Hansard: Minister's Responses / Members 's Statements

House: National Assembly

Date of Meeting: 19 Feb 2008


No summary available.




Tuesday, 19 February 2008







The House met at 14:03.

The Speaker took the Chair and requested members to observe a moment of silence for prayer or meditation.

Notices of Motion


Start of Day


Mrs C DUDLEY: Madam Speaker, on behalf of the ACDP I give notice that I shall move:

That the House debates–

(1) the controversial issue of whether or not the proposed national school pledge will unite or divide the country, whether or not the perceived need for such a pledge is valid, and

(2) the response of the public to the suggestion.




Dr J T DELPORT: I hereby give notice that I shall move:

That the House debates the challenges facing the criminal justice system in South Africa.




Mr M B SKOSANA: I hereby give notice that I shall move in the next sitting of this House:

That this House debates–

(1) the positive and the negative political and social economic features of the Western sponsored democracy in the pre and post colonial Africa, and

(2) the search for a conflict-free model of democracy appropriate to peace, stability, co-operation and development for the wellbeing of all people of Africa.





(Draft Resolution)

Mr M J ELLIS: Madam Speaker, I move without notice:

That the House-

(1) notes that on 11 February 2008 the Soweto Gospel Choir won a Grammy Award in the best Traditional World Music category for the album African Spirit;

(2) further notes that the this is the choirs' second consecutive Grammy Award and that they follow in the footsteps of South African music greats Ladysmith Black Mambazo

(3) recognises that the choir is truly representative not only consisting of members from the age of 16 to 40 years of age but also singing in six of South Africa's 11 official languages;

(4) further recognises that in 2003, the choir founded its own Aids orphans foundation, Vukani, which raises funds for Aids orphans establishments that receives little or no government or private funding and are ambassadors for Nelson Mandela's 46664 campaign;

(5) acknowledges the vital role that the choir plays not only in inspiring all young South African musicians, but also in showcasing the unique talent of our country to the rest of the world.

(6) congratulates the Soweto Gospel Choir on the great honour that has been bestowed on them and wishes them well for their current United Kingdom Tour and the upcoming tours that includes Lebanon, Australia and Fiji.

Thank you. [Applause.]

Agreed to.









(Draft Resolution)

Mr M J ELLIS: Madam Speaker, I move without notice:

That the House-

(1) notes with profound sadness the death of the head of protocol in the office of the President , Johan Reinders, at the age of 56 on Monday, 18 February 2008;

(2) recognises that he is the longest serving official in the President's office and worked for former presidents such as F W De Klerk and Nelson Mandela;

(3) acknowledges the fundamental role he played in ensuring all functions and public engagements hosted and attended by the President and Deputy President were properly managed, coordinated and of a high standard;

(4) further recognises that last week's opening of Parliament was the first one he had missed in 27 years; and

(5) conveys its condolences to his family and friends.

Agreed to.

The SPEAKER: The condolences of the National Assembly and the presiding officers will also be conveyed.









(Member's Statement)

Mr B L MASHILE (ANC): Madam Speaker, the ANC welcomes the decision by the Public Protector that by publishing unfounded and unverified allegation of misconduct against the President and the medical team of the Donald Gordon Centre, and by failing to co-operate with the Public Protector in the investigation of his complaint, the hon Waters acted unconstitutionally and in a manner that is unbecoming of a member of this Parliament.

The Public Protector has found that the claims that the hon Waters made in this regard were without any foundation or substance. The ANC agrees with the Public Protector that the public has a right to be informed of any misconduct by the President. However, reasonable steps must be taken to verify the information before it is published.

It is scandalous that hon Waters did none of these. It is telling that the hon Waters has been found to have acted in a manner inimical to the very Constitution he has sworn to uphold. In accordance with the findings and recommendations of the Public Protector in this regard we call on the DA to demonstrate its loyalty to our Constitution and democratic institutions by acting firmly against hon Waters. I thank you. [Applause]








(Member's Statement)

Mr M J ELLIS (DA): Madam Speaker, I'm particularly pleased to be able to rise after the previous speaker, because I wish to make the following statement: Public Proctor Lawrence Mushwana's recent recommendation that Parliament should take action against DA MP, Mike Waters nearly serves to demonstrate once again the ANC's complete lack of respect for the Constitution and that it would rather choose to pursue its own interest, no matter what the constitutional cost.

While the Public Protector is meant to be completely independent from government and any political party, past decisions made by Mushwana, such as those relating to Oilgate, leaves no confusion over where his allegiances lie, a concern which was raised by the DA as far back as 2002 when he supposedly resigned from being an active member of the ANC to take up his position as Public Protector.

What is confusing through, Madam Speaker is the Public Protector's decision to ...

Prof A K ASMAL: Madam Speaker, on a point of order: Will the hon member recognise in the House that under Chapter 7 of the Constitution every member of the House is obliged to respect the authority and the status of the Public Protector? Will he recognise that if he has any objection to the role of the Public Protector he should put down a motion which this House can discuss? Otherwise I would like you to rule, Madam Speaker, that it's totally improper and out of order for him to impugn the integrity of the Public Protector. [Applause]

The SPEAKER: Hon Ellis, in actual fact you will also recognise that that is true.

Mr M J ELLIS: Yes. Can I finish my statement?

The SPEAKER: Hon Ellis, as long as your statement does not impugn the integrity of the Public Protector.

Mr M J ELLIS: I don't believe it does, Madam Speaker. I want to say that very categorically. May I continue and I want to say ...

Mr A C Nel: No, it's not the question of whether his statement will impugn, the statement has already impugned. And he needs to withdraw.

Mr M J ELLIS: Not at all, Madam Speaker. I do not believe that it can impugn the integrity.

The SPEAKER: Hon Ellis, the hon members are pointing out something that comes out of the statement you have just read, that in actual fact in as far as your statement casts aspersions on the integrity of the Public Protector, it actually has to be withdrawn, because constitutionally and legally it is wrong to do that, except through a substantive motion, in the same way as it relates to other members of Parliament.

Mr M J Ellis: Madam Speaker, I will obey your ruling. I will withdraw the statement, but I wish to give notice then that we will be moving a substantive motion in this House in the very near future. Thank you.






(Member's Statement)

Mr M B SKOSANA (IFP): Madam Speaker, we commend the Australian Prime Minister, Kevin Rudd and the Parliament of Australia for formally apologising on behalf of the people of Australia for the grave injustices committed against the Aborigines for more than two centuries. Mr Rudd said, "We apologise for the laws and policies of successive parliaments and governments that have been afflicted profound grief, suffering and loss on these our fellow Aborigines".

The forceful removal of Aborigine children from their families in order to assimilate them into the white settler colonies has resulted in what is now known as "the stolen generations". That is a people marooned in a political and cultural wilderness. In his book, "The African Predicament", Kofi Awoono recalls Nkrumah's perspective on a relative situation when he said,

Unblessed with the arts of good government, material and spiritual progress, we were still regarded as representing the infancy of mankind. Our highly sophisticated culture was said to be simple, paralysed by inertia and we had to be encumbered with tutelage.

Thank you.






(Member's Statement)

Ms Z KOTA (ANC): Madam Speaker, the Cape High Court has ruled that members of the public were instigated by a DA councillor to illegally occupy houses in Delft must vacate them. The DA, true to its form, has again acted opportunistically and manipulated difficult circumstances of our people and the country face in attempt to score cheap political points. They have encouraged ordinary people to break the law in attempt to clean their dented image.

The DA have uncaring without concern abused poor people's aspiration for decent housing. This is despicable of a shameless politicking of the worst order. All South Africans have a right to a secure place in which to live in peace and dignity. Housing is a human right. The ANC government of our country is committed to the goal for realising the better life for all our people, including the provision of decent housing for all.

The ANC urges all people who have been asked to vacate those houses to ensure that they register and ensure that their names appear on the housing list. The ANC is urging the Minister for Provincial and Local Government Sydney Mufamadi to investigate the behaviour of the councillor and act appropriately. The DA Mayor Helen Zille must show leadership by acting on this matter as a matter of urgency. I thank you.






(Member's Statement)

Rev K R J MESHOE (ACDP): Madam Speaker, in response to questions I raised with the President regarding the serious allegations against the National Police Commissioner, the President said that I must explain to this House and the nation why, "I saw it fit to make the grievous insult which sought to challenge not only the integrity of the person of the President of the Republic, but also the Office of the President and our government as a whole".

In my speech I said that the ACDP believes that in the light of the very serious revelations contained in Advocate Mpshe's affidavit, the President owed the public an explanation as to exactly when he became aware of the serious allegations against Mr Selebi and why he failed to suspend him, rather than answer my straightforward questions, albeit based on allegations. The President chose to see our questions as an insult which sought to challenge his and the integrity of the government.

Whenever there are perceived contradictions coming from government and the Presidency, the ACDP will always ask for clarity and the truth to be told. We believe that truth must be told to and by individuals as well as restore the integrity of government. Only the President can tell us the truth of this matter.

Now even more it is important, following the further allegations by Vusi Pikoli's lawyer that his client will tell the Ginwala Commission that all events indicate that his suspension was linked to attempts to stop the Selebi investigation. Therefore, our question to the President still stand; we want to know when he first became aware of the serious allegations against Commissioner Selebi and why he did not act immediately to suspend him or at the very least, in September 2007 after the NPA had obtained warrants of search and arrest? Thank you.





(Member's Statement)

Dr C P MULDER (FF+): Madam Speaker, the FF+ finds it shocking that whilst the government has phased out compulsory religious education, scripture reading and prayers at public schools, it now wants to expose those same children to a new ideology. Minister Pandor was quick to state that the wording of the proposed pledge comes from the Constitution. However, that is only half of the truth.

Why did the ANC government decide to conveniently ignore the very next phrase in the preamble of the Constitution that says, "We respect those who have worked to build and develop our country and believe that South Africa belongs to all who live in it, united in our diversity". That was ignored.

Children especially from the minority groups do not know the past through which they now have to distance themselves from through this oath. What they are experiencing at present is the persistent way in which affirmative action is now being enforced on them. It is rather necessary to teach children basic values such as respect for life and for the property for others.

The FF+ cannot accept that any government through whatever means want to lay claim to the consciences of South African children. Do we have to remind the Minister of Education and the ANC government of the provisions of section 15 of the Bill of Rights that guarantee freedom of conscience, believe and the opinion? The FF+ is opposed in principle to the concept of introducing any pledge or oath into our schools and will oppose any efforts by this government to enforce this new plan on our children.





(Member's Statement)

Mr M M DIKGACWI (ANC): Madam Speaker, last year Parliament passed the National Sports and Recreation Bill, which, amongst others, made provision from all sports federation to enter into performance agreements with the Department of Sport on transformation matters. It also reserved the right for the Minister to intervene in federations where sport is brought into disrepute.

Extensive public hearings were held across the country to enrich the legislation. In Parliament a wide range of stakeholders participated in the proceedings of the portfolio committee including AfriForum which is closely align to the FF+. AfriForum raised objections to the principles of transformation, equity, equality in sport and alleged political interference in sport.

On the other hand the SA Rugby Union raised concerns which were addressed in the final version of the Bill. During the debate on the Bill, the FF+ threatend to approach the Constitutional Court if the President assented to the Bill. The Bill has subsequently been signed into law by President Mbeki. The ANC notes with concern the approach taken by AfriForum in collaboration with former Springbok captains to use individuals in SA Rugby as a conduit to raise their objections of alleged political interference in rugby with the International Rugby Board.

It is ironic that the FF+ accused the ANC of political interference in sports while they use AfriForum, former rugby captains and naïve individuals in the South African rugby leadership to pursue a political agenda. The FF+ and AfriForum know very well that the Sports and Recreation Act is morally and constitutionally sound. The ANC calls on all South Africans to embrace the transformation in sport as an integral instrument to build a caring and an inclusive society. Thank you.







