Hansard: NA: Unrevised hansard

House: National Assembly

Date of Meeting: 08 Mar 2012


No summary available.










The House met at 14:03.


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






Mr V B NDLOVU: Mr Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the IFP:


That the House debates the recently released audit report into the quality of training provided to police officers.


Dr J C KLOPPERS-LOURENS: Mr Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:

That the House debates the importance of the knowledge economy and recommendations to advance this sector.




Mr Z C NTULI: Mr Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:


That the House debates the role and impact of state-owned enterprises and development finance institutions as instruments of advancing economic transformation in the country.


Mr S B FARROW: Mr Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:


That the House debates the formation of an all-embracing forum to co-ordinate critical cross-cutting issues which currently hinder the promotion of tourism as a catalyst to economic development, growth and job creation in our country.


Ms C C SEPTEMBER: Mr Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:


That the House debates the role of state-owned enterprises in skills development to support the economy.


Mr K B MANAMELA: Mr Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:


That the House debates strategies to improve the living conditions of farm workers.




Dr A LOTRIET: Mr Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:


That the House debates the provision of teacher training as a means to improve the quality of education in the country.




Ms N GINA: Mr Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:


That the House debates the central role of educators in achieving the objectives of transforming education and improving quality education.


Mr N J VAN DEN BERG: Mr Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:


That the House debates measures to improve health and safety measures in informal settlements and recommendations to improve the situation.

Mrs J C MOLOI-MOROPA: Mr Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:


That the House debates assessing the management and democratic governance of health facilities.




(Draft Resolution)


Ms A VAN WYK: Mr Speaker, I move without notice:


That the House -


(1) notes that, in commemoration of the memory of the victims of slavery, the General Assembly, in its resolution 62/122 of 17 December 2007, declared that 25 March, the International Day of Remembrance of the Victims of Slavery and the Transatlantic Slave Trade, be observed annually;


(2) further notes that the day honours the memory of the millions of innocent victims who suffered over four centuries due to the transatlantic slave trade by focusing on the legacy of those enslaved and their contributions to the societies in which they lived;


(3) acknowledges that the challenge today is to remember the past atrocities of  slavery, and continue the fight against its contemporary versions, including debt bondage, domestic servitude, forced marriages and trafficking of children; and


(4) believes that by raising public awareness about the causes, consequences, lessons and legacy of the slave trade, we have a better understanding of history and are able to educate future generations about the dangers of racism and prejudice, and about the universality of human rights.


Agreed to.




(Draft Resolution)


The CHIEF WHIP OF THE OPPOSITION: Speaker, I move without notice:


That the House -


(1) notes that South African pupils at the Bloemhof High School in Stellenbosch are participating in the World Education Games being held from 6 to 8 March 2012;


(2) further notes that the World Education Games is a yearly event in which pupils from across the world participate and compete in educational games and this year around 5 million pupils participating;


(3) acknowledges that this year mathematics and science as well as spelling have been added to the games;


(4) further acknowledges the importance of numeracy, science and literacy skills in a globally competitive environment;


(5) wishes all South African pupils well in their participation in the World Education Games, and wishes last year’s winner for South Africa from the Bloemhof High School in Stellenbosch and South African ambassador, Ansoné Lombard, all the best in this year’s competition; and


(6) calls on government to increase access to computer laboratories throughout South Africa so that many more pupils can have access to global participation in competitions such as the World Education Games.


Agreed to.




(Draft Resolution)




That the House suspends Rule 253(1), which provides, inter alia, that the debate on the Second Reading of a Bill may not commence before at least three working days have elapsed since the committee’s report was tabled, for the purposes of conducting the Second Reading debate today on the Division of Revenue Bill [B 4 - 2012] (National Assembly – sec 76).


Agreed to.




(Draft Resolution)


The DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Mr Speaker, I wish to amend the motion and move as follows:


That the House, for the purposes of conducting the Second Reading debate today on the Division of Revenue Bill [B 4 - 2012] (National Assembly – sec 76), suspends Joint Rule 220(2), which requires that a translation of a Bill’s official text must be received by Parliament at least three days before the formal consideration of the Bill by the House in which it was introduced.

Agreed to.




(Member’s Statement)


Ms J TSHABALALA (ANC): The ANC welcomes the recent institution of the Gauteng Youth Employment Strategy and the Township Enterprise Hub, TEH, as a job-creation project. In particular, the TEH seeks to promote youth-owned enterprises and services, and to increase the participation of youth in the economy.


The TEH projects will be constructed in the areas of Sebokeng, Sharpeville, Kagiso and Katlehong. Each hub will host three clusters of work. The first will be automotive, such as body repairs, spray-painting, wheel and tyre fitment, general motor repairs and car spares. The second one will be centered on general services, such as car washes, hair salons, laundromats and Internet cafés. The third one will be centred on light manufacturing, which will include furniture, cleaning chemicals and clothing textiles.


The Gauteng Youth Placement Programme will also focus on youth employment and will target 18- to 24-year-olds. This is structured as a partnership between the government and the private sector, where government will provide incentives to private-sector placement firms to recruit, prepare and place young people in private-sector jobs.


Getting the nation working is one of the ANC’s priorities and we all need to partner with government to make this a reality.




(Member’s Statement)


Mrs A STEYN (DA): Speaker, residents of Gariep Municipality, which includes the towns of Burgersdorp and Steynsburg in the Eastern Cape, are living in constant fear that Eskom will implement the decision to disconnect the bulk electricity supply to the entire municipality. Gariep Municipality has been in arrears on the electricity accounts since July 2011, to the amount of R11 million. A debt agreement was reached between Eskom and the Eastern Cape province to assist with payments to the value of R5,5 million.


To compound this situation, the Gariep Municipality could not even honour its monthly payment, which is now outstanding, amounting to another R1,4 million. Today, the municipality, in a bid not to have the electricity cut off, eventually paid the R1,4 million and signed an agreement in terms of which they would pay the outstanding amount of the initial debt over the next three months.


The ANC-run Gariep Municipality is plagued by the cancer of rot and corruption, which has already led to a forensic investigation into the municipality. The DA has repeatedly called on the MEC for Local Government in the Eastern Cape to release the report. However, this request has fallen on deaf ears. Today, I will submit a Promotion of Access to Information Act, PAIA, application in order to get the report released. We ask the Minister for Co-operative Governance and Traditional Affairs to urgently meet the Eastern Cape MEC for Local Government in order to solve this crisis. [Applause.]




(Member’s Statement)


Mr N J J KOORNHOF (Cope): Mr Speaker, something is seriously wrong with the relationship between the government and Cosatu, and it is not good for the economy. Our major trading partner, Europe, is slipping into a recession. Political instability in Iran and the United States’ reaction to it may see oil prices skyrocketing. We import 60% of our oil from Iran. We must act very carefully.


Cosatu lives on an island of its own. When the hon Minister of Finance calls for the relaxation of the labour dispensation, Cosatu reacts with vengeance against him. Where are the other Ministers of the economic cluster in the Cabinet on this issue? They are silent!


South Africa lost more manpower days in 2011 due to Cosatu strikes against the Zuma government in comparison with strikes against the De Klerk government in a single year. [Interjections.] Cosatu and its allies in the Cabinet should realise that the role of Cosatu in terms of the new labour dispensation and the shrinking of the state wage bill will be vital if we want to be successful.


We need a more uniform reaction from Cabinet on these issues. Business Day wrote today in its editorial:


It is madness to talk about job creation while turning a blind eye to the forces that actively undermine that goal.


Cosatu is such a force. Let’s create a job-friendly South Africa together. Then we shall see change.




(Member’s Statement)


Mrs S G BOTHMAN (ANC): Speaker, the ANC’s commitment to bringing services closer to the people is gradually bearing fruit. Thanks to a new renal unit people with kidney ailments who live in Bojanala in the North West will no longer have to travel out of the district or province to get dialysis treatment.


This is due to a new state-of-the-art renal unit at Job Shimankana Tabane Hospital in the Bojanala District. This unit will respond to the dire need for dialysis treatment in the district and ease the burden of the Klerksdorp/Tsepong Complex, which is currently the only state renal unit providing such a service in that province.


The ANC believes that this project is a step in the right direction. It will go a long way in enabling people of the greater Rustenburg area and Bojanala District to have highly specialised services an at economically acceptable standard, while helping them to have an improved quality of life. [Applause.]




(Member’s Statement)


Mnu V B NDLOVU (IFP): Somlomo, neNdlu ehloniphekile, iNkatha yeNkululeko ifuna ukuphakamisa ukubonga kakhulu kwabesifazane ngeqhaza abalibambile kuleli lizwe nasemhlabeni wonke. Siyasho futhi ukuthi siyabathanda. [Ubuwelewele.]


AMALUNGU: Nawe siyakuthanda.


Mnu V B NDLOVU: Okwesibili, siveze iqhaza elibanjwe ngabesifazane basemakhaya ekuhluphekeni kwabo, ukuthi uhulumeni abasize ukuze bakwazi ukondla imindeni yabo kanye namakhaya abawagadile bengomama, nobaba; bayizinto zonke emakhaya. Okwesithathu, sicela ukuthi yonke into eyenziwayo yenzelwa abantu besifazane, uhulumeni makabe seduze akwazi ukubaxhasa ukuze ikusasa labo ngaso sonke isikhathi lihlale lithokomele njengabantu abathokozisayo.


Okokugcina, uma ufundisa indoda ufundisa umuntu oyedwa kodwa uma ufundisa umuntu wesifazane ufundisa isizwe sonke. [Ihlombe.] (Translation of isiZulu member’s statement follows.)


[Mr V B NDLOVU: Hon Speaker, and this august House, the IFP wants to convey its greatest appreciation to the women for their contribution to this country and to the world. Firstly, we are saying that we love them. [Interjections.]


HON MEMBERS: We love you too.


Mr V B NDLOVU: Secondly, we want to highlight the contribution made by the rural women through their suffering. Government needs to assist them so that they are able to support their families and the homes they are taking care of - they are the mothers and the fathers; they are everything in their homes. Thirdly, we request that when government does anything for women, it must be close by to support them so that they can make their futures bright as they are warm people.


Lastly, if you educate a man, you educate one person, but if you educate a woman, you educate the whole nation. [Applause.]]




(Member’s Statement)


Mr S Z NTAPANE (UDM): Speaker, the UDM is concerned about reports that a Bloemfontein taxi driver repeatedly assaulted a pedestrian, after having bumped him with his taxi. This is indicative of a new culture of road rage engulfing South Africa. There is a growing trend in South Africa where motor-vehicle drivers, particularly taxi drivers, show no consideration to fellow road users.


This story is the tip of the iceberg regarding the extent to which taxi drivers abuse fellow road users and commuters. Daily our people are either witnesses to or victims of horrific abuse by taxi drivers. We all know how they show a complete disregard for the rules of the road. The taxi industry seems to be a law unto itself. The UDM calls on the Department of Transport expediently to intensify efforts to modernise this industry in order to curb the abuse of fellow road users and restore law and order.




(Member’s Statement)

Ms H C O MGABADELI (ANC): Speaker, the ANC welcomes the initiative of one of the most successful land restitution projects, owned by the AmaNgcolosi Community Trust in KwaZulu-Natal, who has handed over five new classrooms worth more than R1 million to Dulumbe Primary School.


In 2007, the Department of Education built two classrooms for the school, which had 180 learners in that academic year, and fenced the area. The AmaNgcolosi Community Trust has now added five more modern classrooms. The trust has not only built classrooms for the school but has also handed over water projects, cattle dips and electricity projects to the community.


This initiative is in line with the ANC’s policy of eliminating disparities in education and will therefore help to alleviate the plight of pupils who have been learning under difficult conditions in a two-roomed building on a farm. The ANC encourages such partnerships geared at bringing about a better life for all.


Phambili kuma-community trust anjengalawa, phambili! [Forward with community trusts like those, forward!]


HON MEMBERS: Phambili! [Kwaqhwatywa.] [Forward! [Applause.]]




(Member’s Statement)


Mr K J DIKOBO (Azapo): Mr Speaker, during the oversight visit to the different provinces by the Portfolio Committee on Basic Education to assess school readiness, the committee was given the assurance that everything was going well and that books would be delivered by the end of January. Unfortunately, many schools in the Limpopo province have not received their books as promised. Worse still, those schools do not have the faintest idea when their books will be delivered. In fact, they are not even sure that they will receive their books.


We are approaching the end of the first school term and some schools are forced by the circumstances to break the law and copyright laws by making photocopies for their learners. The fact that there are schools that do not even have photocopying facilities makes the situation even worse. Some provincial politicians and officials have blamed the situation on the intervention by the national government. Well, we do not believe them.


Reports that some people have changed and inflated costs on the orders, with the result that a R200 million order was changed to reflect R600 million, are even more disturbing. Azapo and the people of Limpopo would like to know who changed the prices and what is going to be done to such people.




(Member’s Statement)


Mr M WATERS (DA): Mr Speaker, today the DA Youth unveiled a massive billboard in central Johannesburg. It reads: “Youth wage subsidy now” and forms part of the DA’s campaign calling for the immediate implementation of the policy. Two years ago, the President announced the wage subsidy. Last year, R5 billion was allocated to fund its implementation on 1 April 2012. However, during this year’s Budget Speech, Minister Pravin Gordhan had to back down on implementing it, because it is stuck at the National Economic Development Labour Advisory Council, Nedlac – but it is stuck at Nedlac because Cosatu is refusing to discuss it. This is unacceptable.


By opposing the youth wage subsidy, Cosatu is putting its own interests ahead of South Africa’s 3,2 million jobless young people.


HON MEMBERS: Hear, hear!


Mr M WATERS (DA): It is too expensive and difficult to hire workers in our country but the wage subsidy would make it cheaper and easier without changing conditions of employment. This is why South Africa’s second-biggest trade union federation, Fedusa, does not oppose the subsidy.


At www.youthwagesubsidynow.org, we calculated that the subsidy would already have benefited more than 250 000 people if it had been implemented two years ago. The DA Youth has a simple message for Cosatu: They will not sit back and allow them to hold South Africa to ransom. They will not allow them to kill job opportunities for young people who want to work. They want the youth wage subsidy implemented now. [Applause.]




