ATC130522: Report of the Portfolio Committee on Defence and Military Veterans on Budget Vote 22: Department of Defence and Military Veterans, dated 22 May 2013
OF THE PORTFOLIO COMMITTEE ON DEFENCE AND MILITARY VETERANS ON BUDGET VOTE 22:
DEPARTMENT OF DEFENCE AND MILITARY VETERANS, DATED 22 MAY 2013
The Portfolio Committee on Defence and Military Veterans, having
considered Budget Vote 22: Defence and Military Veterans, reports as follows:
The Portfolio Committee
on Defence and Military Veterans considered the 2013/14
budget of the Department of Defence and Military
Veterans on 8 May 2013, as part of its oversight function. Alongside the
Defence Budget allocation, the Committee also considered the 2013 Annual
Performance Plans of the Defence Secretariat, the South African National
Defence Force (SANDF) and the Department of Military Veterans. In addition to
this, 2013/14 2015/16 Annual Performance Plan of the Castle Control Board as
well as Armscors 2013/14-2015/16 Corporate Plan were also considered.
The report comprises a programme-by-programme
summary of key aspects of the
Defence budget allocation and strategic objectives, as
well as the Committees
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
Committees 2012 Budgetary
Review and Recommendation (BRR) report.
The Money Bills
Amendment Procedure and Related Matters Act (2009) provides for,
amongst others, a parliamentary procedure to amend
Money Bills, thus granting parliamentary committees greater opportunity to
influence the allocation of funds to the departments they oversee. Section 5
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 Committees interrogation of, amongst others, each national
departments 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. Essentially the BRR report is a committees 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. The Committee regrets to report that, despite the significance of this
process, it is yet be schedule a briefing on the progress made with the
implementation of the Committees recommendations.
DEPARTMENT OF DEFENCE
MINISTERIAL PRIORITIES AND FOCUS AREAS
The following strategic priorities underpin the 2013/14 activities of
the Defence Secretariat and the South African National Defence Force
For the 2013/14 financial year,
the Department of Defence,
guided by the following priorities:
modernisation of the Landward Defence capabilities remains a priority,
particularly the recruitment and retention of appropriately skilled personnel,
upgrade of SA Army facilities and
the development (and acquisition) of technologically competitive prime mission
equipment (PME). The success of such modernisation should be based on a
confirmed force design and capability needs, and thus the finalisation of the
Defence Review is considered a priority.
maritime capability will be developed to effectively respond to regional and
continental maritime security threats. The South African Maritime Strategy has
been finalised and will form part of the broader Southern African Development
Community Maritime Security Strategies. The SANDF will continue its
counter-piracy operations in the Mozambican Channel, assisting the s of the
Mozambican Defence Force (MDF).
remains a key goal and efforts will be made to create more employment
opportunities within the Defence Industry. The finalisation of the White Paper
on the Defence Industry, including the Defence Industry Strategy is critical to
ensuring that opportunities created are sustainable and in line with the needs
of the SANDF and Department of Defence. The Committee believes the Department
of Defence should again manage Denel. Such a repositioning would improve defence
acquisition and manufacturing processes.
peacekeeping capability requires improvement, to efficiently support
successful execution of the National Youth Service programme remains a
priority. The National Youth Service Policy will be finalised and implemented
in this financial year and initial training of selected youth, prior to
employment in national departments, is set to continue.
African Reserve Force will continue to be revitalised in order for it to
effectively supplement the conventional landward capability and peace support
operations conducted within the regular force. This is in line with the
envisaged one-force concept.
defence industry is should be restructured in order for it to effectively
support and provide requirements in support of the SANDFs mandate. This is
largely too dependent on the confirmation of the final Defence Review. The
capacity of the Defence Industry Council to perform its functions will also be
and support to the newly established Defence Works Formation will be
strengthened. Currently this formation manages certain repair and maintenance projects
in co-operation with the Department of Public Works (DPW). However, in order to
ensure the successful migration of repair and maintenance functions from DPW to
the DOD, a Joint Interim Operations Centre (developed with the assistance of
the CSIR), will be established.
migration will be done within a period agreed to by both Departments.
resource challenges will be addressed through the annual recruitment of 2000
MSDS (Military Skills Development System) recruits; a unique incentive scheme
will be developed to attract and retain scarce skilled personnel, further
training opportunities will be created through closer cooperation between the
SANDF and higher education and research facilities.