(Member's Statement)

Mr P H K DITSHETELO (UCDP): The Departments of Provincial and Local Government and Housing have come up with a programme to assist provinces to run their affairs efficiently and successfully. However, the question still remains unanswered. What is the use of compiling budgets for a department which is not going to follow it? Nothing of course! We are being requested to help in the alleviation of poverty, year in and year out but the amount earmarked for the purpose is rolled over, again and again every year.

For example, the budget of the Department of Agriculture in North West was R366,7 million and the expenditure stood at R270,9 million; which is 73.8% of the total budget. The figure for environmental affairs was R56,9 million and the spending was only R33,6% million; which is 59% of allocations. The amount budgeted for conditional grants was R8, 28 million and only 2,8% of it was spent.

Is this because the need for the original budget has become irrelevant? Surely not. I think it is just poor service delivery. What are the reasons for the underspending?







(Member's Statement)

Ms D VAN DER WALT (DA): Thank you Madam Speaker. The DA wishes to express its general support for the idea of a pledge for learners. Such a pledge, if based on values and a genuine effort to unite, can serve as a constructive point of departure for helping young South Africans engaged with issues of good citizenship, responsibility and social cohesion.

However, the DA would like to draw attention to the possibility of the proposed pledge doing more harm than good, if the public is not consulted and involved sufficiently in the process. If this pledge is designed to build better social cohesion, there must be a well planned and structured mechanism for people of all ages to participate and give their views. This must happen in order for people to feel included and to prevent resentment at having decision imposed upon them.


Watter versekering of waarborg bied die Minister aan die publiek dat hul insette oorweeg sal word?


Furthermore, the DA wishes to draw attention to the need for broader social engagement with issues of responsibility, ethics and good citizenship. It is more important that our children see in the leaders of the countries, exemplary conduct, impeccable ethics and conduct that all times provide clear examples of what children should emulate.

We must hold our leader to account by the same standard we would have our children live by.

When the Bill of responsibilities for the youth of South Africa is tabled, the DA will call for the First Reading Debate. Thank you.






(Member's Statement)


Ms B N DAMBUZA (ANC): Somlomo, urhulumente oxhuzula imikhala nokhokelwa ngumbutho wesizwe i-ANC usebenzisana nabantu ekwakheni ubomi obungcono kubantu bonke beli loMzantsi Afrika. Ukuzalisekisa esi sithembiso, urhulumente weMpuma Koloni uvuselela umzila kaloliwe odibanisa iMonti kunye noMthatha. Ukuvuselela lo mzila kudle urhulumente isixa semali esimalunga ne-117 lezigidi zeerandi.

Uvuselelo lwalo mzila kulindeleke ukuba luqinise amathuba ezoqoqosho kwingingqi yomPhesheya kweNciba. Amatikiti aya kuthengiswa kwezi zikhululo zikaloliwe zilandelayo: eMonti, eAMabhele, eQumrha, eGcuwa kunye naseMthatha. La matikiti aya kuxabisa ama-R30 ukusuka eMonti ukuya eMthatha.

Ukhuseleko lwabahambi-ngololiwe luya kuqinisekiswa ngamapolisa kaloliwe. Lo loliwe uya kuqala ukusebenza ngomhla wokuqala kweyoKwindla okanye uMatshi, apha kowama-2008.

Thina, singamalungu e-ANC, siya kuthi gqolo sisebenzisana nabantu ekwakheni ubomi obungcono apho wonke ubani eya kungcamla khona, singajonge bala lamntu. Ndiyabulela [Kwaqhwatywa.]








(Member's Statement)

Mr H J BEKKER (IFP): Madam Speaker, the IFP is extremely concerned that Tiger Brands' Health Care Unit Adcock Ingram and several smaller health care groups faced the threat of huge fines colluding to fixed tenders and prices. This incident is highlighted at a time when the public is being hit by rising prices: food, electricity, petrol and health care costs and it also come shortly after Tiger Brands were fined R98,8 million following the bread price-fixing scandal.

We also note that the fine paid by Tiger Brands at that time did not benefit any of the victims of poverty. The IFP would therefore like to call on National Treasury to amend the regulations on the deposit of Competition Commission Fines into the Revenue fund, and to rather provide for the victims of anti-competitive behaviour to benefit in a direct manner.

We believe that the government should not be the main beneficiaries of this scandalous behaviour of consumer groups but that the poorest of the poor and especially sufferers of HIV should benefit if Adcock Ingram and the others are to receive a fine from this latest scandal. I thank you.









(Member's Statement)


Mr J B SIBANYONI: Isitatimende ngejima lokwenza iinkolo zisebenze.

Sithanda ukuthokoza indima edlalwe ziinqhema ezilandelako zeMetsweding District: UmNyango weFundo eGauteng nesiYingi sangeTlhagwini yeGauteng, i-Ofisi yePalamende esemphakathini yangeKungwini e-Bronkhortspruit, i-Ofisi yePalamende yangemphakathini iNokeng Tsa Taemane, uMasipala weKungwini, uMasipala weNokeng Tsa Taemane noMasipala wesiYingi seMetsweding.

NgoNobayeni we-2007, ngoTjhirhweni noMhlolanja we-2008, iKungwini neNokeng Tsa Taemane ngokubambisana neKomitjhana yeluTjha yeGauteng zabamba ijima lokukhuthaza abafundi bonyana babuyele eenkolweni. Lokhu kwenziwe ngokunikela iimfundobandulo zokuhlwengisa nokuqinisekisa bonyana abafundi nabafundisi babuyela eenkolweni ngelanga lokuvula. Baqinisekise godu kobana ukufunda nokufundisa kuthoma ngelanga lokuthoma lokuvulwa kweenkolo.

Ijimeli laswaphelisa ngomnyanya wokugidinga ohlanganyelweko esikolweni iCullinan Combined, lapho iinkolo nabafundi abasebenze kuhle khulu batlonyeliswa khona ngeentifikedi, abonongorwana namaphrintha.

Sithanda ukuthokoza zoke iinkampani ngomnikelo eziwenzileko, begodu sithokoza nabafundisi ngokusiza iinkolo nabafundi ukuthumba babe badosiphambili.

Njengombana ijima leli lenziwa qobe ekuthomeni komnyaka omunye nomunye, sikhuthaza abafundi beBanga 12, kulomnyaka we-2008 bonyana basebenze khulu ukuphala beminyaka egadungileko khona kuzakuba khona iinkolo nabafundi abanengi abaziinkutana. Siyathokoza.[Iwahlo.]





(Member's Statement)


Dr S M VAN DYK (DA): Speaker, gegewe die landswye elektrisiteitskrisis waarin Suid-Afrika verkeer, is dit onaanvaarbaar dat die regering slegs om verskoning vra daarvoor, maar steeds weier om die ware redes wat tot die fiasko bygedra het te erken.

Die argument dat Suid-Afrika die slagoffer is van sy eie ekonomiese groei, is 'n skande. Die gevolge van die ANC-regering se agtelosigheid in behoorlike ekonomiese beplanning; ondeurdagte owerheidsbesteding; en die ANC se ekonomiese magsbeheptheid, wat privaatbelegging blokkeer, kos Suid-Afrika nou R2 miljard in verlore produksie per dag en 'n afname in die BBP van 2,2% per jaar. Tog weier die regering dat die ware redes, naamlik swak bestuur, 'n tekort aan kundigheid, Eskom se monopolie-posisie, gebrekkige instandhouding, en onaantreklike beleggingsmoontlikhede van die vernaamste redes vir die krisis was.

Nou sit Suid-Afrika met 'n vooruitsig van groter werkloosheid, emigrasie van kundiges, en groter onsekerhede by buitelandse sakelui om in Suid-Afrika te belê. Die regering behoort nou 'n eed af te lê aan alle Suid-Afrikaners en te verklaar dat hy sy transformasiebeleid sal hersien om kundigheid en kapasiteit te herwin, verder dat die ANC ook sy politieke beleid van inmenging in die ekonomie sal wysig sodat markkragte, die privaatsektor en buitelandse beleggers die land se ekonomie sal laat groei.

Die regering behoort 'n belofte af te lê aan Suid-Afrika dat hulle die land van nou af so sal regeer dat Suid-Afrika se belange bo ANC-partybelange gestel word en dat 'n toekoms vir alle Suid-Afrikaners geskep word waar almal veilig en ekonomies welvarend sal kan leef. Dankie.





(Member's Statement)

Mr J D ARENDSE (ANC): Chairperson, marine resources must be managed and controlled for the benefit of all South Africans, especially those communities whose livelihoods depend on resources from the sea. The fishing stock must be managed in a way that promotes sustainable yield and the development of new species.

The ANC will always assist people in having access to these resources. Barely three weeks after the diving ban regulations on abalone were gazetted authorities have arrested 17 suspected poachers during a night-long operation in Hout Bay and Robben Island.

There are four areas where a total ban on diving has been placed as part of the measures for the protection of the wild abalone and to promote the recovery and rebuilding of the resource. The arrests follow a collaborate enforcement between officials from the Department of Environmental Affairs and Tourism and the SAPS. Amongst the equipment seized during the arrests were the following: a super-duck fishing vessel, 77 pieces of abalone and abalone shucking equipment. The ANC-led government is continuously providing skills to law enforcement agencies to more than match the criminals and their syndicates. I thank you.






(Member's Statement)

Mr C D KEKANA (ANC): Chairperson, the primary task of the ANC remains the mobilisation of all classes and strata that objectively stand to benefit from the cause of social change. The dictum that the people are their own liberators remains as relevant today as it was during the days of anti-apartheid struggle.

The Northern Cape provincial government led by the ANC has committed R90 million towards ensuring community participation in the government development programmes. The plans to be funded include the following: community and social development workers; safety volunteers; school governing bodies; ward committees; and community safety forums.

The ANC believes that all spheres of government should invest in strengthening capacity in pursuance of enhanced service delivery. The goal of the ANC is to create a South Africa in which all experience an improving quality of life, and enjoy human rights with access to opportunities that freedom has brought about, bound together by our humanity. I thank you.





(Minister's Response)


The MINISTER OF EDUCATION: Chairperson, allow me to begin, unusually, by thanking the DA for this statement on the pledge, and we certainly look forward to their suggestions as to the wording because we have published a Gazette and welcome comments on the proposed pledge.

Now, as far as I recall, not a single line of the pledge makes reference to the ANC, and I don't know where the hon Mulder found that reference. But, of course, we would expect him to object to anything that seeks to build a nation and seeks to inculcate positive values in the children of our country.

If one looks at the values that are elaborated in the current draft - and it is a draft - it refers to very positive values that we ould want our children to internalise and reflect both in their conduct as well as in their attention to our society. However, as I have said, we look forward with great interest to the submissions in response to the gazetting.

The HOUSE CHAIRPERSON (Mr G Q M Doidge): Thank you, Minister.

The MINISTER OF EDUCATION: Sorry, I wonder, Chairperson, if you could briefly allow me to say, in the bill of responsibilities, hon De Walt, the word ``Bill'' is used in order to link the document with the Bill of Rights. It is not a formal Bill which would come before the House but it would be available for debate in society, in schools, colleges, universities and in the broader public domain. So it is not a formal instrument. It does what all of us have been talking about, which is that, as we have tabled rights before the nation, let us also get the nation to understand that rights come with responsibilities.

So we have sought to elaborate what some of the responsibilities that are attached to the rights in our Bill of Rights are, and we hope that the South African public will welcome such an elaboration, which many of us have called for in the past. [Applause.]





(Minister's Statement)

The MINISTER FOR PUBLIC ENTERPRISES: I regret I can't thank the DA for their statement on energy. [Laughter.] In fact, I find it somewhat sad that although we had a three-hour briefing this morning where we dealt in detail with a whole range of matters around the energy issue, the hon Van Dyk, 14 years into democracy, is essentially arguing that every problem that occurred with energy is as a result of affirmative action.