(Member’s Statement)


Ms H F MATLANYANE (ANC): Speaker, the ANC welcomes the Department of Rural Development and Land Reform’s approach and commitment to supporting more than 1 000 deserted and unproductive farms, as expressed at the unveiling of the recapitalisation and development programme at Khuphuka Farm outside Rustenburg on Friday, 24 February 2012.


This programme is designed to increase agricultural production and job creation, to guarantee food security and to graduate small-scale farmers to commercial farmers in the agricultural sector. Through the programme, a farm will be funded under close supervision of the department in order to show sustainability going forward. For the programme to be a success, the ANC appeals to the established farmers in the area to share their experience and farming skills with the emerging farmers, so as to create a viable environment to promote food security. [Applause.]




(Member’s Statement)


Mr R N CEBEKHULU (IFP): Mr Speaker, history has taught us that in order to ensure peace and security, the colonialist and apartheid government built police stations in their numbers in the cities and towns to serve farmers to provide security in these areas. In the neglected rural areas, police stations are still lacking.


The IFP hopes that the government will follow up on the promises made by the President in his state of nation address to extend basic services to address inequality, peace and security, and social cohesion and build more police stations closer to where rural people live, enabling people in these areas to access one of the most basic services.




(Member’s Statement)


Mr D A KGANARE (Cope): Speaker, last week the Minister for Co-operative Governance and Traditional Affairs stood in this House and, in response to the DA statement involving the appointment of some devious person as municipal manager, stated that he was determined to fight corruption and would investigate this issue. Speaker, I want to bring to the attention of this House that on 14 November 2011, KPMG released forensic investigative findings to the Department of Co-operative Governance and Traditional Affairs in the Free State, detailing corrupt activities within the Nala Local Municipality.


These findings became the subject of several local, regional and national radio talk shows. I am not sure whether the Minister is aware of this report. If the hon Minister is not aware, I would urge him to ask for a copy from his colleague in the Free State. If he is aware, I would like him to inform this House of what he has done with the recommendations since, as I speak, things continue as if no such report existed.


Some of the findings include the following: The Department of Mineral Resources allocated R2 million for electrification of 500 houses but when the report was published, only 281 houses had been electrified at a cost of R1,125 million. The Free State department of health made available the amount of R3,5 million for the construction of the Naledi Clinic. This project was never completed, but the funds had evaporated. A total of 207 vehicles that do not appear on the list of vehicles belonging to the municipality were fuelled at the expense of the municipality, amounting to R160 477,74. The list goes on.


Ultimately, KPMG recommended that disciplinary action against the responsible officials be instituted, that investigative findings be submitted to the National Prosecuting Authority and that civil recovery against contractors be implemented, but none of these things has happened as yet.


So, the question is: does the Minister really mean it when he says he is against corruption? What we believe is that “gore re re ke dipitsi, re tla bona ka mebala ya tšona”. [What we believe is: seeing is believing.] [Time expired.]




(Member’s Statement)


Mrs W J NELSON: Speaker, the ANC welcomes the SA Department of Higher Education and Training’s signing of an agreement with Cuba. The agreement builds on the long-standing co-operation existing between the two countries. The co-operation will include visits by academic students and experts, as well as collaborations and mutual learning in the areas of teacher education, models of university delivery and agricultural studies.

In addition, the co-operation will entail promoting the study of the Spanish language in a number of South African institutions of higher education and encourage South African citizens to study Spanish in Cuban institutions of higher education. Cuba will also encourage the strengthening of African studies in its higher education institutions and also facilitate the mutual recognition of higher education qualifications of both countries.


The agreement is in line with the department’s strategic priority four, which talks to creating a culture of achievement and improving learner outcomes by partly contributing to the economic and social wellbeing of both the country and the wider global community and transforming knowledge into practical applications by contributing to international, national, regional and local policy formulation. [Applause.]




(Member’s Statement)


Mr I M OLLIS (DA): Speaker, the state of the Metrobus Service in South Africa is deteriorating rapidly. The worst-case scenario is the current state of the municipal bus service in Tshwane, Pretoria. Out of the fleet of 398 buses, only a maximum of 165 buses are currently roadworthy and in service, helping residents.


On Monday, 5 March 2012, commuters, including disabled people and DA councillors, took part in the protest outside the central depot of the Tshwane Metrobus Service, to protest about, among others: One, the financial mismanagement of an almost-bankrupt bus service; two, the lack of maintenance of more than 50% of the current fleet, which does not even move; three, the constant reports of corruption and officials being fired as an indication of the state of operations; four, the cancellation of key bus routes in the city in the middle of the day, leaving elderly “gogos” [grandmothers] and the disabled stranded in the city, unable to go home.


Appeals to the mayor and the city council in Pretoria have fallen on deaf ears. The mayor does not even respond to letters or appeals. This is the state of affairs of the bus service of one metro, but our understanding is that there are several Metropolitan Bus Services in a number of metros controlled by the ruling party that are in a similar state of disrepair.


The DA calls on this government to investigate the sorry state of affairs in Tshwane and other metros. The Tshwane Metro and its ANC mayor seem unable to sort out this dysfunctional bus service. The citizens of South Africa deserve better. The DA in government in Pretoria will do a much better job when we win the city in the next council election. [Applause.]



(Member’s Statement)


Mr N E GCWABAZA: Speaker, the ANC-led government acknowledges the important role the car manufacturing industry and car component manufacturers are playing in creating jobs, growing the economy and developing new technologies. It views the investment of R2,2 billion by BMW in the production of the new BMW 3 Series as a vote of confidence by the private sector in South Africa’s economy. The production of the new 3 Series is expected to create 600 new jobs in Roslyn. The automotive industry accounts for about 10% of the country’s manufactured exports and 5% of total export.


South Africa manufactures 550 000 cars annually and is attracting the leading international brands of motor manufacturers because of the government’s incentives to the sector and also due to meeting the required quality standards. Also of great significance is the fact that the Roslyn plant has started to use more renewable energy and produces 25% less carbon emissions per car in its production process.


The ANC-led government’s plan to strengthen port, rail and road infrastructure will further reduce transport and logistical costs to manufacturers, thus making South Africa an even more competitive foreign direct investment destination. [Applause.]



(Minister’s Response)


The MINISTER OF POLICE: Speaker, regarding the statement made by the member of Cope, first, as a principle, I want to emphasise the point that we understand the Constitution and we embrace freedom of expression, whether it’s being exercised by Cosatu or by anybody else. As government, we have on our part shown movement and conceded an amount of R5,5 billion, as the Minister of Finance has said, on the issue of tolling. So, it’s Cosatu’s right. It is not about the relationship between the ANC and Cosatu. I think, in terms of a relationship, the member should really worry about the relationship within Cope itself, because it is a matter of national worry. [Laughter.] If they can concentrate on that, it would really help.


Regarding the issue of police stations, I agree fully with the hon member that given apartheid spatial design, you have these police stations in towns. This is what this democratic government has started to address and, as you would know, over the past few years - the past year in particular - we have been opening new police stations in rural areas particularly and we will continue to do so. In the strategic plan of the police, which was presented yesterday, this very important area is one of the things we have emphasised because we also believe that we need to take the services to where the people are. That is what we are doing.





(Minister’s Response)


The MINISTER OF SCIENCE AND TECHNOLOGY: Speaker ... ke batla go amogela mafoko a a builweng ke moemedi wa ANC a re bolelela ka tiro e e diriwang ke puso ya rona go tlisa botshelo jo bontle mo bathong ba ba nnang kwa Bojanala. Ke selo se re tlileng go se dira mo ditoropong le ditorotswaneng tsa Aforika Borwa ka gore ke tiro ya rona go dira gore batho ba rona ba nne le maokelo, ditliniki le dilo tsotlhe tse di ba thusang gore ba nne le botshelo jo bo siameng. Re itumela thata fa re bona puso ya rona e re agela sekolo fao re nna teng, mo dikolo di neng di teng pele ka puso e le ya maloba.


Ke batla gore ga ke dumalane gotlhelele le yo o re bolelelang gore ka nako ya ga Rre De Klerk go ne go sena batho ba ba emang ba lela ka go gatelelwa ke tlhaolele, seo ga se nnete. Re ne re lwantsha selo se, gongwe ene ga a gopole ka gore o ne a teng mo ntweng eo mme rona re a itse gore re dirile jang. Sa bofelo Mmusakgotla, ke batla gore re lekile mo Limpopo re le puso go thusa gore bana ba rona ba nne le dibuka le dilo tsotlhe tse di tlhokegang go tsamaisa thuto ya bana ba rona. Re le puso re beile madi, ba ba dirang mo pusong ya bosetšhaba ba thusa mo porofenseng ya Limpopo gore re baakanye mo go senyegileng teng, gore bana botlhe ba rona ba nne le dilo tse ba di tlhokang, le barutabana go thusa gore bana ba rona ba nne le tsamaiso e ntle ya thuto. Ke a leboga Mmusakgotla. (Translation of Setswana paragraphs follows.)


[I would like to accept what was spoken by the ANC member by telling us about the good job done by our government in bringing a better life to the people of Bojanala. That’s what we are going to do in the cities and towns of South Africa because it is our duty to ensure that our people have hospitals, clinics and other things that make their lives better. We get excited when we see our government build a school where we stay, where schools didn’t exist in the previous regime.


I would like to disagree with the one who says during the times of Mr De Klerk there were no people who stood up against apartheid; that is incorrect. We fought it; maybe you don’t remember because you were not part of that war but we know how we did it. Lastly, Speaker, I would like to say that we have tried our best as the government to ensure that our children in Limpopo have books and other facilities needed for them to have a good education. We have put money aside as the government. Those who work in the national government are helping in the Limpopo province so that we can fix things that have gone wrong to ensure that all our children have what they need and that teachers are able to ensure a better education for our children. Thank you Speaker.]



(Minister’s Response)


The MINISTER OF PUBLIC WORKS: Speaker, I am responding to hon Dikobo to indicate that the focus of the intervention in education, in Limpopo in particular, led by Minister Motshekga, is to ensure that we deal with all the backlogs we unfortunately found there. However, it is in the interest of the department to ensure that, in terms of learner support material, all those backlogs have been dealt with. I think the member will be pleased to know that we are scrutinising everything and we are making sure that all the invoices that are being submitted are scrutinised - that is why there are delays - so that we pay for the goods and services which have been delivered. If there is anything irregular, we will do the investigation and they will be treated accordingly. Should there be a need for discipline, that route will be taken.




(Minister’s Response)


The DEPUTY MINISTER OF BASIC EDUCATION: Speaker, the hon Minister of Public Works has partially covered my response, but let me just provide some details, as we have been busy with the procurement of textbooks. That task has indeed been completed. There has been a complete check in terms of the process of requisition as well as the orders. Therefore, the textbooks are in order. In fact, they are in the process of being delivered.


Books are being delivered for literacy and numeracy for Grade 1 to Grade 9 throughout the province as well as maths and science textbooks for Grade 10 throughout the province. That process is complete. The verification process is underway so that the department is satisfied that it is getting value for money in the procurement of those textbooks, as the hon Minister of Public Works indicated. [Applause.]






(Minister’s Response)


The DEPUTY MINISTER OF TRADE AND INDUSTRY (Ms T V Tobias): Speaker, I will respond to two statements made by members of the ANC. Firstly, we welcome the statement made by the member on the partnership between government and the private sector. Two weeks ago the DTI partnered with the National Youth Development Agency on launching the IthubaLentsha Project in Tembisa, at which the ANC-led government decided to continue to assist the South African youth to be entrepreneurs and to benefit from our SMME incentive programme. This has helped young people to qualify for the DTI incentives, which will see many companies being established, benefiting both job creation and the economy of the country.


Secondly, we also welcome the statement by the hon Gcwabaza on the manufacturing of new fleets by the automotive sector. Government, through the DTI, will also continue to provide incentives for innovation in manufacturing, especially when it is intended to create jobs in the market. We call upon other motor vehicle producers to follow the good example of BMW to create more jobs in the market and grow our economy. [Applause.]


Mrs J D KILIAN: Mr Speaker, on a point of order: Is the sixth Minister allowed to respond to questions? In terms of Rule 105(9), there should be five Ministers responding to questions. If my calculations are correct, the hon Cronin will be the sixth.


The SPEAKER: I do not know what Rule you are referring to, but the Rules of Parliament indicate six Ministers. [Laughter.]


Mrs J D KILIAN: Speaker, can I show you that in terms of the seventh edition, the number is five Ministers?


The SPEAKER: Well, in terms of the Rules I have, the number is six Ministers, and the edition we have been using indicates six Ministers. [Laughter.]





(Minister’s Response)


The DEPUTY MINISTER OF TRANSPORT: Speaker, I appreciate the fact that the hon member from Cope is trying to cut me short. I know that they are very scared of what I might say, but I assure them I won’t have anything to say about Cope. As Deputy Ministers, we are counted as half, so this is just half a response. [Laughter.]


I would like to welcome the statement by the hon member of the UDM who condemned what appeared to be an act of road rage by a taxi driver. However, in welcoming that - and we must indeed condemn all acts of road rage and bad behaviour on our roads - I think we must also be careful to not overdemonise the taxi sector. We must neither overromanticise nor overdemonise it.


Our statistics show us that taxi drivers are not the worst offenders in terms of accidents, deaths and serious injuries on our roads, given the kilometres they travel and the amount of time they spend on the road. There are 200 000 jobs directly involved in the minibus sector and probably about half a million jobs overall are offered in the sector. There has been a very significant decline in violence in this quite volatile sector – I think we should acknowledge that - as a result of democratisation and formalisation.


However, there are still some worrying signs of violence. Just in the past few weeks we have witnessed some of these. What do we need to do? We often blame the bad behaviour of taxi drivers, but maybe bad behaviour has to do with the infrastructure in our towns and cities, which is not good for public transport. They often pull over, stop and pick up passengers, drop them off, and so on, because the roads have not been designed for decent public transport. They have been designed for private car users. So, we need to transform these things in order to help the taxi industry transform, and we are making progress.


