Hansard: NCOP: Unrevised hansard
House: National Council of Provinces
Date of Meeting: 12 Apr 2011
No summary available.
TUESDAY, 12 APRIL 2011
PROCEEDINGS OF THE NATIONAL COUNCIL OF PROVINCES
The Council met in the Old Assembly Chamber at 14:02.
The Deputy Chairperson (Ms T C Memela) took the Chair and requested members to observe a moment of silence for prayers or meditation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS – see col 000.
SUSPENSION OF RULE 239(1) FOR THE PURPOSE OF CONSIDERATION OF THE DIVISION OF REVENUE BILL ON TUESDAY, 12 APRIL 2011
The CHIEF WHIP OF THE NCOP: I move the motion in the name of the Chief Whip of the Council as printed on the Order Paper:
That Rule 239(1), which provides, inter alia that the consideration of a Bill may not commence before at least three working days have elapsed since the committee’s report was tabled, be suspended for the purpose of consideration of the Division of Revenue Bill [B4 – 2011 (Reprint)] (National Assembly – sec 76(1)) on Tuesday, 12 April 2011.
Question put: That the motion be agreed to.
IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.
Motion accordingly agreed to in accordance with section 65 of the Constitution.
DIVISION OF REVENUE BILL
(Consideration of Bill and of Report thereon)
Mr T E CHAANE: Chairperson, hon Minister, hon members, special delegates, and ladies and gentlemen, it is an honour for me to take part in today’s debate on the Division of Revenue Bill 2011. I stand here today to present to this House the report of the select committee on the Division of Revenue Bill, as announced and tabled yesterday, 11 April, for consideration.
Chairperson, in terms of the provisions of the Money Bills Amendment Procedure and Related Matters Act, Act 9 of 2009, the Select Committee on Appropriations has the power to consider and report on spending issues, amendments to the Division of Revenue Bill, Appropriation Bill, Supplementary Estimate and Adjustments Appropriation Bill, recommendations of the Financial and Fiscal Commission, reports on actual expenditure published by National Treasury and any other related matter set out in the Money Bills Amendment Procedure and Related Matters Act.
With the co-operation and involvement of the provinces and the public, the committee has executed this mandate despite constraints arising from the late tabling of the Budget in Parliament. Subsequent to the tabling of the Bill in the National Assembly on 23 February 2011 and its transmission to the National Council of Provinces on 10 March 2011, the committee was briefed by National Treasury and the process of consultation immediately ensued. The committee received oral and written submissions and inputs from the Financial and Fiscal Commission, the SA Local Government Association, Salga, the Department of Human Settlements, the Department of Health, the Department of Energy, the Department of Public Works, the Cape Bar Council, the Department of Co-operative Governance and Traditional Affairs, the Umtshezi Local Municipality, Mr Paul Theron and Mr Philip van Ryneveld.
I submit that inputs made by these parties enriched the work of the committee and will further help in the budgeting process. Special note should be taken of the fact that some departments and persons chose to make direct submissions to the National Treasury while the parliamentary processes were still under way. I wish to commend the National Treasury for redirecting such inputs to the committee, as any consideration of these inputs without the involvement of the committee could have been seen as undermining the established parliamentary procedures dealing with legislation. For this reason, the committee presented recommendations aimed at strengthening clause 14(3) of the Bill to avoid such tendencies and to avoid possible misinterpretation of the clause in its current form in future.
Equally, the committee is concerned about the use of clause 16 of the Bill, which deals with withholding the transfer of funds in situations where there is persistent material breach of measures established in section 216 of the Constitution. The current clause, as it stands, is purely administrative as it does not permit the Minister to take any decision in a situation where such withholding will cause disruptions of basic service delivery. I submit that the 2012 Division of Revenue Bill should be strengthened to make withholding an executive function, rather than an administrative function. Perhaps clause 23 of the 2001 Division of Revenue Bill can best address our concerns on this matter and I call on the Minister to consider it.
The 2011 Division of Revenue Bill provides for the phasing out of certain conditional grants – those that are believed to have met the objectives they were intended for - and further introduces new grants. These grants are introduced in order to align planning and implementation with sector needs and to reduce persistent backlogs in the eradication of inappropriate school infrastructure and the provision of water, sanitation and electricity at schools, as well as the improvement of informal settlements. We support all these measures and will continue to conduct oversight to ensure that the implementation thereof is realised.
While we support the views of the provinces on the need to continue discussions on the equitable share formula, we equally remain concerned about poor spending patterns by most provinces, particularly on conditional grants. It is a reality that most provinces still experience structural problems created by the apartheid regime of Bantustans, with, of course, the exclusion of Gauteng and Western Cape. These provinces were left with structural defects, crippled by huge backlogs, poverty, underdevelopment and without enough resources and capacity. In the spirit of intergovernmental relations, we plead with all departments to assist in bridging these challenges. If these challenges are not urgently and drastically addressed, the problem of under-spending and/or overspending will persist.
While the Western Cape continues to be cited as a shining example of clean governance, improved services and clean audit results, ignoring the fact that its problems and challenges are different from those of other provinces would be a huge mistake. The Western Cape had it nice even during the apartheid period. We should not lose sight of the reality that even the much-talked-about quality services provided in this province are delivered only to the very same people who were previously advantaged.
An HON MEMBER: Not true!
Mr T E CHAANE: Such services seem to be exclusive to the extent that migration of the previously disadvantaged to this province to have access to and share these services is met with much resistance and lamentation, as if the same was not the case in Gauteng and the other provinces bordering Lesotho, Zimbabwe, Mozambique, Namibia and Botswana.
As we encourage other provinces to follow this shining example, it also becomes relevant to caution that improved services should mainly cater for those who never enjoyed such services before, that is, the disadvantaged. One cannot help but speak up against the appalling conditions that the poor in Philippi, Khayelitsha, Worcester, Oudtshoorn, Knysna and many informal settlements in and around Cape Town live in. We emphasise the fact that government resources are meant to improve the lives of the people as a whole and should not be spent in a manner and style reminiscent of the past. We should condemn the emerging tendencies displayed by parties like the DA of creating safe and developed havens benefiting minorities at the expense of the poor.
Clean governance and improved services do not mean the introduction of apartheid segregation policies through the back door. It does not mean the deepening of poverty and inequality levels, as seems to be the case here in the Mother City. It does not mean that a metropolitan centre like Cape Town is a province on its own, to the exclusion of other municipalities not controlled by the DA.
An HON MEMBER: Give us a chance and we’ll show you!
Mr T E CHAANE: It does not mean the maintenance of the status quo and acceleration of inequalities. Clean governance and improved services have everything to do with ensuring that government funds are used appropriately to benefit all citizens, irrespective of their colour. It means improving the lives of the poor and the previously disadvantaged. It means bringing clean water to those who, because of the dark complexion of their skins, were forced to drink from the same well as animals. It means making sure that those who were forced to help themselves in buckets and on fields get decent, water-borne toilets. It means that those who grew up playing in dusty roads get appropriate recreational and sporting facilities. It means that those whose cars were driven on roads full of dust and potholes get tarred roads like those in the so-called urban areas. It means that those whose movements were restricted and who could not make choices regarding where they wanted to live and work get such freedoms. It means that those who, for years, were forced to learn under trees will get proper schools. It means not knowing the stars and candles as the only source of light at night. We all need electricity; it is our right. It means an improved public transport system. It means talking more about Soweto as one of the good models and examples of how townships should be developed and how townships should be improved. It means talking more about our improved public health institutions, not private hospitals meant for and serving largely the rich.
We want to see more resources being released to develop areas like Nyanga, Khayelitsha, Gugulethu and Philippi. We want to see these areas being improved and developed like Soweto before celebrating improved services when such benefit old beneficiaries. A slogan like “Re direla botlhe”, [we work for all] with nothing to back it up in practice, is being cruel to the truth.
Chairperson, I am satisfied that the committee has discharged its duties as expected and is satisfied with how the national revenue funds have been allocated. I therefore table the report for adoption by this House. [Applause.]
Mr R A LEES: Chairperson, the solution to job creation lies not in the ANC’s Expanded Public Works Programme, EPWP, and its bloated, inefficient and frequently corrupt civil service and, certainly, does not lie in the R1,2 billion to be handed to the National Youth Development Agency, NYDA. The National Development Youth Agency is perceived by many as little more than the ANC Youth League in disguise. This organisation will no doubt stick to form and waste this huge amount of money on who knows what weird and debauched projects or perhaps parties they may dream up to amuse themselves.
What is required is real economic growth. Economic growth is only achievable when all South Africans are given the opportunity to achieve their full potential. And it is interesting to hear hon Chaane talking about the Western Cape. The Western Cape was run by the ANC, which failed to provide the service the DA is now providing and improvements have been made since the ANC was removed from governance. We need a society which ensures that every South African is given the opportunity to fulfil their potential and their dreams. We need an open opportunity society for all the people, not just some.
The most important and vital role of any government wishing to give every South African the opportunity to achieve their potential and to pull their families out of poverty must surely be to provide education that is globally competitive to all our children. This, more than anything else, means providing highly qualified and motivated teachers in all our schools, no matter whether they are situated in Cape Town or in the foothills of the Drakensberg of KwaZulu-Natal.
It is simply outrageous to give the NYDA R1,2 billion when our teachers remain so poorly paid. The amount of R8,2 billion appropriated for the school infrastructure backlog grant over the Medium-Term Expenditure Framework, MTEF, period is of little use if it is to be spent on building schools in deep rural areas that remain undesirable teaching posts for most of our poorly paid teachers. Why is it that 16 years after the end of apartheid and its evil policy of separate development, the ANC continues to perpetuate the Bantustan concept by providing poor education to rural children, dooming them to a life of rural poverty with no hope of achieving their full potential?
Hon Chairperson, where is the appropriation ...
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon Lees, can you hold on?
Mr C J VAN ROOYEN: Deputy Chairperson, I’m rising on a point of order: I wonder if it’s parliamentary for a member to address this House with his hands in his pockets. [Laughter.]
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon members, order! Hon Lees, you heard what the gentleman said.
Mr R A LEES: What is your ruling, Madam Chair?
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Would you please just continue with the debate, but make sure that your hands are out of your pockets. [Laughter.]
Mr R A LEES: With pleasure, Madam Chair.
Mr D V BLOEM: On a point of order, Madam: It may be that the member has lots of money and is holding it. He must share it because we are debating money issues now and he has lots of money. Thanks, Madam.
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Please comply and continue with the debate.
Mr R A LEES: Chair, that was not a point of order. I can assure the hon member Bloem that I have no money in my pocket but it’s a pleasure to have my hand in my pocket. [Laughter.]
Hon Chair, where is the appropriation to bring teachers’ salaries to a level commensurate with their qualifications and responsibilities? Where is the appropriation of enough funds for training to bring the qualifications of teachers up to global levels?
In 2010, Kwa-Zulu Natal, my province, employed 8 317 teachers who had nothing more than a Grade 12 qualification. In fact, 20 teachers did not even have a Grade 12 and, in reply to a written question, the Minister of Basic Education stated they were not qualified to teach any grade from Grade 1 to Grade 12. One has to ask why these persons were employed as teachers at all. These are the teachers who are given the responsibility to provide, through education, the opportunity for all our children to achieve their full potential. This is certainly not fair on the teachers concerned, but is surely criminally negligent on the part of the ANC government.
It is an exercise in futility to embark on a strategy of filling vacant posts, as simplistically stated by President Zuma. Instead of giving more ANC cadres unproductive and frequently corrupt employment in the unproductive Public Service - or should I say disservice - these funds should be directed at the crisis of the shockingly low standards of education being offered to our children.
The 2011 Division of Revenue Bill looks good from afar, but in reality it is far from good. Thank you. [Applause.]
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon members, please adhere to the policy of no movement, in and out, while the debate is on. Thank you.
Mr K A SINCLAIR: Deputy Chair, in terms of the policy that you have just pronounced on, is it parliamentary for an hon member to work on his computer during the sitting?
The CHIEF WHIP OF THE NCOP: Chairperson, all we need to do is to behave like hon members and stop playing. The chair referred to hon Mokgoro, who crossed between the member and the Chair, which has nothing to do with what has been raised now.
Mr P G MASUALLE (Eastern Cape): Deputy Chair and hon members, we also welcome the opportunity to respond to the report from the committee. We welcome the report.
As the Eastern Cape, we note and appreciate the committee’s recommendations, particularly on some aspects that still need further debate. Of course we welcome the point made that there are matters that need to be attended to. If these matters were attended to, they would make the committee have another view of some of the proposals that are on the table. In this regard I would like to speak about the issue of spending on resources that are made available to provinces, particularly conditional grants in the Eastern Cape.
We have, for a considerable time, been confronted with challenges that really do not bode well in terms of our spending. We have taken measures to correct the situation. There are improvements that we can already see but, going forward, we have made a commitment that we will have zero tolerance of underspending. We take quarterly reviews on performance from accounting officers, including MECs in their collective as the executive committee so that we can correct the situation.
I am making this point because in our province, according to available data, we currently have in excess of 4,8 million people living below the poverty line who require very catalytic and focused public and private investment in order to improve their lot. For them the equal opportunities the speaker who spoke before me referred to are a distant dream that they are not likely to have, given the conditions they were left in by the system that was preponderant in this country for a number of years. I talk here of people who need quality roads in order to access just economic opportunities. I talk here of people who need decent schooling in the form of facilities that have not been readily available for a number of years.
We welcome most of the interventions that this Division of Revenue Bill is speaking to. I speak here particularly on the grant to attend to infrastructure backlogs as this relates to education.
We also want to say that to ensure that we have sustainable communities we will be focusing extensively on the improvement of some of our small towns because, without economic livelihoods in these towns, there will not be any opportunities for people to prosper so that we can deal decisively with issues of poverty and joblessness. It will only be when such economic opportunities are created that the situation can be changed.
Working together with national departments and public entities, we are looking at massifying their collective ability so that we can bring about change in the situation. We do think that, on an ongoing basis, we may need to look continuously at the equitable share funding formula because there are quite a number of variables that change from time to time.
In fact, another variable that we would like to place firmly on the agenda when that time arises has to do with the cost of providing services, particularly for people in the far-flung areas. The cost of providing, for example, a house in the city of Cape Town is one thing. If one talks about the rural community of Madwaleni, the cost of providing a house to a beneficiary there is incomparable to that of providing a house to a beneficiary in the city of Cape Town. Yes, there may be people changing their places of abode. But in terms of the cost of providing services, these are things we need to look into.
Of course we have been working with the National Treasury. We have undertaken that we want to have a much closer collaborative effort with them to ensure, on a continuous basis, that they are brought in to assist wherever that is needed.
This honourable House has in the recent past been presented with an intervention that was proposed by the Department of Education and which we welcome very much. We hope that this House will continue to play its oversight role. We would like to make that effective and efficient at the earliest possible time, so that the process does not take much longer. We would like to work with the national Minister, who is here. We have to have all hands on deck to ensure that the matter is addressed.
On behalf of the province, we support this report and welcome the framework. Thank you. [Applause.]
Mr M W MAKHUBELA: Chairperson, hon members and hon Minister of Finance, Mr Pravin Gordhan, the MTEF provides for a total of R808,3 billion to be allocated in the 2011-12 financial year, R865,9 billion in the 2012-13 financial year and R925,6 billion in the 2013-14 financial year. We have a contingency reserve of R38,9 billion. Moreover, provision has been made for debt service costs that will amount to R77 billion for 2012, rising to R104 billion. Can the Minister clarify for us what it is that he means by this? What is this increment for debt service costs?
The aggregate expenditure over the next three years excludes R94,1 billion in additional noninterest allocations over the baseline projections on the 2010 Budget. Of these additional allocations, R48,8 billion goes to the national government, R40,2 billion goes to provinces and R5,1 billion goes to local government.
With regard to conditional grants, we see here that provinces received R69,4 billion, including indirect transfers of R700 billion for the schools infrastructure backlog grant.
We, as Cope, appreciate the changes effected on the Bill. But are we sure that we have qualified members on the ground to utilise the budget that has been allocated? If the Minister can agree that we have suitable people to utilise the budget, then what will be his reaction to the statement made in Die Burger on 8 April 2011 which says ...
Ek haal aan:
Minister Pravin Gordhan, die Minister van Finansies, het Maandag in die Staatskoerant aangekondig dat R2,4 miljard van agt provinsies weggeneem word weens onderbesteding.
Ek verstaan dat die R2,4 miljard teruggehou word totdat die projekte die oorbetaling na die provinsies regverdig. Minister, my vraag is: Is dit hoe dienslewering bevorder word? (Translation of Afrikaans paragraph follows.)
Minister Pravin Gordhan, die Minister van Finansies, het Maandag in die Staatskoerant aangekondig dat R2,4 miljard van agt provinsies weggeneem word weens onderbesteding.
I gather that the R2,4 billion is being held back until the projects justify the transfer of funds to the provinces. Minister, my question is: Is this how service delivery is promoted?]
We also welcome government’s decision to directly target the infrastructure backlog and set timeframes for the process. This was in line with the recommendations made by the Financial and Fiscal Commission, FFC, in 2002. We also align ourselves with the FFC recommendations of cautioning the government against the diversion of resources away from priorities which may not lead to a better output. Therefore, R267,2 million has been allocated to the Expanded Public Works Programme, EPWP, incentive grant for provinces to increase job creation. But at the same time, this amount has been decreased by R63,8 million from R331 million in the 2010-11 financial year. Can the Minister tell us what the vision of this reduction is? [Interjections.] [Time expired.]
Mr A H M PAPO (Gauteng): Presiding officer and hon members, I just want to indicate that our MEC for finance would also have been here, but he is addressing a finance indaba in our province. He is fully aware of everything that is happening here and concurs. Basically, we want to indicate that there are a number of challenges that we have noted. One of them is in relation to conditional grants, but there is a particular approach that we want to adopt in this area.
