ATC090630: Report on Budget Vote 19
REPORT OF THE PORTFOLIO COMMITTEE ON DEFENCE AND MILITARY VETERANS ON BUDGET VOTE 19: DEPARTMENT OF DEFENCE, DATED 30 JUNE 2009
The Portfolio Committee on Defence and Military Veterans, having considered Budget Vote 19: Department of Defence, reports as follows:
1.1 The Portfolio Committee on Defence and Military Veterans considered the 2009/10 Budget of the Department of Defence on 17 June 2009, as part of its oversight function over the Department.
1.2 Those appearing before the Committee included Mr T E Motumi (Acting Secretary for Defence), Ms C D M Mutloane (Acting Chief Financial Officer), Dr T Gamede (Chief of Defence Policy Strategy and Planning), Lt-General J L Jansen Van Rensburg (Chief of Corporate Staff: SANDF), Lt-Gen V I Ramlakan (Surgeon General: SANDF), Brigadier General C H Roux (Director: Army Acquisition: SANDF), Colonel E van der Post (Acting Director of Planning: SANDF), Mr S D Dladla (Chief Director: Strategic Management), Mr T Ratsomo (Chief Director: Ministerial Services). Representatives from the Office of the Auditor-General and National Treasury also attended the meeting.
1.3 Information contained in the report is based on the Department’s presentation, the 2009 Estimates of National Expenditure (ENE) as well as the Draft Strategic Business Plan FY 2009 for 2009/10 -2011/12.
1.4 Time constraints and demands of the parliamentary calendar frustrated the vigorous interrogation of Budget Vote 19 and the Committee’s report is thus not as comprehensive as it would like it to be.
1.5 At the time of writing this report, the Department’s Strategic Business Plan had not been formally tabled in Parliament. The Committee thus considered the Department’s budget along-side a draft document and a thorough engagement with the details of the strategic objectives was limited. However, the overview provided of aspects of the draft document serves as a reference for the Committee when planning its oversight activities. The Strategic Business Plan of the Department of Defence and Military Veterans for 2009-2010 was subsequently tabled on 23 June 2009.
1.6 Details of the most appropriate institutional design and associated costs relating to Military Veterans are not yet known. This is a key shortcoming and the Committee intends to hold regular briefings with the Department to review the progress made on the design and implementation of the new structure as well as the budget for its administration - together with the implementation of other strategic objectives. These interactions are opportunities for the Committee to pursue many of the concerns not raised at the budget briefing.
2. OVERVIEW OF POLICY PRIORITIES FOR 2009/10 FINANCIAL YEAR
2.1. The Department of Defence and Military Veterans continues to balance its dual responsibilities of being ready to protect and defend the country and its territorial integrity whilst at the same time sustaining its participation in peace support operations.
2.2 For the 2009/10 financial year, the Department recommitted itself to the prioritisation of the following matters:
- The formulation and implementation of a Defence Strategy responsive to current and emerging needs;
- Maintenance of infrastructure and facilities and the implementation of the Works Regiment;
- The rejuvenation and upgrade of the Landward Defence programme;
- Revitalisation of the Reserve Forces, and
- Information Technology
2.3 Alignment with Government priorities is reflected in the Department’s involvement in the following Government clusters:
(a) Justice Crime Prevention and Security Cluster:
- The Department will conduct monthly reviews of the caseflow management of the Military Justice System, as part of the national effort to improve the capacity of the criminal justice system;
- The SANDF presence at borders will continue, although it was due to hand-over border control to the South African Police Service (SAPS) by April 2009;
- The implementation of rural development plans will continue, replacing the commando system with a SAPS reservist system;
- In order for the development and implementation of a strategy to manage military veterans’ affairs, the Department will interact within the cluster to develop appropriate policy proposals; and
- Through the Military Skills Development Strategy (MSDS), the rejuvenation of the SANDF with young and fit members will continue and is set to increase to 10 000 members per annum.