The hon Ollis referred to elderly African women in a rather disparaging way. Notwithstanding that, he is correct to say that there are some serious challenges when it comes to the Metrobus Service in the City of Tshwane and in a number of other cities. I am not going to overpoliticise this. I could easily do that because I can point to some DA-controlled towns in which the bus services are also having serious crises. But I am acknowledging that there are problems we need to address and, as the Department of Transport, we are doing that. [Applause.]


The SPEAKER: That concludes Ministerial responses.


Mrs J D KILIAN: Mr Speaker ...


The SPEAKER: Hon member, please take your seat until I recognise you. In terms of the Rules of the National Assembly, the seventh edition, it states on page 33: “In terms of a House decision taken on 25 October 2005, Ministerial responses have been increased to a maximum of six.” [Applause.]


Mrs J D KILIAN: Mr Speaker, may I address you on that?


The SPEAKER: Yes, please. What I just suggested to Mr Xaso is that we actually need to formalise it through the Rules Committee ... [Interjections.] ... so that the Rules are adapted appropriately, and do not rely on a decision of the House dating back to 25 October 2005. [Interjections.]


Hon member, that can be addressed to the Rules Committee. This is not the Rules Committee. I was simply referring to the Rules we have before us. [Interjections.]




(Consideration of Bill and of Report thereon)


There was no debate.




That the Report be adopted.


Motion agreed to.

Report accordingly adopted.




(Second Reading debate)


Mr E M SOGONI: Speaker, hon members, comrades and compatriots, the ANC welcomes the 2012-13 Division of Revenue Bill, Bill No 4 of 2012, tabled by hon Pravin Gordhan, the Minister of Finance, who has boldly steered the ship in these stormy economic waters.


This Budget was delivered in the context of what the President said when he issued the orders by which to achieve the policy objectives of the ANC in order to defeat the triple challenge of unemployment, poverty and inequality. For the majority of South Africans, the resources provided in this Division of Revenue Bill should go a long way in eroding the triple challenge the President spoke about.


In this record Budget of a trillion rand over the Medium-Term Expenditure Framework, MTEF, the ANC-led government is making a bold statement of intention to deliver on the commitments we made in the 2009 manifesto to create jobs and improve public infrastructure and service delivery. Though we are living in challenging times in terms of the global economic outlook, our country continues to experience growth - small as it may be - thus resulting in the average growth of the Budget of 8,2%, though slower than the period between 2008-09 to 2010-11 period, when the Budget was growing by 11,1%.


The challenge facing our government at all levels is to achieve more efficiently and economically with these limited resources. This also challenges us as Parliament to improve on oversight.


This Division of Revenue Bill introduces new grants intended to build capacity to deliver efficiently and on time: one, the schools infrastructure backlog grant, implemented nationally; and, two, the infrastructure skills development grant, which is to be administered by National Treasury and is intended to support municipalities to create a long-term and sustainable pool of young professionals with technical and operational skills through deploying graduate engineers and scientists as interns in municipalities.


Furthermore, the Bill introduced the provincial disaster grants for the Department of Co-operative Governance and Traditional Affairs, which is intended proactively to respond to immediate needs after a disaster has occurred; and the devolution of the property rates funds grant, administered by the national Department of Public Works to enable provinces to pay rates. During the hearings the SA Local Government Association, Salga, informed the Standing Committee on Appropriations that some national and provincial departments were not paying for services. We are aware that the provinces also feel that the billing system is not accurate and that poses a challenge between the departments and the municipalities.


Further, the Expanded Public Works Programme is a huge grant as it is now also extended to include the social sector. Properly implemented, it has huge potential to absorb a lot of unemployed people - though the challenge, according to Salga, is allowances that vary from province to province. Salga informed us that the Western Cape was paying less in some areas and even within the Western Cape they were not paying the same amounts. These amounts are gazetted in the Public Works ...


HON MEMBERS: Like where? Prove it!


Mr E M SOGONI: You will get the report. Don’t worry. [Interjections.]


The sixth grant is the provincial road maintenance grant, which is intended to ensure efficient investment in provincial roads. Former President Mbeki once said:


... none of the great social problems we have to solve is capable of resolution outside the context context of the creation of jobs and the alleviation and eradication of poverty ... This relates to everything from the health of our people to reducing the levels of crime, raising the levels of literacy and numeracy and opening doors of learning and culture to all.


Another important grant intended to change the lives of rural people is the rural household infrastructure grant, which will soon be integrated into the municipal infrastructure grant, MIG. The objective of this grant is to eliminate backlogs in water and sanitation in rural households. However, it is of concern to note that this grant, administered by the Department of Human Settlements, is underperforming.


The Portfolio Committee on Human Settlements, Salga and the Standing Committee on Appropriations are of the view that before the grant is integrated into the MIG, there must be engagement first because the MIG is underperforming. It may not necessarily solve the problem if we move this grant to MIG without understanding what the issues are. Luckily, this transfer will only take place in the 2014-15 financial year. So there’s still room for such engagement.


This 2012-13 Budget is intended to reach and touch every person in all corners of our country - the President demonstrated the policy objectives of the government through the projects spread around the country. These programmes are testimony to this statement once made by the ANC:


We pledge to all the heroes and heroines who sacrificed for our freedom, as well as to all our friends from the rest of the world, that we will never betray the trust you bestowed upon us when you helped to give us the possibility to transform South Africa into a democratic, nonracial, nonsexist and prosperous country committed to the noble vision of human solidarity.


With these initiatives taken by our government and supported by all of us, we should have no problem achieving a better life for all. Obviously, the struggle continues towards creating a better life but looking at the Mid-term Review, it is clear that a lot has been achieved.


Another important element of the Division of Revenue Bill included in the Local Government Equitable Share is the support by government for ensuring that the poor citizens of our country have access to basic services. People who qualify are those who earn R800 and less. This calculation was based on the 2001 Census, which means that it is likely to be revised once the 2011 Census results have been published.


Finally, this Division of Revenue Bill proposes in section 15 that the National Treasury will have to consult Parliament on changes proposed in terms of virements and introduces a great improvement in the current consultative arrangements between National Treasury and Parliament.

To conclude, I wish to remind this House that the Budget tabled by the ANC-led government should undermine the triple challenge confronting us as a caring government. This Budget also reminds me of the words of one of our colleagues, Deputy Minister Ebrahim - unfortunately he is not here - who once said in court when he was being sentenced:


If I were to choose my life all over again, I would follow the same path. I could never have remained indifferent to the poverty and suffering of our people. I have a deep commitment to peace, freedom and prosperity for all fellow human beings and have an equal distaste for injustice and oppression.


He was speaking on behalf of all of us on right-hand side of the House. [Interjections.]


Speaker, may I take this opportunity to thank the members of the Standing Committee on Appropriations, the staff of the committee and my secretary for their commitment to ensuring that the hearings and the report of the Division of Revenue Bill were processed and completed on time. My special gratitude goes to Ms Thoko Xaso, who is leaving the committee at the end of March. We valued her commitment and support to the committee and to me. [Applause.]


Mr M SWART: Mr Speaker, the Division of Revenue Bill provides for the distribution of nationally raised revenue between the three spheres of government. This year, the relevant amounts are R622,43 billion to national government, R309,05 billion to provinces and R37,87 billion to local government.


South Africa needs to create jobs and eradicate poverty. This can only be achieved by a much higher GDP growth rate. Our current growth rate and the growth rate forecast for the Medium-Term Expenditure Framework, MTEF, is simply not sufficient for achieving this goal.


The DA in its alternative budget focuses on ways in which the national Budget could be structured to achieve an 8% GDP growth rate on a sustainable basis. Such a growth rate is not only required for job creation and poverty eradication but is also necessary to ensure credibility as a Brazil, Russia, India, China, Bric, partner. We have to work smarter and harder and create a streamlined government. We need to eliminate wastage resulting, in the main, from inefficient service delivery by a large number of politically well-connected but poorly performing public servants.


In this regard, a report by the Public Service Commission found that 1 135 cases of financial misconduct were committed by public servants during the 2009-10 financial year, involving an amount of R346 million. The financial misconduct was found in 39 national departments and 9 provincial departments. When reflecting on the performance of some state employees, the following two examples illustrate the point of inefficient service delivery.


In the first example, water pipes to the value of some R200 million will have to be replaced at the Nandoni Dam project in Limpopo. This is because the engineers employed by the relevant departments specified the installation of glass-reinforced instead of steel pipes. They then failed to do quality tests on the glass-reinforced pipes before installation, resulting in these pipes bursting when placed under pressure. The pipes are substandard and will have to be replaced at a cost of R200 million. [Interjections.]


A second example is the way in which private businesses are being disadvantaged by the nonpayment of their accounts in respect of goods and services delivered to the state. At the end of February the department of health in Gauteng, for instance, owed R2,89 billion to its suppliers and the amount is increasing. How do we expect suppliers to survive and continue doing business with the government under these circumstances? [Interjections.]


To ensure a leaner government, the DA’s alternative budget provides for the abolition of a number of government departments and institutions, such as the Department of Women, Children and People with Disabilities, as well as Setas. In this way, we can create a more streamlined government and free up money to help accelerate growth and tackle poverty. [Interjections.]

To achieve the goal of a more streamlined government, the DA’s government budget proposes, inter alia, the abolition of district municipalities. This would lead to an annual saving of R500 million. This is a proposal supported by the ANC’s recently released discussion documents and something they can accept in those documents. [Interjections.]


There just are far too many government departments and institutions and there is reason to be concerned about the excessively high wage component in government expenditure. A good example of this is the department of health in Limpopo, which spends 73% of its budget on salaries. No wonder they have been placed under administration.


The President in the 2012 state of the nation address and the hon Minister of Finance in his Budget Speech this year quite correctly placed great emphasis on job creation and poverty alleviation by way of infrastructurel development. However, the question remains whether the three spheres of government have both the ability and/or capacity to spend the money now allocated to them in the Division of Revenue Bill. In this regard, it is interesting to note that at the end of the third quarter of the 2011-12 financial year, provinces had in aggregate spent only 61,5% of their combined capital adjusted budgets. Similarly, municipalities underspent by R28,4 billion for the financial period ending 30 June. Of this amount, R12,4 billion was underspent on capital budgets.


Investment is critical if we are to stimulate growth and job creation. The ANC government seems to be intent on shooting itself in the foot with regard to procuring investment for the economy by pushing for legislation such as the Protection of State Information Bill – the Secrecy Bill - tampering with concepts such as willing-buyer, willing-seller, undermining the independence of the judiciary and generally seeking to tamper with the Constitution. In addition, the ANC’s tripartite alliance partner, Cosatu, sees fit to stage massive strikes, costing business and the country billions of rands.


Where, then, do we find ourselves? On the one hand we have a Budget and a Division of Revenue Bill worthy of support. On the other hand we face a range of challenges. We can, however, deliver opportunities and a brighter future for all our citizens by tackling government inefficiency, promoting and protecting the values on which our democracy is built and improving service delivery. [Applause.]


Mr L RAMATLAKANE: Speaker, Ministers and hon members, Parliament is dealing with the Budget in compliance with the Money Bills Amendment Procedure and Related Matters Act, Act 9 of 2009. There is a provision in this Act that directed Parliament to establish a Budget Office in order to help Parliament’s committees to amend the Budget and engage with government. We have spoken about this delay in Parliament implementing its own law. To date, however, there has been no progress in this regard. Parliament’s committees are expected to engage with Ministers of Finance as well as government on the Budget, but the committees suffer from a lack of capacity, especially the Appropriations committee.


It is unclear what the consequences will be when Parliament fails to comply with this Act. It is an Act initiated by Parliament and passed by Parliament to be implemented by Parliament itself. As a committee of Parliament, we are indeed inadequately resourced. In order for us to deal with this we need research capacity, economic capacity and a budget analyst, to mention but a few.


In the committee we discussed the Budget and government’s main priority in detail. Nonetheless we believe that the key priorities remain critical for our country. There are, however, various weaknesses in government’s expenditure pattern. This implicates government’s lack of capacity to implement the required system and structures. The Department of Basic Education is a good example in this regard. At local government level, service delivery protests remain the order of the day. This is further fuelled by the heads of department worrying about trying to fulfil the executive authority’s political wishes, not whipping officials to deliver quality service to our people.


The Department of Public Works is another case in point. This department is supposed to be a driver behind job creation, yet it is stained with lease scandals and corruption. All of us as Members of Parliament should be intolerant of poor management, corruption in the management of tenders by state officials and underspending by departments and provinces. The Department of Health is the worst and most worrying department. Not only is it insufficiently capacitated, but its system seriously lacks compliance.


We were told that the country will not meet the Millennium Development Goals, especially the one relating to maternal and infant mortality below the age of five years. This is unacceptable. Provinces are refusing to comply with national priorities because they have their own priorities. President Zuma’s performance agreement, which should become the marshalling force for service delivery, will never see the light of day if the provinces’ to adhere to this performance agreement remains unattended to.


The main problem is that money is not spent on quality projects. In addition, the state’s ability to implement government priorities remains very weak. Departments continue to employ consultants to do work they are supposed to be doing. Limpopo is a good case in point. The Free State is not too far behind in this regard. More worrying is the lack of skilled personnel in the health sector. We warned beforehand that budget approval should not communicate a message to government departments that it is their time to eat. We have seen officials in Limpopo squandering government and taxpayer’s money as if it were their personal chequebook. This is worrying, to say the least.

In conclusion, Cope supported the fiscal policy and we support the Division of Revenue Bill but, Minister, help us to protect those brave officials who stand up against corruption and blow the whistle. Tell the premiers, including the Premier of the Free State, not to victimise those who come forward and blow the whistle against corruption. Cope supports the Bill. [Time expired.] [Applause.]


Mr N SINGH: Madam Deputy Speaker, I want to thank the ANC for the extra one minute that they have given me to speak, otherwise the division of speaking time in this Division of Revenue Bill would have left a lot to be desired.