I think that is a very sad statement for a party that should try and represent all the people of this country and not just your people. [Interjections.] That is the problem, because you are essentially implying that race is at the essence of this. I haven't heard a single statement from that side of the House that's committed that party to doing something about the energy, and the hon Van Wyk, in particular, I think would really like to see a disaster in this country, because you do nothing to support investment in this country; you do nothing other than attack the policies of this government, and frankly, I think that you're an anachronism and your position, in my view, is blatantly racist. [Applause.]

The HOUSE CHAIRPERSON (Mr G Q M Doidge): Hon Ellis, are you rising on a point of order?

Mr M J ELLIS: Chairperson, I ask you, sir, to rule along the lines of what the hon Minister has said. He has said that the party is racist and I believe that that is unparliamentary. [Interjections.]

The DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I distinctly heard Minister Erwin saying that ``your position is racist'', but if you want to consult Hansard and rule on the matter ... [Interjections.]

The HOUSE CHAIRPERSON (Mr G Q M Doidge): Order, order! The comment made by the hon Minister is not unparliamentary. We will now proceed with the response from Minister of Housing. [Interjections.]

I am going to ask the hon members to observe the Rules. If you don't know what the Rules are, then I will have to remind you from the Chair. When the hon member has the floor, we ought to give that hon member that opportunity to be heard. Now, if you contravene the Rules, I have to take action from the Chair. I asked for order and didn't get a positive response.

I am now going to allow the Minister of Housing to go ahead. I don't know what you are heckling for because the Minister hasn't even spoken yet! Please proceed, hon Minister.





(Minister's Response)

The MINISTER OF HOUSING: Thank you very much, Chairperson. I am very glad I come in at this point when we are talking about the issue of race. I would like to commend the hon Zoe Kota for her very incisive statement on the situation in Delft. I think it is an absolute disgrace that the DA should sink so low in its desperate bid to rally support. It has deliberately sought to sow racial tension and divisions in the Western Cape.

I must commend the people who have been moved from Langa and are presently living in temporary shelter. I commend them for their restraint and understanding in the face of this violation. I would like to also thank the other backyarders in Delft who did not respond to the irresponsible calls of the DA councillor. The houses will now be rectified, and the intended beneficiaries should move in very quickly.

I welcome the hon Zoe's call for the DA Mayor of the City to deal with her delinquent councillor. I would also like know from the DA members here what their responsibility is in the face of this racial problem that is being sown. If, in fact, the opposition and in particular, this particular opposition, does not subscribe to the definition of being called racist, I would like them to show that they actually will not stand by a councillor who is blatantly racist [Applause.]






(Minister's Response)

The MINISTER OF SPORT AND RECREATION: Chairperson, Mr Peter De Villiers is a young South African citizen from the small town of Paarl. He is a very excellent rugby coach by his own records. As a matter of fact, in the records of South African rugby, the Springboks have never had a better qualified rugby coach in the whole history of the Springboks from 1906 to date. [Interjections.] So, for everybody... of course, this is a fact.

Chairperson, Peter De Villiers started his coaching at school. He brought the World Cup for the under-19s, for the under-21s, and for the A side. [Applause.] Nobody else has ever done it before him. We don't know if there will be anyone who will do it after him.

The fact that he is black has nothing to do with the fact that he is a Springbok coach today. It has to do with the excellence that this young man displays in the art of coaching rugby.

For the politicians who are in rugby tracksuits... [Interjection]

Mr P J GROENEWALD: On a point of order, Chairperson. I rise on a point of order. Is the hon Minister prepared to take a question?


Mr P J GROENEWALD: Chairperson, I want to ask the hon Minister this: If Mr Peter De Villiers is the best qualified coach since 1906, why was he not appointed and why was Jake White appointed?

The MINISTER OF SPORT AND RECREATION: You should know better – because of political interference, which is always ascribed to us, when in fact it comes from yourselves. My father was never a Minister in the apartheid government. [Interjections.] It is a point; it is the root of the answer to your question. I'm tracing that answer to its roots - the root of parallel development; the root of multinationalism in sport. That is the root of the answer to your question. [Interjections.]

We have now eradicated that root and Peter De Villiers, purely on the basis of his ability and his curriculum vitae and credentials,

has been identified as such. For those skeletons in rugby tracksuits masquerading as sportspersons, when in fact they are ultraconservative politicians, we say they must go back to the ideological Jurassic park where they belong. We move forward. [Applause.]







(Subject for Discussion)

Mrs C DUDLEY: Chair, hon Ministers, colleagues, food inflation in South Africa is clearly out of control, especially the bread price. For the ACDP, this is extremely concerning as it affects poor and vulnerable people without exception. Behind the emotional reaction to soaring bread prices - we are told - two indisputable facts stand out: The first one is that the dramatic surge in the cost of wheat in the past 18 months is here to stay, and the other is that higher prices are likely to hit South Africa's independent bakers, who are the producers of 45% of the country's bread, far harder than it will hit big companies.

Over the past twelve months the price of wheat has risen from R1 700 to R4 000 a ton; global wheat stockpiles are at a 30-year low as climate change has taken its toll; and wheat consumption has outstripped global supply for the last four years. South Africa produced 1,77 million tons of wheat last year but consumed 2,8 million tons. At the same time a growing demand for biofuels has enticed farmers to shift from wheat to maize production, and the price of fuel continues to escalate, adding to a long list of contributing factors to bread price increases.

Mr S N SWART: Chairperson, on a point of order: We cannot hear the speaker at his stage. Could we have some silence, if possible? [Interjections.]

The HOUSE CHAIRPERSON (Mr G Q M Doidge): Order! Order!

Ms C DUDLEY: Global markets and the rand value are, of course, also culprits and often used to explain price increases. We have, however, yet to see a decrease in the price of staple of foods when the rand actually strengthens. I'm not used to the silence. [Interjections.] Come to think of it – why would white bread increase by 2,8% and brown bread by 5,4% when production processes and inputs are the same for both? Interesting!

The National Agri-Marketing Association is still to evaluate costs and margins in the industry, but what we do know right now is that bakeries and dairies have been colluding, and collusion leads to higher prices. The speedy and thorough action being taken and significant consequences resulting in the form of hefty fines are commendable. In future, the ACDP hopes collusion will be viewed as bad for business. Even so, the ACDP calls on government to tell us into whose coffers have the R100 million admission-of-guilt fine gone? Who will benefit from this and other fines? How will this money be utilised to relieve the burden of bread price increases on society?

The outrage sparked by the price-fixing scandal and the recent price increases has solicited several calls for government to intervene, with labour unions and others arguing that the rising cost of staple food could force millions of people deeper into poverty. The argument against government intervention is that it distorts the market allocation of goods and services. When prices are kept artificially low, suppliers allocate fewer resources to the production of goods, leading to shortages.

It is argued that if producers were making superprofits in bread production, consumers could simply vote with their feet and force the bread companies to lower their prices to win back customers. The problem with this argument is that when it comes to a staple food like bread, consumers have no choice but to pay higher prices – whatever they are. Consumer demand is therefore price insensitive and bread producers could increase prices without suffering the reduction in demand that would usually go with price hikes.

One very interesting piece of the puzzle, however, is highlighted in research by South Africa's milling industry, which shows that government, through VAT, is in fact the biggest beneficiary of the recent bread price hikes. It is estimated that government will earn about R1,29 billion in VAT on white bread alone this year. Brown bread, of course, is VAT exempt.

The fiscal benefit for government does not stop there, as VAT is earned on products right along the value chain – from the farmer to the miller and baker, not forgetting the 2% import duty per ton of wheat. Is it perhaps time for white bread also to be VAT exempt, and what about import duty on wheat? Certainly, these are options which government must seriously look at. I thank you. [Applause.]





Mnu S J NJIKELANA: Sihlalo obekekileyo, abaPhathiswa abahloniphekileyo, Malungu ePalamente kunye nabo bonke abemi beloMzantsi Afrika, kukho umntu owakhe wathi "abantu bafuna isonka", impendula yaba kukuthi "banike ikeyiki". Ndiyathemba ke noko ukuba kwezi nzingo sijongene nazo kwezi ntsuku siqinisekisile ukuba urhulumente wethu unxaxhile kwimpendulo elelo hlobo.


The recent incidents of price increases on bread are definitely cause for alarm. At the same time we need not exaggerate alarm on this matter. We have a government that is always responsive to issues that affect the poor. It is obviously on this basis that this Parliament is addressing the matter of price increases on bread.

We need to delve quite deeply into the causes thereof. Certain quarters claim that the astronomical price rises in respect of wheat and fuel and other factors are the cause of the recent price increases. However, in the words of Cosatu in KwaZulu-Natal, and I quote:

This situation threatens the livelihood of many workers and their families. Living standards are becoming unbearable for the unemployed people in our communities.

When inaccessibility of staple foods becomes an issue, as is the case in our country, this obviously constitutes a challenge to, amongst other things, food self-sufficiency, which is central to food security, as it has become an issue due to the liberalisation of agriculture-based economies.

The Board on Tariffs and Trade investigated prices in the food chain in 1992 and observed two divergences, namely that food price inflation was higher than overall inflation between 1981 and 1991, and that retail food price inflation was higher than farm-gate inflation over the same period. In response to this situation, the Department of Agriculture and Land Affairs is currently busy increasing local wheat production; strengthening co-operatives along the bread production value chain; as well as encouraging local bakeries both in peri-urban and rural areas.

The recent incident of bread price-fixing has brought to our attention lessons such as the callousness of those driven by greed and avarice, who have been exposed as siphoning even the last penny from the poor. Deficiencies in the current price regulatory systems need serious attention. In any case, the growing effectiveness of regulatory institutions, such as the Competition Commission, has come to the fore. Recently, the commission has uncovered a number of fraudulent pricing practices and ensured that culprits were brought to book. This has also enhanced awareness by the public of the institution's activities although more still has to be done.

There are challenges with regard to economic morality. Raising the price of bread despite recent penalties is one cause of concern. As if that was not enough, collusion on pharmaceutical products has just been exposed as well. An interesting feature is the deafening silence about the morality of making a living out of the plight of the poor. In fact, the question is: At what stage can we say price collusion and/or fixing is devoid of fraud and criminality in its character, since this is an activity that results in the misery of those whose daily struggle is to fill their stomachs?

The role of directors, shareholders and consumers has never been so challenged. The rampant excuse of saying "we did not know" is brought under the spotlight by these circumstances. Let me say that active shareholding can no longer be mere lip service. Shareholders must ensure that their managers account for their activities. The need to focus on consumption as part of the economic cycle in South Africa has never been so strong.

I am definitely making a strong call to consumer groups to intensify their awareness campaigns and, amongst other things, to ensure citizens, as consumers, are able to influence the pricing of commodities to ensure accessibility thereto. Public accountability of private companies is almost nonexistent. Special focus should be on businesses that produce bread, whether it is producing wheat, baking or distributing. They should ensure that they are as transparent as is necessary.

The current focus on economic transformation is supposed to be enablement more than regulation. However, unfortunately, recent events display demand for the latter. The unfortunate part is that resources that are supposed to be allocated to enabling economic development have to be redirected to punitive measures due to malpractices in prices of commodities, including bread.

The culture of exploitation of the poor through, inter alia, price collusion by large cartels has triggered a lot of responses, as reported in the newspapers. Our government should therefore intervene in this matter and ensure food security for the poor and the economically marginalised, who are the most vulnerable targets of this practice, which is best described by the CEO of Tiger Brands, Mr Nick Dennis, when he says, and I quote:

The anti-competitive activity that took place was completely unacceptable and contrary to our ethical standards.

Indeed, the practice is not only anti-competitive but also unethical. Unfortunately, the practice continues in other companies.