Security cluster departments will endeavor to
absorb MSDS recruits.
finalisation of the Defence Review will be prioritised given the implication it
holds on the
long-term planning and
resourcing of the SANDF.
made with achieving gender parity in the command structures of the SANDF is a
source of concern and targets have been set for the 2013/14 financial year that
would ensure more equitable representation.
the fairness and effectiveness of DOD grievance system will be restored,
through ensuring that procedures are effectively implemented, and that this
system both effectively protects aggrieved and that those found guilty of any
misdemeanor are held accountable. Commanders, who fail to ensure that grievance
process is objectively followed, would also be held accountable.
maintenance and enforcement of discipline will be prioritised through ensuring
effective leadership by heads of services, division and unit commanders, who
are ultimately responsible for discipline. Strict action should be taken when
dealing with ill-discipline, including the abuse of power by commanders. The
DOD legal system will be strengthened to attend to ill-discipline in the SANDF
The DOD will
continue to resolve audit outcomes an will continue to refine its mechanisms of
accounting and use of resources (including personnel, finance, information and
The quality of
internal planning will be improved to ensure that compliance with National
Treasury guidelines as well as Governments outcomes orientated strategic
planning, risk management, as well as monitoring and evaluation processes.
will not tolerate corrupt practices and conduct by employees and internal
capacity to combat fraud and corruption will be improved.
OVERVIEW 2013/14 BUDGET ALLOCATION (DEPARTMENT
the 2013/14 financial year, the Department of Defence received a total budget
allocation of R 40.24 billion.
increases in the budget allocation over the next three financial years (Medium
Term Expenditure Framework period) are not expected according to the 2013/14
Estimates of National Expenditure. By 2015/16, the defence budget allocation is
expected to amount to R45.12 billion.
will mainly focus on border safeguarding, anti-piracy measures as well as
increased deployments in foreign countries. Thus an increase in the budget
allocation (and expenditure) to the Landward Defence, Maritime Defence and
Force Employment programmes should be expected.
The Administration programme will also receive more funding over the
medium term, mainly due to spending on office accommodation, spending on
military veterans benefits and the establishment of operational law
on outside service providers/contractors will decrease, particularly the use of
contractors by the Force Employment, Landward Defence, Air Defence, as well as
the Military Health Support and General Support programmes. Greater focus will
be on developing internal capacity in order to reduce reliance on contractors
originally intended for the payment of contractors will be redirected to fund
peacekeeping commitments in the Central African Republic (CAR) R200 million
will be spent on this purpose for the 2013/14 financial year, increasing to
R215 million in 2014/15. However, given the recent cancellation of the CAR deployment,
the Committee anticipates that the abovementioned funds will now be utilised to
fund the cost of SANDFs peacekeeping commitments.
OVERVIEW OF ALLOCATION PER PROGRAMME
(Performance information of certain
programmes has not been disclosed and is listed as confidential in the tabled
annual performance plans. The Portfolio Committee will therefore consider this
information at a later stage.)
policy as well as manages and administers the Department of Defence. This
programme also provides for military veterans benefits through the Department
of Military Veterans. The R4.4 billion allocation for the current financial
year is mainly due to the spending on office accommodation and the execution of
the departments human resource and financial management functions. Over the
medium term, up to R1.3 billion will be spent on military veterans benefits. Unfortunately,
the annual performance targets for this programme are not included in the
annual performance plan and service delivery targets cannot be measured.
Force Employment programme
total allocation of R3.28 billion and spending will mainly be on conducting
foreign peacekeeping operations, border safeguarding operations and other
contingency based deployments operations as well as anti-piracy operations. Spending
on peacekeeping operations in CAR, assistance to Mozambican Defence Force in
combatting piracy in the
Landward Defence programme
the largest share of the budget (34.4 percent) and amounts to R13.9 billion.
The Strategic Direction subprogramme received the largest increase in funding
(from R264.2 million to R389.9 million), mainly due to the improved salary
dispensation for warrant officers. Expenditure in the infantry capability
sub-programme is also expected to increase to fund the production of new
generation infantry combat vehicles, and expenditure on property payments. The
completion of the ground based defence systems explains the reduction of
funding to the A
ir Defence Artillery
While previously fully disclosed, performance
indicators for this programme been reduced to 4 of which three are listed, in
the 2013 APP, as confidential. The Committee notes that the targeted number of
learners on planned courses had increased; the allocation to the General
support sub-programme had been reduced.
The Department therefore runs the risk of not meeting said target.
constitutes the second largest in the defence budget, for the 2013/14 financial
year, the R6.25 billion allocation is significantly less than allocated in the
previous. The Air Force has reduced expenditure on contractors from a whopping
R1.3 billion in 2012/13 financial year to only R661.2 million for the current
Spending during the next
three financial years will focus on restoring the capacity and capability to
supply and support and prepare forces, integrating new electronic warfare,
navigation, and air missile systems on the Hawk and Gripen fighter jets and
ensuring sustainability, development and retention of human resources.
