ATC120509: Report Budget Vote 34 and the Strategic Plan for the Fiscal Years 2012-2013, dated 9 May 2012
PORTFOLIO COMMITTEE ON COMMUNICATIONS
Report of the Portfolio Committee on Science and Technology on Budget Vote 34: Science and Technology, and the Strategic Plan for the Fiscal Years 2012-2013, dated 9 May 2012:
The Portfolio Committee on Science and Technology (the Committee), having considered and concluded its deliberations on Budget Vote 34: Science and Technology, and the Annual Performance Plan for the Fiscal Years 2012 2013, reports as follows:
On 18 April 2012 the DirectorGeneral, Dr Phil Mjwara briefed the Committee on the strategic plan and budget for the Department of Science and Technology (DST or the Department). A number of briefings by the entities reporting to the Department of Science and Technology followed. These entities were the National Research Foundation, Council for Scientific and Industrial Research, Human Sciences Research Council, Technology Innovation Agency, South African National Space Agency, Academy of Science of South Africa and the Africa institute of South Africa .
The presentation by the Department included a focus on their strategic context and principal goals, building a National System of Innovation with a further focus on key priorities and recent outputs, current strategic challenges, monitoring and evaluation, gross expenditure on research and development and the financial resources of the Department.
2. Strategic Context
The Departments Annual Performance Plan is prepared in line with its strategic plan. The work of the Department is guided mainly by the White Paper on Science and Technology, the Ten-Year Innovation Plan (TYIP) and the National Research and Development Strategy (NRDS). Particularly, the TYIP seeks to contribute to the transformation of the South African economy into a knowledge-based economy. The production and dissemination of knowledge are viewed to be key in resulting economic benefits and to enrich all fields of human endeavor.
The DST 's policy framework is embedded within; and aligned to broader government priorities and policy, as articulated in the Medium Term Strategic Framework (MTSF) and the New Growth Path (NGP). In addition, the DST contributes directly to three of the national government priority outcomes. These are:
- Outcome 2 (helping realise a long and healthy life for all South Africans);
- Outcome 4 (decent employment through inclusive economic growth);
- Outcome 5 (a skilled and capable workforce to support an inclusive growth path).
With regard to Outcome 4, the DST is expected to contribute to the achievement of two targets. These are (i) improving the country's global competitiveness rating (the current ranking is 50 out of 142 countries) and (ii) developing a strategy to increase the country's gross expenditure on research and development (GERD) as a percentage of GDP to 1.5 per cent by 2014.
With regard to Outcome 5, the DST has committed to contribute towards four outputs which are: increase access to high level occupationally directed programmes in needed areas; research, development and innovation in human capital for growing the knowledge economy; provide support to industry-university partnerships and; increase investment in research and development, especially in the science, engineering and technology sector.
3. Principal Goals
The DST has five strategic goals, namely:
· to develop the innovation capacity of the science and technology system;
· to develop South Africa s knowledge-based capacity;
· to develop appropriate human capital for research, development and innovation;
· to build a world-class research, development and innovation infrastructure to extend the frontiers of knowledge, train the next generation of researchers and enable technology development and transfer and
· to position SA as a strategic international research development and innovation (RDI) partner and making the exchange of knowledge, capacity and resources between SA and its regional and international partners possible.
4. Key Policy Developments
The activities of the DST over the next three to five years will focus on three priority domains, that is, research and development, human capital development and infrastructure. It will, therefore:
· Finalise the Human Capital Development Strategy for Research and Innovation;
· Develop a science, technology, engineering, mathematics and innovation (STEMI) promotion and engagement strategy;
· Continue to pursue enhanced investment and co-operation on STI across Africa and globally;
· Re-assess the R&D Tax Incentive and the Venture Capital Tax Company Incentive to improve its effectiveness;
· Finalise the Palaeosciences and Archaeology Strategy;
· Establish an astronomy entity;
· Finalise an Antarctic Research Strategy;
· Finalise a Marine Biology Research Strategy;
· Complete three policy case studies, for government planning and service delivery improvement through innovation, on housing, water and sanitation; and
· Develop a sustainability model for the ongoing development and roll-out of cyber infrastructure, and an investment and growth strategy for the provision of scientific equipment to support research and innovation.
5. 2012/13 Budget Overview
Below follows the DSTs Budget Trends over the MTEF Period:
Source: National Treasury (2012a) - Vote 34 Science and Technology and research unit calculations.
The DST received an allocation of R4.9 billion in the 2012/13 financial year, which was 0.5 per cent of the total appropriation for the country (R969.4 billion). In real terms (inflation-adjusted), the DSTs 2012/13 budget allocation had increased by 6.2 per cent compared to the 2011/12 financial years allocation of R4.4 billion.
