ATC110330: Report on Budget Vote 22: Department of Defence & Military Veterans
REPORT OF THE PORTFOLIO COMMITTEE ON DEFENCE AND MILITARY VETERANS ON BUDGET VOTE 22: DEPARTMENT OF DEFENCE AND MILITARY VETERANS, DATED 30 MARCH 2011
The Portfolio Committee on Defence and Military Veterans having considered Budget Vote 22 (Defence and Military Veterans), reports as follows:
1.1 The Portfolio Committee on Defence and Military Veterans considered the 2011/2012 Budget of the Department of Defence and Military Veterans (DoDMV) on 23 March 2011, as part of its oversight function over the Department.
1.2 The report comprises a programme-by-programme summary of key aspects of the Defence budget allocation and strategic objectives, as well as the Committee’s observations and recommendations. Observations made in this report should not be separated from those made in previous committee reports. The documents should thus be read along with previous reports, including the Committee’s 2010 Budgetary Review and Recommendation (BRR) report.
1.3 The Committee is mindful of the new reporting format, which separates the strategic objectives of the Defence Secretariat and the South African National Defence Force (SANDF). Consequently, the Committee received a briefing on the Strategic Plan and Annual Performance Plan of the Defence Secretariat only, while the tabling of the SANDF Strategic Plan, at the time of writing this report, was still awaited. According to the Department, this new format would better reflect that the Secretariat and SANDF were separate institutions with “distinct yet complementary” mandates and would thus “be serviced differently”.
1.4 As in 2009 and 2010, the report should be read in the context of the time constraints imposed on the Committee, particularly that of the parliamentary programme, as well as the limited time available between the tabling of the strategic plan and the Budget Vote Debate.
2. OVERVIEW OF STRATEGIC FOCUS AREAS
2.1 The Defence Secretariat’s work is underpinned by two over-arching objectives, ie the protection of South Africa and the strengthening of civilian control over the Defence Force.
2.2 Ten strategic priorities have been identified for the next three years. These are:
- The execution of border safeguarding;
- The establishment of the new service dispensation;
- The strengthening of the SANDF’s Landward Defence capabilities;
- The establishment of a balanced maritime security capability to effectively respond to emerging maritime threats;
- The creation of job opportunities through the filling of funded vacancies, recruitments into the Military Skills Development System (MSDS), the call up of 16400 Reserve Force members, the establishment of a Defence Works capability, and through approved projects with the defence industry.
- Improving the SANDF’s peacekeeping capability;
- The implementation of the National Youth Service Strategy;
- The revitalization and transformation of the Defence Reserve Force;
- The restructuring of the defence industry in order to service the needs of the Defence Force;
- The establishment of the Defence works capability that would eventually take full responsibility for the repair and maintenance of facilities.
2.3 In order to achieve the above-mentioned, the following policies would be finalised:
- A policy framework for the implementation of the Defence Act No 22 of 2010;
- The Defence Security Strategy that would complement the National Security Strategy;
- The finalisation of Defence’s contribution to the National Crime Prevention Strategy;
- The finalisation of the DoD Border Management Strategy;
- The National Youth Service Conceptual Framework;
- The establishment of research function in the policy division unit;
- The review of the White Paper on Defence-Related Industries, as well as the development of a Defence Industry Strategy;
- The drafting of a Defence-Related Public Entities Strategy;
- Assets and Facilities Management Policy Framework;
- Human Resource Development Policy and Skills Development Plan;
- Defence Fiscal and Defence Capability Framework;
- Armed Forces Day Policy Framework to facilitate armed forces interaction with the public.
3. OVERVIEW OF 2011/2012 BUDGET
3.1 For the 2011/12 financial year, the Department of Defence and Military Veterans received R34.6 billion. This would mainly be utilized for border safeguarding, the modernisation of the landward defence capabilities, improving the service conditions of soldiers, as well as the expansion of the Military Skills Development System (MSDS).
3.2 The 2011/12 budget process also focused on finding savings within the Department. The Department is expected to save R1.3 billion over the medium term, mainly sourced from non-core goods and services. These savings would fund the new remuneration dispensation.
3.3 A policy reserve would fund key Government priorities over the next three years. The SANDF will receive R600 million over this period, to fund the deployment of soldiers along the borderline and the upgrade and improvement of facilities and equipment for effective borderline patrol. These allocations are as follows: R100 million for 2011/12; R200 million for 2012/13; and R300 million for 2013/14.