(b) International Relations, Peace and Security Cluster
- The Department reports a need for a suitable strategic position to guide its African Agenda. It supports the Department of International Relations and Co-operation’s review of the White Paper on Peace Missions;
- It intends to second suitably qualified personnel to the South African Development Community and African Union Commissions, as its contribution to enhancing the capacity of these bodies;
- Participation in post-conflict reconstruction continues and focus will be on its missions in Sudan and Democratic Republic of the Congo (DRC);
- Participation in peace keeping missions in the DRC (MONUC) and Darfur (Sudan), will continue; and
- Continental peace and stability and the promotion of South-South co-operation will continue. SANDF members will continue participation in the Task Force in Burundi and the Central African Republic (CAR). Participation in the Trilateral Defence Committee of India, Brazil and South Africa (IBSA) continues.
(c ) Governance and Administration Cluster
- In line with the national priority, the Department will ensure the timeous finalisation of performance agreements and alignment of key performance areas (KPA) and key performance indicators (KPI) with key strategic objectives of each departmental programme.
(d) Economic Cluster
- The sustainability of defence strategic capabilities as well as the widening of industrial participation programmes, remain central focus areas.
- The restructuring of the defence sector entities to ensure improved safeguarding of the department’s intellectual property is a challenge.
- The establishment of a Small Medium Enterprise procurement call centre is a key departmental priority.
2.4. The Department will intensify its efforts to improve its internal risk management system to address current challenges. These include the continued deterioration of infrastructure, equipment and facilities due to insufficient funding for maintenance and repairs; the continued loss of scarce skills to the private sector; the provision of an updated defence related internal administrative system for finance, human resources and procurement as well as the servicing of Memoranda of Understanding.
2.5. In response to the State of the Nation Address (SONA), the Department committed itself to the following:
- Through the MSDS, the Department will contribute to the acceleration of economic growth, the transformation of the economy and the creation of decent work;
- The current departmental land restitution programme is aligned to the national priority of implementing a comprehensive rural development strategy linked to agrarian reform and food security;
- The two-phased skills retention and recruitment strategy will be reviewed in an effort to respond to the national call for the enhancement of skills and human resource base;
- Contributing to the intensified fight against crime and corruption, the Department will continue to support the SAPS in internal crime prevention interventions and borderline control; and
- Strategies combating fraud and criminality will be further implemented.
3. OVERVIEW OF 2009/10 BUDGET AND ALIGNMENT TO STRATEGIC OBJECTIVES
3.1. Expenditure Trends
3.1.1. The Department received an increased budget allocation of R32 billion, compared to the R28.2 billion received the previous financial year. This represents an 8.9 percent real increase in its total budgetary allocation (Note: The real increase takes into consideration the inflation target rate of 5.4 percent). Over the current medium term expenditure framework (MTEF), the defence budget is expected to increase to approximately R34.4 billion in 2011/12. Current budget projections exclude funding needed for the administration of military veterans.
3.1.2. The total defence budget, as a share of the Gross Domestic Product (GDP) has steadily declined from 1.62 percent in FY 2002/03 to the current 1.3 percent. In order for the realisation of the proposed Credible Force Design and Force Structure as well as support to Government priorities and Peace Support Operations (PSO), the Department revealed that it needed a total budgetary allocation of at least 2 percent of the GDP. The declining defence budget negatively impacted on the already declining defence capabilities, its force preparation and theoperationalisation of its newly required prime mission equipment (PME).
3.1.3 Trends in the allocations to departmental programmes indicate that the Air Defence programme once again received the largest increased allocation (32.8 percent), followed by the Landward Defence (27.34 percent) and General Support programme (10.44 percent). The Force Employment programme received the largest budget cut of 5.45 percent in real terms but active participation in continental peace support operations remains a high priority.
3.1.4 Given the above-mentioned budgetary constraints, the Department submitted the following policy options which will have an impact on the funding needs for the 2010/11 financial year:
- The establishment of a Military Veterans Management Organisational Structure;
- Occupational specific dispensation and allowances;
- Remuneration for salary levels 1-12;
- The rejuvenation of mainly the South African Army PME;
- Funding for the operationalisation of the Strategic Defence Packages (SDP);
- Continuation Training for the Reserves;
- Completion of the upgrading of the Airforce Base Waterkloof Runway; and
- Enhancement of Information Technology (IT) through the Defence Enterprise Information System (DEIS) Master Plan.