As illustrated, the Research, Development and Innovation Programme received a significant increase of 27.8 per cent in the budget allocation for the 2012/13 financial year.
The Human Capital and Knowledge Systems Programme received the largest share of the DSTs allocation, which was 41.1 per cent.
Over the medium term, expenditure is expected to increase to R6 billion. This is mainly due to an additional allocation of R350 million received over the medium term from the economic competitiveness and support package that comprises:
o R60 million for technology localisation;
o R110 million for the internship programme; and
o R180 million for research into satellite development, titanium and nano-technology.
This allocation was made specifically to stimulate the economy and create jobs. The increase in spending was further due to the funding re-allocated from 2011/12 to 2012/13 and 2013/14 for the Square Kilometre Array (SKA) project, additional funds for improved conditions of service in the DST and its entities, and the expansion of human resources and research infrastructure to support the development of research capacity in universities.
6. Budget summary per Programme
Programme 1: Administration
The Administration Programme is responsible for the overall management of the Department, and ensures that the organisations who receive funding, comply with good corporate governance practices, and align their activities with the NSI. It is also responsible for monitoring and evaluating the performance of the Science Councils. This Programme comprises 4 per cent of the Departments total budget and increased from R195.7 million in 2011/12 to R202.7 million in 2012/13, representing a nominal increase of 3.6 per cent, while in real terms, this allocation decreased by 2.2 per cent.
In terms of economic classification, the bulk of the Programmes allocation, R117.2 million (57.8 per cent), is used to pay employee salaries. The second largest allocation (R82.4 million), is for the payment of Goods and services, where R18.1 million will be spent on travel and subsistence. Expenditure increases over the medium term are due to the expansion of executive support, procurement of the Performance Information Management System, establishment of the Ministerial Review Committee and the introduction of the Ministerial Participation Programme.
Programme 2: Research, Development and Innovation
The Research, Development and Innovation Programme provide policy leadership in long term and cross cutting research and innovation in the NSI. This Programme comprises 23 per cent of the Departments total budget and increased from R854.6 million in 2011/12 to R1.16 billion in 2012/13, representing a nominal increase of 35.3 per cent, while in real terms, this allocation increased by 27.8 per cent. The increase to R1.4 billion over the medium term is due to funds received from the economic competitiveness and support package of R44 million in 2012/13, R45 million in 2013/14 and R91 million in 2014/15 for research into satellite development, titanium and nanotechnology.
In terms of economic classification, the bulk of the Programmes allocation, R1.10 billion (95 per cent), is used for Transfers and subsidies to departmental agencies (R705.1 million) and Non-profit institutions (R397.1 million). The TIA and SANSA respectively receive R455.2 million and R95.5 million of the allocation for Transfers and subsidies. The SKA receives R218.7 million of the allocation for non-profit institutions.
Programme 3: International Co-operation and Resources
The International Co-operation and Resources Programme aims to develop and service bilateral and multilateral relationships and agreements in science and technology. This Programme comprises only 3 per cent of the Departments total budget and increased from R137.2 million in 2011/12 to R141.2 million in 2012/13, representing a nominal increase of 2.9 per cent, while in real terms, this allocation decreased by 2.8 per cent. In terms of economic classification, the bulk of the Programmes allocation, R79.4 million (56 per cent), is used for Transfers and subsidies to departmental agencies (R33.6 million for the Africa Institute of South Africa (AISA) and non-profit institutions (R45.8 million).
Programme 4: Human Capital and Knowledge Systems
The Human Capital and Knowledge Systems Programme aims to develop and implement national programmes to produce knowledge and develop human capital and the associated infrastructure, equipment and public research services. This Programme comprises 41.1 per cent of the Departments total budget, increasing from R1.95 billion in 2011/12 to R2 billion in 2012/13. This represents a 1.4 per cent decrease in real terms. In terms of economic classification, the bulk of the Programmes allocation, R2 billion, is used for to departmental agencies (R1.6 billion), non-profit institutions (R285.1 million) and R99.9 million for public corporations and private enterprises. The National Research Foundation (NRF) receives R1.07 billion of the allocation for Transfers and subsidies. The Academy of Science of South Africa (ASSAf) receives R13.5 million, and R279.5 million of the allocation to non-profit institutions, is allocated for Research and Development Infrastructure. The R99.9 million allocated to Public corporations and private enterprises goes to the South African National Research Network (SANReN).
Programme 5: Socio-Economic Partnerships
The Socio-economics Partnerships Programme aims to serve as a strategic partner within government and with industry, contributing to South Africa s transition to a knowledge economy. This Programme comprises 28.7 per cent of the Departments total budget, increasing from R1.27 billion in 2011/12 to R1.42 billion in 2012/13, representing a 5.6 per cent increase in real terms.