3.4 The modernisation of the landward defence capabilities remains the biggest source of expenditure and received the largest share of the Defence budget (33.99% t). Air Defence received the second largest allocation (24.59%), while the General Support programme is the third largest programme, receiving 11.27%. The latter received a smaller allocation, contrary to the much needed renovation, repair and maintenance of infrastructure and facilities it is responsible for.
4. OVERVIEW OF ALLOCATION PER PROGRAMME
4.1 The Administration programme executes the Department’s overall management, administration and policy development. Its allocated budget increased by 3.82%. Office Accommodation sub-programme consumes 52.77% of the programme’s total budget. This sub-programme manages the payment of accommodation charges, leases and municipal services. The Military Veterans Management sub-programme has received the most substantial increase (116.46%) and will mainly fund the operations of the Department of Military Veterans.
4.2 Force Employment programme provides and employs defence capabilities to successfully conduct all operations and exercises. Its budget allocation has decreased by 6.28%. The sub-programme Regional Security, responsible for the deployment of forces in support of South Africa’s commitment to regional, continental and global security and remains the largest sub-programme at 42.11%. However, this sub-programme’s allocation has decreased by 17.69%.
Sub-programme Defence Capability Management, which provides for the planning
and control of joint interdepartmental and multinational force preparation exercises,
the development of joint force employment command and control plans and capability
development management, has received the largest increase – 77.25%.
Support to the People sub-programme has decreased by 3.99% in real terms.
4.3 The Landward Defence programme provides prepared and supported landward defence capabilities for the defence and protection of South Africa. The Army is currently focusing on replacing obsolete equipment and ammunition with the aim to accumulate sufficient stock to facilitate comprehensive force preparation and training. The programme has therefore received the largest budget increase – a total of 24.59%. In addition to the equipment renewal projects and the procurement of critical ammunition, this increase will be utilised to fund the increase in the MSDS intake, to maintain the Army’s ageing operational vehicle fleet and to implement the new salary dispensation.
4.4 The Air Defence programme, which provides prepared and supported air defence capabilities for the defence and protection of the country, has seen the second largest increase of 16.65%. The Air Combat Capability sub-programme has increased by 130.22% and continues to consume the largest portion of the programme’s total expenditure at 28%.
4.5 The Maritime Defence programme provides prepared and supported maritime defence capabilities for the defence and protection of South Africa. The programme consumes 7.23% of the Department’s total budget and saw a minimal increase of 1.17% in comparison to 2010/11. The sub-programme with the largest increase in real terms is the Maritime Logistic Support Capability with 17.78%; the sub-programme therefore consumes the largest portion of the total budget of the programme at 28.97%. According to the ENE, the increase is attributed to the implementation of the military salary dispensation and the planned recruitment and staffing of personnel with scarce skills, such as divers, technicians and engineers.
4.6 The Military Health Support programme, which provides prepared and supported health capabilities and services for the defence and protection of the country, has seen a budgetary decrease of 4.75 per cent. The programme consumes 8.8% of the Department’s total budget. As indicated in the ENE, spending will mainly be on renewing of main medical equipment and upgrading of health facilities. The two largest sub-programmes remain to be Area Military Health Service (32.32%) and Specialist/Tertiary Health Service (31.19%). The Department’s 2009/10 Annual report indicated that the critical shortage of health care practitioners continued to impact on the combat readiness of the SAMHS and that the management interventions that have been introduced will only bear fruit in the medium to long term.
4.7 The Defence Intelligence programme provides a defence intelligence and counter-intelligence capability, and has seen a decrease in its budget of 2.78%. The programme consumes the smallest portion of the Department’s total budget – 1.93%. All three the sub-programmes have decreased. The Operations sub-programme remains the largest at 60.99%.
4.8 The General Support programme, which provides general support capabilities and services to the Department, has experienced the biggest budgetary decrease – 9.95% – of all the programmes in the Department. Despite this, the programme still remains the third largest at 11.27% of the Department’s total budget.
The Joint Logistic Services remains the largest sub-programme and takes up 37.86% of the programme’s total budget; this is a significant decrease of 25.16%, considering the fact that the sub-programme aims to provide for the much needed renovation, repair and maintenance of infrastructure and facilities. According to the Final Report produced by the Interim National Defence Force Service Commission, “the current infrastructure in the Department is both seriously inadequate and, in many places, in unacceptable disrepair and decay”.