Having said that, as the IFP, we will support this Bill in so far as the recommendations contained in it are concerned. I want to concur with the previous speaker that, as Parliament, we are failing ourselves when it comes to capacitating ourselves to deal with budgets. We should have a budget office up and running but it does not exist. We should have more staff assigned to the Appropriations committee to deal with the budgets, but that does not exit either. I hope that this matter will be addressed sooner rather than later, otherwise what happens is that this becomes a Budget of the Cabinet and the executive, and not a Budget of this Parliament. Yet the Act provides that we as parliamentarians should have a say in the Budget and proposed amendments.


Having said that, one of our concerns is the underspending of conditional grants. We believe that there is not enough centralised monitoring and evaluation over conditional grants that are given either to provinces or to municipalities. There is a lot of underspending by municipalities. For example, the department of local government has a budget of R47 billion. Of that, R46 billion is for transfers and subsidies. Yet when we met them they didn’t have much of a clue about how those monies were being spent at grass-roots level. There has to be effective control and a holistic system at Treasury to ensure that this money is effectively utilised on the ground.


We want to welcome the Section 100 interventions in many of the municipalities and we compliment the Treasury and the Ministry of Finance for being brave enough to go in there and do whatever they had to do. To that end, eThekwini Municipality is also one of the municipalities that, in terms of the Division of Revenue Act, receives a lot of money from this national Budget. Yet we know from media reports and from what is called the Manase report that there are a lot of shenanigans – if I may use that word – taking place within the eThekwini Municipality.


Hon Deputy Minister, we made an appeal to the Minister for Co-operative Governance and Traditional Affairs, Cogta, during statement time in this House, that the Manase report should be released to this House because we have an interest in it. Money appropriated from here goes down to eThekwini and any other municipality, for that matter. Deputy Minister, I hope that this appeal to you will not fall on deaf ears and that the Manase report will be made available to us as Members of Parliament, so that we can see what is going wrong in the Durban area.


The Department of Health expressed to us the major concerns they had with provinces and the hospital grants. We need to assist the Department of Health and other government departments to ensure that the money is spent properly at the lower levels. I see my time is up. Thank you very much, Madam Deputy Speaker. We will support the Bill. [Applause.]


Mr S Z NTAPANE: Deputy Speaker and members, the division of revenue is the first step in the service delivery process. Logic dictates that a large proportion of the revenue should be channelled towards the provinces and municipalities. While these two tiers of government have constitutional service delivery mandates, they have proven to be both wasteful and ineffective over the years, especially the provincial government system.


Provinces, by virtue of their proximity to the people, are supposed to be closely attuned to the service delivery needs of the people. Unfortunately, with the exception of one or two well-run provinces, the opposite is true. Since the inception of our democracy, we have witnessed a distinct inability among provincial and municipal administrations to manage this revenue and deliver services.


The problem here stems from a severe lack of skills, coupled with an institutional culture that celebrates ineptitude. However, we are encouraged by the Finance Minister’s announcements that in order to fight irregular expenditure and tender fraud, government will intensify its efforts to monitor expenditure at provincial and local spheres of government. We demand value for money!


One of the key reasons why the division of revenue does not produce the intended results is the failure to consider the limited revenue-raising potential and capacity of rural municipalities when allocations are made. The majority of rural municipalities operate on a shoestring budget. This situation needs to be changed as it is responsible for the deterioration in the quality of life of rural people.


The UDM believes that if government is serious about improving both the speed and quality of service delivery and, if it wants to “do more with less”, as the Minister of Finance has said on numerous occasions, it has to do away with its cadre deployment policy, in terms of which political affiliation rather than merit remains the fundamental basis upon which people are appointed to positions of power. The deficit in competent and qualified people besetting all spheres of government can be attributed to nothing else than the cadre deployment policy. These are the people the country needs ...


The UDM supports the Bill. [Time expired.]


Mnr P J GROENEWALD: Agb Adjunkspeaker, in terme van die Begroting word R77,3 miljard toegedeel aan plaaslike regerings, maar as ons gaan kyk op plaaslike regeringsvlak, dan sien ons die agterstallige skulde in terme van dienstegelde beloop meer as R60 miljard. Met ander woorde, dit beteken dat as mense hul rekenings vir water en ligte betaal, dit nie nodig sal wees dat belastingbetalers se geld verder verdeel moet word aan plaaslike regerings nie. Dit is tog immers die kern van plaaslike regering dat ’n munisipaliteit vir homself kan sorg.


Dit is egter ’n geval van ons stadsrade wat dink dat daar op nasionale vlak ’n onuitputbare bron van geld is. Ons kan maar geld mors; ons hoef nie ons agterstallige dienstegelde te in nie, want die nasionale regering sal voorsien. Dáárom is R77,3  miljard aan plaaslike regerings toegedeel.


Ek wil vandag vir u sê dit is onbillik teenoor daardie belastingbetalers wat wel vir hul dienste betaal, want op die ou end is dit maar net weer húl belastinggeld wat van nasionale vlak na plaaslike regeringsvlak afgewentel word, waar hulle gesubsidieer word. Daar moet ernstig gekyk word na die plaaslike regeringsvlak. Soos die vorige spreker gesê het, as bevoegde amptenare op plaaslike regeringsvlak aangestel word, sal dit al beter gaan, maar die houding is dat as die geld op is, dan word dit maar net weer van bo gevra.


In 2010-11 is slegs 71% op infrastruktuur gespandeer. Met ander woorde, die geld is daar, maar as gevolg van onbevoegdheid word dit nie gebruik om daardie noodsaaklike infrastruktuur op plaaslike regeringsvlak te vestig nie. Dit is dan geen wonder dat mense in die strate hardloop en betoog teen swak dienslewering nie. (Translation of Afrikaans speech follows.)


[Mr P J GROENEWALD: Hon Deputy Speaker, in terms of the Budget, R77,3 billion has been allocated to local authorities, but looking at the local authority level we see the outstanding debt for service charges now totalling more than R60 billion. In other words, this means that if only people would pay their water and electricity accounts it would not be necessary to further distribute taxpayer’s money to local authorities. Surely, at the core of local authorities lies a municipality’s ability to take care of itself.


However, it is a case of our town councils who imagine that there is a never-ending supply of money at national level. We can just waste the funds; we don’t have to collect our outstanding service fees, because national government will provide. That is the reason why R77,3 billion had to be allocated to local authorities.

I’m telling you today that this is unfair towards those taxpayers who do pay for their services, because, at the end of the day, it is once again their tax money that is simply being devolved from the national level to the level of local authorities, where they are being subsidised. The local authority level should be seriously investigated. As the previous speaker was saying, if competent officials could be appointed at local authority level, things would already improve, but for now the attitude remains that once the funds have been spent, more can simply be requested from upstairs.


In 2010-11 only 71% was spent on infrastructure. In other words, the money is there, but because of incompetence it is not being used to establish the necessary infrastructure at the local authority level. It is no wonder, therefore, that people are running through the streets protesting against poor service delivery.]


Mr J P GELDERBLOM: Deputy Speaker and hon members, thank you for the opportunity to address the House on behalf of the ANC. The 2012 Division of Revenue Bill, together with the state of the nation address, tells a true story of a country whose future is held in most capable hands, guided by heart and modelled by astute thought. Through the New Growth Path, the National Development Plan and Industrial Policy Development Plan, the ANC-led government has overcome what President Zuma refers to as “piecemeal planning”.


The creation of decent work remains the principal intervention for addressing poverty and inequality. In addition, the New Growth Path proposed a new number of complementary interventions to address the structural challenges underpinning inequality. These include: ensuring more equitable access to education and skills development; accelerating rural development; supporting land reform designed to support a more productive and inclusive agricultural economy; optimising the job-creation potential of the green economy; and upgrading financial services for small enterprises and the social economy.


Since most employment creation occurs outside of the state, accelerating it requires the consistent use of core state functions to create an environment that encourages private enterprise and other nonstate organisations to expand jobs. These include ensuring that regulations of all kinds achieve their aims as efficiently as possible, infrastructure is of adequate quality and affordability, strong efforts are made to ensure more equitable and quality education, there are targeted and sustainable subsidies to kick-start new activities that can support large-scale employment creation, local procurement by the state stimulates demand, especially in the light of the instability in international markets; and there is targeted public support research development that unlock opportunities in the private sector. To this effect, the New Growth Path and Industrial Policy Action Plan 2 provide a framework for undertaking these tasks.

As a developmental state, South Africa has a vision informed by a credible plan, and the Budget contained in the 2012 Division of Revenue Bill signifies a major step towards the successful realisation of such a vision. The 2012 Division of Revenue Bill heeds the constitutional requirements for an equitable division of nationally raised revenue among the national, provincial and local spheres of government. Added to this equitable division of revenue is a range of conditional grants made available to the provincial and local spheres of government to achieve specific outcomes.


In respect of economic growth, the 2012 framework for the division of revenue takes due cognisance of the special importance of economic growth as the heartbeat of the economy of South Africa. In his state of the nation address, President Jacob Zuma placed on record that this year, and in the coming years, we have taken the decision that we should do more to grow the country’s economy, in order to get rid of the problem of unemployment, poverty and inequality. The plans set in the 2012 division of revenue cannot be read outside of the broader plan to grow South Africa’s economy, thereby arresting the unfortunate scourge of unemployment, poverty and inequality.


The Minister of Finance announced a total of 43 major infrastructure projects, adding up to R3,2 trillion in expenditure. Accordingly, infrastructure plans amount to R845 billion, of which R300 billion is allocated to the energy sector and R262 billion to transport and logistics projects. According to the Minister of Transport, hon Ndebele, the build programme alone will help sustain between 50 000 and 100 000 jobs in the construction sector. We welcome the R33 billion allocated to local government for infrastructure grants.


The massive infrastructure investment programme will serve as an economic stimulus against the potential effects of the global economic stress. Because of this infrastructure investment, the rich and the poor alike are assured that their future is positioned against any potential pitfalls of the ongoing global economic uncertainty posed by global events. The massive infrastructure programme will span over 20 years and will enhance the growth and job-creation potential of South Africa’s economic sustainability.


Land reform is an integral part of rural development, hence the Department of Rural Development and Land Reform’s policies and programmes are critical to the very existence and survival of many households in South Africa. This is a sector with high job-creation potential and, as such, is a critical avenue for poverty alleviation. A positive impact has been made in creating jobs and work opportunities through the implementation of different initiatives in rural areas. It is the youth that has benefited the most in terms of skills development programmes and jobs created. A total of 7 398 youth were enrolled in 2010, with a further 5 000 to be enrolled in 2011-12, and 10 000 during 2012-13.


The ongoing land reform process should be seen as a golden opportunity where we, as South Africans, can put our differences to rest and focus on building a social compact for the benefit of future generations. The President could not have put it better than when he made the appeal, “the land question is one of the most emotive issues in our history and present and must be handled with utmost care”. Agriculture is at the centre of food security, job creation and poverty alleviation. It is in this context that we welcome the following allocations: a total of R18,1 billion, which includes an additional R1,9 billion for the Department of Agriculture, Forestry and Fisheries, as well as an additional R995 million given to the Department of Agriculture, Forestry and Fisheries for the Comprehensive Agricultural Support Programme, which will continue to support newly established and emerging farmers.


Lastly, we are of the view that the R150 million made available for provincial and municipal agricultural colleges will greatly provide for and improve skills that will benefit the sector. In closing, I would like to emphasise that we welcome this Budget. A lot of work has been done up to this point. However, the collective will and effective implementation of the Budget by officials to ensure that our policy changes the lives of people is critical. So too is our relentless pursuit of effective oversight of the executive, in partnership with the executive, to create a better life for all. As former President Nelson Mandela said, a budget is not just about numbers but about people. The ANC supports the Division of Revenue Bill. [Applause.]


Mr S N SWART: Deputy Speaker, Deputy President, this year saw National Treasury intervening in a number of provinces to address financial mismanagement, which seriously undermined service delivery. While the ACDP fully supports these interventions, particularly in Limpopo, the question that arises is how these provinces were allowed to reach these shocking levels of mismanagement. Deputy Minister, were there no early warning signals and what lessons have been learnt from these interventions? For example, how does one deal with persistent overspending on personnel, which reduces funds available for infrastructure and service delivery? Surely rules should be in place to prevent appointments being made without proper budgeting. Clearly, financial management in provinces must be considerably improved, with the best persons available being employed as managers regardless of their political party affiliation.


The ACDP also shares the concerns about municipalities and provinces not being able to spend their capital budgets. While we appreciate that the National Treasury will continue to build capacity with the Infrastructure Delivery Improvement Programme, clearly much more needs to be done in this regard. We note that municipalities, which are meant to generate their own working capital from rates and levies, are acquiring a bigger share of national revenue - R77 billion, which is well up from last year’s R68 billion. Financial management at municipal levels must similarly be addressed because this is where basic service delivery occurs.


In this regard, Deputy Minister, what progress is being made to establish internal audits at municipalities? In our view, it appears highly unlikely that all municipalities will reach the target of unqualified audits by 2014. It is also apparent that long-term remedial action is required across the board to improve financial management and address wayward spending patterns.


In conclusion, however, the ACDP wishes to commend the Minister and National Treasury for the initiatives already in place to begin addressing the concerns we have raised. Therefore we will support the Division of Revenue Bill. [Applause.]


Mr I S MFUNDISI: Deputy Speaker and hon members, the UCDP welcomes the additional resources allocated to provinces for, inter alia, public sector wage agreements, infrastructure repairs - particularly the 10 priority roads in the North West - the extension of coverage of HIV and Aids treatment and an increase in access to Grade R education. These are indeed in line with what has been identified as key priorities and therefore it appears that national government is putting its money where its mouth is.


We recognise and acknowledge that counting among the development and service delivery impediments in local government is the fact that rural municipalities raise significantly less revenue than larger urban and metro municipalities, while they cater for large populations with collapsed infrastructure. We need to see this recognition expressed in the manner in which revenue and resources are allocated. The aim to boost the economic and social development of provinces and municipalities must be evidenced by the revenue allocations. Further, provinces must be mandated to prioritise and spend larger chunks of their revenue on rural municipalities.


We know that government has raised debt in order to protect the budget baselines and to keep the debt burden manageable, hence provinces are asked to review their budgets. There are two issues that need to be answered in this regard. The first is the long-term event of increasing debt and the second issue is that of ensuring that as the provinces and the departments rigorously review their budgets, they do not perpetuate the phenomenon of funds being returned to the Treasury at the end of the financial year. The UCDP supports the Division of Revenue Bill. [Time expired.] [Applause.]