We also wish to indicate that, over the years, the provincial equitable share has been revised and reviewed. It has evolved from seven components to five components currently and these are health, education and basic education, economic activity, poverty and institutional components. However, notable challenges were experienced during the rearrangement of provincial boundaries in 2006. One of the biggest concerns was that the equitable share formula was not flexible enough to deal with expenditure responsibilities that were driving provincial budgets.
At the provincial level, some of the challenges that have been identified with regard to the provincial equitable share were the following: Provinces were expected to achieve more with the equitable share because they were expected to perform more functions; the equitable share formula did not recognise the fiscal capacity of the provinces, though this is assumed through the economic output component; the equitable share was misaligned with the functions that are performed by the provinces; the formula did not capture changes to the total costs, especially fixed costs in service provision associated with migration; the current formula did not differentiate the expenditure needs across the provinces and there was a disjuncture in the way the other spheres were resourced vis-à-vis the expenditure requirements by these spheres of government.
In order to increase the revenue base, we are of the firm view that the economy has to grow even bigger. Over the years, in dealing with the challenges that are facing the provincial spheres of government, efforts have been made in tweaking the provincial equitable share. However, this has not provided the desired outcome. Moreover, it has just shifted resources between provinces without addressing the funding challenges at the provincial level. In terms of the Medium-Term Expenditure Framework, MTEF, the provincial share of the total budget remains at around 43,8% while the national average share is increasing from 47% to 47,3% at the end of the MTEF.
The focus area in dealing with the funding issues is around the vertical split between the spheres of government. This is a political debate but it will have to be carefully discussed to arrive at the most suitable way of sharing the resources for effective service delivery throughout the country. The role of provinces in economic development should be clarified, especially in relation to municipalities, and resources should also accompany this particular function.
Conditional grants are funds assigned to provinces from national government for the achievement of specific national objectives over and above those considered as basic. Conditional grants have been motivated by the need to ensure minimum nationwide standards for the provision of services of national concern. They are specifically used to provide for national priorities in provincial and local governments’ budgets, promote national norms and standards, compensate provinces for cross-boundary flows, effect transition by supporting capacity-building and organisational reforms and address backlogs and regional disparities in social infrastructure.
Despite the good intent of conditional grants, their proliferation has posed a serious challenge on the powers of provinces. The Financial and Fiscal Commission, FFC, undertook a review of conditional grants and their findings included the following: Grants in general are allocated by national government, with little or no consultation at all with the other spheres of government. However, most importantly, grant allocations tend to be linked to key milestones that do not take provincial dynamics into account. Grants also pose a reporting burden to provinces, which is very cumbersome. Over the years there has been a phasing out of conditional grants and recently there seems to have been an attempt to introduce more conditional grants to provinces. This is likely to be interpreted as taking away some of the constitutional powers of provinces.
These are some of the issues we wanted to raise. Obviously, we have actually had a response to what we have always argued: that the economic development component of provinces should be discussed. The response has been that the powers and functions are those of municipalities. That is why we want a proper discussion across the spheres so that there is an understanding and resources can be allocated in line with that discussion.
Therefore, we are convinced that this year’s division will take care of a number of issues, even if in our input we have raised the issue that the funds for human settlements should be increased due to immigration into our provinces. We are, nevertheless, fully behind this Bill and also fully in support. In our province we were unanimous in our support for all the issues we have raised. Thank you. [Applause.]
Mr A R WINDE (Western Cape): Deputy Chairperson, it’s an honour for me to be in this House today. First of all, I recognise the Minister and all the hon members.
At the outset I want to say that the Western Cape supports this Division of Revenue Bill. There are a couple of highlighted areas that I would like to cover in the time allocated to me. I must just say at the outset that of course we welcome the R36 billion that we are going to spend this year in the province, or the R100 billion over the Medium-Term Expenditure Framework, MTEF, cycle, of which 95% comes to our province via this division of revenue.
The areas that I want to highlight follow on something the chair said when he started this debate, as well as my colleague from Gauteng. It is something that really affects Gauteng, the Western Cape and KwaZulu-Natal, namely the in-migration of people coming to look for opportunities in our province: opportunities for jobs, opportunities around health care and opportunities around education.
I must point out that we welcome citizens from other provinces who wish come to the Western Cape in order to receive better quality health care and education. We welcome them with open arms, because we believe that we need to make sure that we offer all South Africans the service they deserve. Obviously, this puts major pressure on our allocation, specifically when head-per-head rand allocation is happening in other provinces but we are expected to deliver that service. Obviously we are going to have a corrective measure happening in this country shortly with the new census, which will help us correct some of those numbers. I think the migration and the trends are happening ahead of that curve and obviously that does put pressure on how we are able to deliver effective services.
I also want to concur with the Minister when he stated in his Budget Speech that the above-inflation - rate salaries that are negotiated really put huge, huge pressure on us as provinces, because every single time a salary negotiation happens above budget and we do not get the full compensation for that above-average negotiation, those extra funds have to come out of our service delivery pockets. That really makes a big difference. In our province, with 76 000 staff members, just on R20 billion of our R36 billion goes to salaries and wages. So, one can understand that with such a big proportion of our budget going into that sector, it does make a difference if you miss it by one or two per cent.
I would also like to say, specifically around the provincial equitable share review, that I really welcome that review. I also specifically welcome the increase for education and health. Although it’s not very significant, there is an increase from 9,23% to 9,37% over the 2011 MTEF. Obviously, there is an increase and we do welcome it. We do think we should see some of those numbers rising after the census.
The Western Cape received an increase of 5,37% in the conditional grants and I think perhaps that could also be increased a little bit. We are moving from R8,156 billion in 2011-12 conditional grants to R8,747 billion in 2012-13 and R9,580 billion in 2013-14.
I want to talk about infrastructure spending. Contrary to the Chair’s opening gambit in this debate, stating that all the money in this province is spent on rich communities - I think that’s what he said - quite frankly, when it comes to infrastructure spending, we are busy building two hospitals at the moment. If you’re not aware of where they are, they are in Mitchells Plain and Khayelitsha - very wealthy suburbs of our city! [Applause.]
What we are also doing is that we are building ... [Interjections.]
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon member, could you please sit down?
The CHIEF WHIP OF THE NCOP: Would the member, in his speech, also include that those were the ANC’s plans?
Hon A R WINDE (Western Cape): Thank you, Deputy Chair... [Interjections.]
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon members ...
Mr D V BLOEM: Deputy Chair, on a point of order: That was not a point of order. You have never allowed the Chief Whip to say something. Now she is putting her comments to the speaker. You must rule on that. That was not a point of order.
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon Bloem, are you raising a point of order? [Interjections.] May I honestly ask you, then, not to tell me what to do? Take your seat. Thank you very much.
Mr A R WINDE (Western Cape): Thank you very much, Deputy Chairperson. In this province during this financial year, we are also building 10 new schools and refurbishing 15 more, with a further 15 going into the planning stage. We are also going to be able to produce or deliver more schools and more health care facilities because we are making specific use of the downturn in the economy and we are finding, through the tender processes, that we are getting far better bang for our buck and are able to build schools cheaper than we have been able to for a very long time. That is in line with what the Minister said last year and this year - that we have to learn to do more with less. That is exactly what we’ve got to do. We’ve got to make sure that we are more efficient when we spend the taxpayer’s money.
Talking about spending the taxpayer’s money, obviously I must use this opportunity to show that we are doing it effectively. I can tell this House that it was a great feeling in our province when we received clean audits across the board from the Auditor-General. Obviously we’ve got to work as hard as we can to continue that record. It’s not always as easily done as said, but we will make sure that we carry the responsibility of spending the taxpayer’s money efficiently.
I also want to touch on an area of governance. I think you might have noted that we passed a piece of legislation in our province that says we will not be allowing officials working in our province to do business with the province. The Auditor-General highlighted how many people work in the departments and actually do work with those departments. We passed a law and we are going to be rolling it out this year. We can analyse our list of officials who work for us and our supply chain system to see if there are any duplications. This is where we can root out corruption.
Talking about declarations, I think there are a number of issues we need to highlight. The Public Service Commission says that it’s a legal requirement for each of us as hon members to complete our declaration of our own interests every year. This also applies to senior management across government. Only 42% of senior managers in South Africa actually filled in that declaration. There is a law that states it has to be done, but only 42% have done it. In the Western Cape, 100% have filled in their forms of declaration. I think that just really goes to show that we’ve got to continue to improve, continue that cycle and continue to offer taxpayers the guarantee that we are going to look after their money responsibly.
I must also say that I think we really, really need to come down on corruption. We all talk about corruption time and time again. We really need to put measures in place to deal with corruption, to root it out where it raises its head and make sure that we deal with it in a public manner. That is the only way we are going to get rid of this scourge.
Also, I would like to speak to this House following on the chair of the committee’s comments when he opened this debate. He said a lot about the City of Cape Town. I would like to offer the Universal Household Access to Basic Services, uHABS, Index, report, which talks exactly about service delivery on the ground to the people who need it. He spoke about our money being spent on the rich and not the poor. Well, that report speaks exactly to service delivery. I would like him to read some of the report of the national Minister of local government and some of the annual report, which shows where that money is spent.
You will have noticed that the opposition in the Western Cape does not raise that knee-jerk comment to our budget anymore. They no longer say, “Ah, it’s only being spent on the rich!” We showed them that 83% of the budget of the Western Cape goes directly to benefit the poor. That’s 83% of that budget! [Applause.]
I would also like to say that we need to make sure that the way in which we spend our money is in the interests of delivering a different life to everybody in this country. How do we spend that money? I know that from our provincial government’s point of view we’ve got to make sure that in our own procurement space we are spending our money effectively and specifically to help the small, medium and micro enterprise, SMME, sector to make a difference. We are helping the SMME sector to be more cost-effective and I’m very happy to report in this House that the last quarterly report ...
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon member, you have only one minute left. Can you conclude?
Mr A R WINDE (Western Cape): Thank you, Chair. The report shows that in our procurement expenditure for the last quarter, 85% of the total procurement of this province went to black-owned enterprises - 85% of our expenditure! [Applause.] It is through those mechanisms that we can really make a difference in helping the SMME sector to grow and so play our part in the challenge to create those five million jobs, which the President has put to all of us. [Applause.]
UMntwana M M M ZULU: Sihlalo, uNgqongqoshe woMnyango weziMali kuleli lizwe lakithi eNingizimu Afrika, abahlonishwa bonke abakhona, mhlonishwa Ngqongqoshe kuMthethosivivinywa woKwabiwa kweZimali zeZwe [Division of Revenue Bill] yisikhathi lapho okwazi khona ukuthi wabele yonke imikhakha kahulumeni - njengoba sinemikhakha emithathu kahulumeni kuleli lizwe lakithi - izimali ngendlela elinganayo.
Kukhona okuye kungiphazamise njengendoda yakwaZulu. Uma ngabe uthi uhulumeni kazwelonke uwunikeza ama-47,3%, uhulumeni wezifundazwe uwunika ama-44,0% bese kuthi komasipala lapho kukhona khona abantu ngempela bese uthi ubanikeza ama-8,7%. Kuyangikhalisa ukuthi mhlawumbe siyolokhu siba neshwa lokuthi ezweni lakithi kuhlale kunezibhelu esingeke sikwazi ukuziqonda kahle.
Uma ngiqala ngicabanga ngokuthi kukhona engifisa kuthuthukiswe kuye kufike engqondweni yami umasipala oseduze nami. Kulukhuni ukuthi ngigijime ngiye kuhulumeni wesifundazwe ngithi kukhona okushodayo, uye ubuke lokhu okuseduzane nawe. Mhlonishwa Ngqongqoshe, ngomunye unyaka wezimali kuyofanele ukubhekelele ukuthi omasipala njengoba bengama-233 ezweni kufanele babelwe kanjani izimali. Mhlawumbe kungancishwa thina ezingeni likazwelonke kunoma kuncishwe laba abantu abasemakhaya kulolu daba lokwabiwa kwezimali.
Ngiyazi ukuthi akuwona umsebenzi wakho ukuthi ukhiphe le mali bese uyayelusa ukuthi isetshenziswa kanjani. Kuyofanele ukuthi phela lo Mnyango WamaPhoyisa egameni likahulumeni wokubambisana – phela sesifile ngamasela kuyo yonke imikhakha kahulumeni - ubheke ukuthi lezi zimali ziyakwazi yini ukusiza abantu bakithi ngendlela okuyiyonayona.
Okunye okungikhathazayo kakhulu emoyeni wami ukuthi ingabe leliya phupho elihle kangaka elalishiwo ngumhlonishwa uMongameli lokuthi kufanele kwakhiwe izindawo zomsebenzi, lingafezeka yini uma kusekhona imali eyizigidigidi ezingu-2,47 obuye uyilande ezifundazweni ibuyele kuwe ezingeni likazwelonke ngoba kuthiwa kusuke kungahlelwanga kahle. Ngiyacela-ke ukuthi uma senihlangene ngaphansi kwephupho likahulumeni wokubambisana nikwazi ukuhlela kahle ukuthi lezi zimali zisetshenziswe ngendlela efanele, lapho bonke abantu bayahlomula kuzo kunokuba zilandwe futhi ziphinde ziyobekwa ethala noma zibuye zihlahlelwe noma zabiwe kabusha futhi.
Ngiyazi ukuthi kulukhuni kangakanani ukubhekana nezinkinga esibhekene nazo kuleli lizwe kodwa ngiyethemba ukuthi kulo nyaka wezimali mhlawumbe kukhona lapho esizokufeza emva kweminyaka eyi-17, kubonakale ukuthi abantu bakithi bayakwazi ukuphucuzeka.
Abantu bakithi emakhaya bayakhala ngoba kuncane kakhulu okuya kubona. Uma ngingakutshela nje ngomasipala oseduze kwami okuthiwa iNkandla, imali okufuneka ukuthi ukwazi uyisebenzisa ukubhekana nezidingo zabantu baseNkandla abangaphezulu kwezinkulungwane ezingama-255, iyizigidi ezingama-39. Iyonanto eye ingikhathaza kakhulu emoyeni ukuthi ingabe siyababhekelela yini labo omasipala. Ngiyabonga. (Translation of isiZulu speech follows.)
[Prince M M M ZULU: Chairperson, Minister of Finance, all hon members present, the Division of Revenue Bill allows you to allocate revenue equally to all three spheres of government.
Something is always worrying me as a Zulu man. What makes me complain is when you say you will be allocating 47% to national government, 44% to provincial and local government, but where there are many people you allocate only 8,7%. Maybe we will always be faced with service delivery protests that we will not understand.
If I think about the areas to be developed, the municipality where I reside comes to mind. It’s difficult to mention provincial government and say there are shortcomings there, so one always looks at the nearest local place. Hon Minister, in future you will have to look at how best you can allocate revenue to the 233 municipalities of the country. Perhaps you could give us, as national government, less than the rural people in terms of revenue.
I know it is not your task to allocate money and to monitor how it is being used. It is necessary for the Department of Police, in collaboration with the government, to check if these monies are utilised properly to the benefit of our people, as theft and corruption is rife.
Another worrying factor is whether we will realise that wonderful dream the President had of creating more jobs if about R2,47 billion is returned to National Treasury just because it is said that no proper planning was done at the lower levels to use it. I therefore request that when you meet in the dream government of national unity, you must be able to plan well so that these monies are well used to benefit all our people, rather than for it to be reclaimed, or kept, or even reallocated.
I know how difficult it is to deal with the challenges that we are faced with in this country, but I hope that with this year’s Budget we might perhaps achieve something after 17 years and show that our people can develop.
Our people in the rural areas are complaining because very little is allocated to them. Let me tell you about the municipality of Nkandla, which is close to me. The amount of money required to service those more than 255 000 people is R39 million. This is exactly what worries me and makes me wonder if we really care about these municipalities. Thank you.]
Mr C J VAN ROOYEN (Free State): Deputy Chairperson, hon Minister and hon members, it is indeed a privilege to participate in a debate in this House again, because this is where I was schooled in 2004. Deputy Chairperson, I’m not going to talk about the purpose, the role and the objectives of the Division of Revenue Bill, since I’m sure everybody in this House is well versed in it. However, allow me to raise some issues from a provincial perspective. I would also like to respond to some of the issues raised by the members of the DA, which I feel are misleading the House and the public. Before that I will complete my prepared speech.
As the Free State province, we fully support the Bill. We also support the National Treasury’s proposed amendments to improve the oversight over conditional grants and agree to the rationale ... [Interjections.]
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon member, can you just take your seat? Hon Lees, you may proceed.
Mr R A LEES: On a point of order, Madam Chairperson: Is it parliamentary for a member of this House to accuse other members of the House of misleading the House without giving due evidence of such misleading?
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon Van Rooyen, please continue with your deliberations. Hon Lees, I’ll come back to you after this.
Mr C J VAN ROOYEN (Free State): Thank you, Deputy Chairperson, I hope he listens very well when I speak.
Let me say from the start that we support the Bill. We also support the National Treasury’s proposed amendments to improve the oversight over conditional grants and agree to the rationale thereof. The fundamental principles thereof are also very sound. I have to caution them, however, that the withholding of funds for underspending by provinces must be very carefully implemented, since the impact of such withholding may have severe consequences and could impact negatively on service delivery and job creation - which we all agree is government’s main priority for this year.
As a province, we proposed that in terms of clause 16(3) of the Division of Revenue Bill, consideration must be given to extending the notice period from seven to 14 days, to allow provinces to make proper representation as to why the allocation should not be withheld. The important issues that must be considered by National Treasury before withholding funds include the following: the impact thereof on service delivery and, very importantly, the expectations of communities; the impact of funds for the financial commitment and other unintended financial consequences. The root cause of the underspending must be investigated thoroughly and possible alternatives or solutions must first be considered before funds are withheld.
With regard to the proposed measures to strengthen oversight over the infrastructure grants through the introduction of the new sector-specific grants, and the reasons for the splitting thereof - the so-called 40/40/20 - we understand and fully support the principles thereof. The problem we have is that the new proposed grant completely deprives the provinces of any discretion and therefore ignores provincial priorities and specific needs.
I’m of the opinion that the National Treasury’s “one size fits all” approach in this regard is not in the spirit of the Intergovernmental Relations Framework Act or the Public Finance Management Act, PFMA, and could even in the extreme be considered unconstitutional.