While a total of 14 performance indicators had been provided
in the 2012 APP, for 2013, this number has been reduced to four. As with the
Landward Defence and Maritime Defence Programme, three of the four performance
indicators are listed as confidential.
While the SAAF has increased the number of learners in planned courses
(2786 learners) ,
this target may not be
achieved due budgetary constraints. The reasons for the reduced allocation
available for training of personnel are unclear.
And the Committee cautions that this may
impact on the SAAFs ability to maintain its capabilities.
this financial year, The
received R3.17 billion and this figure is likely to increase to
R3.72 billion in 2015/16.
Combat capability subprogramme received the biggest increase in funding due to
the planned acquisition of harbour tug-boats in 2014/15, payments for
replacement of offshore vessels, the upgrading of
The Committee notes that performance indicators in the 2013
APP have been reduced to four items, of which 3 are listed as confidential.
While the funding allocation to the Maritime
human resources and training capability subprogramme has increased, the number
of learners to be enrolled on courses during the current financial year, is
reduced to 2984 learners.
received R 3.64 billion for the 2013/14 financial year,
allocation is likely to increase to R3.9 billion by 2015/16. While the
Direction and the Mobile
Military Health Support sub programmes share of the budget
allocation decreased, but more funding
will be allocated in 2014/15 to fund the
of chemical and biological defence projects. The Area Military Health Service
and the Military Health Product Support
subprogrammes received the biggest share
the allocation, the former due to the procurement of additional medicine and the
maintenance of equipment.
Spending over the next three years is aimed
the provision of
operational, tertiary and specialist health support and the
maintenance of health facilities. Given that
3 of the performance indicators in the
are listed as confidential, the Committee cannot assess whether expenditure is
aligned to clearly defined
objectives. Furthermore, in contrast to performance
indicators submitted last year, only one indicator is submitted for
a whole range of
health care activities.
It is therefore not possible to monitoring and track detailed
achievements of specific health care
activities within this programme. While
number of health care activities is expected for the 2013/14 financial year,
the limited budget may curtail any
achievements of targets set.
is responsible for the defence intelligence and
counter-intelligence capability and
received R762 million 7 percent more than
in the previous financial year. The Operations sub-programmes funding
increased to fund the development of strategic
information capability and the impact
the new salary dispensation for military personnel. Expenditure on services to
contracted service providers is expected
to decrease contractors are utilised for
projects at the Defence Intelligence Headquarters and the Defence
Intelligence Headquarters. It should be
noted that performance targets are not fully
due to the classification of certain information. A significant decrease in the
planned number of vetting
decisions to be taken in this financial year is noted.
provides general support capabilities and services
through three sub programmes: Joint
Logistical Services Command and Management
Services and Military Police. This is the largest programme in the defence
budget and constitutes 12.04 percent
thereof. Funds for the departmental support
and command and management information systems were
Funds allocated for the use of contractors have also decreased to R119
million (compared to the R855 million
in previous financial year). Property payments
expected to increase, as well as the number of employees. The information
regarding the outputs and performance indicators of the
joint logistic sub
and military police are confidential. The Committee is
concerned over the lack of
clarity regarding certain performance indicators and
targets, given this programmes
underperformance against targets set in the last
performance particularly relates to compliance with DOD
ICT portfolios of the
Defence Enterprise Information System Master Plans.
Moreover, given the reduction
in funding for this financial year, the Committee is
doubtful whether targets set will be
DEPARTMENT OF MILITARY VETERANS
STRATEGIC PRIORITIES FOR THE 2013/14
The following priorities inform the expenditure and annual performance
plan of the Department of Military Veterans:
establishment of a fully functional Department of Military Veterans with an
independent budget vote and systems;
provision of immediate social relief to the most vulnerable of military
of comprehensive support services within the availability of resources for both
military veterans and where applicable, their dependents;
of military veterans heritage and memorialising and honouring military
of empowerment programmes for and of the military veterans aimed at ensuring
economic participation by military veterans;
maintenance of a secure and national military veterans database; and
implementation of a high impact communication and marketing strategy
OVERVIEW OF 2013/2014 BUDGET ALLOCATION
not a separate vote, the Department will receive R351 million for the current
financial year. This allocation is likely to increase to R606 million by
2015/16. Spending, over the next three years is likely to focus on filling of
critical posts and supporting the delivery of benefits to military veterans.
the Department is building its capacity to deliver on its mandate as defined in
the Military Veterans Act (No. 18 of 2011), the Administration programme
consumes the biggest portion of the budget, and the main sources of expenditure
for this programme over the medium term are the development and implementation of
the required ICT and security services, policies and procedures, communication
and marketing of the military veterans programmes, the funding and provisions
of infrastructure projects and the establishment of internal audit function.