3.2 Allocation per programme
3.2.1 Programme 1: Administration
- The Administration programme deals with policy development, management and administration of the Department and received a total allocation of R2.86 billion. It comprises sub-programmes such as Ministerial and Departmental Direction, Policy and Planning, Financial Services, SANDF Command and Control, Acquisitions, Human Resources and Legal Services.
- Key strategic objectives for the current financial year include the development of a Defence policy that is aligned with Government policy, the attainment of consensus on defence policy, the development of a framework for systematic monitoring and evaluation.
- As stated above, the total allocation to this progarmme is R2.86 billion and is expected to increase to R3.1 billion in 2010/11. The Legal Services sub-programme received the most substantial increase (18.75 percent) due to the implementation of an occupation specific dispensation for legal practitioners. The Policy and Planning sub-programme’s allocation has decreased by 44.45 percent.
3.2.2 Programme 2: Landward Defence
- This programme provides prepared and supported landward defence capabilities for the defence and protection of South Africa. This includes sub-programmes such as infantry capability, armour capability, artillery capability, air defence artillery capability, engineer capability, general training capability as well as signal capability.
- For the current financial year, key strategic objectives include the provision of three infantry battalions for external deployment, one air landed battalion and two multi role battalions in reserve and four battalions involved in exercises. One tank regiment and one armoured car regiment will be provided while one composite artillery, one light artillery battery and a light battery in reserve, will be funded for.
- Landward Defence received an R8.74 billion allocation and this is expected to increase over the next three years, to R9.98 billion in FY 2011/2012. Increased funding will also be utilised to fund the increasing number of MSDS members; to manage the increased maintenance requirements of the SA Army’s ageing operational vehicle fleet; to initiate the landward defence equipment renewal projects; to procure critical ammunition; and to establish the Works Regiment. The Strategic Direction sub-programme has increased by 221.08 percent to make provision for two military exercises – one focusing on the integration of the MSDS members, and the other on the airborne branch of the MSDS.
3.2.3 Programme 3: Air Defence
- This programme provides prepared and supported air defence capabilities for the defence and protection of South Africa. Air defence capabilities include helicopter capabilities, transport and maritime surveillance capability, Air combat capability, air base support capability, command and control capability and training capability.
- Strategically, the Department aims to provide four helicopter and one combat squadron, one maritime and transport squadron, three medium transport squadrons, one light transport squadron and nine reserve squadrons at the required readiness levels. One air combat squadron and a 24 hour air command and control capability will also be funded.
- Total budget allocation for the current financial year is R10.27 billion which will decrease to R9.4 billion in FY2011/12. The Air Combat Capability sub-programme received the largest share of the allocation (41.86 percent) due to the production and delivery milestones in theGripen advanced light fighter aircraft project expected to peak in FY2009/10. The Transport and Maritime Capability sub-programme consumes 25.92 percent of the programme’s budget – a substantial increase of 54.38 percent – owing to the strategic airlift capability programme. The 27.21 percent increase in the Training Capability sub-programme should be utilised to accommodate the increased intake of MSDS members. The considerable decrease of 34.56 percent in the Helicopter Capability sub-programme can be attributed to the finalisation of the maritime helicopter project in 2009/10.
3.2.4 Programme 4: Maritime Defence
- This programme provides prepared and supported maritime defence capabilities for the defence and protection of South Africa. Sub-programmes include Maritime Combat Capability, Maritime training Capability and base Support Capability.