In terms of economic classification, the bulk of the Programmes allocation, R1.37 billion, is used for Transfers and subsidies to Departmental agencies (R499 million) and Public corporations and private enterprises (R872.7 million). The Human Sciences Research Council (HSRC) receives R214.2 million of the Departmental Agencies allocation. The Council for Scientific and Industrial Research (CSIR) receives R737.5 million of the Public corporations and private enterprises allocation. The marginal increase is ascribed to sustained activities in policy and indicator development, tax incentives, sustainable human settlement research, sustainable livelihoods and social development analysis.
7. Committee findings on the presentation by Department and entities
· Members highlighted their concerns with the general state of presentation documents and reports, which were either not user-friendly (DST and NRF annual performance plans), paginated, acronyms used without clarifying in a glossary and colour graphs used in illustrations which made it difficult to read and follow some of the presentations.
· Members were concerned that the National Advisory Council on Innovation (NACI) was not listed as one of the entities who submitted a strategic plan, nor had there been an annual report tabled for the 2010/11 year. Though the Department explained that the entity was incorporated within their Programme 1, Members maintained that they could not follow the activities of that entity. They cautioned that all entities established by law were obliged to report to Parliament. Failure to do so at a specific time, required proper procedures and correspondence explaining non-compliance. Correspondence to that effect should be directed to the Speaker of Parliament, so that the relevant Committees are kept informed.
· Members welcomed the forthcoming recommendations by the Ministerial Review Committee in relation to the challenges experienced by the Technological Innovation Agency. They expressed their interest to be updated on the matter.
· Members noted that the gross expenditure on R&D, as a percentage of GDP had slowed, instead of increasing as was anticipated. They enquired about the DSTs inability to meet the percentage target for R&D. They explained that it was attributed to the fact that the GDP grew faster than the national amount invested in R&D. The Department was currently working on a draft strategy titled Enhancing the National System of Innovation to support growth and development: A strategy to increase R&D investment in South Africa . Once finalised, the Committee wants to be briefed on the report.
· In response to questions by Members about why the Department was not reaching its target for international funds it planned to leverage, the Department indicated that increasingly, South Africa was seen as an emerging economy partner, therefore the amount of development funding available to South Africa was decreasing. However, as an emerging economy South Africa had access to larger science and technology international co-operation agreements and projects.
· Members acknowledged the important work done by the Department and its entities and questioned whether it was significantly highlighted amongst communities and across government departments. They urged the Department and its entities to accelerate efforts in communicating its programmes and achievements to all South Africans.
· Members noted the important role of soil science and soil scientists in addressing some of the challenges and effects of climate change. They encouraged the Department and its entities to explore ways to support the development of soil science and addressing skill shortages in that area.
· Members noted that intergovernmental collaborative partnerships were instrumental in ensuring the work done by the Department and its entities, were used and implemented. Enhanced co-ordination was necessary at Executive as well as Parliamentary level amongst the various portfolio and select committees in instances where science and technology issues are transversal.
· Members particularly singled out the Departments of Higher and Basic Education, and stressed that the relationship between the DST and those departments should be strengthened to address similar issues of concern regarding mathematics and science at school level.
· In interacting with the public entities in the science portfolio, Members expressed their general satisfaction with the entities operations and plans. They acknowledged that the science agencies in this portfolio have an important role to play in facilitating the development of cutting-edge science and technology capabilities in the country.
· In some instances the Committee found that the Parliamentary grants were inadequate to fulfill the total funding requirements of the entities and it was difficult for them to advance their mandates fully.
· Entities reported that they struggled with retaining and attracting high-level technical skills and expertise, due to the lack of certain skills in the country and the incomparable nature of public sector salaries versus the private sector. Members cautioned that entities should explore all possible avenues to find individuals with the necessary skills as they may not always be reached via the mainstream recruitment methods.
· The Chairperson referred to the Money Bills Amendment Procedure and Related Matters Act and advised the Department and entities that projects, which lacked funding should be brought to the attention of the Committee. This Act enables the Committee to make recommendations with regard to financial allocations.
The Portfolio Committee on Science and Technology, having considered and concluded its deliberations on Budget Vote 34: Science and Technology, and the Annual Performance Plan for the Fiscal years 2012 2013, recommends that Budget Vote 34, be approved by the House.
Report to be considered
Department of Science and Technology (2011) Strategic Plan for the Fiscal Years 2011-2016
Department of Science and Technology (2012), Annual Performance Plan 2012-2013
Department of Science and Technology (2012) DST Strategic Plan, Presentation to the Portfolio Committee on 18 April 2012
Portfolio Committee on Science and Technology (2011) Report of the Portfolio Committee on Science and Technology on Budget Vote 34: Science and Technology, dated April 2011.
Research Unit: Parliament of RSA (2012), Vote 34: Department of Science and Technology Budget 2012/2013.
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