2013/14 allocation to the Socio Economic Support Services programme will be used
to provide housing to 1 500 military veterans, dedicated health counseling
and treatment to 1 000 military veterans and to provide access to health care
services for 10 000 veterans. Since 2012/13 financial year spending by the
empowerment and stakeholder management programme focussed on the provision of 3
honouring functions and the erection of 7 memorials .During thee 2013/14 financial
diagnostic studies and organisational
reviews will be conducted in order to better align capabilities to the
Departments mandate. These will mainly focus on improving the monitoring and
evaluation as well as communication capabilities.
OVERVIEW OF ALLOCATION PER PROGRAMME
four sub-programmes and constitutes 39 percent of the total budget allocation
to the Department. Most of the funds allocated to this programme will be spent
on office accommodations, due to the need for office space for newly appointed
personnel. Over the next three years, allocations to this programme are likely
to increase due to the required establishment of provincial offices, wellness
and health centres and other infrastructure programmes.
Spending on personnel is set to increase to
R42 million. Funds allocated of training and development of personnel in those
functions currently outsourced will increase to R3.4 million. Machinery and
equipment will cost the Department an estimated R 10 million. An additional 10
performance indicators had been developed, but cannot be measured since targets
had not been provided for in the APP. It is therefore unclear how the
establishment of the anti-corruption hotline, the success in implementing the
DMV Service Delivery and Improvement Plan, and how compliance with budget
prescripts will be improved.
Socio Economic Support Services
programme consists of four sub-programmes and constitutes 38.56 per cent the
largest portion - of the total budget. The 72 million will be spent on providing
services to military veterans, including greater spending on healthcare and
R60 million has been
dedicated to the provision of housing. The Annual Performance Plan lists 11
performance indicators and targets: for the 2013/14 financial year, the
Department aims to provide 1000 military veterans with access to counselling
services; 1000 military veterans should have access to military healthcare
facilities, 8000 veterans should receive pensions, 1500 decent housing, and 100
mainly NSF members will be compensated for any physical and mental injuries.
Empowerment and Stakeholder Relations
programme consists of three sub programmes and received R 76 million for the
current financial year and expenditure is likely to increase to R 170 million
The filling of critical
posts, providing benefits and services to military veterans in terms of Section
5 of the Military Veterans Act, the establishment of 2 military veterans
governance structures, erecting 7 memorial sites and investment in heritage
preservation, are likely to be prioritised over the next three financial years.
For 2013/14 financial year, spending on military veterans skills development
programmes, including the recapitalisation of the Defence Centre for Advanced
Training will be prioritised.
performance plan lists 18 performance indicators. The Department aims to host 3
events honouring Non-statutory Force military veterans, finalise agreements
with three institutions of higher learning, and provide burial support to
military veterans, as the
need arises. The Military Skills Development Policy is still being
conceptualised and thus targets for implementation is not provided.
ARMSCOR (Armament Corporation of
Armscor receives an annual transfer payment from the Department
of Defence. For the 2013/14 financial year, Armscor will receive R1.98 billion
and this will grow to R2.18 billion in the 2015/16 financial year. This
transfer together with revenue from the sale of goods, services and redundant
equipment fund operational expenses.
It should be noted that, Armscor has proposed a new funding
model to ensure effective execution of its mandate and to maintain its
capabilities in the long run.
funding model proposes that Armscor is rewarded or penalised for the quality of
and how efficiently it delivers services to the Department of Defence.
Over the next three years, the Department of Defence is expected
to increase spending on capital acquisitions, mainly for the re-establishment
of capabilities of the Simonstown Dockyard.
CASTLE CONTROL BOARD
The Castle Control Board mainly funds its operations from ticket
sales to visitors to the Castle, rental income and fees from hosting events. It
does not receive any transfer from Government.
Strides have been made to ensure compliance with National
Treasury performance standards, and improving internal control deficiencies.
Over the MTEF period, the Board will increase expenditure on improving
administration through the corporate governance programme, as well as the
preservation, interpretation and showcasing of history of the Castle. These
programmes have a direct impact on the Boards goals which are to maximise the
tourism potential of the Castle ad to increase its public profile and positive
perception across all sectors.