In addition, the Joint Logistic Services sub-programme is also responsible for the reduction of logistic-related audit qualifications through the Logistic Intervention and Repositioning Programme (LIRP). This relates to issues raised by the A-G, especially the disclosure of financial information on movable tangible capital assets, intangible capital assets and immovable tangible capital assets, as well as the maintenance of a proper asset register.
5. COMMITTEE FINDINGS
5.1 Defence Budget
In both its 2009 and 2010 reports on the DoDMV strategic plan and budget, the Portfolio Committee recognized the need for a greater defence budget. However, while an increase in the funding for the Departmemt should be considered, maximum efficiency and accountability in the planning and use of limited resources are essential. Vigilant monitoirng of the effectiveness of internal controls and accountability must be priorotised.
5.2 Defence policy
Effective planning can only be done once budgetary plans and expenditure are aligned to updated defence policy. We remain concerned that an updated defence policy is yet to be finalised. This document provides a long term indication of the defence needs. The delays in both the finalisation and implementation means that the effective monitoring of defence activities is limited.
5.3 Border control
The Committee re-iterates that, in order for the SANDF to effectively undertake the monitoring and patrolling of the borderline, a sufficient number of soldiers has to be deployed to conduct foot, air and vehicle patrols. The SANDF’s readiness to patrol the border largely depends on the rejuvenation of the defence force to ensure that appropriately skilled and young soldiers are trained and ready for deployment. A comprehensive briefing on the implementation of Operation Corona should be scheduled in the current financial year.
5.4 Revitalisation of the SANDF Reserve
The Committee notes that initial targets set for the call up of Defence Reserves have not been reached in 2009/10 and would also not be reached in any of the other years. National Treasury noted that 15 323 Reserve Force members were called up between 2007/08 and 2009/10, at an average cost of R328.4 million, whereas the South African Police Services (SAPS) called up 75 000 Reserves over the same period, at an average cost of R99.6 million. It appears as if the Defence Reserves are called up on a more permanent basis, in other words for a full year, whilst a SAPS Reservist can only work for 160 hours per annum. A comprehensive report on the state of the SANDF Reserves, as well as the rejuvenation of this force, must be submitted to the Committee as a matter of urgency.
5.5 Military Veterans
The Portfolio Committee stresses the need for a coherent and well-co-ordinated strategy that would meet the immediate and basic needs of military veterans – interventions that would contribute to long-term self-sufficiency. The improvement of the socio-economic conditions of military veterans is essential, given the potential political and social consequences this may hold. For this reason, the Committee stresses that the Department of Military Veterans should become fully operational as a matter of urgency. Specifically, the publication of a strategic plan, a separate budget vote, as well as the finalization of a policy on military veterans requires immediate attention.
5.6 Youth development
The creation of sustainable employment and professional development of young South Africans is important. We welcome the prioritization of National Youth Service, but caution that greater detail regarding this strategy, as well as the synergy between new plans and existing plans, is outstanding. We anticipate greater interaction regarding these matters throughout the financial year.
Deteriorating conditions of facilities remains a cause for concern. These conditions not only impact on the morale of the SANDF, but could also threaten health and safety of our soldiers. We welcome the planned establishment of an in-house repair and maintenance capability and recognise the need for greater interaction with the Department regarding the specific repair and maintenance challenges, the planned management plans, as well as the budgetary implications.
5.8 Budgetary Review and Recommendation Report
Section 5 of the Money Bills Amendment Procedure and Related Matters Act (2009) compels the National Assembly, through its committees, to submit Budgetary Review and Recommendation (BRR) reports on the financial performance of departments accountable to them on an annual basis. The BRR report must be informed by a committee’s interrogation of, amongst others, each national department’s medium-term estimates of national expenditure, strategic priorities and measurable objectives, National-Treasury-published expenditure reports, annual reports and financial statements, as well as observations made during oversight visits. This report is essentially a committee’s assessment of a departments’ service delivery performance given its available resources, as well as the effectiveness and efficiency with which its programmes are implemented. Although BRR reports must be published at a specific time in the budget cycle, it is clear that the work that informs the report must be ongoing. Regrettably, progress made with the implementation of committee recommendations is an outstanding matter.
6.1 While mindful of the challenges faced by the SANDF and the Department of Defence and Militray Veterans, the Committee recommends that the 2011/12 budget be approved.
7.1 The Committee thanks all those who appeared before it for their input and co-operation, and looks forward to fruitful interactions with all stakeholders as it performs its oversight of the DoDMV.
Report to be considered.
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