Deputy Chairperson, allow me to raise an issue which I think needs urgent attention, namely the role and functions of provincial committees in terms of the Money Bills Amendment Procedure and Related Matters Act. The first problem is the very tight timeframes provided for by the Act with regard to the division of revenue. For example, in section 9(3) the Act requires that the Division of Revenue Bill must be passed by Parliament within 35 days. Given the fact that the annual Division of Revenue Bill is a section 76 Bill and, taking into account the six-week-cycle Rule of the NCOP, very little time is allowed for provinces to have proper public hearings, as required by the Constitution. The Division of Revenue Bill is probably the single most important Bill to be referred to provincial legislatures each year, since it is from this Bill that provinces and municipalities derive most of their annual income. Sufficient time must therefore be allowed for provinces to conduct public hearings, as prescribed by the Constitution.
The second problem is the nonexistence of any role for provincial committees in the Medium-Term Budget Policy Statement process. The process is - as we are all aware - the basis for the division of revenue. Section 6(10) of the Money Bills Amendment Procedure and Related Matters Act requires that the Committees on Appropriations of both Houses, within 30 days of the tabling of the Medium-Term Budget Policy Statement, MTBPS, report to the House on the proposed division of revenue and conditional grant allocations to provinces and municipalities.
However, and this is the bone of contention, this process is done without any reference to or input from provincial committees of finance. Surely if we all agree on the importance of the Division of Revenue Amendment Act in provinces and municipalities, then provincial committees should be allowed the space and time to participate in the MTBPS process. Without the provincial participation, the question arises: On what basis does the provincial permanent delegate participate in the NCOP select committee on this matter, considering the fact that the Division of Revenue Bill is a section 76 Bill, which in itself entails certain constitutional requirements?
The importance of the participation of provincial legislatures in the process around the MTBPS is critical in light of the fact that section 6(2) of the money amendment Bill requires that, in addition to the proposed fiscal framework for the next three years, the MTBPS also includes the proposed division of revenue between the three spheres of government, including grants. The importance of this matter - to my mind - warrants the attention of the National Speakers’ Forum because I think it is not only the Free State that has a problem with that but all the other provinces too.
In conclusion, since I know the SA Local Government Association, Salga, is represented in this House, may I raise my concern regarding the level of participation of provincial Salga in the public hearings process in our province. Considering the importance of the Division of Revenue Bill for the funding of municipalities, it was - to say the least - very disappointing. I cannot believe that Salga in the Free State had no inputs of their own to make to the Bill from which the municipalities derive most of their increases.
Let me come to the issue that I said I will raise regarding the issues raised by the DA. The DA has this poster on poles everywhere you go, which says that they will provide services to all. I think it is necessary for us to really unpack this “service to all”. If we look at what happens here in the Western Cape, let me start with the most obvious: “toilet without walls”. Is that services to all? No! Hon Deputy Chairperson ... [Interjections.]... because it is in the township. They will not build it in other townships or ... [Interjections.]
Let me go to the second issue: They forcibly removed people from Hout Bay and left them out there. Is that services to all the people? They built the cycle lane for the rich in Milnerton. Is that service to everybody? That is why I’m saying they are misleading the public and also this House. I thank you. [Applause.]
Mr R A LEES: Deputy Chairperson, on a point of order: Despite the fact that hon Van Rooyen has stopped speaking, what he was saying was not relevant to the debate and I wish you to rule on the relevance of what he has said.
Mr S S MAZOSIWE: Deputy Chairperson, I must say at the outset that the ANC supports the Bill. South Africa is a unitary state and that feature should inform the division of revenue. A division of revenue which is devoid of a consideration of history is unlikely to address poverty and inequality. The division of revenue should, as a developmental tool, right past wrongs and correct past imbalances.
The division of revenue ... [Interjections.]
Jy moet luister, agb Lees. Jy moet mooi luister. (You need to listen, hon Lees. You need to listen carefully.)
The division of revenue should not be a means of ensuring that more of the same happens in a balanced manner, but is to be tilted towards ensuring that the gap between the formerly disadvantaged and their opposite is narrowed to its ultimate obliteration.
The allocation of resources to the three spheres of government is a critical step in the budget process, required before national government, the nine provinces and the 283 municipalities can determine their own budgets. The allocation process takes into account the powers and functions assigned to the three spheres of government. The process for making this decision is at the heart of co-operative governance as envisaged in the Constitution.
The division of revenue is a financial instrument which the ANC-led government uses to ensure that its policy programmes are brought into effect through the provision of the necessary financial resources. Given that the programmes of government are targeted towards the poor, delivery and the budget are mutually re-enforcing elements of a common objective. Hence the Division of Revenue Bill is critical in ensuring that the fiscus does meet the priorities that the ANC has set for government in terms of delivery in the various spheres of government. It is a political instrument that has a specific focus and target, informed by ANC policy and priorities.
Therefore, the five-year plan, as set out at the ANC’s 52nd national conference in Polokwane, does provide key indicators which should find resonance in the Division of Revenue Bill. The ANC National Elections Manifesto of 2009 and the 2011 state of the nation address inform the Division of Revenue Bill. The Bill is one instrument to achieve these objectives and, within its allocations, to track the priorities of government, which is essential.
The decision as to where money goes is not simply a structural decision between spheres of government, but rather represents and reflects a political choice between national, provincial and local government programme priorities. Again, when we examine the horizontal division between provinces, much of what the provinces must respond to is tied to fulfilling executive mandates and upholding constitutional obligations.
With regard to the equitable share for each province, again there are deep political considerations that inform the amount each province is given under the equitable share. These considerations are rural demographics, poverty levels, population size, backlogs and key development areas within the province, as well as projects and programmes that would create jobs.
For 2011, these needs are looked after through the equitable share formulas for provincial and local government, and through specific conditional grants. The developmental needs are accounted for in the strong growth in the provincial and local government spheres of nationally raised revenue. Both the equitable share and infrastructure grant formulas are redistributive towards poorer provinces and municipalities.
The ANC government continues to invest in economic infrastructure like roads and in social infrastructure like schools, hospitals and clinics, in order to stimulate economic development and job creation so as to address economic and social disparities.
The 2011 Medium—Term Expenditure Framework, MTEF, continues to strengthen provincial and local government’s ability to provide social and municipal basic services and perform their constitutional functions. It is not the Western Cape that has determined that; it is the ANC-led government that has set up a framework under which funds are allocated. It is not a miracle, therefore, that one particular Western Cape government is able to implement this, because it is part of the overall government strategy to implement this and make sure that the poor get something from the fiscus. So, the Western Cape cannot stand here and gloat about this particular provision because it has been developed by the ANC and voted for in Parliament by the ANC-led government. That is the truth. We cannot sit here and distort it. It is wrong and unfair.
On the review of the provincial equitable share formula, the ANC government has agreed to a comprehensive review of the provincial equitable share formula and a task team is currently working on this, in time for the 2011 MTEF.
In 2004 it was decided that the national government should take responsibility for social assistance. These funds were taken out of the provincial equitable share and the formula was reviewed and some minor changes were made. An objective redistributive formula is used to divide the equitable share among provinces.
In 2006 the Budget Council called for a comprehensive review of the provincial equitable share formula to address concerns that it was not flexible enough to deal with expenditure responsibilities driving provincial budgets. The review was conducted in two phases. The first phase was concluded by the Financial and Fiscal Commission, FFC, in 2009. The FFC identified the policy imperatives that should underpin the review and proposed options for the reform of provincial fiscal powers and the provincial fiscal framework. National Treasury led the second phase of the review and the recommendations were presented to the Budget Council in October 2010.
Government has responded to the FFC’s recommendations relating to the formula and the provincial division of revenue, but it has not considered the FFC’s proposed changes to the fiscal powers of provinces. Based on the review, a number of reforms will be introduced to the provincial equitable share formula for the 20ll Budget. The structure of the provincial equitable share remains unchanged.
A new health component will be introduced and the weights of the education, health and basic components will be revised. The unconditional nature of the equitable share formula, the oversight and support responsibilities of national departments in charge of concurrent functions and the discretion of provincial governments have not been affected by these changes.
A number of new components to the formula were considered, but all options were constrained by the lack of availability of regularly updated official demographic data sets. Since the last review of the provincial equitable share formula, the expenditure shares of education and health have changed. Health and education are still the two largest expenditure items on provincial budgets.
In respect of local government, the FFC recommended that the institutional component and revenue-raising correction component be reformed, so that the institutional component assists poor municipalities and the step structure of the differentiated tax mechanism of the revenue-raising correction component is removed. The current method of using actual property rates and own revenues collected to calculate the correction is problematic, as poor fiscal effort and reporting is used as a measure for additional funding, which could be seen as a contradiction of section 227(2) of the Constitution. The FFC recommends that this practice be replaced ... [Time expired.] The ANC supports the Bill. Thank you.
Mr K D MOLUSI (Northern Cape): Deputy Chairperson, thank you for affording me this opportunity, on behalf of the Northern Cape province, to participate in the debate about such an important Bill for South Africa at large. We understand that the Division of Revenue Bill gives effect to section 214(1) of the Constitution, which requires that an Act of Parliament must provide for an equitable share and allocation of revenue.
The Division of Revenue Bill that we debate today seeks to embody a philosophy that lies at the heart of the struggle for national liberation, a struggle that has ushered in the democracy and freedom that we all enjoy today. It is a philosophy of people motivated by the desire, as Amartya Sen said, to remove “the various types of unfreedoms that leave people with little choice and little opportunity of exercising their reasoned agency” and, in turn, affirm people’s freedoms, such as freedom of association, freedom of speech, freedom of expression, and freedom to explore our capabilities and abilities.
The desire to remove the various types of “unfreedoms” by our people was informed by the understanding that freedom is the primary aid of development and also the principal means of achieving it, meaning that in order to emancipate themselves from the conditions of abject poverty, the people of South Africa must firstly strive for the attainment of political freedom and, secondly, strive towards the attainment of economic freedom. We will continue to argue that the essence of our work is to create the conditions for the elimination of hunger and food insecurity, the reduction of crime, the creation of a healthy nation free of disease, and the creation of sustainable jobs, education and training for our people.
In our quest to create a better life for all, foremost on our agenda is the New Growth Path, which prioritises, inter alia, creating employment, reducing poverty and fostering economic growth in the country. It is in this context that there is a real need for government to challenge the underlying structure of growth. Over the next years, the state must do more to improve the support structures and systems for economic activities that seek to create decent work opportunities on a large scale, above all by identifying opportunities for growth and providing, where required, infrastructure, training, marketing support, adequate regulations and access to start-up capital. The call for expanding decent work opportunities includes an integrated rural development and agrarian reform strategy that addresses mass joblessness and poverty simultaneously, improving the conditions of farm workers.
However, the Northern Cape has the following concerns relating to the impact of the Division of Revenue Bill on the province. The concerns include the fact that the provincial equitable share formula does not address the challenges of distance and the rural environment. This stems from the fact that the changes to the components’ weighting negatively affect the Northern Cape. The incorporation of the old Kgalagadi District Municipality and part of Pampierstad villages in the surrounding areas into the Northern Cape from the North West province did not make accommodation for transitional arrangements and, as a result, it continues to put pressure on the provincial budget allocations.
Furthermore, the adjustment of the equitable share baseline by 0,3% could compromise service delivery in this regard. In addition, decaying bulk infrastructure in municipalities in and around the Northern Cape is a continual financial constraint while we experience minimum revenue collections, as a result of poverty levels and unemployment. For example, the Sol Plaatje municipality in Kimberley recently experienced water cuts due to old infrastructure. We wish to highlight the fact that poor asset management is one factor of the decaying infrastructure, but the old bulk infrastructure is a reality and should be addressed.
In his state of the nation address this year, President Zuma said:
... we are concerned that unemployment and poverty persist, despite the economic growth experienced in the past 10 years to address these concerns, we have declared 2011 a year of job creation through meaningful economic transformation and inclusive growth.
This simply translates to this: We have to mobilise all resources, especially the private sector, to contribute in terms of ensuring that retention in the current hostile economic environment becomes a reality. In fact, we strongly urge the private sector to consider retrenchment as the last, rather than the first, resort when responding to the current economic crisis. Other innovative options, such as the reduction of working hours and labour-intensive methods, should be explored with workers to save jobs.
It is important that we utilise our resources in the most efficient and effective way. Improved efficiency and effectiveness of our public spending will not only help to maintain the fiscal discipline needed during these trying times but also provide us with an opportunity to continuously review our programmes. Our focus should now not only be on how to cut unnecessary public expenditure but rather on increasing the value for money of public spending and how to make the most of limited public resources. The period ahead, therefore, calls on us to look carefully at the relationship between inputs, outputs and outcomes. Both as a province and local authorities, we must avoid unnecessary costs when executing our programmes. Let us tighten our fiscal controls and discipline, so that we not only achieve more unqualified reports from the Auditor-General, which is what we want, but simultaneously also deliver more to our people. The people of our country deserve no less.
Infrastructure development programmes can help to give access to community facilities, such as schools, hospitals, roads, water, housing and more. In this way, they will help meet the challenge of basic needs. They will also create employment, develop skills and provide small, medium and micro enterprise, SMME, development opportunities, as the policy and practice of the Expanded Public Works Programme is implemented. To emphasise, infrastructure delivery underpins the very strength of a country’s competitive performance and contributes to the welfare and striving for a continuous improvement in the quality of life of our people through the provision of social support structures.
The Expanded Public Works Programme dovetails perfectly with the infrastructure spending, as it relies on lower skilled labour and, in turn, boosts growth in employment. We have no doubt that together with the private sector we will be in a position to deliver services effectively and efficiently, and we can only conquer this if we embrace the spirit of partnership. This partnership between the government, the private sector and our communities must extend to all facets of the development agenda in our province, ensuring that working together we can do more. Our primary goal remains the reconstruction and development of our economy and the progressive building of a shared future in which we can take pride in the quality of our public services, the creation of jobs for our people and security in our communities.
In conclusion, this Division of Revenue Bill deals with priorities that we determined for ourselves at national and provincial level. Our province is very rich in scarce minerals, and the type of mining activity being carried out and planned for the future makes us the richest province in the country. This cannot continue, and this process must address this anomaly. Significant progress has been made, and we are a long way from where we started, but we still have a long way to go in being able to say that our country has truly been economically transformed to benefit the poorest of the poor. Every step of this journey is driven by the absolute commitment to provide a better life for all. The Northern Cape supports the Division of Revenue Bill. I thank you. [Applause.]
Mr M NEMADZIVHANANI (Limpopo): Hon Chairperson, hon Minister of Finance, hon members in this House, all protocol observed, as Limpopo, we are thankful that this Bill was sent to our province by the NCOP. We find that to be in line with the Constitution, particularly section 76, as it applies to this specific Bill.
We not only submitted this Bill to the legislature and the Portfolio Committee on Treasury but took it to the people through public hearings. We see this Bill as a transmission belt between the needs of the people and delivery by government. We are proud of the ANC for ensuring that this process in the Constitution is adhered to. That is why people in Limpopo have confidence in the leadership of the ANC. [Applause.]
We find this Bill to be redistributive. When we say “redistributive” we mean to redistribute funds to those who, in the old days of apartheid, were deprived and not given the chance to express themselves. They were made passive recipients, but now they are active participants. If you look at the infrastructure, school infrastructure and urban settlement development grants, you will see that all those grants are redistributive. This is a very productive policy, which should be encouraged. Surely we should give ourselves, as government, a round of applause for embarking on a challenging process. [Applause.] The ANC will go into the corridors of history, recognised by the people for its redressive policy. We are redressing the imbalances of the past.
This Bill plays a supervisory role because it allows us and government to supervise municipalities, provinces, national Ministries, as well as premiers, including the one of the Western Cape. What better supervisor could there be?
We took the decision as a province that we were going to fight the colonial design in our province because by colonial design, South Africa - its economy in particular – was built in such a way that its neighbouring states brought labour to work as migrants.
Obviously we know that this House and Treasury will take note of the implication of our province bordering on a number of countries. We have a challenge, for example, in Musina, because when our brothers and sisters come across the border to seek education and health, we cannot chase them away because it is against the policies of the ANC to do so. The ANC encourages us to live with our neighbours and to look after their health as good hosts. We are going to remove the colonial design that was created - roots, stem and branch - through this Bill, so that we have an integrated economy here in the Southern African Development Community, SADC.
We are proud of the fact that the issue of disaster management has been addressed because in the past, in our province in particular, we suffered disasters. Hon members must understand that when disaster strikes, it does not come with drum majorettes so that we can see the drum majorettes there. It just happens like a tsunami. The funds that have been reserved will help us to deal with such unforeseen circumstances.
As a province, we are encouraging our people, consciously so, to work with Statistics SA in the upcoming census. With correct and unbiased statistics, Treasury will be able to manage its fiscals, particularly when it comes to the equitable share, having a clear understanding of population, as well as verifiable statistics. This will be the responsibility of each and every citizen. We are also encouraging our municipalities and hospitals to keep records of the services that they provide, as well as of the death and birth rates, so that we don’t have inflated birth rates or deflated death rates.
What we want specifically is to ensure that there is good governance and delivery. As the province of Limpopo we are proud that, slowly but surely, Treasury is replacing organised confusion with systematic order. The organised confusion is from the past. They are introducing systematic financial order.
I can see that there are some political parties such as the DA that want the ANC to adopt a spaza-shop approach to finance. We will never do that. [Interjections.] I want to emphasise that if there is a programme on corruption, it is the ANC that is leading this campaign, through its hotlines and its structures on the ground. [Applause.] We can now see that many municipalities no longer have disclaimers.
I want to say that if you have a bus in the village and it’s just lying there, it is possible for bees to come and make a hive in there. It is possible for chickens to come into the bus and lay eggs. It is also possible for dogs to sleep underneath the bus. But because the ANC bus is on the move, through this Bill, other parties are barking at the ANC. [Applause.]