- For the current financial year, the Department will provide and sustain the operations of a surface combat capability of four frigates, one combat support vessel, three off-shore patrol vessels, three inshore patrol vessels and a maritime reaction squadron in each operational cycle. Furthermore, it must provide a sub-surface capability of three submarines in each operational cycle, two mine countermeasures systems in each operational cycle to ensure safe access to South African harbours and mine clearance capacity, when needed. An ongoing hydrographic survey capability must also be maintained to ensure safe navigation in charting areas and to meet international obligations
- The programme received R1.96 billion has been allocated for the current financial year which is expected to increase to R2.14 billion over the next three financial years. The Maritime Combat Capability sub-programme, which provides mission ready and supported maritime defence capabilities in accordance with the approved force design of the Department, accounts for the largest portion of the programme’s total budget, namely 26.88 percent. Although the Maritime Training Capability sub-programme utilises only 11.17 percent of the programme’s budget, it received the largest increase of 23.82 percent to fund the increased number of MSDS members.
3.2.5 Programme 5: Military Health Support
- The Military Health Support programme provides and prepares supported health capabilities and services for the defence and protection ofSouth Africa and sub-programmes include Mobile Military Health Support, Area Military Health Service, and Specialist/Tertiary Military Health Service, Military Health Product Support Capability, Base Support and Military Health Training.
- Key strategic objectives include the provision of one conventional medical battalion group, one specialist battalion group and three reserve battalion groups and the realisation of a comprehensive multi-disciplinary health service to a patient population of 230 000 patients per year.
- This programme received a real increase of 7.79 percent to fund the higher than average increase in the remuneration of health professionals, the anti-retroviral rollout and the increase in the MSDS intake. The Specialist/Tertiary Health Service and Area Military Health Service sub-programmes consume 33.64 percent and 31.93 percent respectively – the largest portions of the programme’s total budget. The Military Health Product Support Capability sub-programme has increased significantly with 36.76 percent. This increase is partly due to the launch of the defence against chemical and biological warfare project, the planned building of a new military health depot, and the improvement and maintenance of the health informatics system. In line with the priorities of Government and the Department, the Military Health Training Capability sub-programme has increased with 23.57 percent to accommodate the increased number of MSDS members.
3.2.6 Programme 6: Defence Intelligence
- This programme provides for a defence and counter-intelligence capability and has an allocated budget of R589 million. This is expected to increase to R646 million in FY 2011/12.
- The programme consumes the smallest portion of the Department’s total budget (1.84 percent), but has increased by 7.94 percent. This isdue to the anticipated investment in a strategic information collection capability, and is in line with the Department’s priority to improve its intelligence capacity. The development of this capability is vested within the Operations sub-programme, which explains why the sub-programme consumes the largest part of the programme’s budget (66.64 percent) and has received the biggest increase within the programme (10.91 percent).
3.2.7 Programme 7: General Support
- This programme focuses on the provision of general support, capabilities and services to the Department and sub-programmes include Joint Logistic Services, Property Management, Command Management Information Systems and Military Police.
- Strategically, the Department aims to prepare and maintain one joint logistic operational support unit, one ordinance depot, three ammunition depots, one technical service unit and one mobilisation centre. It will further ensure a 90 percent serviceability of deployed equipment by providing a joint logistical operational support group, repair and maintain the department’s infrastructure at 33 bases over the next three years, ensuring that the timeframe service is available 98 percent of the time and the wide area network 95 percent of the time, providing information and communication systems solutions in accordance with the Defence Information’s Systems Master Plan and reducing the number of criminal cases under investigation by the military police by 5 percent and sustaining one combat – ready provost company for deployment, 22 area offices and 22 detachments for the investigation and crime prevention and military correctional facilities.
- Total budgetary allocation for the current financial year is R3.34 billion and is expected to marginally increase to R3.96 billion in FY2011/2012. This is the third largest programme in the Department, comprising 10.44 percent of the Department’s total expenditure. Challenges relating to the poor condition of defence facilities will be addressed. The Joint Logistic Services sub-programme consumes the largest portion of the programme’s budget – 40.51 percent, an increase of 7.85 percent – mainly to repair and maintain defence infrastructure and facilities and to upgrade the runways and hardstands at the Air Force Base Waterkloof.
3.2.8 Programme 8: Force Employment
- Force Employment provides and employs defence capabilities which include an operational capability to successfully conduct all operations and joint interdepartmental and multinational (JIM) military exercises. This programme comprises six sub-programmes which include Strategic Direction, Operational Direction, Special Operations, Regional Security, Support to the People and Defence Capability Management.