Mr R B BHOOLA: Madam Deputy Speaker, the MF welcomes the allocation directed to infrastructure but notes that it is evident that municipalities are struggling in terms of spending their capital budgets for implementing their capital projects. It is important to give priority to and put more effort into capacity building because infrastructure is implemented mainly at local levels. Can you imagine directing monies towards municipalities without capacity? This will result in low spending affecting service delivery, widening the gaps for fraud and corruption and ultimately resulting in monies being returned to National Treasury.


The MF is concerned about the functional role of the Municipal Infrastructure Support Agency, the Development Bank of Southern Africa, DBSA, and the Department of Co-operative Governance and Traditional Affairs. How is the structure functioning and helping municipalities? We are concerned about the lifespan of the National Health Insurance pilot projects and whether the budget is enough for implementation, taking into account the crucial concerns of the NHI.


The failure of the Eastern Cape Department of education to spend the schools backlog infrastructure grant, in view of the fact that the allocation has been increased, is of concern to the MF. KwaZulu-Natal also has a number of remote areas and in reality we also have mud schools but no budget has been allocated for those mud schools. The MF is concerned because we know the backlog for school infrastructure in KwaZulu-Natal is a tremendous challenge. The MF will support the Bill. [Applause.]


Mr K J DIKOBO: Deputy Speaker, hon members, Azapo supports the Division of Revenue Bill. We do so hoping that the money will be used for what it is intended. Azapo supports the Bill also hoping there will be no instances of underspending by provinces. Azapo urges this House to look again at a policy that says money not spent shall be returned to the Treasury. Every time money is returned, the biggest losers are ordinary people who had nothing to do with the underspending and whose only sin is that they have inefficient officials. Is there not a way in which government could deal with the officials and politicians responsible without harming the very people it is trying to assist? As we said, Azapo supports the Bill. [Applause.]


Ms R M MASHIGO: Deputy Speaker, members, Ministers and Deputy Ministers, we are gathered here today to support the division of nationally raised revenue between the three spheres of government, as required by our Constitution. How many times have we heard people refer to skills, infrastructure and employment - and all these can only happen through the proper allocation of resources and accountability. Haircuts by Cabinet and the reprioritisation of programmes in the departments played a major role in what we are able to decide on in this division of revenue today.


Chapter 2 of the Constitution of South Africa states:


Everyone has the right to a basic education, including adult basic education; and to further education ...


The Constitution is based on the Freedom Charter of 1955, which states:


There shall be equal status in the bodies of the state, in the courts and in the schools for all national groups and races.


The people demanded compulsory and free education.


The ANC-led government knows that poverty, unemployment and inequality can be fought through education. As one of the priority needs of government, the Department of Education received the largest portion in the budget, that of R207,3 billion from 2012 through out the MTEF, to R236,1 billion.


The Department of Basic Education received R11,3 billion for five conditional grants, which are: Dinaledi Schools Conditional Grant; HIV and Aids Conditional Grant; National School Nutrition Programme, NSNP; Technical Secondary Schools Recapitalisation Conditional Grant; and Education Infrastructure Conditional Grant. There is also R2,3 billion for the School Infrastructure Backlog Grant, which is Schedule 7.


The equitable share of provinces has been increased over the medium term to address no-fees schools’ subsidies, increasing access to Grade R and also extending assessment to Grade 9 learners.


The National School Nutrition Programme is a very good initiative, which was started in this department to address poverty alleviation in quintiles 1 to 3 schools. Through this programme children are certain to get a nutritious meal and can concentrate in class as a result. However, it becomes a real concern when children are not fed because of the lack of proper equipment, lack of monitoring and noncompliance.


During the hearing with the Department of Basic Education, the Portfolio Committee on Basic Education was given a report on the 2010 backlog grant for 49 mud schools in the Eastern Cape, which was approved in October during the medium-term adjustments. They also presented us with the 2012 activity chart for the 50 schools still to be built in the Eastern Cape. The total amount on the school infrastructure backlog grant for 2012-13 is R2,3 billion, within which there is R1,5 billion for the 50 Eastern Cape schools I already mentioned.


The Portfolio Committee on Basic Education attended the hearing. We were happy because together with them we will be able to ensure value for money and accountability during the process of building these schools in all the provinces, especially in the Eastern Cape. It was gratifying to know that the 49 mud schools are already in the process of being improved and will be operational very soon.


The technical secondary schools’ recapitalisation grant for the 200 technical schools is welcomed because it contributes to skills development. It is very important that students should know the importance of technical schools at the secondary level, so that they are able to make career choices at that level, because the country cannot afford to import skills that can be obtained locally.


After matric, further education and training colleges, are another option for tertiary education. As a result, there is a higher education grant, which will successfully ensure that FET college functions are transferred to the Department of Higher Education. They are established to provide a wide range of learning programmes that address the skills shortages facing the country.


Transformation is a process. The Department of Basic Education should produce learners who qualify for higher education in order to address the economic needs of the country. This has been a tough road for the Department of Basic Education. It started by redressing the worst disparities in education created by the apartheid system. All the different departments of education had to become one, with one curriculum. Educational facilities and other tools of the trade in black schools, both in urban and rural areas, had to be established and funded within the available resources. Different models of education had to be tried and reviewed and decisions had to be changed. Consultations had to be made in order to get the right model. There are still problems but there is also progress. It can be said, as we stand here, that we can now see the light. We see the light at the end of the tunnel. We see the differences that are taking place, brought about by our hon members in the Department of Education.


The Ministers are working very hard to address all the problems - this is evident. The Department of Health received R25,7 billion, allocated to seven conditional grants. On maintenance, the department, under the leadership of the Minister, commissioned a team to audit all 4 200 facilities, clinics and hospitals to report on everything that forms part of the daily operations of hospital institutions. Findings on 337 facilities were completed and reported problems in all aspects of hospital maintenance, starting from repairs and ending in every type of infrastructure – broken toilets and all. This was a brave effort taken by the Ministry of Health. As a result, there is a grant to address this.


Another brave effort, which we see as activism, came when the Ministry commissioned an audit through the Development Bank of Southern Africa to visit all the hospitals to check the qualifications of hospital managers. This was brave because we know hospital managers are the key to the efficient and effective running of hospitals. This action will turn around the management of hospitals because qualified people will run them.


Allocations for the training of health professionals are also welcomed. An annual increase of medical students at medical schools has been confirmed. It is for the Department of Health and the Ministry of Higher Education to discuss how this is going to take place. We are aware that the Department of Higher Education has a grant that will look at the improvement of university infrastructure, including student accommodation, and we think all the medical schools will also be considered during this progress.


The National Health Insurance grant will be used for selected pilot projects at the districts. This is an issue that needs serious attention and as a result more detail will be given in the Green Paper. The enactment of the National Health Act is also welcomed.


Section 13 of the Bill was also mentioned by the Department of Health, as they feel this will assist them in achieving their goals because officials will have to report on the processes that are applied with regard to projects. National Treasury will provide the format, which will link National Treasury and the department, including Members of Parliament. We will be able to do our oversight because we will be working with facts.


I would like to refer the House to what hon Grant Snell said, based on the fact that there were problems between the money transferred to the provinces and the priorities not linking up. There is this issue that provinces’ equitable share is crafted into a provincial budget in the form of an appropriation. Adversely, there are a number of co-ordinator structures established at the national level to facilitate the alignment of national budget to achieve national priorities. Consequently, due to these different priorities, the budget does not achieve what it was intended for. We need to address this issue because delivery is compromised and the state does not know which one exactly is the priority when these two spheres of government are involved. We need that to get attention.


Jobs will be created. Let us support the Minister of Finance when he says that: “We have a shared responsibility to prevent corruption.”


It is our duty as Members of Parliament to do our oversight and get accountability. The ANC supports the Division of Revenue Bill. [Time expired.] [Applause.]


The DEPUTY MINISTER OF FINANCE: Deputy Speaker, let me start by thanking members for the support they have given to the Division of Revenue Bill before us today. Members have drawn our attention to the fact that this is a legislative requirement in terms of the Constitution, in terms of the Money Bills Amendment Procedure and Related Matters Act and also in terms of the Intergovernmental Fiscal Relations Act.


Most of the clauses in the annual Division of Revenue Bill of this year remain unchanged, with just three policy changes effected. The first is the inclusion of specific anticorruption conditions, which is the new section 13 in the Bill. This places additional responsibilities on the heads of provincial departments with infrastructure conditional grants. The second is the inclusion of a new subsection to provide Parliament with two weeks to comment on any proposed change to the frameworks of conditional grants prior to the Minister gazetting those changes. The chairperson of the committee, the hon Sogoni, referred to this. The third is the reconfiguring of the expanded public works grants due to the slow uptake. In-year calculations of the incentives’ end have now been removed, hence there is no longer a need for a schedule to provide for this eventuality.


Different members in the committee raised a number of issues even though they supported the Bill. Among those is the hon Swart from the DA, who first bemoaned the growth rate not being enough and said the DA’s alternative budget would address this; and that there is inefficient public service, corruption and misconduct, and nonpayment of the suppliers. I am glad he also responded to his concerns by saying he supported the ANC policy documents released. I want to invite him to attend our policy conference in June, because his party will not be releasing any documents any time soon, except the shadow documents he has tabled.


He also alluded to the capacity in the three spheres to spend and that there is underspending. This was echoed by the hon Ramatlakane and also the hon Singh. There are a number of capacity-building initiatives in place at national level to support provinces and municipalities and perhaps from the National Treasury’s side I should draw these to the attention of members. One of the members, the hon Swart from the ACDP, actually alluded to our Infrastructure Development Improvement Programme. This provides technical and advisory support for capital expenditure planning and other technical advice, and support for all nine provinces. This programme also promotes best practice in infrastructure roll-out for the full lifecycle of infrastructure projects, which includes putting in place user asset management plans.


There is also the financial management grant, which promotes and supports reform in financial management and builds capacity in municipalities to implement the Local Government: Municipal Finance Management Act, Act No 56 of 2003, including, through funding, interns in municipalities to boost capacity. The third is the infrastructure skills development grant, which supports municipalities to create a long-term and sustainable pool of young professionals with technical and operational skills through deploying graduate engineers and scientists in municipalities.


The hon Bhoola has demonstrated his nonattendance at committee meetings, because all of these have already been tabled at the committee level. He must take it upon himself to attend committee meetings so that he can apprise himself of these developments.

The hon Ntapane also raised the issue of capacity and the issue of revenue-raising, together with the hon Groenewald, who later submitted an apology that he was going to have to leave. He will read Hansard. I would like to indicate to him that as a responsible citizen and an elected representative in this House, he must also encourage people to pay their bills in their respective municipalities.


The hon Swart also alluded to the interventions that I have raised. The hon Ramatlakane also talked about the issue of spending in provinces. My thanks go to the hon Mashigo for responding that the alignment of provincial priorities with the national priorities is also a matter we assist with. She also raised the issue of the Gauteng provincial government. We are already in the process of assisting the department of health in Gauteng and we are beginning to reap the benefits of the support we are giving them.


The other matter that was raised was the issue of the eradication of mud schools. We have allocated a substantial amount to provinces to deal with that, including an amount of R159 million to KwaZulu-Natal for the 2012-13 financial year.


All in all, there was general support for this Division of Revenue Bill and I do not want to belabour this in this House. I want to take the opportunity to thank the committee for processing the Bill expeditiously and all the members who spoke for the support they have given the Bill.


Debate concluded.


Question put: That the Bill be read a second time.

Bill read a second time.




(First Reading debate)


The DEPUTY SPEAKER: Hon members, while the hon Sogoni is coming to the podium, I want to indicate to you that I can hardly hear the speakers. There is too much noise in the House and I don’t want to disrupt the hon member at the podium. This is not a classroom and we should not have to continue talking about the noise.


Mr E M SOGONI: Thank you very much for protecting us, hon Deputy Speaker. It is ironic that this debate coincides with the Cosatu march that took place yesterday. The ANC-led government is sympathetic to the call by Cosatu. However, it is in the interests of the public that government build infrastructure – roads, in this case. It is important to note that the failure by the SA National Roads Agency Limited, Sanral, to pay its debt would have far-reaching consequences and could compromise all of us as road users. Once again, in the public interest, it is expedient that Parliament does its part in bettering the lives of the people by passing this Bill.


On behalf of many of our fellow South Africans, especially those living in Gauteng, we would like to express our appreciation to government for listening to the cries of our people that 66 cents per toll would have had a devastating effect on road users. As a result, public transport has been exempted. Our caring and responsive government intervened decisively to lower and cut the fees by half.


Government is a 100% shareholder of Sanral. Therefore if Sanral has made a financial commitment, the government must intervene and the credit rating would affect the rest of the country, not just Sanral. Roads are an important pillar of the economy. If there are no proper roads, there will be no economy. We cannot afford not to have good roads. However, the issue of affordability, which the public is raising, is important. As we have indicated above, the matter has been taken care of.


When the Minister tabled the Budget, he alluded to fluidity in the economy, caused by what is happening in Europe. This fluidity also has a negative impact on our country. We all know that government cannot afford to build all the roads at once. It is therefore necessary for government to partner with the private sector because it has limited resources. However, this government will continue to support the poorest of the poor.


I am sure that from now on we all understand that lessons were learnt from this process. In fact, the director-general highlighted this fact to the committee. The project should serve as a reference for future tolling. We therefore propose that this Bill be supported by this House. [Applause.]


Mr I M OLLIS: Aha, the Gauteng Freeway Improvement Project! I am the DA spokesperson on transport and I happen to live in Gauteng. So, this Bill affects me personally. While the DA will not object to the appropriation of R5,8 billion for the Gauteng Freeway Improvement Project, we must place on record our objection in the strongest terms to the way in which this entire project was undertaken. [Interjections.] Our objection rests not with the concept of toll roads per se, or even with the user-pays principle, but with three key aspects of this programme: the financial structure and funding model, the public participation process, and the costly and inefficient collection system.