Any intervention undoubtedly has to include the following considerations: Enhancement of the social wage by government such that the poor are able to absorb any dramatic price increases, especially on staple food, which must be given urgent attention; the development of a vibrant and dynamic consumer movement in keeping with our historical goal of deepening democracy – as consumers, South Africans need to re-socialise themselves and consumer activists have to mobilise intensively for the highest possible consumer consciousness; a strong focus on small, medium and micro enterprises, in particular co-operatives, could provide some viable solutions; and further enablement and/or empowerment of the Competition Commission and sister regulatory bodies.

Whilst short-term interventions are more than essential, it is only long-term strategies that will address this quagmire on a sustainable basis. Some of these long-term strategies are: The refinement of relevant legislation; compliance with company policies to be made a public issue; enhancement of global alliances against price collusion at global level; the need to intensify moral regeneration beyond the current focus into economic morality; the possibility of the reintroduction of the regulation of food prices, especially on staple foods, has to be debated; and addressing the broad socioeconomic issues that shape the overall environment for the determination of food prices.

Our government needs to heed the call of the resolutions that were taken at the ANC's 52nd National Conference, which spoke of "transforming the structures of production and ownership, including through antimonopoly and anticoncentration policy, aimed at creating competitive markets, broadening ownership and participation by our people, addressing monopoly pricing and other forms of rent-seeking and anticompetitive behaviour." Food price-fixing should be seen as an effect whose cause is the further growth of monopoly capital and its accrual of profit at all costs results in exploiting and further impoverishing the poor and economically marginalised. Chairperson, I see my time is up. Thank you. [Applause.]




Dr P J RABIE: Chairperson, the recent escalation in food prices and in particular the recent hike in the price of bread has enraged consumers with reference to particular segments of the food industry.

The milling industry was criticized when it was announced that the four big bread producers, namely Tiger Brands, Pioneer Foods, Foodcorp and Premier Foods, are being investigated by the Competition Commission for collusion in setting bread prices. Tiger Brands has already paid a R100 million admission of guilt fine, while Foodcorp and Pioneer are set to be charged by the Competition Commission.

Chairperson, price fixing of staple food like bread is totally unacceptable. Seen in the light that millions of needy South African consumers are battling at the present moment to make ends meet, bread is a key component of the daily diet of needy consumers.

I am perfectly aware that any tax system must be as simple and straightforward as possible, but recent research conducted by South Africa's milling industry shows that since the escalation of the price of bread the government's VAT income increased to 76c on the cost of a single loaf of white bread which sells at a total of R6,20. This is of grave concern.

I am aware that brown bread is VAT exempt but it must be mentioned that the government earns VAT on products along the value chain, from the farmer to the miller and baker.

The DA welcomes the government's initiative in asking the National Agricultural Marketing Council to investigate and evaluate costs and margins in the baking industry. My request, however, is that government investigates and evaluates the cost possibility of reducing the VAT to zero-rating on white bread.

South African bakeries produced roughly 1,7 million loaves of white bread and 1,1 billion loaves of brown bread in 2007; what is of concern however is that the CEO of the Chamber of Milling, Mr Jannie de Villiers, says that Albany Bakery, a subsidiary of Tiger Brands and the South African market leader, has been losing 40 cents on a loaf of bread since August 2007. I am saying this because if an industry is not able to break even, retrenchments and jobs losses are inevitable.

The bread industry was heavily regulated in the past. It is an undeniable fact that price-fixing and the manipulation of trading conditions lead to higher prices. The bread industry has been deregulated, and as has been stated before any anti-competitive business practice in this sector affects needy consumers negatively.

The DA is aware that the price of bread is of vital importance to the wellbeing of millions of needy consumers. We appeal to all respective role-players, the farmers, the bakers, the millers, transport, the retail sector and government, to refrain from unfair trade practices.


Die bekamping van armoede is van groot belang vir 'n groeiende, vooruitstrewende Suid-Afrika. Voldoende, bekostigbare voedsel - in dié geval die prys van brood – moet gesien word in die sosiomaatskaplike omstandighede wat in Suid-Afrika heers. Indien instellings egter broodpryse vir korttermyn finansiële gewin manipuleer, word streng optrede teen sodanige instellings verwelkom.

Armoede as normatiewe verskynsel word teen die sogenaamde broodlyn gemeet. Dit is die regering van die dag se plig om toe te sien dat, soos persoonlike veiligheid, brood en ander graangewasse, soos byvoorbeeld mieliemeel, ook bekostigbaar vir die verbruiker is. Indien dit nie gebeur nie, toon die geskiedenis dat sosiale onrus onafwendbaar is. Ek dank u.





Mnr H J BEKKER: Baie dankie, mnr die Voorsitter.[ Thank you, Chairperson.]


Chairperson, one characteristic of our fledging democracy is the great disparity that still exists between the various communities of our society. While many people are thriving and have improved their lives greatly, there are still too many South Africans who struggle daily with the devastating effects that hunger and poverty have on their lives. It is these people, in particular, who are the worst affected by the unscrupulous actions of those companies involved in this pricing scandal.

We in the IFP strongly condemn the unethical behaviour displayed by the companies in this price-fixing scandal. In their attempts to further increase their profit margins they have inflicted much suffering and pain on people who are amongst the most vulnerable in our land. Strong action should be taken against the companies and individuals responsible for this unethical behaviour. They must be held accountable for their actions and should apologise to the public.

We therefore welcome the resignation of the chief executive officer of Tiger Brands as being honourbound when he figuratively fell on to his own sword. The IFP also welcomes the massive fine issued to Tiger Brands in the amount of R98,8 million following this bread price-fixing scandal.

Interesting though is that the shareholding, and the Stock Exchange, because of this incident and, of course, there is also the natural loading of the share prices on the Stock Exchange, has lost R350 million. This is also an indication that the public and even the investors are taking this particular aspect very seriously.

However, we note that this fine paid by Tiger Brands did not benefit any of the victims. Therefore, the IFP would call on National Treasury to amend their regulations on the deposit of Competition Commission fines into the revenue fund and rather to provide for the victims of anti-competitive behaviour to benefit in a direct manner.

We believe that the government should not be the main beneficiary of this scandalous behaviour of consumer groups but that the poorest of the poor should rather be the beneficiary in the future.

For the future one must realise that the price of wheat has, for the first time, smashed the R4000 per ton barrier, thereby doubling in price within one year. This is a bad omen for the future of the bread price. We would have to dig deep and become original in our thinking, particularly in view of global demands and the weakening of the South African rand.

The IFP, in its philosophy of self-sufficiency and self-help, would encourage consumers to bake their own bread but then there must be sufficient and economical bread flour on the shelves. Should the South African milling industry not be coming to the table, then import duties and levies should be zeroed.

Government and particularly the Department of Agriculture and Land Affairs must also look into the situation of the farmers. There is virtually no support for our farming industry. The production of the farmers is going down and we must ask ourselves: Why?

Is it not time that we should look at our farmers and assist them with this? Because we must also bear in mind, in terms of corporate governance and the King Report, that we must not look at the bottom line of profit only. There must be a triple bottom line which embraces the economic, environmental and social aspects of a company's activities.

Corporate governance and social responsibility are issues that should be ingrained into every organisation's culture at every level, from the top to the bottom of that organisation. I thank you.

Mr J BICI. . .



Mr J BICI: Chair, hon members, the UDM has noted with dismay the exposure of the price fixing racket that has been a feature of the bread industry for several years. The one inescapable fact is that bread is a major staple food in this country. Therefore, the poor must not be excluded from accessing this food. Yet, the escalating price is effectively putting this staple food beyond the reach of many people.

The steep fine that has been imposed for the price fixing does not translate into any relief for the poor. Since the imposition of the fine, the price of bread has risen again and it is still to increase by about 40c.

Various factors have an impact on the price of bread. For example, maize prices play a major role and a combination of supply shortages as well the use of export parity pricing by domestic maize producers places a continuous upward pressure on the price of maize and therefore of bread.

These factors all collide at a time when the economy is slowing down, and the hardships of the poor are on the increase. The onus is on the government to find creative ways of encouraging lower bread prices. For example, the government can intervene by way of subsidy. The other relief is to regulate that a percentage on the penalties realised on price fixing be used on a bread subsidy. I thank you.




The MINISTER FOR AGRICULTURE AND LAND AFFAIRS: Thank you, Chairperson. The Ministry of Agriculture and Land Affairs is gravely concerned about the bread price escalation as it inevitably affects the poor and the vulnerable groups most, for whom bread is a staple food.

Although various explanations have been given by various role-players from the milling, baking industry and other organisations, there still exists the perception that increases in bread prices constitutes misuse of market power. In this regard, two aspects need to be explained: Firstly, the extent to which the international market forces contribute to the increase of the price of bread. Secondly, the dynamics in the local wheat-to-bread value chain and the role of wheat producers, processors or millers and retailers in the pricing of bread.

The international market forces in the wheat-to-bread value chain have made a great impact on the price of wheat and bread in South Africa today. Prices of food worldwide, including grain products such as bread, have been decreasing for decades following the Green Revolution. Research shows that there are indications that we have reached an end of that downward trend. This reversal is the result of rising demand for food, animal feeding and fuel, particularly from the great nations of the East. This is exacerbated by climate change having a negative impact on crop yields leading to low supplies of food commodities, especially grains. Grain is also increasingly in demand in the production of biofuels as well as in putting additional pressure on supply and to the price of food. The current low stork of grain globally and the slow rate of growth in outputs, have unfortunately resulted in a continuation of the upward trends in food price straight into the forcible future.

South Africa is a net importer of wheat, which makes it the main in put in the production of bread. We are therefore exposed to these international forces owing to the fact that we have import wheat at import parity prices. We are discussing this matter with the Minister of Trade and Industry. In the past South Africa produced a lot of wheat from the Western Cape Province and it still does, even though it is not as much as in the past. The Eastern Cape and the Free State used to produce wheat as well, but they have ceased and we need to ensure that we encourage production again in these two provinces. We should go back to ensuring that we increase wheat production, to ensuring food security as well as stabilising the price of wheat and food in the long run. It has been shown in the current Safex wheat prices that in the past year that the price of wheat has increased by almost 200%. Recent hikes in the price of bread have been justified to a certain extend by using these explanations.

Notwithstanding the international forces we have referred to above, in addition, South Africa has been rocked by scandals of price fixing from the bread industry and the dairy industry. I want to support the hon members who have condemned these practices; I also want to commend the Competition Commission which has come out with very clear investigations and sanctions against these companies. I would suggest that we come out with firmer measures and sanctions to ensure that we discourage these practices. We have expressed our greave concern, especially considering that the poor are most affected by the rising food prices. On 25 January 2008, I met with the collective key stakeholders in the agriculture sector to look into the escalation of the bread price and to find common working solutions to make bread affordable to all South Africans.

During that meeting the role-players resolved that a detailed investigation into wheat-to-bread value chain is necessary in order to ascertain that we have ensured that there is no unreasonable profiteering by certain firms at the expense of the poor and other role players in the value chain. The Department of Trade and Industry and the Department of Agriculture are also looking at the tariffs, especially the wheat tariffs to ensure that they do not have a negative impact on the price of bread. The National Agricultural Marketing Council – NAMC - was subsequently requested to establish a Section 7 committee to investigate the entire wheat-to-bread value chain. The Section 7 Committee of the Marketing and Agricultural Products Act 24 of 1996, empowers the NAMC to establish Section 7 committees to undertake investigations; as they may be needed on matters concerning agricultural marketing, especially those issues that affects the poor and make recommendations to the Ministry of Agriculture and Land Affairs.

The meeting was attended by farmers, millers, bakers, retailers and consumers. In this meeting the grain producers committed themselves to increase wheat production in the country to strengthen co-operatives along the bread production value chain. Also, as the department, we have committed that we will ensure that we encourage the establishment of these co-operatives for production of bread. We will also assist local bakeries, especially in our rural areas and the peri-urban areas to produce their own bread. The Ministry has committed to assist farmers in ensuring that they increase wheat production locally and in ensuring that we set up co-operatives and small businesses. Also, we would like to work with women's organisations and encourage them wherever they are to produce their own bread. We believe that this will go a long way towards ensuring food security and stabilising the price of bread.