- Part of the Department’s key strategic objectives, is to provide and employ special operations capability in accordance with national requirements, conduct 20 annual external peace missions, conduct 24 JIM military force preparation exercises over the next three years and undertake missions in support of government departments and international obligations.
- R1.8 billion has been allocated to this and constitutes 5.63 percent of the Department’s budget. This is a decrease of 5.45 percent in comparison to the 2008/09 allocation. The UN Peace Mission in the DRC and Special Operations sub-programmes continue to consume the largest portion of the programme’s budget – 30.69 percent and 22.44 percent respectively. The budget allocations for sub-programme African Union Mission in Sudan have increased with a staggering 370.85 percent in comparison to 2008/09.
4. COMMITTEE OBSERVATIONS
4.1 Military Veterans
4.1.1 The renaming of the Department to include Military Veterans emphasises the national importance of providing for the well-being of this neglected sector of our society. The Committee identified the following pressing matters:
- Information regarding the design of the most appropriate organisational structure for military veterans, the associated costs and how funding will be sourced for its establishment and the provision of services are still largely unknown.
- While the Committee is aware that to date, the Directorate of Military Veterans (Defence administration programme), has largely been responsible for the development and implementation of programmes aimed at improving the well-being of military veterans, the success of such programmes remain largely untested.
- Military Veterans are largely excluded from the provision of basic services (housing, medical care, education) and live a poor quality of life. Targeted strategies are needed to ensure greater access to such services. A review of the Military Veterans Act, 1999 and Special Pensions Act, 2008 is essential to ensure the inclusion of all military veterans.
- The historical legacy and contribution to the South African liberation struggle of former members of the liberation forces have largely been neglected. The preservation and public recognition of their contributions should be prioritised
4.2 Defence Programmes
4.2.1 The Committee appreciates the concerns raised by the Department regarding its budgetary challenges and the impact this had on its ability to fulfill its constitutionally mandated obligations. We also recognise that, while an increase in funding for the Department must be considered, the Department should also ensure maximum efficiency in the use of finite resources which can only be achieved if budgetary planning and expenditure are aligned with defence policy and subjected to appropriate internal controls.
4.2.2. The Committee questions the pace and quality of the transformation of the SANDF into an appropriately skilled, gender and demographically represented defence force, especially as it relates to the ability to operate and maintain newly acquired defence equipment. In this vein, vital statistics regarding the racial and gender representivity in relation to defence capabilities and skills base are not known and this is needed to evaluate the progress made in the transformation of the SANDF.
4.2.3 While the Committee agrees that the Department could contribute to combating crime, it believes that an appropriate role for the Defence Force has yet to be developed. The Committee is of the opinion that the SANDF could greatly contribute to ensuring the safety and security of South Africans, rather than merely focusing on crime prevention.
4.4.4 The Committee is concerned that SANDF members are currently underutilised. Creative strategies must be developed to increase the Department’s involvement in the socio-economic and educational development of South Africa.
4.4.5 Cogniscent of potential irregularities in the procurement of defence equipment, the Committee recognises a need for strategies to ensure maximum transparency in and integrity of the planned procurement process of landward defence equipment.
4.4.6 The Committee recognises the impact the MSDS could have on both the rejuvenation of the SANDF as well as strengthening its skills base. However, follow-up information on the employment status of those intakes that have completed their training is needed to assess this system’s impact on employment creation.
4.4.7 The shortage of technical skills in the SANDF, particularly pilots and engineers is a cause of concern. The Committee also notes with concern that such information could not readily be provided by the Department, but would conduct follow-up meetings to assess the skills shortage in the Department.
4.4.8 The Committee also noted with concern the continued deterioration of defence infrastructure, equipment and facilities due to a lack of proper funding for this crucial element.
4.5 General matters
4.5.1 The attendance of the chiefs of each arm of service (SA Army, SA Airforce, SA Navy and the SA Military Health Services) at future budget and annual report briefings are vital. The Committee expressed concern over the absence of these officials, and will schedule regular combat readiness briefings of the SANDF, to monitor to which extent the defence force can fulfill its obligations.