Firstly, the financial structure of this project was not tabled as part of the initial proposals. It only became clear much later on that Sanral was building extremely expensive freeways and that the payments were going to be extremely burdensome on commuters and the taxpayer. The Minister of Finance, who is not here, and the hon Jeremy Cronin have both appealed to us not to focus on how they got us into this mess, but to focus on how to get out of it. Unfortunately for both Ministers the DA has one in four South African voters demanding that we do our oversight job in this Parliament and ask those difficult questions. As such, I hereby call on the Minister of Finance and the Treasury to open an investigation into the Electronic Toll Collections consortium’s contract and the contract with the Vienna-based Kapsch TrafficCom, which has 85% ownership of Electronic Toll Collections, ETC. We need to know all the details of why Sanral signed such an exorbitant toll collection contract with ETC and what Tolplan’s role in this was.


We must know: one, who signed the contract; two, why the exorbitant costs were not initially tabled in the Gauteng province, in Parliament or with the Treasury before the contracts were agreed to; three, what the exact administrative costs will be as opposed to payments for the actual infrastructure, which our calculations show are exorbitant in the extreme; four, why the collection costs will be so much more than the costs of the actual infrastructure; and, finally, who was enriched in the process. [Interjections.]


The public-participation process was also extremely flawed. The Constitution, the Bill of Rights and numerous South African laws have clearly set down the need for the public to be informed and consulted in appropriate ways when major projects affecting the public are undertaken. In the case of the Gauteng Freeway Improvement Project, public participation was either rushed through or nonexistent. In typical ruling-party style, the public in Gauteng were treated as cannon fodder for the political agenda of politicians and bureaucrats intent on another grand project.


Public roads and highways are crucial in providing public transport for goods and people, but this project has grown from a public necessity into another grand and overpriced edifice. Spending of this kind of taxpayers’ and commuters’ money without consulting the public is unforgivable. We cannot just let it go, hon Gordhan and hon Cronin. The public demands to know why so little consultation has occurred.


Finally, the DA objects most of all to the costly and inefficient system of collecting the toll fees. If an alternative, such as adding a fuel levy of 12 cents per litre of fuel, had been considered, it is our calculation that this would have cost the retailing industry approximately R4 million to collect the funds necessary to pay for the toll roads over a period of time. This would have been a reasonable cost. This toll scheme should be funded out of these levies.


However, according to our calculations, what is envisaged by this Gauteng toll scheme is a cost of R1 billion per annum just to collect the money. This amount adds up to R11 billion in administration fees over the cost period of this project. [Interjections.] This amount will be spent on just collecting toll fees from the consumer. Where does 85% of the profit from the collections process go? A private company, headquartered in Europe, will be taking 85% of the profit to line the pockets of foreigners. That’s billions of rand of taxpayers’ and motorists’ money being flushed down the drain that could have been spent on highways or public transport, or even subsidising buses or taxis for the poor! That is not a caring government, Mr Speaker. That is a colossal waste of poor people’s money, last seen in South Africa during the days of the Arms Deal. [Interjections.]


The DA cannot rest until we know who authorised this mess, why such huge fees were paid, and whether any kickbacks occurred. [Interjections.] [Applause.]


The DEPUTY SPEAKER: Hon member, you were so passionate that you didn’t even hear me say there was a point of order, but that’s fine. What is your point of order, hon member?


Mr G S RADEBE: Deputy Speaker, I wanted to know if the member would take a question, but it’s fine. [Interjections.]


The DEPUTY SPEAKER: No, he can’t take a question because his time is up. [Interjections.]


Mr L RAMATLAKANE: Deputy Speaker, during the debate on the presentation of the 2012-13 Budget a Cabinet bailout proposal for SA National Road Agency Limited, Sanral, amounting to R5,7 billion for e-tolling on Gauteng toll roads, was presented in an extraordinary way. As we know, the debt was in fact made by Sanral and tariffs decided on without proper consultation with any stakeholders. The government argued in the presentation to the committee that section 30 of the Public Finance Management Act, PMFA, is a sound authority to permit this allocation. When you read this section, you can clearly see how skilful this provision has been stretched to suit this bail-out plan for Sanral and, by extension, the Gauteng provincial government. One wonders why Gauteng was not top-sliced to deal with this debt.


How do we support that public infrastructure is semiprivatised through payment made by the working class for life? This is an expense that is going to spiral out of control into infinity. The tariffs year on year will run out of control and government won’t be able to control or regulate downwards the tariffs of Sanral from time to time.


Yesterday, Cosatu led an oppositional march. In fact, 32 marches in the major cities and towns were mounted and the message they were sending was clear: no e-tolling. It is our considered view that public infrastructure like roads is the responsibility and asset of government - the state. By extension, it is owned by the taxpayers, the workers and the people of our country. About 100 000 people marched yesterday. The question we are asking here is whether this march, which was in fact led or supported by the Minister of Higher Education and was in opposition to this, will mean anything. Since the people have now rejected e-tolling in Gauteng, what are we going to do? The General Secretary of Cosatu, Zwelinzima Vavi, had this to say:


We have been betrayed on tolling by our comrades. We were one on the issue before local government elections last year, but the party has since changed its tune.


One of the major objections that we in Cope have is e-tolling without alternative routes for people to use without paying exorbitant fees. We were told that alternative routes would be created in the future but that future should have happened before. Therefore, we do not support the bailout of Gauteng tolling, not without there being alternative routes for many people. For that matter, we don’t support any e-tolling anywhere, given the exorbitant amounts involved and the resultant semiprivatisation of our roads. [Applause.]


Mr N SINGH: Deputy Speaker, the proposed tolling of Gauteng’s roads, otherwise known as the Freeway Improvement Plan, GFIP, has been a contentious issue for some time now. The majority of the citizens of Gauteng believe that they will be unable to carry the extra financial burden this tolling system will place on their shoulders. It is their voice and their concerns that we need to consider as we debate this highly emotive issue. While we have empathy for the need of the R5,7 billion relief that is being suggested to ease the financial burden on the users of these roads, we believe that the Bill is dealing with the symptoms rather than the cause, which is what needs to be addressed. It cannot be effectively addressed in the manner government is currently proposing.


The latest revelation, that every 10 cents of the 30 cents per kilometre that motorists will be charged will go to the collection of fees is totally scandalous considering that it will mean that R7 billion of the R20 billion will go to a foreign entity. Government must accept that this has been a costly mistake which could have been handled through a dedicated road fund established out of the current surcharge on fuel.


The IFP believes the toll structure will have detrimental consequences. In the seeking of alternative routes - not that there are many - road congestion will simply shift to other roads, which will have a negative impact on road safety and the maintenance of the alternative routes. This will simply mean the current problems will be exacerbated.


At the micro level, the IFP is concerned with the lack of evidence suggesting that alternative methods of subsidising the road networks in South Africa had been extensively explored. We believe that this Bill sets a dangerous precedent for other entities to now come to government, knock on the door and say, “We are in trouble.” The IFP calls upon government to prioritise the roll-out of efficient, reliable, affordable and safe public transport for all the people of South Africa. Making a bad situation less bad is not the answer.


What we need is a holistic relook. Should the government of Gauteng also not have been made to carry part of this burden through a reduction of equitable share of the revenue? Was this considered? So, there are many factors that need to have been considered. The IFP will emphatically not support this Bill.


Mr S Z NTAPANE: Deputy Speaker, hon members, government seems hell-bent on imposing the Gauteng e-tolling system, notwithstanding public opposition. Thus far, government concessions on the rationing of the e-tolling system in Gauteng has not gone far enough to address public concerns such as the following: A third of the money collected via the e-tolling system will go towards administration; the failure to use the fuel levy for the building and the maintenance of roads, which is by far the most effective and the more equitable way of doing it; the commoditisation of public roads; the inflationary effect of the e-tolling system on the domestic economy and so on. For these reasons, the UDM finds itself stuck between a rock and a hard place. In what way, one may ask.


We shall be seen to be insensitive to the attempt to reduce the cost burden to the taxpayers if we vote against the Bill on the one hand. On the other, we shall be misconstrued as being in tacit agreement with the e-tolling system if we do. However, after careful consideration, the UDM decided to support the Bill. [Applause.]


Mr S N SWART: Madam Deputy Speaker, in 1991 the Supreme Court of Appeal ruled in favour of the Johannesburg City Council in an action brought by a very courageous city council to interdict the South African Roads Board from tolling the N13, known as the Southern Bypass, from Uncle Charlie’s in the west to the Rand Airport in the east. What is important is that the court granted the interdict because the audi auteram partem principle had not been applied. That means that the council had not been given an opportunity to be heard regarding the consequences of the proposed tolling. This toll road was then stopped.


The ACDP believes that the present tolling project was also not preceded by a proper consultation process. Some have said the project was conceived in deceit, sold to the public as one of the benefits of hosting the 2010 Soccer World Cup and no mention was made of tolls. A much-belated consultation process was held following public outrage and after toll gates had already been erected. Taxpayers were told that there was a debt of R20 billion that could not be serviced unless taxpayers paid for the tolls. Surely consultation should have taken place before the debt was incurred. It would no doubt be argued in court again that the audi auteram partem principle has yet again not been complied with.


Tolls were introduced under two critical conditions: only new national roads would be tolled and alternative routes would always be available. Suburban roads are now sought to be tolled, with people expected to pay tolls for roads they have already paid for. This is on top of a massive 20c increase in the fuel levy. Minister, while the ACDP appreciates this additional adjustment is a step in the right direction, we believe the whole issue of levying tolls on existing roads must be reconsidered. While we thus support the Additional Adjustments Appropriation Bill, we do not support the Gauteng freeway tolling system.


Mr R B BHOOLA: Madam Deputy Speaker, we must be reminded that we are operating in global economic turmoil and be mindful that the deficit is part of the effect of the economic downturn. Despite the infrastructure programme that the President has outlined in the state of the nation address, which intends to push the economy, the MF emphasises the need for a comprehensive plan from government that takes into account the lessons learnt during the economic recession.


I wonder how government will ensure that this R5,75 billion bail-out of Sanral is the first and the last so that we can move on and focus on how to address our deficit. The Minister of Finance tabled austerity programme measures for government, addressing the issues of economic recession and urging departments to find savings in their programmes. What has the Minister done to ensure austerity programme measures improved and what lessons were learnt so that we do not experience this situation again in the future?


The MF notes that public participation consultation is still a challenge when it comes to these kinds of projects. This must be one of the projects that government must learn from and ensure that we do not continue to bail out and compromise the projects we are already financing, which undoubtedly will have a negative effect on service delivery. The Minority Front will support the Bill.


Mr K J DIKOBO: Deputy Speaker, hon members, we do not remember a time when this House was informed that government was going to take a loan or incur a debt to erect new toll gates in Gauteng. Azapo is opposed to the whole e-tolling saga and the way in which it was implemented. We are also disappointed that consultation with communities only started when costs to the users were discussed and then not to discuss the whole principle.


The whole e-tolling matter is messy and Azapo does not want to be involved in the mop-up operation. [Interjections.] Just on principle Azapo does not support the Additional Adjustments Appropriation Bill.


Ms N R BHENGU: Deputy Speaker and hon members, it is interesting to observe that some of the members in the opposition benches do not use their constituency offices to explain the policies that are passed by this House as well as the Bills that are passed by this House. [Interjections.] The tolling of roads is a policy that was passed by this august House and mandated Sanral to implement that policy. [Interjections.] We cannot then turn around and say the tolling of roads had to be consulted on with communities when it is the responsibility of the very same members who passed that policy to use their constituency offices and inform their constituencies about the policies. [Interjections.]


The ANC has tasked me to speak on the “user pays” system and how that relates to sustainable development - a central pillar for building a developmental state. I will link that to today’s debate on the allocation of R5,75 billion to Gauteng toll roads, announced by the Minister in his Budget Speech. [Interjections.] Due to limited time, I will focus on two issues: The first is the principles of the Masakhane Campaign and how they relate to sustainable development and the process of building a developmental state. The second is the Gauteng Freeway Improvement Project, the implementation and funding thereof.


In February 1995, the first President of the democratic South Africa, Mr Nelson Mandela, launched the Masakhane Campaign as an ongoing campaign to raise awareness and facilitate a paradigm shift in society in relation to roads and responsibilities of the government, the private sector and society at large. It was also meant to instil a culture of responsibility in all sectors of our society in line with a sustainable development approach.


Three principles of the Masakhane Campaign relate to the debate today. Firstly, it is introducing a culture of payment for services rendered by government by those who can afford to pay. Secondly, there is the provision of services where they do not exist, the upgrading of inadequate and poor services and maintenance of adequate services to prevent them from degrading. Thirdly, the cross-subsidisation by the rich community of services rendered to the poor, because we believe that those who are rich were able to accumulate their riches by exploiting poor communities.


The Cabinet’s intervention responds to issues raised by communities, the transport sector and the business sector about the fee structure that was initially announced by Sanral in March 2010. The allocation of R5,75 billion serves to reduce the costs from 66 cents per kilometre to 30 cents per kilometre for a light vehicle with an e-tag and 58 cents for a light vehicle without an e-tag. The reduced fee relates to the principle of affordability in payment for services and cross-subsidisation. All South Africans would, through the taxpayers’ purse, pay the reduced cost of users of the Gauteng improved freeway.


The socioeconomic benefits of this project include less congestion on our roads, fewer road accidents, lower cost of goods because of less time spent on roads and the higher productivity of workers as a result of less stress due to the easy flow of traffic on world-class, improved freeways in the Gauteng province.


Uma uhamba kuleya migwaqo yase-Gauteng, ungathi uhamba ezitaladini zegolide esicula ngazo kuleli hubo elithi “Jerusalema Khaya lami engilithandayo”. [Uhleko.]


Izithuthi ezisetshenziswa ngumphakathi - amabhasi namatekisi – azikhokhi lutho ngokusebenzisa le migwaqo esezingeni eliphezulu neyenza umuntu asheshe afike lapho eya khona. Lokhu kusho ukuthi abantu abampofu bakhokhelwa nguhulumeni nayilabo abadla izambane likapondo ngohlelo lwe-cross-subsidisation njengoba kucacisiwe kuMasakhane Campaign. (Translation of isiZulu paragraphs follows.)