We, as Limpopo, are saying that, with insight, hindsight and foresight, this Bill is the most important developmental tool. It promotes a productive economy, and on that basis our people are behind us and they gave us the mandate to support this Bill as a province. Thank you.
Mr A F MAHLALELA (Mpumalanga): Deputy Chairperson, hon Minister and hon members, it is indeed a great privilege for me to reflect on the Division of Revenue Bill 2011 in this House, on behalf of the Mpumalanga Provincial Legislature, on this occasion as we debate the Bill in the year the ANC has declared the year of consolidating people’s power for a national democratic society.
As we advance towards the centenary of the ANC, the Bill is an indication of the ANC’s determination to improve the quality of the lives of our people. Let me draw inspiration from the words of wisdom spoken by the former President, Isithwalandwe, Dr Nelson Mandela, on the occasion of the President’s Budget Vote debate in the National Assembly on 18 August 1994, when he said:
At the end of the day, the yardstick that we shall all be judged by is one and one only: and that is, are we, through our endeavours here, creating the basis to better the lives of all South Africans.
He continued and said:
This is not because the people have some subjective expectations fanned during an election campaign. Neither it is because there is a magic wand that they see in the new government.
The division of revenue by the hon Minister correctly responds to the questions asked by the former President. Indeed, our reflection on this Division of Revenue Bill is accurately captured in the reports that we submitted during the negotiation mandate. As a matter of fact and principle, we support the Bill. However, we want to raise a few issues, hon Minister, in relation to the Bill. Before we do that, we want to indicate that in terms of the division of revenue, it is our view that it indeed conforms with Chapter 3 of the Constitution, which affirms co-operative governance. To this end, this Bill puts into practice and applies financial logic to the affirmation of section 40 of our Constitution, when it says:
In the Republic, government is constituted as national, provincial and local spheres of government which are distinctive, interdependent and interrelated.
In line with our 2009 ANC manifesto priorities, we are pleased to note that the division of revenue over the next three years of expenditure will be channelled towards government’s 12 outcomes, using government’s functional groupings as the basis for budgeting, with the main emphasis on the following: job creation, education and skills development, health, human settlements and, more importantly - especially in our case, as Mpumalanga - rural development.
As you will know, our province is rated second in terms of HIV/Aids prevalence. That is why we welcome the increase that has been allocated to the comprehensive HIV/Aids grant. But we also want to indicate that regarding the amount allocated to health in general, as reflected by Limpopo in particular, we border on two countries – Swaziland and Mozambique. The reality of the situation is that the people of Mozambique and Swaziland, especially those close to the border of the two countries, do receive health services from the province of Mpumalanga.
We are not certain to which extent the formula, as presented, begins to take into consideration the fact that we have that challenge. Secondly, we are not sure of the extent to which the formula takes into consideration the burden of diseases. It remains one of the challenges that when the health allocation is done, this has to be taken into consideration.
In relation to education, although we are pleased with the allocation for further education and training, FET, colleges in the province, we still feel that it is insufficient when we take into consideration that Mpumalanga is one of the two provinces without a university. As a result, we are losing a lot of skills in the province, and we feel that greater and more resources should be allocated to further education and training so that we are in a position to make sure that we improve the skills that we experience a shortage in.
We want to welcome the allocation and, at long last, the recognition by national government that Mpumalanga is one of the electricity suppliers in the country. As a result, there is a lot of transportation of coal on our roads, and we are known as a province with many potholes, not necessarily because we don’t have the willingness to deal with the potholes, but because of the amount of coal that is transported on our roads. Our road infrastructure is unable to deal with the amount of coal that is transported. Therefore, we welcome the amount that has been allocated to coal haulage on our road network –and we hope that it will be increased in the next financial years to come.
We are of the view that it is not a permanent solution to the problem. The permanent solution to the problem, in our view, is that we need to move towards transporting our coal via rail, so that we are in a position to move away from trucks on our roads. Then we would be in a position to maintain our roads in good condition.
One of the issues that we want to comment on, therefore, is in relation to the allocation to infrastructure, a grant that will deal with the challenges of infrastructure that is very unsafe. We also want to welcome the initiatives by National Treasury to deal with the challenges of infrastructure by making sure that a monitoring system is created so that we are in a position to make sure that, first and foremost, we accelerate service delivery in relation to infrastructure and also produce quality. It has always been a problem that where infrastructure has been built, you will find that some of it is not of good quality.
As I conclude, I also want to raise the matter that was raised in the public hearing around the issue of the municipal infrastructure grant, MIG, allocation as it relates to sports infrastructure. It is our view that the MIG funding as it relates to infrastructure has not been properly allocated because, as a result of huge competing needs in municipalities, sports infrastructure has become a casualty. It is therefore our view that some review needs to be put in place, either ring-fencing the allocation or giving it as a separate conditional grant to municipalities, if municipalities are tasked to provide that service. In doing so, we will make sure that sports infrastructure is built in our communities so that the youth also have the opportunity to use that infrastructure and move away from committing crime.
I want to conclude by saying that in the latest report that I have seen, there is no province that has received a clean audit, as alleged by the Western Cape, and therefore it is not correct that the Western Cape has obtained a clean audit. The correct information is that all departments have obtained unqualified reports - but not a clean audit. There are some departments with unqualified reports but with issues. It is wrong to come and mislead the House and say that the Western Cape has received a clean audit while it has not.
Let me conclude by saying that as reflected in our final mandate, we support the Bill, as I have indicated, and we are of the firm view that the Budget will intervene in dealing with the challenges that we are confronting as a country. Finally, let me draw on the wisdom of the late ANC president Oliver Tambo, on the occasion of his installation as the Chancellor of the University of Fort Hare on 19 October 1991, when he said:
South Africa needs to believe in our capacity to overcome our painful history; to begin again and to regard our failures ... not as finite moments, but as occasions for a new beginning.
I thank you. [Applause.]
Mrs L MABE (North West): Hon House Chairperson, I greet all members in this House. I want to remind members that - as the ANC government - we have inherited huge backlogs, especially in areas that were part of the Bantustans.
I must also remind this House that all the wrong things that happened, especially those that hurt the majority of the citizens of this country, have been happening for more than 400 years. This democratic government is only 17 years old, compared to the more than 400 years of oppression of the majority of the citizens of this country. We must always be mindful that we are only 17 and, therefore, a teenaged democratic government.
Somebody said that we must not make the mistake of beating ourselves up as teenagers because even established democracies still have problems that are the same as the ones we have in our country. You go to America or the UK and you still have the poor there. It is not only in South Africa where we have the poor.
We must also remember that the people who stay in lavish suburbs are the result of the sweat of the poor coming from the rural areas. [Applause.] Therefore, as the ANC government, we must focus on our mandate to make it possible for those who have been disadvantaged to be liberated economically.
Furthermore, it is important for us to compare ourselves with our peers, not the well-established democracies. We fully agree with and we are not even shy to acknowledge the fact that when it comes to conditional grants, we have not been performing well.
As a province, however, we have taken a conscious decision that the executive is going to take action to make sure that they do their oversight on the spending of conditional grants. We have taken a decision that we, as MECs, are not going to rely on officials’ reports, but are going to do active oversight over conditional grants. That is executive activism because they have taken an interest in monitoring the budgets.
I must also indicate that we fully support and appreciate the school infrastructure backlogs grant because it’s in those rural areas that schools have a backlog in infrastructure. We think that the three years - that is the time that has been allocated - will put pressure on us to make sure that we deliver as fast as possible to address those backlogs. Those children also need water, sanitation and electricity to study in better classrooms. That is also a sign that this government is concerned with the interests of the poor and not only those of the rich who have been advantaged for many decades.
I also support the committee’s report to the effect that withholding funds should not be an administrative decision. It should be an executive decision so that the politicians can be the ones who take the decisions, knowing full well how they are going to make sure that the administrators do what is expected of them because we do oversight over them. This, hon Minister, through you, Chairperson, is critical. As politicians we must be part of the decision on whether or not to withhold funds.
Furthermore, remember that one of the executive decisions that must be taken, hon Minister, is the fact that we have a municipality in our province called NW397, which is a merger of Kagisano Local Municipality and Molopo Local Municipality. These two are poor municipalities and, unexpectedly, they have not received their allocation. This was an omission on the part of National Treasury in allocating the municipal systems improvement grant. They haven’t allocated it. The biggest question is: If you merge two poor municipalities and don’t provide a grant for their systems to be merged, how can that be possible, because they don’t have income-generating capacity?
The water and sanitation survey of 2007 indicates that the population of that joint municipality is more than 82 000. Remember, we must ensure that we deliver to the people who are disadvantaged and poor. However, it will be difficult to merge the systems if you don’t have a grant that will assist you. That will compromise service delivery in that area.
I must also remind this House that, in the same municipality, there are some people who were not happy that the two municipalities were merged. So, if we don’t support them, then we provide fertile ground for those who want to take advantage of the good things and misuse them.
That is why I am appealing to this House and the hon Minister that an executive decision must be taken to ensure that we provide for that municipality in 2011. It can’t be administrative, hon members. It can’t at all. If this is not addressed, it is going to compromise us because, politically, people will feel that, since we have merged the two municipalities, there is no need to give them support.
Currently, they rely on Dr Ruth Segomotsi Mompati District Municipality and the provincial departments of finance and local government and traditional affairs for services and technical assistance. So, if you take the little that they have, how do you expect them to deliver more effectively to the people of that municipality?
Who will be the most affected people in that area? Women! Women! Women are in the majority in the rural areas and, as a woman, I can’t be happy if more women are disadvantaged. Grants - the equitable share, in particular - do not provide sufficient opportunity for provinces to manoeuvre around the allocations that we get because funds are already channelled through conditional grants. We have little space to manoeuvre, especially in the rural provinces.
I must make it clear to the members of this House that sometimes when people say that they will deliver to all, we must be clear on what they mean. In the province we have the municipality of Tswaing, of which Sannieshof is part. In that municipality there is a lady called Carin Visser, who was a chairperson of the ratepayers’ association. She organised people not to pay for services and she utilised that to play with people’s emotions. Currently, she is a DA candidate. And you ask yourself: Was it a stepping stone to mislead people not to pay for services when they say “services for all” so that they can use it as their ticket to go and ask for votes? Is that a service for all? I must also indicate that that is a sign of a person who acts like a chameleon, who changes colour based on the conditions they find themselves in. [Interjections.] It’s simply the actions of a chameleon.
Hon members of the House should remember that before Botswana became independent - when it was still Bechuanaland - this area, our capital, Mafikeng, was part of Botswana. It was the capital of Botswana then, in the early 1960s. However, when the then government took over the areas that were part of Botswana to become part of Bophuthatswana, they never made allocations for those areas. This means that we have to deal with the backlogs of the former residents of Botswana, who are currently North West or South African residents. The people are of the same families. You just cross the border and it’s the same family. You go to Botswana and you find the same people who are of the same family. The question is: Why didn’t they allocate at that time?
When the Minister tabled the Budget, I appreciated it. When we went out of the NA Chamber, somebody said, “Wow! What a progressive Budget, aimed at assisting the poor.” It is not everybody who can say that, especially not the DA. They can’t appreciate the fact that this is a progressive Budget, intended to assist those who have been disadvantaged for many years.
As I conclude, I wish to indicate that, as a province, we want to send our greetings to the current Director-General of the National Treasury for good work done. Lesetja Kganyago has done a good job, and he is going to do a good job at the Reserve Bank. [Applause.] We fully support him. It was the correct decision by the President to deploy him where he will do his best because we require his skills. The country also requires his skills and we want to wish him well. The North West supports the Division of Revenue Bill. [Applause.]
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon members, on behalf of this House, I take this opportunity to welcome Mr Mofokeng and the other gentleman over there. [Applause.]
Cllr I R IVERSEN (Salga): Madam Chair, greetings also to the Minister of Finance. The division of revenue should, in terms of the South African Constitution, seek to strengthen provinces and municipalities so that they have the ability to provide basic services and perform the functions allocated to them. It should therefore seek to promote the improvement of the living environments and livelihoods of all constituencies by means of making provision to meet their developmental and other needs. The President, in his state of the nation address, assured our people that, and I quote:
We have instituted a turnaround strategy for local government, focusing on, amongst others, strengthening of basic administrative systems, financial management and customer care.
Over the medium to long term, all of us will have to work together with municipalities to achieve the strategic outcomes of establishing a responsive, accountable, effective and efficient local government, particularly following the local government elections.
The new term of local government will have to focus on supporting and contributing to government’s five priorities. Municipalities are important stakeholders in achieving the priorities of job creation, health, rural development and crime prevention.
The Minister of Finance reported on the recovery and growth in the economy of about 3,1% last year and expressed the anticipation of continued growth of about 3,6% in the current financial year.
It is appreciated that the government, through its budgets, continues in its moves to accelerate the pace of employment creation in order to focus on economic policy. It is aimed at introducing a youth employment subsidy and a jobs fund; encouraging small enterprise development; expanding investment in skills and education and improving the capacity and effectiveness of municipal development planning, including combating crime and corruption and promoting a service-orientated Public Service administration.
It is noted that the municipal infrastructure grant that the metros received was combined with a top slicing of the human settlements development grant, to provide provinces with the opportunity to create a new grant for the metros - the urban settlements development grant.
The consolidation and ring-fencing of the funding of cities are welcomed. It lays a foundation for the devolvement of housing and public transport functions to cities and the integration of other grants to form a proper fiscal instrument in support of urban, built-environment projects.
While this important policy intervention is welcomed, we hope that future policy developments concentrate on finding similar funding solutions for rural areas in our country. We hope that the next Division of Revenue Bill will address the funding and capacity issues in undercapacitated and unviable municipalities, to allow them to ensure sustainable service delivery areas, without compromising the ability of large municipalities and metros to develop economically and provide an enabling environment for job creation.
We also note that the Minister took back unspent monies from eight provinces, which we believe was the correct thing to do. I am not sure who the ninth province is, but I trust that Minister Winde will most probably be able to help me with that name.
Local government received R34,1 billion in the 2011-12 financial year. It goes up to R37,5 billion in 2012-13, and R40 billion in 2013-14 of equitable share, which is an upwards revision to the baselines. It is noted, with appreciation, that the equitable share makes provision to sustain basic service delivery and revisions towards strengthening governance and administration in smaller municipalities. Government also provided R8,6 billion in 2011-12, R9 billion in 2012-13 and R9,6 billion in 2013-14, as the metros’ share of the general fuel levy. Salga understands that two municipalities will become metros following these local government elections. It has to be included in these allocations. The allocations will have to be increased as the distribution from the share of the general fuel levy will go to more municipalities. We trust that the Minister of Finance hears our plea.
Salga acknowledges the increased national transfers to local government for infrastructure which amount to R29,5 billion, R33,1 billion and R35,5 billion for each of the Medium-Term Expenditure Framework, MTEF years, including over and above municipal services infrastructure and funding for other municipal disasters. However, I need to point out that the refund on disasters is not covered by the costs that the municipalities have to bear to sort out those disasters. We hope that legislation will be addressed to make it possible to get a 100% refund.
Salga believes that the role of national and provincial government is to support and monitor provincial outcomes of municipal infrastructure investments. The efforts of these spheres of government should focus on improving the capacity, efficiency, effectiveness, sustainability and accountability of the local government sphere and on making integrated development plans the primary mechanisms for intergovernmental co-ordination.
Good municipal governance is built upon an effective interface between councillors and officials, strong links between financial and technical support functions and appropriate organisational structure, with the right people in the right positions or, in other words, fit for purpose.
It is appreciated that local government continues to give funds for capacity-building initiatives. The increase in the financial management grant to R1,4 billion of the MTEF for the modernisation of financial management and building of an in-house capacity in municipalities is noted with appreciation. However, as identified in the turnaround strategy, more attention will have to be paid to building the required technical and professional capacity of municipalities.
Salga recommended to the 2010 Budget Forum that a fiscal framework review of local government be undertaken. This review should focus on revisiting local government’s share of nationally raised revenue and reforms to the equitable share formula. The conditional grants should take into consideration the ever-increasing demands for basic services, patterns of population migration and growth as well as the bulk prices of municipal services and the development responsibilities of local government.
A revised fiscal regime for local government has to consider the differentiated needs of urban and rural areas alike. The input requested the Minister of Finance to establish an independent commission to undertake the review of the local government fiscal framework in consultation with stakeholders.
While it is important to engage government on improving intergovernmental fiscal transfers, we acknowledge that municipalities need to continue to improve revenue collection and billing as well as to explore new sources of revenue in order to address service delivery challenges and promote economic growth.
In conclusion, Salga supports the 2011 Division of Revenue Bill.
Mr C J DE BEER: Chairperson, it has been a very busy afternoon. I would like to thank the hon Minister for being present. I also want to add my voice in thanking the Director-General of the National Treasury for the excellent work he did and the expertise he brought into National Treasury. I encourage him to go and continue practising it at the Reserve Bank. We also thank the personnel in National Treasury and the provincial treasuries in South Africa for their commitment and their contributions. Some of them are sitting there.
The ANC government’s objective is to create a better life for all and roll back the frontiers of poverty by focusing on its five manifesto priorities. This is demonstrated in the equitable division of revenue across all the spheres of government in order to create a national democratic society, hon Lees. Quality should inform the division of revenue - quality of spending and quality of service delivery.
As a developmental tool, the division of revenue should actively right past wrongs and correct past imbalances to improve our people’s lives. We have been doing this since 1994. We could have done it before, had we been in power, but it happened in 1994. The time is now! Do you remember the posters on the lamp posts? The time is now! The priorities are the poor and the working class, and to free all people from poverty.
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon member, is that a point of order?
Mr W F FABER: Madam Chair, will the hon member take a question, please?
Mr C J DE BEER: No. No. [Interjections.]
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon member, do you want a question or not?
Mr C J DE BEER: No. He can ask me outside.
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): No. He says no. [Interjections.]. You may continue, hon member.
Mr C J DE BEER: Chairperson and hon Faber, we work with realities. However, hon Lees, I am a bit disappointed in you this afternoon. [Interjections.] You are very sceptical about the division of revenue. The words were “the revenue Bill is far from good”. Chairperson, we must work with the financial resources that are available in this country.