I want to close off by saying that as the Department of Agriculture together with other role players in the wheat-to-bread value chain are committed to ensuring that we will work together and continue to examine this issue, not only the bread prices, but we are also working with the dairy industry on the dairy products prices like milk prices that are also increasing.

We would like to call on all hon members and all stakeholders to come together, to put our forces, our resources and work on a strategy that we will ensure that we cut the price of bread. We have joined forces with the trade unions, the community organisations and the churches to join their campaign to ensure that we fight the escalating price of bread, milk and all food prices in the country. Thank you very much. [Applause.]




Mr M HOOSEN: Chairperson, the collusion and blatant exploitation of the poor by the main bread producers in South Africa is not only an insult to the nation, but a deliberate and premeditated attack on the poorest people of our country.

The R99 million fine imposed on Tiger Brands last year was not enough to deter cartels from colluding with each other at the expense of the most vulnerable in our society.

The need to strengthen the hand of the Competition Commission to impose harsher and stricter penalties has now become more evident than ever.

The existing Act of Parliament that mandates the Competition Commission needs to be urgently amended. Currently the Act allows the commission to impose only a fine, but it needs to be changed to make provision for criminal prosecution as well.

We live in an equal society which the ID has shown must treat corrupt politicians and businessmen the same. We would also like to propose that government implements specific rural development programmes to increase the local production of wheat. I thank you.






Mnr P J GROENEWALD: Agbare Voorsitter, ek wil in hierdie debat begin om 'n wanpersepsie uit die weg te ruim. Daardie wanpersepsie ontstaan wanneer die publiek van Suid-Afrika op televisie sien dat die prys van koring R4 000 'n ton is en almal dink dit is die boere wat hierdie geweldige voordeel kry. Dit is nie die boere nie. Die boere het Desembermaand reeds klaar hulle koring geoes en hulle kry beslis nie R4 000 'n ton soos wat gesê word nie.

Wat is die kern van die problem van die hoë broodprys? Die kern van die problem is weer eens die skuld van die ANC-regering en spesifiek die Minister vir Landbou en Grondsake. Hoekom sê ek dit? Die agb Minister het dit netnou hier in 'n mate erken. Sy't gesê die Oos-Kaap, die Wes-Kaap en die Vrystaat produseer nie meer koring nie. Hoekom nie, agb Minister? Weet u hoekom produseer hulle nie meer koring nie? Omdat dit nie meer kostedoeltreffend is vir 'n boer om koring te produseer nie.

Graan SA het die ANC-regering en u voorganger Thoko Didiza in 2000 gewaarsku en gesê ons moet 'n behoorlike landboubeleid kry sodat ons die voedsel in Suid-Afrika kan beskerm, maar toe was dit mos nou goedkoop om koring van die buiteland in te voer. En wat gebeur as 'n mens koring goedkoop kan invoer? Dit is nie vir die boer kostedoeltreffend om dan met koring voort te boer nie.

GraanSA het u gewaarsku, maar u het nie geluister nie, net soos in die geval van Eskom, want u word lank voor die tyd gewaarsku, maar u dink net aan korttermyn-beplanning en nie aan langtermyn-beplanning nie. Dit is hoekom die boere in daardie provinsies nie meer produseer nie.

Nee, agb Minister, as u die probleem wil oplos, moet u ophou om ideologies gedrewe beleid in die landbou uit te voer. U moet begin om landbou te dien en sorg dat die boere 'n behoorlike beleid kry wat hulle ook kan beskerm in onsekere tye, want die ANC staan deesdae net vir "ANother Crisis". U moet die krisisse begin oplos. Dankie.




Mr D M DLALI: Chairperson, "the people shall share in the country's wealth". How we can allocate this clause of the Freedom Charter in the context of a democratic developmental state is another question. In this context the ANC conference said:

Our most effective weapon in the campaign against poverty is the creation of decent work. Moreover, the challenges of poverty and inequality require that accelerated growth takes place in the context of an effective strategy of redistribution.

The President of Republic of South Africa said in his state of the nation address that we require a national war room for a war against poverty, bringing together all the departments concerned, different spheres of government and the society organisations to deal with this war as a collective as a matter of urgency.

Having said the above, the critical issue that we need to address and deal with is the question of food security. Poor South Africans need food at all times. There is no doubt about the fact that the price of bread has a negative impact on society and in particular the poorest of the poor.

The big businesses that monopolise and take advantage of the ANC government's approach of being a caring government, and want this government also to take care of them, are making a big mistake. These monopolies are making a big mistake – monopolies such as Tiger Brands, Pioneer Foods, the producer of Albany bread, and Premier Foods raised prices by between 30c and 35c a loaf of bread in the week before Christmas. Their timing was also wrong and taking advantage of the Christmas holidays.

I'm also informed that this situation threatens the livelihood of many workers and families. The living standard has become unbearable for the poor, underpaid and unemployed people in our communities.

The Times of Wednesday, 6 February 2008, first edition, wrote on page 18, "Consumers must rise against the outrageous prices". It went further to say,

The news is not good. As everyone who has done regular grocery shopping will tell you, food inflation in South Africa is out of control. The deregulation of agricultural markets that began in the dying days of the protectionist apartheid government has led to greater efficiency in the market.

One may agree with some of the issues raised here, but others may not agree entirely, the reason being that the markets always want a hands-off approach from them, for them to do what they want. As a democratic developmental state we'll have to intervene in the markets, not to be dictated by the markets and be driven by them.

The same article went further to say:

The Competition Commission has rightly begun investigating the pricing of basic foodstuffs such as bread and milk, and has already fined Tiger Brands for price-fixing. But this is not enough. Consumers need to stand up and make their voice heard over the extortion they encounter while buying staple foods.

Again, there are certain issues that are correct in this article, while one may not agree with other issues raised here.

But this message is very loud and clear that we need to advance the agrarian revolution we spoke of at the ANC conference. This also underlines the necessity of effective rural development programmes, ensuring that investment in infrastructure, services and training reaches those areas of the country that have been most adversely affected. We need to advance the agrarian revolution for a war against poverty.

I'm also informed that accelerating growth and transforming the economy require a democratic developmental state that is able to lead in the definitions of a national economic agenda and mobilise society and direct resources towards achieving this agenda. Unlike the said quote from the Times of 6 February, while acting to promote growth, efficiency and productivity, it must be equally effective in addressing the social conditions of the masses of our people and realising economic progress for the poor. I'm further informed that the developmental state should maintain its strategic role in shaping the key sectors of the economy. This debate today centres around the role of a democratic developmental state in my own view and where it is supposed to allocate its priorities. Therefore the ANC leads and the ANC lives.

Getting back to the agrarian revolution, the producers of wheat, the farmers in South Africa, are not subsidised like wheat producers in the EU, US and Canada. Agriculture is heavily subsidised in the EU, US, Japan and many other countries. The input cost is not felt by those farmers or producers at all, and the result of this is that Africa becomes a dumping ground, while we also import wheat at a very high cost from these countries that subsidise their producers.

At the general Grain SA meeting held recently in Elsenburg in the Western Cape, Neels Ferreira, chairperson of Grain SA, claimed that South African producers had the capacity to supply local wheat demand and were eager to do so. Unfortunately, wheat prices, combined with the high input costs, did not justify such an expansion. What next then?

Due to reduced earnings, farmers downscaled wheat production, but now there is an international wheat shortage. Prices have skyrocketed, making it more expensive to import wheat.

Sakkie van Zyl, market researcher and economist at Grain SA says the wheat supply is at a historic low. Due to climate conditions, international production was hampered in three of the five major exporting countries, Australia, the EU and Canada, so production expansion amounted to only 602,5 million tons in 2007, compared to 591,5 million tons in 2006. At the same time international consumption came down from 610 million tons to 620 million tons, decreasing supply levels by 110 million tons and resulting in a supply-consumption ratio of only 18% compared to 20% in 2006.

Increased local production will not happen overnight. I'm told that many farmers have lost their faith in the wheat industry and have restructured their enterprises around strong livestock components. Agricultural input costs have also increased astronomically, in some cases by 70%.

Neels Ferreira, chairperson of Grain SA, said there is a misperception that higher consumer prices are due to farmers making huge profits. This is not true. Distribution costs have had a much greater impact on the wheat price over the past year than producer prices. He further said:

We are currently evaluating the whole supply chain to identify exactly where the money is going to. We need to ensure the whole industry functions in a free-market environment.

There is also a view that producers who want to produce very fine quality wheat must be rewarded for it and those who would rather aim at mass production must be rewarded for that. I'm not sure whether this approach is correct. We need to debate this issue. We need to look carefully at these suggestions and how and by whom they can be effected.

I'm also informed that government could intervene in the bread price by removing the tax on white bread, which would reduce the price by 80c and would also force down the price of bread. I'm not sure of this either. We'll just need to look at this carefully.

Given South Africa's deregulated and open-market economy, global market trends have important implications ... [Time expired.]




Mr M V NGEMA: Chairperson, when the regulation of the agricultural marketing was introduced in South Africa, the main objectives were as follows: To achieve a more efficient use of this country's agricultural resources; to ensure investment and employment in agricultural marketing activities; to conserve political and bureaucratic time and energy formally spent on price setting; to place less of a burden on government finances; and to lower real food prices.

Chairperson, deregulation of the agricultural sector has assisted in ensuring that prices started to become regionally differentiated to reflect transport costs and regional variations in demand and in supply. One of the main objectives of agricultural deregulation has been to promote competition and to reduce costs throughout various agricultural products supply chain to the benefit of consumers as well as farmers. The key question is: "Has deregulation reduced food price inflation and as such benefited the majority of the poor consumers for who food constitutes an important part of the total expenditure?"

The government needs to strengthen co-operatives within the agricultural sector to ensure that they become significant economic actors as this has been proven in other countries like Brazil, Canada and Uruguay. Research by SA Milling Industry shows that government, through VAT... [Interjections.] Thank you, Chairperson. [Time expired.]




Mr B E PULE: Chairperson, the levels of poverty in South Africa have risen. The number of unemployed people has also risen. There is also a considerable number of people seeking work, and this includes a greater proportion of women from rural areas. The gap between the rich and the poor is enormous. All these classes of people pay the same price for a loaf of bread.

This increase has indeed a negative impact on the poorest of the poor. The UCDP calls upon Competition Commission to investigate whether big bread producers have not connived to increase the price artificially. This has to be done in the milling storage and the baking value chain.

South Africans are really reeling with the increase of basic foods, energy and interest rates. Regulators, watchdogs and audit bodies have not decisively intervened by way of investigation. The claim by Tiger Brands Ltd that the increase of price on a loaf of bread by 40 cents results from the rise in the prices of wheat and fuel is not acceptable. No amount of good reasons will really convince the poorest of the poor.

The UCDP, however, appreciates the attempt by the hon Minister of Agriculture to have discussions with interested parties and to also look into ways of increasing local wheat production and the strengthening of co-operatives along the bread production value chain. I thank you.




Mr R B BHOOLA: Chairperson, in terms of the price-fixing scandal on bread, it appears that role-players have been severely fined and that the 90% dominance in the milling industries that these parties have luxuriously indulged in has now come to an end.

It is understood that the deregulation of the wheat market has introduced much competition since 1997. It is indeed upsetting that this dominance of power has also further found need for collision in price fixing. We are an impoverished nation that requires the private sector's assistance to overcome poverty, stimulate social and economic growth and assist in transforming South Africa into a first-world country. Both affirmative action and black economic empowerment or BEE, were to endorse the private sector into the process of transformation. But, it appears that some in the private sector remain profit-driven and refuse to form part of the bigger South African vision of and for democracy.