DEPARTMENT OF DEFENCE
Since 2009, the Portfolio Committee has persistently cautioned that a
shrinking defence budget could weaken the SANDFs ability to fulfill its
mandate. While an increase in the funding for the Department should be
considered, maximum efficiency and accountability in the planning and use of
limited resources are essential.
resolution of challenges identified by the Auditor-General of South Africa,
particularly challenges relating to the establishment of an internal audit
function, asset management, and supply chain management, would improve the
efficient management and use of a limited budget.
The finalisation of the Defence Review
While the Committee believes that the developmentment of performance
information could be improved, effective planning can only be done once
budgetary plans and expenditure are aligned to an updated defence policy. The
current Defence Review should be finalised as a matter of urgency, as this is
required since it would guide the medium and long term planning of the defence
needs (budget and capabilities). The delays in both the finalisation and
implementation mean that effective monitoring of defence activities is limited.
The SANDF cannot, with the limited funding available, deploy the
appropriate number of soldiers to the borders, required for the effective monitoring
and patrolling of the borderline.
re-iterated that in order to fully secure our borderlines, a sufficient number
of soldiers should be deployed to conduct foot, air and vehicle patrols.
The SANDFs 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.
Attention should be given on how the Reserve Force will be utlised to
strengthen presence along borderlines. Detailed information regarding the
implementation of Operation Corona remains outstanding.
Border fences are in a visible state of neglect and the SANDF have
limited expertise available to effectively repair and maintain these border
fences. Service Level Agreements (SLA)
with appropriate specialist service providers should
be promptly finalised
The deteriorating conditions of facilities remains a cause for concern
and the Committee welcomes the progress made with the establishment of the
Defence Works Formation.
Poor state of
facilities impact on the morale of the SANDF, but could also threaten health
and safety of our soldiers. Greater interaction between the Committee and
Departments of Defence and Public Works is regarding the specific repair and
maintenance challenges, the planned management plans, as well as the budgetary
implications are required.
The status of Denel
An effectively regulated domestic defence industry is crucial in
maintaining the SANDFs necessary state of readiness. In this vein, the
Committee urges that Defence Review clarify whether
Denel and Armscor are sufficiently supporting the SANDF in maintaining
its capabilities; and whether it is feasible for the Department of Defence to
again manage this entity (currently managed by the Department of Public
DEPARTMENT OF MILITARY VETERANS
Reliability of performance information
The Committee, during its interaction with the Department of Military
and inconsistencies in performance information contained the 2013 Annual
Performance Plan. This means that the Committee will not be able to measure the
DMVs success in achieving objectives and targets, and for which they should
properly be held accountable.
The integrity of the
military veterans database
The Department should ensure that
measures are in place to detect errors on their database,
and to verify information supplied
by those wanting to register as a military veteran.
Regulations to the Military Veterans Act
Said regulations were tabled on 9 May 2013, and the referral to the
appropriate Parliamentary Committee is still outstanding.
These regulations are essential in ensuring
that the required processes determining who qualifies for certain benefits and
services are clarified and that the Military Veterans Act is successfully
implemented to ensure that military veterans quality of life is greatly
Appointment of a Chief Executive Officer
The three-year delay in the appointment of a Chief Executive Officer is
a cause of concern and the Committee urges that this critical vacancy is filled
as a matter of urgency.
Review of Armscors security arrangements
The Committee believes that current security arrangements provided for Armscor
are inadequate, and that such arrangements should be on par with security provided
to buildings and facilities classified as National Key Points (NKP).
During its interaction with the Committee, the Defence Secretariat
undertook to submit to Parliament, a comprehensive report on Armscors
Such a briefing
will be scheduled for the third quarter of the Parliamentary calendar year.
CASTLE CONTROL BOARD
The Committee commends the Castle Control Board for their efforts in
addressing the numerous management challenges identified by the Auditor-General
of South Africa (AGSA). We welcome the appointment of the Executive Director
a position that was vacant for an extended period of time.
Comprehensive marketing strategy
The Committee remains concerned that
little is done to raise awareness of the historical significance of the Castle
remains. Current marketing and awareness campaigns require review to ensure
their national and international reach.
acknowledges that greater synergy is needed in the manner in which the DoD
budget is allocated across programmes and the better alignment of
performance targets to strategic objectives
remains work in progress. The Committee urges that priority should be given to
this challenge and that steady improvements be made to move towards such a
of the challenges faced by the SANDF and the Departments of Defence and
Military Veterans, the Committee recommends that the 2013/14 budget is approved.
While the current Defence budget is
inadequate to meet the needs of the SANDF, the Committee will monitor improved
alignment of the limited defence budget to strategic priorities.
To this end, the finalisation of the current
Defence Review is critical in order to provide proper and effective policy
guidance to defence spending.
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 Department of Defence and the
Department of Military Veterans.
Report to be
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