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon De Beer, can you take your seat? Yes, hon Lees? [Interjections.]
Mr R A LEES: Chair, I have a great deal of respect for the hon De Beer, but I would request that his remarks be directed through the Chair and not directly to myself, please. [Interjections.]
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Is that all, hon Lees?
Mr R A LEES: Madam Chair, I believe that is a valid point of order, and I would request that you support me.
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Thank you very much. Take your seat. Hon De Beer, continue.
Mr C J DE BEER: I apologise if I did not address the member through you, Chairperson. However, the hon member does not come up with solutions, and I will get to that a bit later. He is sceptical about the National Youth Development Agency and about real economic growth. He will see where we come from. [Interjections.]
Given the economic structure we inherited, it must be said we cannot correct everything that was not addressed in the previous 100 years. The creation of Bantu Native Reserves had no developmental imperatives in its genesis or implementation but ensured comfort and plenty for the ruling elite. This resulted in rural and poor provinces, and our young democracy had to deal with it. That is the reality.
But it is important to see where we come from, financially. In 1994, total revenue was a mere R112,4 billion. Expenditure was R137 billion and debt service cost R24,1 billion. It is evident that in the past 17 years, the ANC-led government has succeeded in rebuilding the economy, which increased the revenue base from a mere R112,4 billion to R924 billion by the end of the Medium-Term Expenditure Framework, MTEF, period. [Applause.] Now, that is progress! Congratulations, hon Minister.
On 1 April this year, Sars collected R2 billion more in revenue. That is a fact. The point is: What do we do with that money? We must spend it wisely on resources that we have. Since 1994, 2,5 million houses have been built; 10 million people have permanent homes - ’n dak oor sy kop [a roof over his head].
A total of 14,5 million people receive social grants, of which 9,5 million are children under the age of 14, and we are going to take it up to the age of 18. But what has also happened since 1994? Then, only 36% of households had access to electricity. Today, 84% do. That is an increase. That is improvement. [Applause.] That is a reality. In 1994, 62% had access to clean water. Today, 93% do. That is improvement. In 1994, 50% had access to better sanitation. Today, the figure is 77%. That is improvement. [Interjections.] You cannot deny it. These are facts.
The division of revenue – and it is also a reality – is informed by the Minister of Finance’s Medium-Term Budget Policy Statement, MTBPS, delivered in October, by the January 8 Statement of the President of the ANC and also by the state of the nation address. That forms the basis. That is the departure point.
The division of revenue contains conditional grants and agency payments to provinces and local government, and funds retained for national departments. These refer to infrastructure grant allocations to municipalities in order to meet the target priority programmes of government.
Conditional grant allocations fund the development of infrastructure and job creation. This runs like a golden thread throughout the priorities. The Financial and Fiscal Commission also recommends fiscal consolidation on successful programmes, expanding social grants and reprioritising expenditure towards maintenance and repairs.
An important development in 2011-12 is the transformation of the infrastructure grant to provinces into three sector conditional grants. This will ensure a more aligned approach to the roll-out of infrastructure delivery and reduce persistent backlogs through the health infrastructure grant, education infrastructure grant and provincial roads maintenance grant.
These grants aim to improve and revitalise hospitals, to improve education infrastructure by not allowing children to sit in mud schools, like they do in the Eastern Cape, and to improve school nutrition. We emphasise that early childhood development should be appropriately prioritised as one of the key priorities of government. Sufficient resources should be directed towards this function. The Department of Basic Education should also request such a grant. That is a proposal that we make from our side.
Conditional grants to local government aim to eradicate backlogs and build institutional capacity in local government. I am also referring to the municipal infrastructure grant, MIG, allocations, capacity-building grants and Expanded Public Works Programmes. It is clear that all infrastructure development projects are aimed at job creation and are in support of the New Growth Path.
Total employment grew by 5,6% last month - it was reported this morning. This is the highest in more than two and a half years. This is according to a report published by the staffing and outsourcing group, Adcorp Holdings. Chairperson and hon members, that is improvement. It is a reality. We all agree that the allocated funds and objectives will be reached within the division of revenue when there is decent monitoring.
We need good governance. Government, through its departments, is implementing the 10-point plan in local government. This is a turnaround strategy for both health and education, and a strategy for job creation. However, we need committed and skilled people to implement and administer these programmes and manage the spending of the taxpayer’s money. The taxpayer must get value for money.
We have to change the way the Public Service works, otherwise there will be no improvement in service delivery. Looking at the report from National Treasury, dated 3 March, on the spending of conditional grants, and coming to the Western Cape - although the MEC ...
... het die vlag gewaai vanmiddag vir die Wes-Kaap ... [... waved the flag for the Western Cape this afternoon ...]
... what happened? There is underspending in education on the HIV and Aids life skills education grant. Here is the report from Treasury. [Interjections.] I am not sucking it out of my thumb. In housing, there is underspending on the human settlements development grant. That is the report of the National Treasury. [Interjections.]
Underspending cannot be condoned, whatever the reason. However, there are also factors that should be taken into consideration, such as whether all alleged spending has actually been done or whether funds have been transferred to implementing agencies.
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon members, there is a debate going on. Can we, then, be silent? Listen, even if we have to actually criticise. I do not want to call you by name, but this has been going on for some time. Continue, hon De Beer.
Mr C J DE BEER: Chairperson, they are going to shout at me now. Again, whether the alleged spending translated into equitable and improved service delivery, and/or whether there is value for money for the money spent, should be considered.
Now, let us look at the situation in Skandaalkamp and Vissershok. Where is that? It is about 10 km from where we are sitting now. Skandaalkamp and Vissershoek are in Ward 23. More than 4 000 people are living there next to wetlands. If you are an older person and you live near water, it affects your lungs.
Jy kry brongitis en longontsteking. [One contracts bronchitis and pneumonia.]
The hon Minister is a pharmacist. They do not have water. There are only two taps for 4 000 people, and no toilets. [Interjections.] Much to the surprise of the Western Cape, we will go there and see what is going on. [Interjections.] In Ward 33, raw sewage is running down the street. [Interjections.]
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon de Beer ...
Mr C J DE BEER: There is a main road leading into the settlement.
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon de Beer, conclude.
Mr C J DE BEER: And so I can carry on. [Interjections.]
The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): No. [Laughter.] I will give you one minute to conclude.
Mr C J DE BEER: We have a solution. We must look at good governance at national, provincial and local level. We will have to do decent monitoring, decent evaluation - even in our committees - to do effective oversight. As members of Parliament, in your deployment, sit with your councillors once a month and take them through the issues. Take back the information that we gather here and let there be synergy between our local government members and us, as members of Parliament. I thank you. [Time expired.] [Applause.]
The MINISTER OF FINANCE: Deputy Chairperson, MECs and hon members of the NCOP, our municipal representatives, thank you very much for a very interesting debate. Elections make things even more interesting. [Laughter.] We suddenly find facts from all over to support whatever argument we have.
However, I think we should remember that there are no angels on earth. We all have excellent things that we do, but we all have weaknesses that we need to resolve. In that sense, I don’t think there is anybody here who can say that he or she has got everything right or perfect.
Furthermore, we shouldn’t bluff the public by claiming that any one political party has something going that is better than any other, except that the ruling political party can say that it is playing a major part in bringing us to 16 or 17 years of democracy. Apart from saying that it will deliver to all, it can certainly say that it has committed itself to a better life for all, something which, I think, is a huge difference. [Applause.]
It is going to take us many years of hard work to really uplift all of our people and all of our areas in accordance with all of the challenges that we actually talked about here. Nonetheless, I think it’s commendable that the NCOP has connected, if you like, and taken up the challenge that the money Bills process presents to all of us. It has got more involved, got into the details and connected with provinces to hear voices from the ground and to reflect them in the way in which this debate occurred. This was the intention when we crafted the design of the NCOP many years ago.
So, congratulations to Mr Chaane and the Select Committee on Appropriations, and, indeed, to all of you from the provinces for the excellent work that you have done. We certainly appreciate the feedback that you have given about adjustments that National Treasury might need to make, or the voices that we need to listen to, in the process as we go forward.
The division of revenue process is, of course, a very important process in our fiscal governance. It is based, ultimately, on the fiscal framework, which stipulates the framework or picture within which we, as South Africans and like every family, want to live. During the division of revenue process we need to note the amount that we earn; take into cognisance that we want to spend in a way that ensures that we don’t borrow too much; and ensure that we will be able to pay back what we borrow, together with the interest that we owe.
We have wonderful examples in the world at the moment, which show that if you don’t follow that simple formula, you get into serious trouble. Ireland, Greece and Portugal are some of those examples. Today’s Business Day talks about the possibilities of Italy finding itself in trouble. Those are countries that many hon members referred to as democracies that have been around for many years.
Yes, we can proudly say that it’s now 16 years of good governance in South Africa. The ruling party has certainly given us a fiscal framework and a fiscal stability that we can all be proud of. We are second to none in the world in that regard.
It is going to be impossible to address all the concerns that all of our colleagues have raised. However, let me emphasise what hon Molusi said about removing un-freedoms and the importance of impacting on the daily lives of our people.
Hon Mabe pointed out that Bantustans were a reality in South Africa. They did leave us a particular legacy and where they existed is where most of our challenges come from in terms of delivery, the level of development, capacity and our ability to meaningfully uplift people in those areas. So, let’s not deny that reality. In fact, let’s share them with all South Africans so that all can share the burden of history. That is how they will recognise that this is a collective burden that we have to take on.
While we might want to point fingers at one another during election time, it doesn’t really help at the end of the day. We all have to take up the challenge of asking: What does this generation of South Africans do to uplift those people and put them on a completely different footing?
Hon members have raised certain concerns about some issues which I will tackle quickly; for example, the withholding of grants. Remember that the process of withholding grants is both a political and an administrative process, and there is money that still hasn’t been spent at the end of a financial year. However, it is not necessarily a punitive process. We have been trying to make this a political football and, I think, that is unfortunate.
The real intention of withholding money is to allow space for discussions and recommendations. Since provinces have spare money, if you like, in their bank account, which was supposed to have been spent in a particular way and at a particular time, all that we ask is to sit down with them and work out how they are going to spend that money. Furthermore, we ask them to allow us to support them in whatever way possible so that they can spend their money better and in a more focused way. We also ask them about the kind of technical assistance they require so that they can spend their money better.
It is also about giving provinces an opportunity to say where they want to direct these monies. We offer the provinces an opportunity to indicate whether they want to direct these monies to where they were originally intended or to new priorities that they have.
It is also an important feedback for the Infrastructure Delivery Improvement Programme, IDIP. We need to upscale this programme, put in more assistance from the Development Bank of Southern Africa, DBSA, and ensure that provinces can meet their delivery targets in a way that all of us expect them too.
The equitable share is an issue that many hon members have referred to. However, as one hon member said, that’s the framework we have got to work with; that’s the framework that we have got to live with. If anybody wants more money, you either have to take it from another province, or you have to take it from another sphere.
Perhaps one other thing that we need to have discussions about – even informal discussions - is whether money is really the challenge in South Africa. The more I go to different parts of the country - regardless of who governs in that part of the country – it’s about how we spend the money. It’s about what value we get for our money. It’s about the efficiency of our systems. We must recognise that these are significant challenges that we have.
I’m assured by the staff in the Treasury and a whole lot of data that I can give you that all the concerns we have raised about Mpumalanga, or Limpopo, or Gauteng, or the Western Cape are, in fact, taken into account in each annual revision of the equitable share. We might not see it because of its technical nature. But, perhaps, that’s an area that we need more technical discussions around so that we have a better understanding of what underpins this.
Of course, money is also something that we can never be satisfied with, and we must admit that. Even if we put extra into a particular area or province, we are still going to say we need more. However, it is the search for that “more” that enables us to ask how we do these things on a more efficient basis than we might have done.
Hon Chaane referred to the question of the equitable share and I hope that the reasons and approaches that I spoke of will actually help us to understand where we are coming from. Hon Lees asked questions about the effects of economic growth. Well, we have all said where we want to go. We have a growth path and we say we want to restructure the economy. I think if we become just a little more positive and less cynical about what we want to do, then we will identify with the growth path; we will identify with the necessity to create jobs.
The real issue now is not to ask where we are going but to ask: What options do I have? What answers do I have? What solutions do I have? What innovations do I have? You can again say to each of us that we dismissed your particular plan. However, the ANC is certainly very serious about creating jobs and increasing our level of growth in this country. We will do our best, and we would ask others not to play political football with this issue as well. We would like others to come to the party with concrete and better ideas. I doubt whether you can, but let’s give it a shot.
You raised questions about teachers’ salaries, and so on. If we go back to the last three years, billions of rand have been spent in the occupation-specific dispensation, OSD, for the improvement of teachers’ salaries, and a whole lot of commitments have been made about how we will improve teacher training as well. That doesn’t remove the 50-year legacy of Bantu education but it begins to address it. We are not going make Bantu education suddenly disappear from our midst - as if with some magic wand – because we have the money. And, again, don’t play political football with this issue as well. These are the things that affect every young person in South Africa and their ability to cope with the challenges of the 21st century. The more we can find solutions together, the better it will be.
The MEC from the Eastern Cape, hon Masualle, also talked about the equitable share and some of the challenges of providing services in rural areas. Several other hon members raised this question as well. I think the rural areas do pose very specific and serious challenges to us. Although we have made many adjustments and policy changes as we go, I think there certainly is room for further interrogation of whether we could do better, or whether we could do things differently, or whether we could be a lot more effective than we are at this point in time.
The same applies to rural municipalities. We have got to recognise that there is a special set of challenges. I think it will be useful for provinces like the Eastern Cape, Limpopo and others to engage in a series of really deep, searching exercises, which will go beyond the normal paradigms, and ask what they must fundamentally change in order to address the lives of people in those areas.
Hon Makhubela raised certain questions about funds between spheres, and so on. Again, there is lots of information that is available to you, hon Makhubela. Please contact us afterwards because we don’t really have the time to go into the details, save to say that we have R94,1 billion available for distribution at the moment. The Expanded Public Works Programme, EPWP, amount has been shifted to municipalities because we believe there is greater potential there if we can help them absorb that incentive and spend that money. We have tried at the provincial level, now let’s try the municipal level and see if we could actually do better.
Hon Winde also challenged us on the equitable share and immigration into the Western Cape. As the data seems to indicate, we may have taken those factors into account. Congratulations, hon Winde, on the hospitals that you are building, but, you know, you are about 20 years too late. Nonetheless, I suppose it’s better late than never as far as our people are concerned.
Hon Mahlalela has addressed the question of clean audits versus unqualified audits. We thank him very much for his assistance in that area. So, Mpumalanga is not that sleepy after all - they are on the ball! I think all provinces and provincial leadership will commit themselves to acting a lot more assertively on the question of corruption. Again, we need to get the public involved and playing an active role in this regard.
Hon Prince Zulu is worried about Nkandla. I have got to be careful because that is where our President comes from. However, we recognise that, in the allocations, Nkandla has a particular challenge in terms of the level of poverty. It is something that I believe has been taken into account. However, it becomes part of the more general challenge that we pick up as well.
Hon Van Rooyen has made some very useful contributions. However, the one that I want to respectfully challenge is when he says that the so-called one-size-fits-all approach might be unconstitutional, and so on. I can assure hon Van Rooyen that there is nothing unconstitutional. So, before somebody goes out and prints in the press that there are unconstitutional things going on, it would be useful if you checked with us about these matters because we might be able to give you the evidence that you require. At least, we don’t want you to lose sleep in the Free State because of these sorts of issues. However, thank you very much for raising some of the issues. I’m sure we can address some of those questions as we go on.
We want to agree with hon Nemadzivhanani that we don’t want spaza-shop finances. We have seen what it did to countries like Greece. Again, we would like to work with the provinces and ensure that the division of revenue process is truly engaged with. I’m sure that as we go into the fourth, fifth and sixth year of these processes, we will certainly take that one further.
Hon Mahlalela has particular concerns about potholes and we certainly take that into account. However, we want to agree that that will ultimately be done, sir. That is where Transnet needs to come to the party.
Sports infrastructure has a strong set of recommendations from the Select Committee on Appropriations. We will take some of those into account. Many thanks to you all, hon members, and I apologise if I haven’t addressed some of the specific issues. I have got them all here, but the time is limited.
Thank you for agreeing to support the Division of Revenue Bill. This is a very important process in our democracy, where we ensure that we allocate the revenue pool in a transparent way. In fact, that is taxpayers’ money, and we think of them. This is how we allocate it. This is where it is going to be spent.
Yes, we are also frank with our taxpayers that we do, in fact, have many challenges. We are not going to run away from them. We have every determination to make sure that, as we go through each year, we will improve the way we explain our expenditure, the way we spend our money, and the way we undertake delivery so that they can, indeed, have a better life. [Applause.]
Question put: That the Bill be agreed to.
IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.
Bill accordingly agreed to in accordance with section 65 of the Constitution.
NOTICES OF MOTION
Mr D V BLOEM: Deputy Chair, I hereby give notice that on the next sitting day of the Council I shall move on behalf of Cope:
That the Council -
(1) notes the shocking revelation that Minister Sicelo Shiceka allegedly splurged more than R2,5 million of taxpayers’ money on hotel accommodation and flights for himself, staff, family and friends since his appointment in 2008;
(2) further notes that this travesty of justice has manifested over period of time when we have witnessed communities protesting, in some cases violently, against a lack of service delivery; and
(3) calls on government to urgently institute an investigation into these allegations and, if found to be true, demands the removal of Minister Shiceka from office.