We have to realise that bread is part of a basic diet. While prices remain to increase, we have an increase in the number of families that cannot afford the exorbitant price of bread.

With poverty comes malnutrition. If we are to constructively turn hungry bellies into full bellies then we need to address the prices of basic necessities such as bread, milk, rice, maize, salt, sugar, eggs, meat, chicken, fish and vegetables. We have children who go to school hungry. We have government striving to address the dilemma through a feeding scheme. Then we have the private sector working hard at impeding our progress to assist the hungry for their own greedy profitable gain.

Government needs to evaluate what may be deemed as basic necessities in food and also look at addressing the pricing in the market so that not only the poor but also the aged may survive.

The MF sincerely feels that we need to evaluate the cost of living and service the community by making survival more accessible by reducing the cost of living. I thank you.




Mr B A MNGUNI: Chairperson, hon Ministers and colleagues, the SA Reserve Bank noted in the December 2007 quarterly bulletin that inflationary pressures in the domestic economy intensified concurrently at the producer and consumer price levels from the middle of 2006, primarily due to sustained increases in food prices.

The bank further noted that owing to an increase in international grain prices, the drought conditions during the planting and harvesting seasons, and a weaker exchange rate, particularly in the first half of 2006, food price inflation already exceeded the upper end of the inflation target range for 18 consecutive months. These developments in domestic food prices were also evident on the international front as demonstrated by the acceleration of food prices in numerous other countries over the past two years.

On 17 January this year, China imposed price controls on a wide range of goods, ranging from grain, edible oil, milk, meat and liquefied petroleum gas to school fees and fertilisers. Producers of specified products or services are now required to submit any planned increases in prices of more than 4% to the government for approval 10 days prior to any adjustments. In addition, the Chinese cabinet amended the regulation on administrative punishment for price violations to allow harsher penalties for price manipulation, collusion and other price-related malpractices. Meanwhile, local governments have been instructed to conduct special checks on grain, oil, meat and liquefied gas prices to ensure price stability and enforce the new regulations.

What I'm saying in a long-winded way is that food price increases are inevitable in the face of increasing oil prices, which has a knock-on effect on other commodities and basic necessities such as food and transport. However, this does not mean that millers, bakeries and other role-players involved downstream should be unscrupulous and take advantage of the situation.

Various studies have been done on the income and expenditure of the poor sections of our country, and the indications are that the majority of our people in South Africa spend more than 50% of their income on food. Therefore, the increase in food prices, especially bread, denies these majorities better socioeconomic conditions and food security. Talking of food security, it exists when all people, at all times, have physical and economic access to sufficient food to meet their dietary needs for a productive and healthy life. To sustain food security, availability, access and utilisation of food have to be secured.

South Africa has the most advanced economy on the African continent, with an abundance of natural resources. Statistically, South Africa has sufficient food resources to feed its population. It has also a relatively high per capita income compared to its neighbouring states. The alarming food insecurity is clearly a failure of livelihood to guarantee access to sufficient food at the household level and not primarily an agricultural failure, as it might be in other Southern African states.

The negative trends in agriculture, in my view, seem related to government's strong ideological leaning to free market economies. In my view, we followed an economic strategy with full liberalisation of agricultural markets, and failed to introduce a system of stockpiling and further state control in the setting of tariffs and prices for agricultural products so as to secure affordable access to sufficient food for everyone. Our land reform programme based on the willing seller-willing buyer principle has redistributed less than 10% of the land to date, and is a key factor in the food insecurity in many families in the rural areas.

Again, this does not mean that the likes of Tiger Brands and others must be let off the hook. Their price fixing is an indication of market failure and, to some extent, a weak regulatory environment as far as the Competition Commission is concerned. Collusion is a bad business practice and is equivalent to unethical behaviour. For us to have a caring society and a better life for all, we need to impose stiffer sentences on companies that cheat.

In the new Bill that is under discussion in Australia, price fixing and collusion is an offence which can land a director or directors of that company in jail for a period of up to three years in jail. The company might be fined up to 10 million Australian dollars or 10% of its annual revenue, depending on which is the greatest. Even though the penalties in South Africa are higher than those in Australia, I would still advocate for harsher penalties, because this price collusion will have a greater impact on the day-to-day lives of the poor.

A study conducted by Watkinson and Makgetla in 2002 on the fishing industry in the Western Cape concluded that globalisation, through external policy prescription, is not the only reason why vulnerable communities with little or no disposable income are facing deeper social inequalities. Therefore, our policies also need to be in favour of the poor. Thank you. [Applause.]




Dr S E M PHEKO: Chairperson, hope is the poor man's bread. The escalating prices of food, milk and other daily nutritional food stuff are an assault on the poor of our country. This situation is stealing hope from the hearts of millions who depend on bread for their daily sustenance. Bread has always been a measure of human survival. It has been said that, ``to the hungry, God is bread.''

Our country has the means and capacity to eliminate hunger from our daily lives. We need only the will, a real political will that will defeat the hunger and poverty from which millions of our people suffer. The question we have to ask ourselves is: On which side is our bread buttered? Is it buttered on the side on those who want to exploit the poor with price increases they cannot afford or is our bread buttered to end poverty?

The PAC believes that it is not just bread, but food that should be secured because the prices of food have escalated dramatically. Food sovereignty is based on the human rights to food, to self-determination on the rights of rural people to produce food for local and national markets. Food sovereignty depends on agriculture with farmers and fisheries. Give our people land and skills to produce their own bread and not be subjected to bread companies that exploit them.

The state must play a strong role in policies of agrarian reform and food production. The state must apply policies that recognise rights and democratise access to land, to coastal areas, forests ... Thank you very much. [Time expired.]




Mr L M GREEN: Chairperson, it is people like Mr Imraahn Mukaddam, the independent bread distributor in Cape Town responsible for exposing price fixing in the milling industry, who deserve to be honoured today as a true patriot and a defender of peoples' rights and interest. His courage to stand up to big business curtails has brought to light the increasing levels of unethical behaviour within white-collar business in South Africa.

Corporate South Africa with its continued anticompetitive practices and disdain for the ordinary consumer is in need of justice. Price collusion is but one example of an endemic practice fuelled by greed, control and unrestrained power. Should such business practices collude with willing partners in politics, the rules of governance are geared to benefit the few.

The FD feels that collusion like white-collar crime should be viewed as a criminal offence punishable by imprisonment, yet most companies can expect from bodies like the Competition Commission a hefty fine, while in most cases the responsible action taken by an executive or director is to resign from the affected company.

We wish to commend the Minister of Agriculture and her department for the announcement that she made here today concerning the role of co-operatives to ensure food security. We believe that is a step in the right direction.

Collusion is a crime against humanity, and it is unconscionable that South Africa, with its high rate of poverty and unemployment, should endure companies like Tiger Brands and others that care very little for our endeavour to overcome the injustices of the past and build a society in which all our people can prosper.

The company was fined 5,7 per cent of its bread sales last year, which amounted to R98,8 million, which indicates that collusion is a profit-making strategy irrespective of who may suffer as a result. Such practice is unethical and reprehensible. Although a fine cannot wipe away these companies' contribution in perpetuating poverty, it at least helps in naming and shaming them for what they are. As a result of its collusion it is reported that Tiger Brands shareholders have lost about R6 billion. The CEO of Tiger Brands, at the time, is alleged to have said that the anticompetitive activity that took place was completely unacceptable and contrary to their ethical standards.

Unfortunately, events of recent weeks seem to contradict the statement as the company is again embroiled in price-fixing scandals with a pharmaceutical company.

The FD, an alliance partner of the Christian Democratic Alliance, recommends that the fines imposed on Tiger Brands and other companies should not be handed over to the Competition Commission, but passed on to the consumer through a subsidy to keep bread prices low.

Finally, as a further recommendation of the FD, we would like to suggest to government to use those funds as start-up fund to adopt a bread policy whereby certain brands are governed by government pricing structure as a means of protecting bread. Thank you.




Dr A I VAN NIEKERK: Thank you, Chair. Hon Minister, I would like to direct this to you today because the high bread price that we are dealing with is a negative symptom of a serious economic disease, which, if left unattended as the government of the day is doing, will eventually affect all of us in South Africa, with extremely high food prices and no bread on the table for the poor.


Die kern van die probleem rondom wisselende broodpryse is die bron en die beskikbaarheid van koring en in Suid-Afrika ten opsigte van ingevoerde koring. Ek wil dit hard en duidelik stel: Die broodprys is nie 'n eenvoudige storie nie, maar tot dusver het die regering van die dag in sy apatie vir die probleem van die koringbedryf, soos geopenbaar in die optrede van die Ministers van Handel en Nywerheid en van Landbou, grootliks tot hierdie probleem bygedra. Die publiek en arm mense betaal nou die hoë prys as gevolg van die regering en sy Ministers, wat die kommersiële landbou en veral koringboere nie na waarde gereken het nie en die koringboere se advies konstant eenkant gegooi het en totaal geïgnoreer het. Daar is nie geluister na die waarskuwings uit die bedryf oor wat sal gebeur met voedselpryse indien die land nie na sy landbou omsien nie en boere gevolglik ophou om koring te plant – soos wat deur Neels Ferreira van die georganiseerde landbou daargestel word. Wêreldvoorrade van voedsel neem af. Die Financial Mail verklaar:



... global production of wheat will this year fall short of demand to make it the fifth of the last six years where demand has exceeded supply.


Nogtans, ten spyte hiervan, het die regering van die dag rustig sit en kyk hoe ingevoerde koring die land binnekom. Hulle het niks daaromtrent gedoen nie. Vertoë vir 'n heffing om dit te keer, is eenkant toe geskuif, want goedkoop kos moet inkom. Die prys word nou betaal as gevolg van die ingevoerde koring. Boere kon nie meer suksesvol produseer nie.




... and that is why people in the eastern parts of our country stopped producing wheat. They couldn't, because there was no profit in it and we were depending on imported wheat. That resulted in cheap prices. All of a sudden the international supply just disappeared. What happened in South Africa? In the past we had 1,4 million hectares and now we only have 600 hectares of wheat. In the past we produced 2,5 million tons of wheat, but now we only produce 1,8 million tons of wheat.

Currently we have 1,2 million tons of wheat imported every year whereas in the past we imported only 400 000 thousand of wheat. This resulted in the drop of our food security. Our food security in the past was 84 per cent for wheat and it has now dropped to 60 per cent. What is going to happen in the future? People will depend on what happens outside.

The price of wheat has increased from 1 500 to 3 000 and now it is nearly 4 000, and the ad valorem tariff of 2% that government has is still not attended to. Why? Because the Department of Trade and Industry did not have one single person from agriculture to help them to decide what the right tariff would be. The implication of what will happen was not really judged by the department, and agriculture was relaxing. So, there is neglect, as far as I am concerned, of the government of the day and the Ministers concerned with all the ...


... waarskuwings wat hulle gekry het oor tyd ...


... they just ignored them. They didn't do it and now we have fait accompli, 800 000 tons more important than the previously one; that means R1,6 billion in foreign exchange.

There are thousands of jobs that have been lost. The bread price is high and our food security is low. What must we do? The first thing that has to happen is that the Department of Agriculture and the Minister must let their arrogance towards agriculture pass ... [Time expired.]




Ms L L MABE: Hon Chair, I would like to make a plea to South Africans. We need to be vigilant when it comes to consumer education. Where we are treated unfairly we also need to take action to protect ourselves. That is one of our rights as consumers in this country. We are exploited by those who control the market; we are exploited by those who control the means of wealth at the expense of the poor in this country. It is time that we take action to protect ourselves as consumers.

We also need to educate our people on consumer issues so that they would understand the difference between a 700g and 800g loaf of bread so that they can take head on those flouting the laws and the rules of the country.

I would also like to thank the Minister of Education for the massive literacy campaign, which will further enable our people to read and make them aware of the issues that affect them as consumers.

