITTEE REPORTS
National Assembly
1. Report of the Portfolio Committee on Justice and Constitutional Development on the Prevention and Combating of Trafficking in Persons Bill [B7B – 2010], (National Assembly – section 75), dated 7 June 2012
The Portfolio Committee on Justice and Constitutional Development, having considered the subject of the Prevention and Combating of Trafficking in Persons Bill [B7 – 2010] (National Assembly – section 75), referred to it and classified by the Joint Tagging Mechanism as a section 75 Bill, reports the Bill with amendments [B7B - 2010]:
The Committee wishes to report further:
The Committee would like to see the Bill implemented as soon as possible, especially the provisions relating to the establishment of offences and penalties. However, it is aware that preparations to ensure readiness to implement certain provisions may require more time. For this reason, the Committee has provided that different dates may be fixed in respect of different provisions of the Act.
Report to be considered.
TUESDAY, 12 JUNE 2012
ANNOUNCEMENTS
National Assembly and National Council of Provinces
The Speaker and the Chairperson
1. Draft Bills submitted in terms of Joint Rule 159
(1) Further Education and Training Colleges Amendment Bill, 2012, submitted by the Minister of Higher Education and Training.
(2) Higher Education and Training Laws Amendment Bill, 2012, submitted by the Minister of Higher Education and Training.
Referred to the Portfolio Committee on Higher Education and Training and the Select Committee on Education and Recreation.
National Assembly
The Speaker
1. Introduction of Bills
(1) The Minister of Higher Education and Training
(a) Further Education and Training Colleges Amendment Bill [B 24 – 2012] (National Assembly – proposed sec 76) [Explanatory summary of Bill and prior notice of its introduction published in Government Gazette No 35401 of 30 May 2012.]
(b) Higher Education and Training Laws Amendment Bill [B 23 – 2012] (National Assembly – proposed sec 75) [Explanatory summary of Bill and prior notice of its introduction published in Government Gazette No 35401 of 30 May 2012.]
Introduction and referral to the Portfolio Committee on Higher Education and Training of the National Assembly, as well as referral to the Joint Tagging Mechanism (JTM) for classification in terms of Joint Rule 160.
In terms of Joint Rule 154 written views on the classification of the Bill may be submitted to the JTM within three parliamentary working days.
12 JUNE 2012 PAGE: 244 of 244
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