[When you are driving on the roads in Gauteng, it is as if you are driving on the golden streets which we sing about in the hymn “Jerusalema Khaya lami engilithandayo”. [Laughter.]


The transport used by commuters – buses and taxis - pay nothing for using high quality roads that make travelling easy and fast. This means that the poor people are subsidised by the government and those who are well off are assisted through the cross-subsidisation programme as stipulated in the Masakane Campaign.]

The upgrading of Gauteng road infrastructure is in line with the Masakhane Campaign of upgrading inadequate services. Although the Gauteng province identified a toll-roads network in 1996, long before the national Department of Transport conducted a survey on national household public transport in 2003, the intervention responds to many of the issues raised in that report and seeks to improve transport services in South Africa. This project should therefore be viewed as part of the entire Integrated Transport Infrastructure Development that is taking place in Gauteng, which includes the Gautrain, the BRT, the improvement of the O R Tambo Airport and the upgrading of the railway transportation system.


Sanral is a state entity, established in terms of the South African National Roads Agency Limited and National Roads Act, Act No 7 of 1998. Sanral is responsible for operations of nontoll roads, which are funded by government allocations, and is not allowed to borrow. It is also responsible for toll operations, which are divided into two types: those that are funded by Sanral and operated on its behalf and roads concessioned to private parties under public-private partnership. Therefore, this project is in line with that national policy.


The ANC government is building a developmental state based on the principles of sustainable development, where government and communities work together to build their country. The ANC supports the Additional Appropriation Bill.

The DEPUTY MINISTER OF FINANCE: Thank you, Deputy Speaker, once again, and thanks to members who have supported this Additional Adjustments Appropriation Bill.


Let us get some facts straight. The hon Ollis, in his campaign for leadership of the DA in Gauteng ... [Interjections.] ... goes all out to speak against the policy of his organisation in the Western Cape. [Interjections.] He says that this is going to be a costly collection system.


An HON MEMBER: Maar dis mos waar! [But surely that is true!]


The DEPUTY MINISTER OF FINANCE: He says that this matter must be investigated. [Interjections.] Without investigation, let us tell you, hon Ollis, that the cost of administering the tolls is about 5 percentage points below the international average. [Interjections.] To raise R1 billion ... [Interjections.] ... Let me turn to your alternative. [Interjections.] To raise R1 billion, the fuel levy would have to be increased by 5 cents per litre. To raise R19 billion, multiply that by 19 - without an investigation. A fuel levy would make people who do not benefit fully from the road pay for it. [Interjections.] That would also be unfair and inequitable. Raising the fuel levy to raise R19 billion, plus interest, would lead to a massive increase in public transport fares, which are currently exempted. [Interjections.] This would hurt the poor and the working class, for whom you have no regard. [Interjections.] If this is what the DA wants, if this is what Cope wants, it would also lead to inflation, which will also hurt the poor. [Interjections.]


Again ... [Interjections.] ... hon Ramatlakane says that this is a bail-out of Sanral. Hon member Ruth Bhengu has correctly pointed out that Sanral is a state-owned company with a specific task to perform. This is actually a bail-out of citizens, and not of Sanral.

I find it churlish and petty for Mr Ramatlakane to try and punish his departed leader, who was premier in Gauteng at the time ... [Interjections.] Don’t try to punish him by opposing this piece of legislation. [Interjections.] He says the tariff will spiral out of control. [Interjections.] We have stated in the package here that we are going to ensure that the increases will be capped within the inflation range.


An HON MEMBER: Over R1 billion a year!


Mr D A KGANARE: Speaker, is the Deputy Minister prepared to take a question? [Interjections.]


The DEPUTY MINISTER OF FINANCE: Yes, sir, at the end. [Interjections.]


Fortunately, a number of members that have raised the issue agreed with us that this is a matter that requires our attention. Where we differ is how we address this matter.

I said I would put some of these things into perspective. Perhaps I should repeat some of these things because there is this notion that this is tolling without alternate routes. It is not true. It is not entirely true that it is without alternate routes. We are saying that, as part of the package, the R55 and the R101 roads must also receive attention, so that they are not in the state in which they are now and it would be the choice of the motorist to choose to use the tolled road. [Interjections.]


We have reduced the toll fee payable by motorcycles with e-tags to 20 cents, for light vehicles with e-tags to 30 cents, for nonarticulated trucks with e-tags to 75 cents, and for articulated trucks with e-tags to R1,51 per kilometre. With regard to exemption for public transport, as I have pointed out earlier, taxis and buses will not pay toll fees. Maximum toll fees payable per month are capped at R550 and 15% discount after R400 per month to remove the uncertainty and provide relief to frequent users. [Interjections.]


We have also introduced time-of-day savings of 20% for heavy vehicles to deal with the concerns of the freight industry. This allows for lower toll fees for off-peak times to reduce traffic congestion during peak hours and also to reduce the economic impact of the toll fees on consumers.


There will be a contribution from the fiscus to reduce the tariff without placing too much strain on Sanral’s balance sheet of R5,75 billion as an adjustment appropriation this year. This adjustment is motivated in accordance with section 30 of the Public Finance Management Act, which provides for the adjustment due to significant unforeseeable economic and financial events affecting the fiscal targets set in the annual Budget. [Interjections.]


Mr Dikobo said there was never a time when this House was told about this. Hon member, I accept that your predecessors might not have given you a handover report. [Interjections.] We tabled these things in the Budget Review. At the bottom of page 94 of this year’s Budget Review - if you are in a hurry, it is at the bottom - we refer to the exposure of these state-owned enterprises. Break the tradition of not reading documents. [Laughter.] Read it today, hon Dikobo, and thank you very much for the support we have received. [Applause.]


Mr D A KGANARE: Deputy Speaker, the hon Deputy Minister said he would take a question. Why is he running away from the question? [Interjections.]


An HON MEMBER: He’s running away!


The DEPUTY SPEAKER: Hon member, I hadn’t even given you permission to speak when you stood up and asked that question. So, even if the Deputy Minister was still on the podium, you were not going to ask that question. [Interjections.] Are there any objections to the Bill being read the first time?



The DEPUTY SPEAKER: No objections. Agreed to. The Secretary will read the Bill a first time.


Mrs J D KILIAN: Deputy Speaker, that is not how we understand it. The question was not fully put because we would like to call for a division.


The DEPUTY SPEAKER: No, no, no! What do you mean by “the question was not fully put”?


Mrs J D KILIAN: Deputy Speaker, you did not say whether the ayes have it or the noes have it. [Interjections.]


The DEPUTY SPEAKER: No, there was no need for that. I asked: Are there any objections to the Bill being read the first time? Nobody said anything and then I said: No objection. Agreed to. [Applause.] Yes. [Interjections.] No, no, no, only if there were objections would I say “ayes” and “noes”. You know the procedure.


Mrs J D KILIAN: But, Deputy Speaker, we did say we have objections. [Interjections.]


The DEPUTY SPEAKER: No, it must have been a small, shy voice that was saying that. I didn’t hear that. And I think, hon member, if you said that and realised that I was proceeding, you should have raised your hand and said no then, not afterwards. Please! [Interjections.]


Mrs J D KILIAN: Deputy Speaker, with great respect, I did raise ... [Interjections.] ... and I did ask. Can you please minute Cope’s objection?


The DEPUTY SPEAKER: No, thank you. I think Cope’s objection will be recorded. But, I think, we need to do that in good time, not when I have already gone to the next item.


Mr A M MPONTSHANE: Deputy Speaker, I think I fell into the same trap because we were also going to call for a division. [Interjections.]


The DEPUTY SPEAKER: Order, hon member, order! You must have patience. Hon Mpontshane, speak to me.


Mr A M MPONTSHANE: Yes, hon Deputy Speaker, I am saying I sort of fell into the same trap because I thought that, procedurally, you would call for the ayes and the others. [Interjections.]


An HON MEMBER: You have been here since 1994! [Interjections.]


Mr A M MPONTSHANE: That’s what normally happens.



Mr A M MPONTSHANE: I am giving my version, Deputy Speaker. I fell into that trap because that’s what the convention is.

The DEPUTY SPEAKER: No! Hon Mpontshane, take your seat, please.


Mr A M MPONTSHANE: Deputy Speaker, can I therefore be allowed to register the IFP’s objection, please.


The DEPUTY SPEAKER: Yes, your whatever will be registered. [Laughter.] I am terribly sorry that I moved on while you were still thinking of doing that. [Laughter.] No, the procedure is this: If I am asking if there are any objections and there is no reaction or there’s a voice that I can’t hear from the Table, you are supposed to stand up or raise your hand to indicate that there is an objection.


Ms T B SUNDUZA: Deputy Speaker, on a point of order: I don’t know why you are stressing yourself because the Rules of the House stipulate that members should not sleep. Those members on the other side were sleeping, so they did not hear you. Can we please proceed? Thank you. [Laughter.]


The DEPUTY SPEAKER: That’s not a point of order. [Interjections.] No, hon members, I really want to move on.


Mr V B NDLOVU: Uxolo kancane, Sihlalo. [Excuse me, Chairperson.]


Mrs J D KILIAN: Deputy Speaker, what we just wanted to say was that we did say no, but you didn’t look at us ... [Interjections.] ... and therefore I had to rise. As long as the objections of Cope and the IFP are recorded ...


The DEPUTY SPEAKER: It is recorded, hon member.


Mnu V B NDLOVU: Uxolo kancane, Sekela Somlomo, angiboni ukuthi kungakuhle ukuthi ilunga elihloniphekile lithi silele. Akubona ubuhlakani lobo, akuzwakali kahle kithina esesibadala kunaye. (Translation of isiZulu paragraph follows.)


[Mr V B NDLOVU: Excuse me, Deputy Speaker, but I do not think it is acceptable for the hon member to say that we are sleeping. That is not acceptable; it does not sit well with us since we are older than her.]


The DEPUTY SPEAKER: Hon member, hon Ndlovu was not sleeping in the House. Withdraw your remark, please.


Ms T B SUNDUZA: Hhayi baba, ngoba nguwe sengizoxolisa nje. Ngiyabonga. [Uhleko.] [It’s fine, sir, I will apologise because it is you. Thank you. [Laughter.]]


Debate concluded.


Bill read a first time (Congress of the People and Inkatha Freedom Party dissenting).




(Second Reading debate)


There was no debate.


Question put: That the Bill be read a second time.


Division demanded.


The House divided.


The DEPUTY SPEAKER: Have all members voted?




The DEPUTY SPEAKER: Have you pressed? Can you press again? It will be checked afterwards. Hon members, don’t panic, just press. It will show up here. We will close the voting and it will show. If it doesn’t show, we will do it again. Thank you, the voting session is now closed.


Mr A M MPONTSHANE: My thing is not working, hon Deputy Speaker. [Laughter.]


The DEPUTY SPEAKER: That will be very sad.


Mrs J D KILIAN: Deputy Speaker, just to make sure that the members’ votes are recorded, can we submit a list of names to the Table? [Interjections.] Two of the members’ machines are not working.


The DEPUTY SPEAKER: No, no! We’ve just closed the voting. I’m waiting for the results. All that will follow after we’ve seen the results, please. [Interjections.] Order, hon members! I’m told that we need to rerun the voting because it appeared on the screen but didn’t print. The Table feels it’s going to work this time.


Are all members in their allocated seats? The voting will now commence. Those in favour of the Bill being read a second time will press the “Yes” button, those against will press the “No” button and those wishing to abstain should press the “Abstain” button. Have all members voted? The voting session is now closed. [Interjections.]


The MINISTER OF SCIENCE AND TECHNOLOGY: Deputy Speaker, I rise to ask you to calm hon Mpontshane down. He is very agitated because his thing is not working ... [Laughter.] ... and I thought it important to calm him down in order to indicate that his thing would not make a difference anyway. [Laughter.]

The DEPUTY SPEAKER: Order, hon members!


Mr A M MPONTSHANE: Deputy Speaker, I really wouldn’t mind that because I’m nearing my 60s. [Laughter.]


The DEPUTY SPEAKER: Hon Mpontshane, the irony is – and I’m sure this always happens – that when you are told about something, it stays in your mind. Your name is here, which means your thing is working. [Laughter.]


The MINISTER OF SCIENCE AND TECHNOLOGY: Deputy Speaker, I think we must be even more worried now. [Laughter.] The member doesn’t know that his thing is working. [Laughter.]


Mr G B D MCINTOSH: Madam Chair, may I ask the hon Minister a question. How does she know whether Mr Mpontshane’s thing is or isn’t working? [Laughter.]


The DEPUTY SPEAKER: The hon Minister knows because Mr Mpontshane said so! [Laughter.] Order, hon members!