I would also like to make a plea to all the departments, including tertiary institutions that they need to train more people on economic issues. The departments should also take the responsibility of ensuring that the unemployed graduates are trained to become inspectors across all fields not only on trade and industry issues, but also in agriculture and other issues. The more inspectors we have, the more people we'll have to check whether or not people are flouting the laws of this country.

I would also like to indicate that without further massive skills training we will always have problems like collusion, abuse of monopoly of power, etc. Therefore, it is important that we go massively. That is why the ANC on its January 8 Statement said education is a right and we must go massively on education.

I would also like to point out some of the issues that members have indicated that impact on the increase of the price of bread. One of the issues is biofuel production. This is economically fashionable, and if we are not careful, hon Minister, we will also have a problem with maize, because of the increase of maize price. At the moment it is very difficult for a poor person to buy a bag of maize meal. It is also very expensive for a poor person to buy a loaf of bread.

How possible is it going to be for school children to buy "sephatlho" [bunny chow]? It will be very expensive. These learners depend on "sephatlho" [bunny chow] for their lunch. In some areas it costs R6,00 and in some areas R8,00 which is a lot for a poor person to spend in just half a day. We need to take a look at some of these issues.

Another issue that I would also like to raise is the rise in the price of both wheat and maize that impacts negatively on the poor, especially in Southern Africa, because this is where the two commodities form the staple food. And if we do not have control over the price of bread - and I am not saying that government must determine the price of bread, but we need to have some control to ensure that the poor are not impacted on negatively – we'll be in trouble.

Another thing that we need not ignore is that the rise in oil prices as a result of attacks in the Middle East is also causing a problem. The question is: Is taking arms, fighting against other countries which produce oil the only way we could solve problems in the Middle East? The price of oil is almost US$100 a barrel. This impact negatively on the price of basic food stuffs.

Maybe we need to change our approach towards the behaviour of farmers in our country. Farmers need to co-operate with farmworkers and we need to give more land to farmworkers and to the previously disadvantaged people so that they can produce more food and enable us to have food security.

It seems like the hon Van Niekerk and the FF Plus have said that the ANC's ideological policies are the ones that are at fault. I do not agree with that argument, because without ANC ideological policies you cannot change production or land-ownership in this country. Therefore, there is no way that we can run away from ANC ideological policies because it is the ruling party and its ideological policies must be put into effect.

We cannot allow the minority ideological points or positions to be the position of government of the majority. It is not possible.

It is important that the price of bread be re-looked. Like I said, we need to have inspectors. When you consider the people who receive social grant, the more the price of bread increases the less they will have to spend on such commodities; the less they will have to spend on maize; and the less they will have to spend on transport. Unfortunately most of them rely on the "yellow pages" [they travel on foot]. They cannot afford cars, taxi fares and all these luxurious commodities. It therefore means we must re-look at how our policies can benefit the poor more than the rich.

Subsidy is one of the issues, because the US, the EU and other developed countries continue to subsidise their farmers and maybe it's time that we also look at subsidising emerging farmers. I am not referring to all farmers, but to emerging farmers only, so that they can become sustainable and produce more food substances including maize which at the moment we experiencing problems with that is why the price of bread is increasing the way it is.

An article in today's Business Day says:

While there has been an outcry in South Africa, bread prices here still lag behind global prices with bread in the US, UK and Australia costing as much as R15,00 a loaf.

The person who has written this article forgets that he is comparing a developing country to developed countries. This is unfair comparison. Why can't the person compare developing countries with each other, because as South Africa we must compare ourselves to developing countries that are poor like us? We are not as rich as the developed countries. [Interjections.]

Zimbabwe is fine, don't worry about it.

I also want to say that it is important for us to ensure that, as Members of Parliament, and as the public, we go out and fight for our rights. These rights of low bread prices, of no collusion on bread prices will assist our children. I pity our children who rely on R6,00 or R8,00 a day to buy "sephatlho" [bunny chow] with chips and "machangani wors" [small polony]. This kind of meal means a lot to those children. Let us all take our position and assist these people to have food security.




Mrs C DUDLEY: Chair and hon Minister, in spite of some confusing statements, clearly nobody refutes the fact that food inflation is out of control especially the bread price and grave concerns for poor and vulnerable people are shared.

The ACDP notes your commitment, hon Minister, to various projects intended to positively impact on the bread price and we support those proposals. I also wanted to know why, by the way, we had ceased to produce wheat in the Eastern Cape and other provinces? And thank you hon Van Niekerk for your perspective.

The ACDP is very aware that agricultural and land policies are of critical importance and must be handled wisely or the people will perish.

We may not be able to make immediate inroads with regard to the production of wheat, the rand value or fuel prices, but certainly it has been shown that collusion will not be tolerated and again the ACDP applauds those who have aggressively addressed this plight.

The ACDP calls on government to ensure that victims of the collusion scandal benefit directly and indirectly with immediate effect. The ACDP welcomes calls for government to intervene, but exactly how this should be done may still be in contention.

Should bread prices be controlled or should there rather be subsidies which target the poor? Perhaps it would be more fitting to start by taking government's hands out of the part and exempt white bread from VAT. Import duty on wheat must also be urgently re-evaluated.

Government's interventions in other countries to keep bread prices from rising include Argentina who placed a ban on wheat exports; Brazil and the EU who lowered import duties on wheat; Israel who removed state price controls on bread and provides subsidies for the poorest members of society. Many other examples exist and should be seriously considered.

I want to thank everybody for participating in this debate and for responding to the ACDP's call to facilitate it. Thank you. [Applause.]

Debate concluded.





Mr N T GODI: Chairperson, comrades and hon members, it is my pleasure and honour to present to the House the 12 reports of Scopa, the Standing Committee on Public Accounts, as part of our oversight work. These reports can be divided into two, firstly those dealing with unauthorised expenditure and, secondly, those dealing with our review of annual reports.

In the annual reports review, Scopa is gravely concerned at the deteriorating state of affairs in the Department of Defence. There has been some deterioration, with more than double the qualification issues compared to the previous year.

Whilst there have been some improvements in the Department of Health, there remain concerns about the Division of Revenue Act and the effectiveness of monitoring by management to ensure compliance with legislation, policies and procedures.

We are also concerned about underexpenditure on programmes dealing with HIV and Aids. We are also unhappy about the nonactivity of the SA National Aids Trust, which is a contravention of the Deed of Trust, section 3 of the Public Finance Management Act and the Public Audit Act.

The Department of Correctional Services is another department that needs "Business Unusual". However, I'd like to highlight Scopa's concern about, amongst others, the public-private partnership jails. In the year under review, the department incurred a cost of

R560 million from these PPPs. As Scopa, we are worried whether this huge cost is justifiable and whether the department is run cost-effectively.

Comrades will recall the corruption that went with the negotiation of these deals. Thus Scopa is calling on the department to supply Parliament with the cost benefit analysis in terms of value for money to the taxpayer within 60 days of the adoption of this report by the House.

We are also concerned about governance arrangements in the Department of Justice and Constitutional Development in so far as it relates to third-party funds, that is moneys in trust that got a disclaimer of opinion. This largely results from reluctance on the part of the department to accept accountability and responsibility for the funds.

The National Prosecuting Authority got a qualified audit opinion as a vacancy rate of 30,7% impacts negatively on the strategic objectives and operations of the NPA. We recommend that these vacancies be filled urgently to enable to NPA to fulfil its mandate.

We are also concerned about the Criminal Asset Recovery account that is run by the Criminal Asset Recovery Unit: there are no systems or processes to account for and track the status of finalised confiscation and forfeiture orders, and to track all cases handed over to curators.

CARA or the Criminal Asset Recovery Account, has a vacancy rate of 8%. This bad state of affairs cannot be allowed to persist.

I'm now coming to unauthorised expenditure. With the passing of these resolutions, we will have dealt with all outstanding cases of unauthorised expenditure that were brought before the committee. We want to thank the Auditor-General's Office and the National Treasury for their assistance in this regard.

In all the reports, we are recommending that the House approves the amounts involved. We do so because the accounting officers have confirmed that, one, services for the expenditure were to the department's satisfaction; two, no individual benefited unduly; three, measures are in place to prevent a recurrence.

The unauthorised expenditure involve the following departments and amounts: The Department of Foreign Affairs, an amount of R6 879 000; the Department of Land Affairs, an amount of R7 182; Presidency, an amount of R15 331,06; the Department of Justice and Constitutional Development, an amount of R139 052 849,71; the Department of Trade and Industry, an amount of R32 246 285,72; the Department of Public Works, an amount of R299 218 429,94.

Lastly, we are greatly impressed with the improved co-ordination between Scopa and all role-players, which saw the reports before the House in record time. We commend these reports to the House. Thank you.




Ms L M MASHIANE: Chairperson, from what the chairperson, hon Godi, has said, Scopa does not only review the financial management side of performance by departments and entities in order to determine compliance with the frameworks that Parliament has put in place, such as the Public Finance Management Act. Scopa also carries out this vigorous scrutiny, because there is a link between service delivery and sound financial management.

Today Scopa is tabling before this House reports, and departments and entities were all called to a hearing. I'm going to name them, specifically because we keep this under wraps, as a result departments' performance does not improve. The departments that were called to hearings are: The Department of Defence; the Department of Health; the Department of Correctional Services; the Department of Justice and Constitutional Development; the Department of Public Service and Administration.

Regarding unauthorised expenditure, which has been tabled by hon Godi, the following departments were involved: The Department of Foreign Affairs; the Department of Land Affairs; the Presidency; the Department of Justice and Constitutional Development; the Department of Trade and Industry and, lastly, the Department of Public Works.

Furthermore, the Department of Public Works continues to face serious challenges regarding ownership of assets. This is in relation to moneys for refurbishment and improvements, paid by the departments concerned, not being transferred to the department, as well as classification as current versus capital expenditure.

Scopa would like the House to note that it is far from satisfied with the general position regarding public sector financial management, especially taking into account that some of these departments appear before the committee each and every year. If one considers the key elements of effective financial management, one can assess the ability of a department to manage its finances and, therefore, to deliver on its mandate on a daily basis.

We are able to conclude whether a department is at an elementary level of financial management or has progressed to stronger, effective financial management and resource utilisation.

The key challenge is a proper control environmental. Without proper controls and associated practices, there is lack of sustainable practices of financial management. Without a basic control environment, assets might not be adequately protected or resources adequately controlled.

We do come across too many departments and entities establishing a proper control environment where the required capacity has not yet been reached, for example with respect to internal audit units, audit committees, fixed asset registers.

I would also like to ask portfolio committees that when they deal with their reports, not only to look at the policy, but also the strategies of the department versus the finances of that particular department. That will also give you an indication of whether there is proper monitoring going on within that particular department.

Another key challenge is the availability, reliability and utilisation of sound financial and operational data, commonly referred to as "management information". Once a stable control environment has been established, departments can focus on integrating their financial and nonfinancial systems, practices and procedures. The aim is to provide information that can be used to manage resources and take decisions with caution, in an efficient and economical manner.

This information provides the basis for developing performance indicators and cost and quality measures, and for monitoring performance to ensure that intended results are achieved and to demonstrate accountability.

We still come across too many instances where the management of information is of poor quality. Surprisingly, we also come across instances where it seems as if management does not use the information available. Thank you, Chairperson. [Applause.]




Mr J J M STEPHENS: Chairperson, hon members, we are very pleased to note that the Standing Committee on Public Accounts' resolutions are now put before the House much closer to the time they were passed by the committee. This makes for a timelier and more relevant debate, as the hon Trent argued previously. It is indeed a very positive development in our parliamentary practice.

Many colleagues inform me that this debate is traditionally regarded as the most boring of them all. I have no intention of breaking with such an esteemed tradition, and I shall consequently endeavour to make my five minutes feel like 10.