5. COMMITTEE RECOMMENDATIONS
*Briefings on matters raised in the recommendations will be scheduled within 60 days of the publication of this report.
5.1 Military Veterans
5.1.1 The Committee is aware that an appropriate administrative structure for Military Veterans is still outstanding and notes the establishment of a Task Team to investigate the most suitable administrative structure. In this regard, the Committee would schedule departmental briefings on the following matters:
- Terms of reference and timeframes for completion of the work of the Task Team;
- The outcomes of its verification process to determine the number of military veterans;
- Who qualifies as a military veteran;
- The types of support and services to be provided to military veterans;
- The kind of administrative structure most suitable to provide the required support to military veternans.
5.1.2. Limited employment opportunities, access to basic services, education and training opportunities remain key challenges for military veterans and the Committee recommends that strategies be developed to ensure access to education and training opportunities. The Committee would schedule regularly departmental briefings on progress and challenges relating these issues.
5.1.3 The Committee remains concerned that the current age provision in the Special Pensions Act excludes many military veterans and this leads to discrimination of who will benefit from legislation designed to assist military veterans. The Committee recommends a review of this Act.
5.2 Defence Programmes
5.2.1. The finalisation of the Defence Update is a long outstanding matter and creates a defence policy void. The lack of a long term indication of the defence needs mean that effective monitoring of defence activities is limited. The Committee would schedule a departmental briefing on the status and finalisation of the Defence Update.
5.2.2. The combat readiness of the SANDF is a cause of concern, especially in light of the budgetary constraints and South Africa’s increasing involvement in continental and regional peacekeeping operations. Comprehensive briefings on the combat readiness of the SANDF would bescheduled.These briefings should include the conditions and serviceability of PME and the level of force preparedness.
5.2.3. In terms of land redistribution and rural development, the Committee will schedule a departmental briefing on the following matters:
- The size of land available for redistribution;
- The size of land currently managed by the Department;
- The percentage of land already redistributed;
- The types of land redistributed.
5.2.4. The role of the SANDF in borderline security is yet to be clarified given the most recent extension of the Department’s role in this regard. This matter should be addressed by all departments concerned, as well as the proposed Border Control Management Agency, and a comprehensive briefing on this matter would be scheduled as a matter of urgency.
5.2.5. The Department envisages that the Reserve Force should provide the bulk of the landward conventional capability. The Committee recommends that the Department conducts a skills audit to ensure that the Reserve Forces can play a more meaningful role commensurate with its skills base in society. An appropriate date for such a briefing will be communicated to the Department. The Committee would schedule a departmental briefing on the current state of the Reserve Forces and must include the role of the Reserve Forces in rural security.
5.2.6. The role of the SANDF in crime prevention should be clearly defined and such pronouncements remain the responsibility of the President, whose prerogative it is as Commander -in -Chief of the SANDF.
5.2.7. The conditions of facilities are a cause of concern and impacts on the readiness as well as morale of members of the SANDF. A comprehensive briefing on the state of facilities is required.
5.3. Arms Industry and Arms Control
5.3.1. The capacity of Denel and Armscor to support the SANDF in maintaining its capabilities remains crucial. In this regard, the Committee recommends that an investigation be instituted to determine whether Denel should become an entity of the Department of Defence and Military Veterans. The Department should investigate this matter and report to the Committee on its findings.
5.3.2 The efficiency of the National Conventional Arms Control Committee (NCACC) is a concern, particularly as it relates to the timoeussubmission of quarterly and annual reports, as required by the relevant legislation. Parliament awaits the submission of these reports, including the 2008 Annual Report. Furthermore, Committee would schedule a briefing on the progress made in improving the NCACC’sadministrative capacity.
5.4. General matters
5.4.1. As previously mentioned, the chiefs of the four arms of service did not attend the budget briefing, as requested. The Committee expects the attendance of all four chiefs of the arms of service at future budget and annual report briefings.
6.1. The Committee wishes to thank the Acting Secretary for Defence and all those who participated in the budget briefings for their co-operation.
Report to be considered.
No related documents