Mr M H MOKGOBI: Hon Chair, I hereby give notice that at the next sitting of the Council I shall move on behalf of the ANC:
That the Council -
(1) notes that a senior official of the City of Cape Town, Mansoor Mohamed, will appear before a disciplinary tribunal on 18-21 April for speaking out about the state of poor administration and leadership in the DA-led City of Cape Town, resulting in the overusage of consultancies in almost every department in the City of Cape Town;
(2) further notes that Mansoor Mohamed was so astounded by the poor leadership of the City of Cape Town that he wrote a recommendation that the entire mayoral executive committee of the DA go for basic leadership training courses;
(3) takes note of the fact that the very tribunal convened to discipline Mansoor Mohamed is chaired by Advocate Ismail Jamie and prosecuted by Gavin Stansfield of Cliffe Dekker Hofmeyr who add to the large number of consultants used by the City of Cape Town instead of its legal affairs department; and
(4) takes this opportunity to call on the Public Protector to investigate and stop the DA’s systematic squandering and abuse of taxpayers’ money by employing hundreds of consultants to do work that is supposed to be done by the staff members who have been rendered redundant in a systematic way to siphon off public funds to the supporters of the DA camouflaged as consultants to the City of Cape Town.
Mr A J NYAMBI: Deputy Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
That the Council -
(1) notes that this year marks the 32nd anniversary of the execution of one of our gallant fighters and heroes of the struggle, Solomon Kalushi Mahlangu, whose death on 6 April 1979 on the gallows became a declaration of supreme sacrifice by one of our beloved cadres towards ensuring our freedom from the tyranny and brutality of apartheid and its forces;
(2) further notes that Comrade Solomon Kalushi Mahlangu was sentenced to death by hanging on 2 March 1978, after being wrongfully charged with murder and terrorism in 1977 and on 15 June 1978, Comrade Solomon Kalushi Mahlangu was refused leave to appeal his sentence by the Rand Supreme Court and, on 24 July 1978, he was refused again in the Bloemfontein Appeal Court despite 60 000 petitions by fellow South Africans; and
(3) takes this opportunity to pay tribute and homage to this great son of Africa for his bravery and sacrificing his life for freedom and democracy in South Africa; Let his spirit live forever to guide South Africa and all nations of the world to achieve peace and prosperity.
Mr H B GROENEWALD: Thank you, Chairperson; hon Bloem has already dealt with my issue.
Mr S H PLAATJIE: I hereby give notice that on the next sitting day of the Council I shall move on behalf of Cope:
That the Council -
(1) notes the termination of a R208 million contract to Kaulani Civils for the construction of a road from Koster to Lichtenburg in the North West province because of non-performance and failure to meet targets;
(2) further notes that government allegedly failed to make timely payments to Kaulani Civils and therefore the company could not perform their tasks in time, leaving construction on the Koster-Lichtenburg road undone; and
(3) calls on government to do everything in its power to resolve this matter in order for the construction to continue and provide effective service delivery to the people in this area.
Mr O DE BEER: Thank you, Chairperson, my submission has been dealt with already.
Mr K A SINCLAIR: Chairperson, I hereby give notice that on the next sitting day of the Council I shall move on behalf of Cope:
That the Council -
(1) notes that according to press reports, serious behind-the-scenes lobbying and horse-trading is taking place in the ANC to oust President Zuma as its leader at the next national conference of the organisation;
(2) recognises that this plot further destabilises the already volatile political situation in the tripartite alliance; and
(3) acknowledges that this tug-of-war for power and faction fighting will pave the way so that an opposition coalition will sooner, rather than later, be in power in the majority of provinces and in South Africa.
[Interjections.] I so move. [Applause.]
Mr A G MATILA: Chair, I hereby give notice that on the next sitting day of the Council I shall move on behalf of the ANC:
That the Council -
(1) notes that last Sunday marked the 18th anniversary of the death of the former general secretary of the South Africa Communist Party and chief of staff of uMkhonto weSizwe, Comrade Chris Martin Thembisile Hani, who was brutally murdered outside his house in Boksburg on 10 April 1993 - a year before the first democratic elections on 27 April 1994;
(2) further notes that Chris Martin Thembisile Hani, who was the son of a former ANC activist, was born on 28 June 1942 in a small rural town, Cofimvaba, in Transkei, approximately 200 km from East London, the fifth of six children, was a fierce opponent of the apartheid government and its blatant dehumanisation of and utter disregard for blacks and the working class in South Africa;
(3) acknowledges that the life of Comrade Chris Martin Thembisile Hani continues to inspire new generations of revolutionaries and serves as a magnificent example of a courageous revolutionary leader who personified the noblest principles and finest traditions of our liberation and socialist movement; and
(4) takes this opportunity to pay homage and tribute to this great son of Africa for his selfless and tireless sacrifices to fight for the liberation of Black people and the working class from the bondages of callous apartheid that orchestrated his death in 1993.
Mr D B FELDMAN: Chair, I hereby give notice that on the next sitting day of the Council I shall move on behalf of Cope:
That the Council -
(1) notes that while claiming to be unable to pay starving workers in Orkney and Groenvlei, an individual by the name of K Zuma has made a donation of R1 million to the ANC;
(2) further notes the blatant disregard by Aurora of our country’s laws and the arrogant manner in which favour is seemingly “bought” from government;
(3) acknowledges the tragic suicide of an Aurora miner after losing everything as a result of nonpayment of salaries owed to him; and
(4) debates the lack of political will by the ruling party to act against its own.
The CHIEF WHIP OF THE NCOP: Amendment to that motion would be, it is not Aurora, but an individual by the name of Khulubuse Zuma.
RELEASE OF MR FUSI MOFOKENG AND MR JOSEPH MOKOENA AFTER SERVING 19 YEARS IN PRISON FOR A CRIME THEY DID NOT COMMIT
The CHIEF WHIP OF THE NCOP: Chairperson, I hereby move without notice on behalf of the ANC:
That the Council –
(1) notes with elation the release of Mr Fusi Mofokeng and Mr Joseph Mokoena, who served 19 years in the Kroonstad Prison after a conviction for murder in 1993;
(2) further notes that Mr Mofokeng and Mr Mokoena, who were convicted under the doctrine of common purpose despite insisting on their innocence, petitioned the Select Committee on Petitions and Members’ Legislative Proposals, which played an integral role in their release early last week;
(3) takes this opportunity to thank the Ministries of Correctional Services and Justice and Constitutional Development, particularly Minister Nosiviwe Mapisa-Nqakula and Deputy Minister Andries Nel for always being there to listen and support the committee’s quest to ensure that the two prisoners were released to join their families; and
(4) welcomes Mr Mofokeng and Mr Mokoena in the House and wishes them well in their future endeavours.
Motion agreed to in accordance with section 65 of the Constitution.
ATTACK ON TWO ANC WARD CANDIDATES BY IFP MEMBERS AND/OR SUPPORTERS
Ms B V MNCUBE: House Chairperson, I hereby move without notice:
That the Council –
(1) notes with utter dismay that members of the Inkatha Freedom Party attacked members of the African National Congress, two ward candidates, as they were about to board taxis in Alexandra Township to participate in the SABC-hosted debate at the University of Johannesburg on Sunday, 11 April 2011;
(2) further notes that one of the people attacked in this hideous incident is in a critical condition in hospital;
(3) takes this opportunity to condemn in the harshest possible terms such horrific and criminal acts, which undermine the pledge to the Independent Electoral Commission signed by all parties and are a blatant violation of the constitutional right of association of the ANC members; and
(4) calls on the police to ensure that the perpetrators of this crime are brought to book.
Motion agreed to in accordance with section 65 of the Constitution.
CONDOLENCES ON DEATH OF ANC MEMBER AND ACTIVIST, COMRADE MBUYISELO VELEM
Mr T M H MOFOKENG: Chairperson, I hereby move without notice:
That the Council –
(1) notes the death of ANC member and community activist, Comrade Mbuyiselo Velem, who passed away last Friday, 8 April 2011;
(2) further notes that Comrade Mbuyiselo Velem was one of the activists who championed the plight of the people of Makhaza and fought against the open toilets provided by the DA-led City of Cape Town; and
(3) takes this opportunity to convey its profound and heartfelt condolences to the family of Comrade Mbuyiselo Velem and wishes them strength in these difficult and trying times.
Motion agreed to in accordance with section 65 of the Constitution.
CONDOLENCES TO VAN NIEKERK FAMILY ON TRAGIC LOSS OF THEIR CHILDREN
Ms M P THEMBA: Chairperson, I hereby move without notice:
That the Council –
(1) notes with profound sadness the tragic death of a young brother and sister after their mother tried in vain to save them from their burning home in Lydenburg in Mpumalanga last Saturday, 9 April 2011;
(2) further notes that the Thaba Chweu municipality’s fire engine broke down on the way to the fire and their other fire vehicle was at an official's house and he wasn’t answering his phone;
(3) takes this opportunity to convey its heartfelt condolences to the Van Niekerk family on the tragic loss of their children in such a horrific incident; and
(4) calls on the Thaba Chweu municipality to investigate the reasons why one of their officials took a car used for emergencies to his house and to ensure that serious steps are taken against the official for such negligent actions that are a clear indication of dereliction of duty.
Motion agreed to in accordance with section 65 of the Constitution.
CALL FOR KING OF SWAZILAND TO STEP DOWN AS EXECUTIVE HEAD OF SWAZILAND
Mr R A LEES: Chairperson, I hereby move without notice on behalf of the DA:
That the Council –
(1) notes with grave concern the struggle of the people of Swaziland for democracy and freedom from the tyrannical rule of the last absolute monarch in the world;
(2) also notes the arrest and imprisonment of Swazi citizens apparently because of their involvement in the movement for democracy in Swaziland; and
(3) calls upon the King of Swaziland to immediately step down as the executive head of Swaziland and to hand over to an interim multiparty government in order to allow the people of Swaziland the opportunity to work out a democratic constitution for that country.
The HOUSE CHAIRPERSON (Mr R J Tau): Is there any objection? Hon member, do you have an objection?
Mr J J GUNDA: No, Chair. I was just saying that they couldn’t object.
The HOUSE CHAIRPERSON (Mr R J Tau): Can you come to order? I asked for an objection and no one raised his or her hand. The member was making a noise, as if he was not happy about something. I just wanted to ascertain from him if he had an objection. He has satisfied me that it was not an objection. Therefore, there is none. [Interjections.] Hon Gamede, do you have something to say? [Interjections.]
Mr J J GUNDA: Chair, I have something to say. Excuse me please, on a point of order: Chair, I was ... [Interjections.]
The HOUSE CHAIRPERSON (Mr R J Tau): Are you calling me to order?
Mr J J GUNDA: Yes, Chair, I was supporting that motion. You need to listen. Thank you.
HON MEMBERS: Hayibo! [[Gosh!]
The HOUSE CHAIRPERSON (Mr R J Tau): Hon member, can you retract the words you used earlier, when you said you were calling me to order, when in actual fact I had made a ruling on the matter? Can you withdraw what you said?
Mr J J GUNDA: Chair, I said I was supporting the motion. I was not ... [Interjections.]
The HOUSE CHAIRPERSON (Mr R J Tau): No, can you withdraw your words, when you said you were calling me to order, on a matter that I had already made a ruling on? [Interjections.]
Mr J J GUNDA: Chair, I was not making a noise. That is what I was saying. I was not making a noise.
The HOUSE CHAIRPERSON (Mr R J Tau): Hon member, can you sit down? I am asking you to withdraw the earlier statement you made to the effect that I was out of order after I had made a ruling. Can you withdraw that statement?
Mr J J GUNDA: Chair, I withdraw.
The HOUSE CHAIRPERSON (Mr R J Tau): Thank you very much.
Motion agreed to in accordance with section 65 of the Constitution.
INTRODUCTION OF BRAILLE BALLOT PAPER TO ENABLE THE BLIND AND VISUALLY IMPAIRED TO CAST THEIR VOTES PRIVATELY
Mr D D GAMEDE: Chairperson, I hereby move without notice:
That the Council –
(1) notes the undertaking made by the Independent Electoral Commission to introduce Braille ballot papers at all voting stations across South Africa to allow blind people and those with visual impairment, such as the partially sighted, to cast their votes in private in next month’s local government election on 18 May 2011;
(2) further notes that the Braille ballot paper, which will accord people with visual impairment the liberty to cast their votes in privacy, is part of a commitment made by South Africa when signing the United Nations Convention on the Rights of People with Disabilities, which requires, among other things, that states recognise the right of disabled people to cast their votes in an election by secret ballot; and
(3) takes this opportunity to welcome this innovative approach of the IEC as a crucial milestone for the country’s visually impaired citizens.
Motion agreed to in accordance with section 65 of the Constitution.
WISHING PRESIDENT JACOB GEDLEYIHLEKISA ZUMA A HAPPY 69TH BIRTHDAY
Mr G G MOKGORO: Chairperson, I hereby move without notice:
That the council -
(1) notes that today marks the 69th birthday of President Jacob Gedleyihlekisa Zuma, who was born on 12 April 1942 in Nkandla, in the former Zululand, now part of KwaZulu-Natal; and
(2) takes this opportunity to wish uMsholozi a wonderful birthday and many years of blessings.
Motion agreed to in accordance with section 65 of the Constitution.
COPE CALLS ON MEMBERS OF ANC-LED TRIPARTITE ALLIANCE TO JOIN ITS PARTY
Mr D V BLOEM: Chairperson, I move without notice:
That the Council –
(1) notes that for the first time in the history of the ANC and its alliance – ANC, Cosatu and SACP - many of their members registered with the IEC as independent candidates in the upcoming local government elections;
(2) further notes that this clearly shows that there are serious problems and divisions in the alliance, and that members are revolting against their leadership;
(3) takes this opportunity to call on all members of the alliance who believe in democracy and justice to join Cope.
THE HOUSE CHAIRPERSON (Mr R J Tau): Hon members, is there any objection to the motion? In the light of the objection, the motion may not be proceeded with. The motion without notice will become a notice of motion.
HANGBERG POLICE OFFICERS DEMOLISH SHACKS AND SHOOT AT DEFENCELESS RESIDENTS
Mr L P M NZIMANDE: Chairperson, I hereby move without notice:
That the Council –
(1) notes the tragic story of Delon Egypt, who was one of the victims who lost an eye in what residents refer to as the “Hangberg Police War” when city police demolished shacks built in a firebreak on the sides of Sentinel Mountain and openly shot defenceless residents, with at least two people losing an eye each after being shot at close range and 62 residents being arrested;
(2) further notes that despite the fact that the bullet is still lodged inside Mr Egypt’s head because doctors say it would be too dangerous to remove it, Mr Egypt has not received any assistance from the City of Cape Town; and
(3) takes this opportunity to call on the City of Cape Town to ensure that residents of Hangberg are provided with support to recover from the traumatic experience inflicted by its police officers.
The HOUSE CHAIRPERSON (Mr R J Tau): Is there any objection to the motion? In light of the objection, the motion shall not be proceeded with. The motion without notice will become a notice of motion.
CONGRATULATIONS TO CHARL SCHWARTZEL ON WINNING US MASTERS ON SUNDAY, 10 APRIL 2011
Mr M J R DE VILLIERS: Chairperson, I move without notice on behalf
of the DA:
That the Council –
(1) notes that Charl Schwartzel, a South African golfer, became the new US Masters champion on Sunday, 10 April 2011;
(2) further notes that it was also his first win in America, so Charl Schwartzel said, and that he was very proud of this achievement; and
(3) congratulates Charl Schwartzel on his achievement.
Motion agreed to in accordance with section 65 of the Constitution.
ADCORP’S EMPLOYMENT INDEX SHOWS EMPLOYMENT GROWTH AT HIGHEST LEVEL IN TWO YEARS
Mr S S MAZOSIWE: Chairperson, I hereby move without notice:
That the Council –
(1) notes that the latest Adcorp Employment Index released yesterday, 11 April 2011, by South Africa’s largest diversified employment services company showed that employment grew to its highest level in two years in March;
(2) further notes that for the first time in over two and a half years all sectors, occupations and employment types recorded positive growth in employment figures, resulting in employment growth of 5,6% in March with the highest employment growth rates in transport at 18,3%, electricity at 13,6%, agriculture at 11,8%, mining at 11,5%, professional services at 10,8% and machine operator occupations at 10,4%;
(3) acknowledges that the growth in employment is a result of the ANC government’s declaration of war against poverty and unemployment, especially its declaration of 2011 as the year of job creation through meaningful economic transformation; and
(4) takes this opportunity to support the call to rally all resources and strategies to create decent jobs for our people in order to respond to the legacy of entrenched systemic apartheid poverty in South Africa.
The HOUSE CHAIRPERSON (Mr R J Tau): In light of an objection, the motion shall not be proceeded with. Therefore, the motion without notice will become notice of a motion.
RULING BY CONSTITUTIONAL COURT THAT ONLY A JUDGE CAN DECIDE TO SELL A PERSON’S HOUSE IN EXECUTION
Mrs A N D QIKANI: Chairperson, I hereby move without notice:
That the Council -
(1) notes that in a landmark decision on Monday, 11 April 2011, the Constitutional Court ruled that only a judge - and not a High Court Registrar, as was previously the case - can decide if a bank or any credit granter can sell a person’s house in execution;
(2) further notes that this complaint was brought by Ms Elsie Gundwana, who lives in Thembalethu township outside George in the Western Cape and whose house was repossessed and sold by Nedcor Bank; and
(3) takes this opportunity to welcome the judgment as a victory for the poor, which will put an end to the blatant flouting of the constitutional right of people to housing as an inalienable right guaranteed by our Constitution.
Motion agreed to in accordance with section 65 of the Constitution.
CONDOLENCES TO WILSON FAMILY ON DEATH OF DAISY WILSON
Mrs B L Abrahams: Chairperson, I hereby move without notice on behalf of the DA and especially the Eldorado Park community:
That the Council –
(1) sends condolences to the Wilson family on the passing away of their mom, grandmother, great-grandmother and great-great-grandmother yesterday;
(2) notes that Daisy Wilson, one of the oldest DA members in Eldorado Park, was born 102 years ago and would have celebrated her 103rd birthday on 19 May 2011;
(3) further notes that Granny Wilson, fondly known for her intellectual capacity and outstanding memory at her age, was always be reminiscing about the good old days and will be sadly missed. May her soul rest in peace and rise to glory.
Motion agreed to in accordance with section 65 of the Constitution.