Scopa reports, by their very nature, deal with history, a subject many would instinctively avoid. They are probably regarded as boring, because what happened a year or so ago seems not relevant to the here and now. They have nothing to do with the present challenges; with today's headlines. They do not deal with the future, but rather dwell on the past. It is these perceptions that I wish to challenge.

It was Cicerowho said that those who are ignorant of the past remain forever children. And Sir Winston Churchill had it right when he said that when we are ignorant of history we are forever condemned to repeat it. Clearly, knowledge of the past serves as a guide to the future, and that is how Scopa reports should be viewed.

As a Parliament we have the exacting and onerous responsibility of oversight. We cannot put all our effort and attention into developing policies and passing budgets, enacting legislation, monitoring expenditure and then be laissez faireabout the utilisation of state resources in the process of implementation.

Scopa recommendations must serve as a basis for oversight. The fundamental question the Auditor-General and Scopa ask of every role-player is this:

Can you account fully and satisfactorily, at an accepted reporting standard, for the performance of the directives you have been given and the money you received from this Parliament in order to carry out those directives?

All other questions are ancillary to that fundamental question, but the answer is sealed in a simple yes or no. Sometimes, like the case of the Department of Home Affairs, the answer is no. At others, such as the case with South African Airways in the second report now before the House, the answer is yes. But mostly there are degrees of compliance.

Once the fundamental question has been answered, recommendations are required. What must be done to rectify and or improve the situation? It is not only a very bad audit report that should cause portfolio committees to sit up and take notice. Valuable recommendations abound, even after a clean audit report. In the present case of SAA, which has a clean audit report, there are nevertheless three areas of concern on which recommendations are made; SAA as a going concern, compliance with legislation and capacity and or people related issues. To ensure that these recommendations are implemented properly and that we get value for money and our effort, we will require a regular and persistent inquiry by the Portfolio Committee on Public Enterprises in this case.

Scopa cannot monitor the implementation of its recommendations. That must be the function of the portfolio committees, but that is seldom, if ever done. This lack of follow up causes departments to have the same problems year after year, when they come to Scopa, and often they backslide ever deeper into the mire. Nothing is fixed, because only the Auditor-General and Scopa complain of the inadequacies. All others ignore these reports. They are filed never to be read again, apparently.

We shall never get the service delivery we seek; we shall never get the service quality our people so desperately need if we fail to rectify the identified deficiencies, mistakes and attitudinal problems of the past.

I want to appeal to all portfolio committees to set aside at least one session every year to deal with the relevant Scopa reports. Please interrogate them, analyse them and internalise them. Only then will you be able to oversee their proper implementation. It is an ongoing process that has to be persistently pursued throughout the year as you interact with your departments.

It is an iterativeprocess to build an efficient and devoted civil service. We all have a role to play. Scopa reports are an excellent point to start from. Thank you.

The HOUSE CHAIRPERSON (Mr K O Bapela): Hon Member, if you wanted to ask a question you should have stood up at the time when the member was still at the podium. When I wanted to recognise you, you thenwithdrew. I am sorry about that.




Mr H J BEKKER: Chairperson, if the hon Eddie Trent so desperately wants to ask a question, he can ask me, but anyway, I don't think he will try me on this. But, it is a known fact that the previous Auditor-General as the present one in terms of philosophy has increased and lifted the bar in terms of audit reporting and particularly, in terms of financial reporting. Thus, the relevant departments are now being scrutinised year by year in a stronger way and this is to get our public accounting up to scratch and to get it in the right way.

The Scopa reports before this House reflect inter alia that the departments of defence, correctional services, justice and health received qualified audit opinions from the Auditor-General for the 2006-07 financial year. The IFP is very concerned that these departments have become serial offenders. Bear in mind that we are talking now about, for instance, the Correctional Services and it may ring a bell if we're saying serial offenders in terms of that specific department.

It is also of great concern that the shortcomings or failures in their financial management are repeated from one financial year to the other. Some of these failures include inadequately trained and skilled financial personnel, high vacancy rates, non compliance with Treasury regulations, Public Finance Management Act and inadequate asset management. What is most worrying is that the accounting officers at these departments appear incapable of effectively addressing these failures. If they did, the departments would not have received qualified audits on an ongoing basis.

Repeated qualified audits raise questions whether these accounting officers are capable financial managers that are fit to take overall responsibility for their departments and account to Parliament. It does not appear to be the case, and the IFP would therefore want to see a situation where stronger action is taken against specifically the accounting officers who fail in their duties.

South African taxpayers deserve full value for their contributions to the national fiscus, but in respect of certain state departments this does not appear to be the case at all.

We've got also SAA, which is being referred to over here, and although this is not directly relevant to the specific financial year, I just want to issue a personal feeling with regard to the Mango aspect, which indirectly is being subsidised by the taxpayer. Should it, in the next financial year, appear that there is no real profit making that this could be paid back, this should surely be looked upon as irregular expenditure.

The IFP supports the recommendations made by the committee, and looks forward to the full compliance by the involved accounting officers with these recommendations ... [Time expired.]




Ms S RAJBALLY: Chairperson, Scopa has an extremely positive role to play as an instrument of transparency and effective governance. We call for all bodies to be extremely co-operative under their review and to take the recommendations made by Scopa seriously.

We believe that Scopa reports need to be made more accessible to the public for scrutiny on the positive running of government structures.

The MF feels that maybe we have lost focus on the fact that we are a government by the people for the people. That clearly indicates that we are answerable to the people and dependent upon the decision of the people. The people have a right to decide and we have a right and duty to serve. The MF thanks Scopa for its assistance in serving the nation and we support the report. Thank you. [Applause.]




Mr P A GERBER: Mr Chairperson, thank you for the opportunity to address this House on the 13 Scopa reports tabled before us today. I would also like to thank the Whippery for bringing them so quickly in the House after we have passed them in the committee. Normally, these reports come at the end of our term, when it is basically "injury time". So, I would like to thank them.

Scopa never used to debate its resolutions or reports in the past. This is a new practice which we have developed in this House in the past couple of years. In essence, Scopa is basically "a resolution factory". So, we all welcome this new extension of Scopa work.

I do however wish to say that it is totally unfair that every time that Scopa debates its reports in this House, it is always at the end of the day's sitting, with very few members in attendance. This is also the case with some other committees. I think we should rectify this. If there are other committees, and there might well be, that experience the same problem, then that should also be rectified.

I also want to convey my disappointment that while we are dealing here with at least ten Ministries there is only one Deputy Minister present in the House. That is not fair, really. [Applause.]

Scopa has undertaken a couple of overseas study visits in the past years to enhance training for our members. Various models were investigated. I think the one that has shown the most potential that we can use in South Africa is the one that the public account committees are using in India.

In India there are two public accounts committees – one dealing only with departments and the other one dealing with parastatals and government companies only.

This is a model we should investigate as it could be used in South Africa. At the moment, in terms of parastatals and government companies, we are only scraping the bottom.

Scopa has over the past years decided to do more monitoring of parastatals with excellent results. We need to do even more.

Often when you look at the financial statements of these parastatals, who mostly have external auditors, they appear to be very clean and in a good state. Many of the external audit reports are one-pagers. If you look at the Transnet Report on page 140, the external auditor's report is a one-pager. If you look at Eskom, pages 25-26, it is two pages. If you look at SAA, page 18, it is a one-pager.

We at Scopa decided that these one-pager picnics can no longer continue. So, we decided to call some of these parastatals for public hearings over the past couple of months.

When we do call a particular parastatal to a public hearing, the Auditor-General and the external auditors of that specific parastatal must, in conjunction with each other, prepare a briefing to Scopa before such a hearing can take place.

One such parastatal with a one-page external auditor's financial report that we did decide to call to Scopa was the SAA. Since the promulgation of the Public Audit Act until now, the Auditor-General has not exercised his right to elect to audit the SAA, and the SAA has thus continued to appoint external auditors in terms of the Companies Act. Perhaps the Auditor-General should review his decision not to audit the SAA.

The financial report of the external auditors of the SAA is once again a one-pager. That is on page 18.

However, when we called the SAA for a hearing, their external auditors supplied us with the real external auditor's report, and here it is, all 104 pages. So, what you get is from one page to 104 pages. Parastatals must put fewer pages with fancy pictures in their annual reports and more financial information.

Many issues and problems came to the fore from these 104 pages of financial information. For example, for the 2006 period, the SAA had expired contracts with 12 companies which they continued to pay to the extent of more than R192 million. There were also contracts that did not go through the Tender Board, with 11 companies totalling more than R70 million. Then there were also contracts with four companies totalling more than R20 million that could not be located. In total, in 2006 R283 million slipped through the cracks at the SAA. This we would not have been able to pick up had we not called the SAA for a hearing.

Another issue that came up was that the Minister of Trade and Industry issued his report, compiled in terms of section 258 of the Companies Act, resulting from an inquiry into the affairs of the SAA. The report invalidated the share issue arising from the R6 billion recapitalisation, which occurred in 2004.

The issuing of shares in parastatals to employees is a matter that should be dealt with very carefully. I raise this matter because Eskom, in their latest report, have a deferred bonus scheme which offers bonus shares to the CEO, the finance director and the divisional managing directors. So far Eskom has awarded more than 35 million shares to these individuals. But on the other hand, we stand here and we say government is a single shareholder. That doesn't make sense.

Another significant issue that came out of these 104 pages of external audits is that various SAA subsidiaries were technically insolvent in 2006. For example, SAA Technical incurred a further loss of R253 million and Air Chefs incurred a further loss of R32 million.

In the executive summary conclusion - this is a thick report - the following comments were made by the auditors, and I would like to read this to you:

SAA has some work to do on its internal control system …

The responsibility for implementation of sound internal controls is broader than just a finance team. Every department within the airline must be committed to the implementation of controls.

This may require substantial increase in a number of suitably skilled individuals, with appropriate financial and commercial skills.

It may also be necessary for the entire Exco team to undergo training on COSO, or some other globally accepted governance best practice, to ensure consistency of understanding in regard to internal controls.

My question is: Why didn't the external auditors mention this in the tabled report to Parliament for us as parliamentarians? I think it shows disrespect for Parliament and it could actually be interpreted as misleading when it comes to not giving all the information. This kind of economical skeleton financial reporting has in the past led to the Enron and Parmalat disasters that we have read about in the past couple of years. We must not allow this to happen in South Africa! [Applause.]

With regard to the Mango issue, the resolution before the House, in clause 4, specifically asks the SAA to report to the House on their Mango operation. At 31 March 2007, Mango had an accumulated loss of R61 million. This includes the prestart-up expenditure of R33,8 million.

We therefore ask that the SAA provides the House with a cost benefit analysis in terms of value for money to the taxpayer of why we are doing what we are doing. We need this study to be supplied to Parliament before the Mango hits the fan.

We should standardise and expand the skeleton financial reports of external auditors to Parliament. For instance, I would like to read to you, just in short, the notes from the 2006 report of the external auditors on the SAA:

Based on the audit procedures performed, we are unable to express an unqualified opinion on SAA's PFMA compliance.

It doesn't say that it is qualified; it says it is "unable to express an unqualified opinion". So, it's already softening it. Yet, in 2006 it doesn't even have any qualification; it just has an emphasis of matter.

When we get to the 2007 report – also from the thick report which I have shown you – it says here:

Based on the audit procedures performed, we are unable to express an unmodified opinion.

Why doesn't it say it's "qualified" again in plain English?

In conclusion, these statements are very, very economical with the truth or reality. We need to take all steps, as members of Parliament, to have more comprehensive and complete financial reporting by external auditors to Parliament so that we don't have a disaster in a couple of years coming up.

With these few words, I would like to put these 13 resolutions to the House. Thank you very much, Chairperson. [Applause.]

Mr D K MALULEKE: Chair, I move, on behalf of the Chief Whip of the Majority Party, that the report be adopted. Thank you.

Motion agreed to.

Reports accordingly adopted.

The House adjourned at 16:40.


No related


No related documents