The Council adjourned at 17:09.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS
WEDNESDAY, 30 MARCH 2011
National Assembly and National Council of Provinces
1. The Speaker and the Chairperson
(a) Strategic Plan of the Electoral Commission (IEC) for 2012 – 2016.
2. The Minister of Human Settlements
(a) Report and Financial Statements of the Thubelisha Homes for 2008-09, including the Report of the Independent Auditors on the Financial Statements and Performance Information for 2008-09.
(b) Strategic Plan (Business Plan) of the National Housing Finance Corporation (Ltd) for 2012 – 2014.
(c) Strategic Plan (Business Plan) of the Social Housing Regulatory Authority (SHRA) for 2011 – 2012.
3. The Minister of Transport
(a) Strategic Plan of the Department of Transport for 2011/ 12 – 2013/14.
FRIDAY, 1 APRIL 2011
National Assembly and National Council of Provinces
1. The Speaker and the Chairperson
(a) Revised Report and Financial Statements of the Public Protector South Africa for 2009-2010, including the Report of the Auditor-General on the Financial Statements and Performance Information for 2009-2010 [RP 212-2010].
2. The Minister of Home Affairs
(a) Agreement between the Government of the Republic of South Africa and the Government of the Russian Federation regarding the Waiver of Visa Requirements for holders of Diplomatic or Service/Official Passports, tabled in terms of section 231(3) of the Constitution, 1996.
(b) Agreement between the Government of the Republic of South Africa and the Government of the Swiss Federal Council regarding the Waiver of Visa Requirements for holders of valid Diplomatic, Official or Service Passports, tabled in terms of section 231(3) of the Constitution, 1996.
(c) Agreement between the Government of the Republic of South Africa and the Government of the Republic of Cuba regarding the Waiver of Visa Requirements for holders of Diplomatic, Official and Service Passports, tabled in terms of section 231(3) of the Constitution, 1996.
(d) Agreement between the Government of the Republic of South Africa and the Government of the People’s Republic of China regarding the Waiver of Visa Requirements for holders of Diplomatic Passports, tabled in terms of section 231(3) of the Constitution, 1996.
(e) Agreement between the Government of the Republic of South Africa and the Government of the Republic of Mozambique regarding the Temporary Joint Clearance for the duration of the 2010 Fifa World Cup South Africa, tabled in terms of section 231(3) of the Constitution, 1996.
(f) Memorandum of Understanding (MOU) between the Government of the Republic of South Africa and the Government of the Republic of Zimbabwe on Cooperation and Mutual Assistance on Immigration matters, tabled in terms of section 231(3) of the Constitution, 1996.
FRIDAY, 8 APRIL 2011
National Assembly and National Council of Provinces
1. The Speaker and the Chairperson
(a) Strategic Plan of the Public Protector South Africa for 2011 – 2014.
(b) Report of the Commission for Gender Equality (CGE) on Engendering the 2010 FIFA World Cup.
2. The Minister of Justice and Constitutional Development
(a) Annual Report of the National Conventional Arms Control Committee (NCACC) for the year ended December 2010, tabled in terms of section 23(1)(c) of the National Conventional Arms Control Act, 2002 (Act No 41 of 2002).
3. The Minister of Public Works
(a) Strategic Plan of the Department of Public Works for 2011/14.
4. The Minister of Finance
(a) Updated report on recommendations contained in reports of the Standing Committees on Finance and on Appropriations on the Medium‑Term Budget Policy Statement, Adjustments Appropriation and the Fiscal Framework, as well as in Budgetary Review and Recommendation (BRR) Reports, tabled in terms of section 7(4) of the Money Bills Amendment Procedure and Related Matters Act, 2009 (No 9 of 2009).
(b) Updated Strategic Plan of the Financial Intelligence Centre for 2012 - 2015.
(c) Strategic Plan of the Independent Regulatory Board for Auditors (IRBA) for 2011 – 2012.
(d) Government Notice No R. 183 published in Government Gazette No 34070 dated 4 March 2011: Amendment of Regulation 28 of the Regulations made under section 36, in terms of the Pension Funds Act, 1956 (Act No 24 of 1956).
(e) Government Notice No R. 219 published in Government Gazette No 34113 dated 11 March 2011: Regulations made under section 13quat(9), in terms of the Income Tax Act, 1962 (Act No 58 of 1962).
(f) Government Notice No R. 207 published in Government Gazette No 34092 dated 14 March 2011: Amendment of Rules (No DAR/86), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(g) Government Notice No R. 208 published in Government Gazette No 34092 dated 14 March 2011: Amendment of Rules (DAR/87), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(h) Government Notice No R. 225 published in Government Gazette No 34108 dated 11 March 2011: Amendment of Schedule No 1 (No 1/1/1423), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(i) Government Notice No 242 published in Government Gazette No 34142 dated 23 March 2011: Financial Services Board: Publication of regulations in respect of appeals to Appeal Board for public comment, in terms of the Financial Services Board Act, 1990 (Act No 97 of 1990).
(j) Government Notice No R. 254 published in Government Gazette No 34166 dated 28 March 2011: Amendment of Schedule No 1 (No 1/1/1424), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(k) Government Notice No R. 255 published in Government Gazette No 34166 dated 28 March 2011: Amendment of Schedule No 1 (No 1/2B/154), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(l) Government Notice No R. 256 published in Government Gazette No 34166 dated 28 March 2011: Amendment of Schedule No 1 (No 1/3B/14), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(m) Government Notice No R. 257 published in Government Gazette No 34166 dated 28 March 2011: Amendment of Schedule No 1 (No 1/5A/152), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(n) Government Notice No R. 258 published in Government Gazette No 34166 dated 28 March 2011: Amendment of Schedule No 1 (No 1/5B/153), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(o) Government Notice No R. 259 published in Government Gazette No 34166 dated 28 March 2011: Amendment of Schedule No 4 (No 4/339), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(p) Government Notice No R. 260 published in Government Gazette No 34166 dated 28 March 2011: Amendment of Schedule No 6 (No 6/3/21), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
(q) Government Notice No R. 273 published in Government Gazette No 34159 dated 1 April 2011: Appointment of an authorized dealer in foreign exchange: Albaraka Bank Limited, in terms of the Exchange Control Regulations.
(r) Government Notice No R. 274 published in Government Gazette No 34159 dated 1 April 2011: Cancellation of appointment of an authorised dealer in foreign exchange: The Royal Bank of Scotland N.V., South African Branch, in terms of the Exchange Control Regulations.
(s) Government Notice No R. 272 published in Government Gazette No 34159 dated 1 April 2011: Amendment of Schedule No 1 (No 1/1/1425), in terms of the Customs and Excise Act, 1964 (Act No 91 of 1964).
5. The Acting Minister for Cooperative Governance and Traditional Affairs
(a) Regulations to provide for a disciplinary code and procedures for municipal managers and managers directly accountable to municipal managers, submitted for tabling on 25 March 2011 in accordance with section 120(7)(a) of the Local Government: Municipal Systems Act, 2000 (No 32 of 2000).
National Council of Provinces
1. The Chairperson
(a) Submission of a complaint into the allegations of fraud, nepotism and unethical conduct by the Directors of Inyanda Road Works and Construction in the Steve Tshwete Local Municipality (Mpumalanga).
Referred to the Committee on Petitions and Members’ Legislative Proposals for consideration and report.
National Council of Provinces
1. Report of the Select Committee on Appropriations on the 2011 Division of Revenue Bill [B4-2011] (reprint), dated 06 April 2011
The Select Committee on Appropriations, having considered the Division of Revenue Bill [B4 – 2011 (reprint)], reports as follows:
1. Introduction and background
In terms of Section 4(4) of the Money Bills Amendment Procedure and Related Matters Act, 2009 (No. 9 of 2009) (the Money Bills Act), a committee on appropriations has the power and functions conferred to it by the Constitution, legislation, the standing rules or a resolution of a House, including considering and reporting on -
* spending issues;
* amendments to the Division of Revenue Bill, the Appropriation Bill, Supplementary Appropriations Bills and the Adjustment Appropriations Bill;
* recommendations of the Financial and Fiscal Commission, including those referred to in the Intergovernmental Fiscal Relations Act, 1997 (No. 97 of 1997);
* reports on actual expenditure published by the National Treasury; and
* any other related matter set out in the Money Bills Act.
According to section 7(3) of the Money Bills Act and section 76(4) of the Constitution, the Minister of Finance must table the Division of Revenue Bill in the National Assembly and thereafter it must be sent to the National Council of Provinces. In accordance with these sections, the Minister of Finance (the Minister), Mr. Pravin Gordhan, tabled the 2011 Division of Revenue Bill (the Bill) in the National Assembly on 23 February 2011. On 10 March 2011, the Bill was transmitted to the National Council of Provinces and referred to the Committee.
The purpose of the Bill is to provide for the following:
* the equitable division of revenue raised nationally among the national, provincial and local spheres of government for the 2011/12 financial year;
* the determination of each province’s equitable share of the provincial share of that revenue; and
* any other allocations to provinces, local government or municipalities from the national government’s share of that revenue, and any conditions on which those allocations may be made.
Following a briefing by National Treasury, the Committee held public hearings on 22 and 23 March 2011 in line with section 9(5)(b) of the Money Bills Act. The Committee received written and/or oral submissions from the following departments, stakeholders and interested parties: the Department of Health, the Department of Human Settlements, the Department of Public Works, the South African Local Government Association, the Financial and Fiscal Commission, the Cape Bar Council, the uMtshezi Local Municipality and Mr Paul Theron.
This report reflects the main themes emerging from the engagement with the afore-mentioned national departments and stakeholders including National Treasury. This report is in terms of section 9(2) of the Money Bills Act.
The 2011 National Annual Budget (the Budget) sets out a financial framework for addressing job creation challenges, reducing poverty, building infrastructure and expanding the economy of the country. The Budget further addresses government’s medium term (three-year) spending priorities. The implications are that the Budget provides an indication of government’s assumptions and intentions, which should improve both planning and budgeting within line departments as well as overall budget co-ordination, and contribute to the quality of engagement with the budget by civil society and legislatures. This anticipated quality of engagement is expected to strengthen oversight and budgetary efficiency and effectiveness.
2. The 2011 Division of Revenue Bill
The 2011 Division of Revenue Bill was tabled together with the response of the Minister of Finance to the recommendations made by the Committee in the reports on the 2010 budget review and the 2010 Medium Term Budget Policy Statement. National Treasury reported that in keeping with the provisions of the Constitution, monies appropriated from the National Revenue Fund are to be shared, as per section 214 (1) of the Constitution, between national government, provinces and municipalities through the 2011 Division of Revenue.
The Medium Term Expenditure Framework (MTEF) provides for a total of R808.3 billion to be allocated in the 2011/12 financial year, R865.9 billion in the 2012/13 financial year and R925.6 billion in the 2013/14 financial year. The allocation for the 2011/12 financial year excludes a contingency reserve of R38.9 billion for the MTEF period. However, the contingency reserve for the 2011/12 financial year is R4.1 billion. Moreover, provision has been made for debt-service costs that will amount to R77 billion for the year 2012, rising to R104 billion in the 2013/14 financial year. The aggregate expenditure over the next three years includes R94.1 billion in additional non-interest allocations over the baseline projections of the 2010 budget. Of these additional allocations, national government receives R48.8 billion, provinces R40.2 billion and local government R5.1 billion.
2.1 Conditional grants to provinces
With respect to conditional grants for the 2011/12 financial year, provinces receive R69.4 billion, excluding an additional indirect transfer of R700 million for the School Infrastructure Backlogs Grant.
The 2011 Division of Revenue Bill has effected several changes to the conditional grant framework for provinces and municipalities. These changes are as follows:
* the Infrastructure Grant to Provinces. In order to align planning and implementation with sector needs, and to reduce persistent backlogs, funds for this grant will now be transferred through three conditional grants - the Health Infrastructure Grant, the Education Infrastructure Grant and the Provincial Roads Maintenance Grant - on the votes of the departments of Health, Basic Education and Transport. These departments will work closely with Treasury to strengthen planning and organisational capacity at national and provincial level;
* a new conditional grant, the School Infrastructure Backlogs Grant, is introduced for eradication of inappropriate school infrastructure; and provision of water, sanitation and electricity to schools. The programme will be completed over three years, after which the grant will be discontinued;
* at the local government level, the merging of the Municipal Infrastructure Grant for cities and a portion of the Human Settlements Development Grant has resulted in the introduction of the Urban Settlements Development Grant. This is part of government’s response to the differential operational and funding needs of large cities, small towns and rural areas. This merger will also allow the eight metropolitan municipalities to take a more integrated approach to upgrading urban informal settlements; and
* in addition, the Provincial Disaster Grant and the Local Government Disaster Grant have been introduced under the National Disaster Management Centre to allow provinces and municipalities to respond more rapidly to disasters.
2.2 Conditional grants to local government
Conditional grants to local government, which aim to eradicate backlogs and build institutional financial capacity, have been revised. The total value of the conditional grants directly transferred to local government, including the water operating subsidy, increases from R27.5 billion in the 2011/12 financial year, to R30.4 billion in 2012/13 and R32.7 billion in the 2013/14 financial year.
Conditional grant allocations to local government are being reconfigured to differentiate between the funding of urban and rural municipalities. The most significant change that the Bill introduces is the creation of a new Urban Settlements Development Grant for metropolitan municipalities to fund the improvement of human settlements. Metropolitan municipalities will no longer receive allocations through the Municipal Infrastructure Grant.
3. Submission by Financial and Fiscal Commission
In compliance with section 214 (2) of the Constitution, section 9 of the Intergovernmental Governmental Fiscal Relations Act No. 97 of 1997 (IGFR) and section 9 (7) (a) of the Money Bill Amendment Procedures and Related Matters Act No 9 of 2009, the Committee is required to consult with the Financial and Fiscal Commission to ensure that all recommendations made by the Commission are being considered before the Division of Revenue Bill is passed.
The Financial and Fiscal Commission (FFC) generally welcomed the 2011 Division of Revenue Bill but emphasised the following:
* Soft targets in health and education budgets should be protected;
* Improvements are needed in quality of service and efficient management;
* Concern was expressed about the overspending on health and education in the provincial budgets;
* Government’s decision to directly target the infrastructure backlogs and set time-frames for the process was welcomed, and was in line with their recommendations made in 2002;
* The continued strengthening and increased taxation powers afforded to municipalities were supported, but they cautioned against a possible situation where municipalities could impose taxes unconstitutionally; and
* They cautioned against the diversion of resources away from priorities, which may not lead to better output.
4. Submissions by National departments
As per the government’s major budget priorities over the medium term, the Committee invited national departments that would play a critical role in ensuring that these priorities are realised.
4.1 The Department of Health
The National Department of Health (the DoH) submitted that during the Medium Term Framework budget process it requested additional funding of R19.9 billion, for both national and provincial departments for the three year period. However, it was only allocated R18.0 billion.
There was an increase in the allocation of conditional grants to provinces. This increase was attributable to the increased allocations for the Comprehensive HIV and AIDS Grant, and the National Tertiary Services Grant. The DoH reported that three Schedule 4 grants would be allocated to provinces to supplement the functions funded from provincial budgets. These are the Health Professional Training and Development Grant and the National Tertiary Services Grant (both of which are nationally assigned functions to the provinces); the Health Infrastructure Grant and the Forensic Pathology Grant. The Forensic Pathology Grant would be phased out in the 2012/13 financial year and would thereafter be included in the Provincial Equitable Share allocations.
The DoH further reported that transfer payments would not be withheld based on non-performance or non-compliance. However, the new Division of Revenue Bill allows that 5 per cent of both the Health Professional Training and Development Grant and the National Tertiary Services Grant allocation can be withheld while interventions are put in place.
4.2 The Department of Human Settlements
The Department of Human Settlements (the DoHS) reported that for the 2011/12 financial year it has been allocated a budget of R22.6 billion.
With regard to conditional grants, the DoHS submitted that it has three grants (Schedules 4, 5, and 7 grants), namely, the Urban Settlements Development Grant, the Human Settlements Development Grant, and the Rural Households Infrastructure Grant.
The Urban Settlements Development Grant is a newly established grant comprising a mix of funds from the Human Settlements Development Grant, the Department of Cooperative Governance and others. This grant is meant for responding to the urban built environment development needs within metropolitan municipalities. It also allows for the acquisition of well-located land. The DoHS further reported that the funds related to this grant must be used as a supplementary fund to existing municipal and provincial funds for the eradication of poverty and inequality.
4.3 The Department of Public Works
The budget allocation for the 2011/12 financial year shows a 3.3 per cent increase from the previous financial year allocation and it is inadequate as demonstrated by the increased spending as at the end of February 2011.The submission of the Department of Public Works (the DoPW) focused on three grants, namely: the Devolution of Property Rates Grant, the Expanded Public Works Programme Incentive Grant to Provinces and the Expanded Public Works Programme Incentives Grant to Municipalities. The DoPW presented as follows:
4.3.1 The Devolution of Property Rates Grant
An amount of R1.8 billion has been allocated for the Devolution of Property Rates Grant for facilitating the transfer of property rates expenditure responsibility to provinces. This exercise, although helpful in ensuring that the municipalities increase their revenue, does not take into consideration the availability of funds at national and provincial departments of Public Works.
4.3.2 Expanded Public Works Programme (EPWP) Incentive Grant to Provinces
An amount of R267 269 000 has been allocated for the Expanded Public Works Programme Incentive Grant for provinces with a view to incentivise provincial departments to increase job creation efforts in infrastructure, environment and culture programmes through the use of labour intensive methods and the expansion of job creation in line with the EPWP guidelines. However, it is important to note that the allocation for this grant decreased by R63 735 000 from the R331 004 000 allocated in the 2010/11 financial year. This is noted with great concern since this programme intends to promote job creation, particularly labour intensive methods and full time equivalent jobs.
4.3.3 Expanded Public Works Programme Incentives Grant for municipalities
An amount of R679 583 000 has been allocated for the EPWP Incentive Grant for municipalities in order to incentivise municipalities to increase job creation efforts in infrastructure, environment and cultural programmes through the use of labour intensive methods and expansion of job creation in line with the EPWP guidelines. It is important to note that this grant has increased by R56 587 000 from the R622 996 000 allocated in the 2010/11 financial year.
The Committee welcomes the increase of this grant but is concerned about the low uptake by municipalities.
5. Submission by South African Local Government Association
The South African Local Government Association (SALGA) submitted that it welcomed the additional funding to local government. However, SALGA argued that there should be a systematic review of baselines to ensure that revenue allocations to local government as a whole are congruent with its full range of developmental and service delivery responsibilities and its vertical share. This should be coupled with efforts to build the capacity of weaker municipalities to spend efficiently and effectively. Allocations to local government are not based on proper studies into the true long term costs of municipal service delivery, which can vary substantially across municipalities in different service delivery contexts.
SALGA further reported that the growth of 8.2 per cent per annum in the Local Government Equitable Share (LGES) over the next three years is less than the increase of 9.3 per cent in Infrastructure transfers. SALGA explained that since LGES is utilised for operating and maintaining infrastructure through which basic services are provided to the poor, its slower growth implies more pressure on municipalities to collect revenue from the poor to provide for repairs and maintenance. Therefore, more technical support should be provided to rural municipalities for planning and execution of infrastructure projects.
5.1 Local government grants
On the Urban Settlements Development Grant, SALGA commented that it welcomed this grant to metropolitan municipalities and the additional funding for the Rural Transport Services and Infrastructure Grant; however noted with concern that the funding for the Rural Household Infrastructure Grant has been reduced due to poor spending. For example, the indicative funding for the 2011/12 financial year was shown as R350.0 million in the 2010 Bill, however the indicative funding for the 2011/12 financial year is now shown as R231.5 in the 2011 Bill.
With respect to reduced allocations and discontinued grants, SALGA reported that the Neighbourhood Development Partnership Grant allocations have been continuously reduced due to under-spending. A specific concern regarding this grant is that smaller municipalities are not provided support to access the grant. Concerns were also raised with respect to the reduction in the allocation for the Municipal Systems Improvement Grant. The extended allocation of the Water Services Operating Subsidy Grant which was scheduled to end in 2010/11 is welcomed. Regarding the Electricity Demand-Side Management (EDSM) grant SALGA proposed that this grant should be continued beyond the 2011/12 financial year.
5.2 Changes proposed to conditional grants allocations
Subsequent to the Committee’s public hearings requests were made directly to National Treasury by the National Department of Cooperative Governance, the National Department of Energy and Mr Philip van Ryneveld that or corrections be made on the conditional grants framework contained in the 2011 Division of Revenue Bill. Upon being made aware of this by National Treasury, the Committee resolved that the above mentioned stakeholders make submissions directly to the Committee. As a result, these subsequent hearings were conducted on 06 April 2011. The submissions related to the following conditional grants:
* The Electricity Demand Side Management Grant re-allocation from Mutale Local Municipality (LIM342) to Musina Local Municipality (LIM341); re-allocation from the Sedibeng District Municipality (DC42) to the Emfuleni Local Municipality (GT421).
* The Integrated National Electrification Programme Grant re-allocation from Mookgopong Local Municipality (LIM364) to Modimolle Local Municipality (LIM365).
* Omission of NW397 from the Municipal Systems Improvement Grant (this new municipality has not been included in the allocation schedule).
* Public Transport Infrastructure and Systems Grant (local government). The wording in the conditions to be corrected to make it clear that direct operational costs consist only of fuel, labour and vehicle maintenance; and to make provision for National Treasury to approve specific alternative arrangements regarding the ownership of vehicles purchased with this Grant.
* Public Transport Operations Grant (provincial government) A condition to be included that requires provinces to take reasonable measures to assist with the transition in cases where public transport services are devolved to municipalities.
Mr Philip van Ryneveld submitted that the second and third conditions of Public Transport Infrastructure Systems Grant should read as follows:
* From the start of operations, Integrated Rapid Public Transport Network (IRPTN) systems must recover all the direct operating costs of contracted vehicle (word inserted) operators from fare revenue, other local funding sources and, if applicable, from any Public Transport Operations Grant contributions. These direct operational costs [include-be deleted] consist of [be included] fuel, labour and vehicle maintenance. City-wide networks must ultimately also recover the capital costs of vehicles.
* If buses are brought with grant funds and are used by contracted operators, the
municipality must retain ownership unless National Treasury specifically approves alternative arrangement [inserted words]
5.3 Response by National Treasury
National Treasury supported the proposed changes to the Electricity Demand Side Management Grant; the Integrated National Electrification Programme Grant; the Public Transport Infrastructure and Systems Grant and the Public Transport Operations Grant. However, they indicated that, in order for an allocation to be made to the new NW397 municipality, money would have to be taken away from other municipalities.
6. Submission by the Umtshezi Local Municipality
The Umtshezi Local Municipality (the Municipality) submitted that based on the municipal services that it provides to its population, its equitable share of R25.8 million is insufficient. This argument was motivated by a comparative study of the population statistics versus the equitable share of all municipalities that fall under the Uthukela District Municipality. The Umtshezi Local Municipality reported that its total population is comprised of 64 418 people (i.e.11. per cent) of the Uthukela District Municipality’s total population of 714, 009. The second smallest municipality, the Indaka Local Municipality, services a population of 101, 557 people (i.e.14.2 per cent of the district’s population) but it has been allocated an equitable share of R53.0 million. The Municipality questioned why the difference of 2.4 per cent share of the population is equivalent to an equitable share allocation of an additional R27.2 million.
6.1 Response by National Treasury
According to the 2007 Community Survey,. the Umtshezi Local Municipality’s population has grown by 40 per cent since 2001, a much higher rate than the national average of 8 per cent. However, the allocation to a municipality is not determined by the size of their population but by the number of poor households with and without access to services. While the number of poor households in the Umtshezi Local Municipality has declined at a lower rate than the national average (-11 per cent versus -18 per cent), progress in expanding service delivery has been slower in the Umtshezi Local Municipality than in the country as a whole. The number of poor households with access to services is the most significant determinant of equitable share allocations and the Umtshezi Local Municipality’s progress in this area has been slower than progress in other municipalities. This should provide an incentive to the municipality to increase access to services, poor households in particular.
7. Comments by Mr Paul Theron
Mr Paul Theron was the only member of the general public to make a submission to the Committee. He said the purpose of his comments was to inculcate job creation and skills development in the use of the Provincial Roads Maintenance Grant. He argued that this will further entrench Extended Public Works Programme principles. He also proposed that similar amendments should be made in respect of the frameworks for the Education Infrastructure Grant, the Health Infrastructure Grant, Urban Settlements Development Grant and the Human Settlements Development Grant.
7.1 Committee response
The Committee responded that job creation and skills development are some of the key government priorities and therefore the Bill as a whole has an implicit bias towards furthering the priorities of job creation and skills development.
8. Cape Bar Council
The Cape Bar Council requested clarity on the following clauses of the Bill which read as follows:
* Clause 11(2)(a)(i): It is not clear what is meant in the context by the words “….exclusively appropriates…”; and
* Clause 25(1)(a): Although the wording in this regard has probably been deliberately chosen – particularly given the safety net and “policing” measures provided by clauses 25(1)(b) and (c) – it is suggested that the words “negatively affected” in clause 25(1)(a) could be seen as bordering on the unacceptably vague. This in turn leaves somewhat in the air the nature and content of the “agreement” to be entered into in such circumstances by the “affected municipalities” as mentioned earlier in the provision.
8.1 Response to the Cape Bar Council’s submission
The use of the term "exclusively appropriates" in clause 11(2)(a)(i) of the Bill refers to funds which are indicated in the Appropriation Bill as only being able to be used for the specific and exclusive purpose that is indicated in the Appropriation Bill. In terms of section 43(4) of the PFMA, the funds cannot be shifted via a virement to be utilised for any other purpose.
In respect to clause 25(1)(a), the use of the term "negatively affected" is deliberate, as it is intended to convey, that the implications of the shifting of municipal boundaries must be addressed comprehensively in the agreement described, to ensure that absolutely no negative effects result for the affected municipalities in terms of the flows of funding and the provision of services.
9. Negotiating Mandates from Provinces
The following provinces submitted negotiating mandates in support of the Bill. Some raised issues for consideration as follows:
9.1 Eastern Cape
The Province of Eastern Cape supported the Bill and raised the following issues for consideration:
* The revenue raising component of the equitable share formulae must be reviewed to address the matter of municipalities that are struggling to generate their own revenue;
* The equitable share allocations are based on numbers and do not take into account the uniqueness and geographical spread of the province and the different municipalities;
* The equitable share allocations must also provide an allocation that deals specifically with the old infrastructure backlog due to the decaying infrastructure around the Province; and
* Indicative figures of the Municipal Infrastructure Grant (MIG) allocations for the outer years which appeared on the 2010/11 Division of Revenue (DOR) Bill for Cacadu district municipality do not appear in the 2011/12 DOR Bill.
9.2 Free State
The Province of Free State supported the Bill and proposed the following amendment to the Bill:
* In Clause 16(3), the Province proposes to extend the minimum notice period of 7 days to 14 days in order to provide sufficient time to the receiving officer to provide reasons why an allocation should not be withheld.
The Province of Gauteng supported the Bill and recommended the following:
* the Provincial Equitable Share allocations should be re-examined, taking into account the issue of migration faced by the Province.
The Province of Kwazulu-Natal supported the Bill.
The Province of Limpopo supported the Bill.
The Province of Mpumalanga supported the Bill and emphasised the following:
* The NCOP is urged, in future, to provide Legislatures enough time to consider Section 74 or 76 Bills, so as to ensure sufficient public participation. This timeframe is especially important in terms of the Division of Revenue Bill;
* When the general budget allocation to health is determined, all relevant conditions and data should be taken into account to ensure that the budget adheres to the burden of disease;
* The 15 per cent allocation in the Municipal Infrastructure Grant (MIG) to develop sport facilities is not applied consistently by municipalities due to the competing needs that exist in communities. There should either be specific conditions stipulated and included in the MIG to ring fence the allocation; or the 15 per cent should be taken out of the MIG and be introduced as a separate conditional grant;
* Although the addition of Schedule 9 that caters for disasters declared at national level is welcomed, the definition should be broadened to provide for minor disasters that occur on a smaller scale and require intervention by provincial government or municipalities; and
* It is imperative that all applicable and relevant factors be taken into consideration when allocating funding for matters relating to HIV and Aids so as to ensure that the allocated budget can provide adequately for the burden of diseases.
9.7 North West
The Province of North West supported the Bill and made the following observations:
* Rural areas are not given enough consideration when funds are allocated;
* Certain municipalities are allocated funds yet there is no development, including youth development projects, to empower them; and
* Some municipalities fail to prioritise important projects like water, electricity and the upgrading roads and bridges.
9.8 Northern Cape
The Province of Northern Cape supported the Bill and raised the following concerns:
* With the re-demarcation and incorporation of the Kgalagadi District Municipality (the John Taole Gaitsewe District Municipality) into the Province of Northern Cape, the conditional grants were never adjusted to accommodate the transitional arrangements. This continues to put pressure on the provincial fiscus;
* The cutting of the equitable share by 0.3 per cent could adversely affect service delivery; and
* The withholding of funds for non-performing infrastructure projects must be done in proper consultation with provincial governments. The CIDB principles should be reviewed to accommodate the unique conditions present in the Northern Cape Province.
9.9 Western Cape
The Province of Western Cape supported the Bill.
9.10 Response by National Treasury
With regard to the issues raised by provinces, National Treasury responded as follows:
* The revenue raising capacity component was adjusted in 2011, and will further be reviewed in future. and should be viewed together with the other components. The intention of this component is to direct more funds towards municipalities that have limited potential to raise own revenue;
* The Provincial Equitable Share formula does take into account the uniqueness and geographical spread of provinces. Some components, like the institutional and poverty components, actually benefit the more sparsely populated provinces;
* Decaying infrastructure is a result of poor asset management and support is being given to provinces to improve their capacity to deliver and maintain infrastructure;
* The re-demarcation between district and local municipalities is dealt with by specific clauses in the Bill;
* The health component of the Provincial Equitable Share (PES) formula has been completely reworked, addressing some of the concerns raised, including the burden of disease;
* The Provincial and Local Government Disaster Grant is subject to the requirements of the Disaster Management Act, which contains very specific definitions. The budget of provinces and municipalities must make provision for any disasters on a smaller scale;
* A lot of the money going into rural areas is currently not being spent. Nevertheless, they do try to get more funds to the rural municipalities; and
* The population data used in the Provincial Equitable Share formula is updated using annual mid-year population estimates.
10. Final Mandates
The following provinces submitted Final Mandates supporting the Bill: Eastern Cape, KwaZulu-Natal, Limpopo, Mpumalanga, North West, Northern Cape and Western Cape.
During deliberations and engagement with relevant stakeholders, the following findings were identified:
11.1 The responsibility of budgeting for the development of sport facilities in schools was not clearly defined between the departments of Basic Education, Cooperative Governance and Sports and Recreation.
11.2 There is an increase in the expenditure for personnel in some provincial departments of Health and Education without enhancement of the service delivery, particularly in the Eastern Cape and Limpopo provinces. Moreover, the stated 40 per cent of the wage bill in relation to 2010 wage agreements is a cause for concern due to the impact that it will have on the strategic plans of the various departments over the Medium Term Expenditure Framework (MTEF).
11.3 There is a lack of intervention by both provincial and national treasuries to address poor spending on conditional grants in provinces, in terms of section 17 of the Division of Revenue Bill.
11.4 The Expanded Public Works Programme Incentive Grant to Provinces has decreased by R63 735 000 from R331 004 000 to R267 269 000, which is concerning since this programme forms part of the job creation initiative.
11.5 The existence of the Urban Settlements Development Grant appears to be counter-intuitive to government’s intention of uplifting rural provinces, as it implies a bias towards urban development at the expense of rural development.
11.6 The scholar transport policy has not yet been finalised. The administration of the scholar transport programme is a cause for concern in several provinces.
11.7 Municipalities have adopted different policies with respect to billing periods in relation to the Devolution of Property Rates Grant. Some bill on a monthly basis, others bill quarterly, half-yearly or yearly, which impacts on the spending performance of the Devolution of Property Rates Grant.
11.8 The Committee noted with concern that certain stakeholders had made submissions to National Treasury while the Bill was before the Committee and an opportunity had been given for written and oral submissions to be made to the Committee. The Committee did not agree with the interpretation of clause 14 (3) of the Bill by some departments and stakeholders. That is the submission for request directly to National Treasury to revise or amend the framework before the publication of the Gazette in term of sub-section (1) of the Bill. The Committee ruled that all submissions should be directed to Parliament while the Bill is still before the Committee. It is only after publication of the Gazette in terms of subsection 2 of the Bill that such requests should be directed to the National Treasury.
The Committee, having considered the Division of Revenue Bill [B4 – 2011 (Reprint)], reports the Bill and recommends that the House approves the Bill.
The Committee further recommends as follows:
12.1 The Departments of Cooperative Governance, Sport and Recreation, and Education should, within three months after the adoption of this report by the House, clarify the responsibility of budgeting for the development of sports facilities in schools. Furthermore, National Treasury should submit a report on schools whose sports facilities would be constructed through the allocation of the Public Municipal Service Infrastructure component (15 per cent of the Municipal Infrastructure Grant allocation) in the 2011/12 financial year.
12.2 The National Treasury should stipulate specific conditions or regulations within Municipal Infrastructure Grant that would ring-fence the 15 per cent allocation meant for development of sport facilities. Alternatively, the 15 per cent allocation should be taken out of the MIG and be introduced as a separate conditional grant.
12.3 The Department of Transport and the Department of Basic Education should pay urgent attention to the clarification of the responsibility of scholar transport in order for this programme to be fully implemented in all provinces.
12.4 Municipalities should have a uniform billing system to avoid backlogs, especially with respect to accessing payments from the Devolution of Property Rates Grant. Moreover, the provinces should assist less capacitated municipalities to improve on property management and on their billing systems.
12.5 The Department of Cooperative Governance should locate funds within the Department’s own revenue to allocate to the new municipality NW397.
12.6 National Treasury should, within three months after the adoption of this report by the House, submit a detailed report to the Committee on the performance of all grants that are being phased out.
12.7 National Treasury should, in future, ensure that Division of Revenue Bill consultation processes are followed properly. Furthermore, clause 14 of the bill should be strengthened to force departments and interested parties to table their submissions to the Committee once the bill has been tabled in Parliament. Thereafter, if there are necessary changes because of errors, National Treasury should table them before the Committee for consideration before they are gazetted. For this reason clause 14(3) should in future be phrased as follows - The National Treasury may at any time in consultation with Parliament and after consultation with the affected institutions and/or at the written request of a transferring national officer, revise or amend a framework published in terms of subsection (1) or (2), to correct any error or omission.
12.8 National Treasury must effect the agreed correction to the Electricity Demand Side Management Grant; the Integrated National Electrification Programme Grant; the Public Transport Infrastructure and Systems Grant and the Public Transport Operations Grant ; and gazette them in terms of clause 14 of the Bill.
Report to be considered.
TUESDAY, 12 APRIL 2011
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 12 April 2011:
(a) Division of Revenue Bill [B 4 – 2011 (Reprint)] (National Assembly – sec 76(1)).
National Council of Provinces
1. Message from National Assembly to National Council of Provinces in respect of Bills passed by Assembly and transmitted to Council
(1) Bill passed by National Assembly and transmitted for concurrence on 12 April 2011:
(a) Local Government: Municipal Systems Amendment Bill [B 22B – 2010] (National Assembly – sec 75).
The Bill has been referred to the Select Committee on Cooperative Governance and Traditional Affairs of the National Council of Provinces.
National Assembly and National Council of Provinces
1. The Minister of Human Settlements
(a) Report and Financial Statements of the Thubelisha Homes for 2009-2010, including the Report of the Independent Auditors on the Financial Statements and Performance Information for 2009-2010.
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