AYES - 181: Abram, S; Adams, P E; Ainslie, A R; Bapela, K O; Bhengu, F; Bhengu, N R; Bhoola, R B; Bikani, F C; Bonhomme, T; Borman, G M; Boshigo, D F; Botha, Y R; Bothman, S G; Burgess, C V; Cele, M A; Chikunga, L S; Chiloane, T D; Chohan, F I; Coleman, E M; Cwele, S C; Dambuza, B N; Daniels, P N; De Lange, J H; Diale, L N; Dikgacwi, M M; Ditshetelo, I C; Dlakude, D E; Dlamini-Zuma, N C; Dlulane, B N; Dudley, C; Duma, N M; Dunjwa, M L; Fihla, N B; Frolick, C T; Fubbs, J L; Gasebonwe, T M A; Gaum, A H; Gcwabaza, N E; Gelderblom, J P; Gina, N; Goqwana, M B; Gumede, D M; Hajaig, F; Hanekom, D A; Huang, S - B; Jeffery, J H; Johnson, M; Kekana, C D; Kenye, T E; Kholwane, S E; Khumalo, F E; Khunou, N P; Koornhof, G W; Lekgetho, G; Lesoma, R M M; Line, H; Lishivha, T E; Luyenge, Z; Mabasa, X; Mabedla, N R; Mabuza, M C; Madlala, N M; Madlopha, C Q; Mafolo, M V; Magama, H T; Magubane, E; Magwanishe, G; Makasi, X C; Makhubela-Mashele, L S; Makhubele, Z S; Malale, M l; Malgas, H H; Maluleka, H P; Maluleke, J M; Manamela, K B; Manana, M C; Mandela, Z M D; Mangena, M S; Maserumule, F T; Mashigo, R M; Mashishi, A C; Masilo, J M; Masutha, T M; Mathebe, P M; Mathibela, N F; Matlanyane, H F; Matshoba, J M; Mavunda, D W; Mayatula, S M; Mbili, M E; Mdaka, M N; Mdakane, M R; Mgabadeli, H C O; Mjobo, L N; Mlambo, E M; Mmusi, S G; Mnisi, N A; Mohale, M C; Mohorosi, M; Mokoena, A D; Molewa, B E E; Moloi-Moropa, J C; Moloto, K A; Moni, C M; Moss, L N; Motimele, M S; Motsepe, R M; Mthethwa, E N; Mthethwa, E M; Mufamadi, T A; Mushwana, F F; Ndabandaba, L B G; Ndabeni, S T; Ndlanzi, A Z; Nelson, W J; Nene, N M; Newhoudt-Druchen, W S; Ngcengwane, N D; Ngcobo, B T; Ngcobo, E N N; Ngele, N J; Ngwenya, W; Ngwenya-Mabila, P C; Nhlengethwa, D G; Nonkonyana, M; November, N T; Ntapane, S Z; Ntuli, Z C; Nxesi, T W; Nxumalo, M D; Nyalungu, R E; Nyekemba, E; Oliphant, G G; Pandor, G N M; Peters, E D; Petersen-Maduna, P; Phaahla, M J; Phaliso, M N; Pilane-Majake, M C C; Pilusa-Mosoane, M E; Radebe, B A; Radebe, G S; Saal, G; Schneemann, G D; Segale-Diswai, M J; September, C C; Sibanyoni, J B; Sibiya, D; Sindane, G S; Sithole, S C N; Sizani, P S; Skosana, J J; Smith, V G; Snell, G T; Sogoni, E M; Sonto, M R; Sosibo, J E; Suka, L; Sulliman, E M; Sunduza, T B; Surty, M E; Swart, S N; Tinto, B; Tlake, M F; Tobias, T V; Tsebe, S R; Tseke, G K; Tsenoli, S L; Tshabalala, J; Tshwete, P; Tsotetsi, D R; Twala, N M; Van der Merwe, S C; Van Rooyen, D D; Van Wyk, A; Williams, A J; Williams-De Bruyn, S T; Xaba, P P; Xasa, T; Ximbi, D L; Zulu, B Z.


NOES - 23: Bhanga, B M; Cebekhulu, R N; Diemu, B C; Dikobo, K J; Kganare, D A; Kilian, J D; Koornhof, N J J; Lucas, E J; Madisha, W M; Makhuba, H N; Mbhele, P D; McIntosh, G B D; Mnguni, P B; Mpontshane, A M; Msimang, C T; Msweli, H S; Ndlovu, V B; Njobe, M A A; Ntshiqela, P; Plaatjies, S K; Ramatlakane, L; Singh, N; Sithole, K P.


ABSTAIN - 41: De Freitas, M S F; Eloff, E H; Esau, S; Farrow, S B; George, D T; Greyling, L W; Hill-Lewis, G G; Kloppers-Lourens, J C; Krumbock, G R; Lorimer, J R B; Lotriet, A; Marais, E J; Marais, S J F; Maynier, D H; Mazibuko, L D; McGluwa, J J; Michael, N W A; Mokgalapa, S; More, E; Motau, S C; Ollis, I M; Paulse, S; Rabie, P J; Rabotapi, P M W; Robinson, D; Schäfer, D A; Selfe, J; Shinn, M R; Smalle, J F; Steenhuisen, J H; Steyn, A; Stubbe, D J; Swart, M; Swathe, M M; Van den Berg, N J; Van der Linde, J J; Van der Westhuizen, A P; Van Schalkwyk, H C; Waters, M; Watson, A; Wenger, M.


Question agreed to.


Bill accordingly read a second time.




(Debate on IPU topic)


The HOUSE CHAIRPERSON (Mrs F Hajaig): Deputy Speaker, I am going to speak on one of the items for discussion at the 126th session of the Inter-Parliamentary Union, IPU, and that is a general debate on the political, economic and social situation in the world. At the last meeting, there was a request for a special item to be added and that was Somalia and the food crisis there – a famine, actually.


The crisis in Somalia is one with a long history and it’s dominated by a number of complexities. Recently, the crisis was worsened by food security difficulties, which have impacted on the people of Somalia in a profound way. Thus the IPU chose this topic as a special issue to be debated.


In terms of the historical background, in January 1991, the downfall of President Siad Barre resulted in a power struggle and clan clashes in many parts of Somalia. In November, the most intense fighting broke out in the capital, Mogadishu, between two factions. One faction supported the interim president, Ali Mahdi Muhammad, and the other supported the chairman of the United Somali Congress, General Mohamed Farrah Aidid. Since that time, fighting persisted in Mogadishu and spread throughout Somalia, with heavily armed elements controlling various parts of the country. Some of these elements declared alliance with one or other of the two factions, while others did not. Numerous groups of bandits simply added to the problems experienced in the country.


The hostilities resulted in widespread death and destruction, forcing hundreds of thousands of civilians to flee their homes and causing a dire need for emergency humanitarian assistance. Of almost 4,5 million people in Somalia, over half of the estimated population were threatened by severe malnutrition and malnutrition-related diseases, with the most affected living in the countryside. It was estimated that perhaps 300 000 people have died since November 1991 and at least 1,5 million lives were at immediate risk. Almost 1 million Somalis sought refuge in neighbouring countries and elsewhere.


In the year 2000, at a conference in Djibouti, clan elders and various other senior figures named Abdiqasim Salad Hassan as the president. A transitional government was established with the aim of reconciling the warring militias. As its mandate was drawing to a close, however, the administration had made little progress in uniting the country. In 2004, after talks held in Kenya, the main warlords and politicians signed a deal to set up a new parliament, which later appointed a president. This type of administration, however, is facing difficulties in bringing reconciliation to a country divided by fiefdoms.


In 2001, the plight of the Somali people was exacerbated by the worst drought in six decades, which left millions of people on the verge of starvation and caused tens of thousands to flee to Kenya and Ethiopia in search of food. The food security situation in Somalia, as classified during the post-eyr 2010-11 assessment, estimated that 2,4 million people were in crisis. However, the effects of the ongoing drought, deteriorating purchasing power, rampant conflict and the limited humanitarian space continue to aggravate the situation in most parts of the country. The dry season of 2011 was particularly harsh, considering the prevalence of dry conditions for almost nine months.


As I have limited time, I am going to tell you a little bit about our government’s and civil society’s contribution to the crisis. As of August 2011, South Africa’s contribution to relief efforts in Somalia has exceeded R20 million. Deputy President Kgalema Motlanthe noted that the government had responded to the humanitarian crisis confronting Somalia by raising R8 million towards the famine relief programme. Of this, R4 million was donated to the Gift of the Givers towards transportation and the logistical costs of delivering aid to Somalia. Additionally, the government, in partnership with Brand South Africa, had teamed up with the Gift of the Givers and launched the Somalia Relief Campaign to raise public awareness of the dire situation in Somalia.


The South African government also provided transport in the form of the SA National Defence Force C130 Hercules supply plane to the Gift of the Givers to deliver 18 tons of essential food and antimalaria medication to Mogadishu on 16 August. The government also collaborated with other organisations from South Africa contributing to relief work for Somalis in Somalia and refugee camps in neighbouring countries. A number of organisations contributed to this effort. 


In conclusion, one has to say that ultimately, while assistance did come from a range of sources, there are many who see Somalia as a failure in dealing adequately with food production issues. These are areas that will have to be discussed appropriately in the future to ensure that a food crisis of this magnitude is prevented from emerging again. I think the role of the international community and the role of the African Union is very important in helping to build institutions of good governance in Somalia. We need a political situation of peace, of strengthening the institutions providing stability and justice and, of course, finally, an economic solution where economic growth and the employment of people is ensured.


Finally, I would like to add that because of the piracy issue on the Indian Ocean coastline, the Minister of Defence and Military Veterans has set aside one of our frigates to help patrol the Mozambican Channel because the piracy issue is not limited to the area around Somalia but is moving further south. So, South Africa is also playing an important role in trying to curb piracy and providing some kind of peace and stability. [Applause.]


Die HOOFSWEEP VAN DIE OPPOSISIE: Agb Voorsitter van die Huis, wanneer ons die politieke, ekonomiese en sosiale situasie in die wêreld ontleed, dan moet ons weet dat Suid-Afrika daarna moet streef om ons demokrasie te vestig en te konsolideer, maar ook om ’n nuwe tipe etiese raamwerk vir die 21ste eeu daar te stel. Dit moet ’n raamwerk wees wat onderskeid tref tussen wat reg is en wat verkeerd is in die hedendaagse globale, interafhanklike wêreld, waar die misbruik van mag al hoe meer wydverspreid voorkom.


In ’n tyd van sinisisme is Suid-Afrika ’n voorbeeld van die triomfering van hoop oor vrees, en van verdraagsaamheid oor vooroordeel. (Translation of Afrikaans paragraphs follows.)


[The CHIEF WHIP OF THE OPPOSITION: Hon Chairperson of the House, when analysing the political, social and economical situation in the world, we should know that South Africa must strive towards establishing and consolidating our democracy, but also towards introducing a new type of ethical framework for the 21st century. It should be a framework that differentiates between what is right and what is wrong in the current global, interdependent world, where the abuse of power is becoming more and more widespread.


In a time of cynicism, South Africa is an example of the triumph of hope over fear, and of tolerance over prejudice.]


Emerging from a bitterly divided past, we have made a widely admired transition from authoritarian rule to becoming a beacon of human rights. Our human rights-based Constitution – as one leader of the Libyan transitional government recently said – serves as an inspiration to the new democracies of the Arab Spring and, may I add, also to many other countries in the world. The legacy of our inspirational leadership, pioneering Constitution, improved social cohesion and steady economic development caught the attention of the world. We have ever steadily become a respected voice in the international community.


Yet, as inspirational as our leadership may have been, and while our local social and economic challenges persist, it is important to note that the global landscape has been transformed. The global strategic template prevailing since the 1950s has been recast by the events of the Arab Spring. South Africa now has to consider its response to this changed world and also consider how we should reposition ourselves and reinvigorate our ethical framework. This is complex. In the world of statecraft, the choice is rarely between right and wrong. More often it requires an ability to discern between shades of grey, and right versus right.


At the end of 2012, our nonpermanent seat in the UN Security Council will expire. For us to occupy a permanent position will be largely dependent on our ability to crisply articulate our African priorities, as well as strengthen relations between the African Union, AU, and the UN. Securing the position would enable South Africa to take a clear stance on various issues, which will restore our credibility as an ethical voice in international affairs.


However, this is unlikely until we address the events north of the Limpopo River. South Africa must acknowledge that Zimbabwe is in dire need of electoral reform and must take up the role of mediator. President Zuma must take a firm stance and ensure that South Africa assists with negotiations towards a referendum and to ensure free and fair elections to end the reign of President Robert Mugabe. Continued silence by this government is tantamount to support of President Mugabe’s illegal and suppressive rule.


South Africa must uphold the UN doctrine of the Responsibility to Protect, the so-called R2P. For far too long the world has turned a blind eye to genocide, war crimes and human rights violations by hiding behind the cloak of the Westphalian Order’s definition of sovereignty. Our own Cyril Ramaphosa was one of the key architects of R2P, so we must follow suit.

As Kofi Annan and others have well argued, if humanitarian intervention is indeed an unacceptable assault on sovereignty, how should we respond to gross and systematic violations of human rights that offend every precept of our common humanity? The international community stood by when genocide unfolded in Rwanda and more recently also in Darfur. South Africa must assume a greater responsibility to ensure that the AU’s military intervention and peacekeeping role becomes operational. By supporting R2P, South Africa will pledge its support for humanitarian intervention on the African continent.


Last year we turned a blind eye to human rights violations in Swaziland. We did ourselves no favours by abstaining from voting on the Security Council’s resolution to intervene in Syria. Our efforts to call for action in Libya and post-election Ivory Coast were dismal. We can and must save face and regain our credibility. We should engage Nigeria and resolve our differences. The Horn of Africa is poor and hungry. Let us support humanitarian relief in Somalia and Ethiopia and, while the noble people of Iran are not our enemies, let us speak out against Iran’s breach of international protocol with regard to its uranium enrichment programme. It is important that South Africa engages in dialogue with Tehran. We must invest in soft-power strategies. I wonder how many of our diplomats are trained in Farsi or are knowledgeable about that great culture.


Furthermore, President Zuma should call upon the entire African community, notably Uganda, to uphold international human rights norms pertaining to the individual’s sexual orientation, as it should be. The American Secretary of State, Hillary Clinton, speaking for President Obama, eloquently put this forth in Geneva recently.


Suid-Afrika is inderdaad geseënd dat ons in staat is om nie net mededeelsaam te wees nie, maar ook om van ander te leer. As ons na ons Brics-vennote kyk, dan sien ons duidelik welke beleidsrigtings suksesvol is en welke nie. Ons glo dat Suid-Afrika na die weste moet kyk, veral in die rigting van Brasilië, nie net na hul hoogs gerespekteerde leierskap nie, maar ook ten opsigte van die realisme van die ekonomie. (Translation of Afrikaans paragraph follows.)


[South Africa is indeed blessed, not only in being generous, but also in being able to learn from others. Looking at our Brics partners, we can clearly see which policy directions are successful and which are not. We believe South Africa should be looking to the west, in particular to Brazil, not only as regards their highly respected leadership, but also in respect of the realism of the economy.]


Brazil has achieved many successes in the struggle for both economic and social emancipation. Brazil was able to raise the living standards of poor households through smart social policies, such as amendments to encourage flexibility in the labour market and financial incentives to enhance employment creation.


We can emulate the success of Brazil, where poverty has declined from 20% in 2004 to a mere 7% in 2009. This can be achieved through our own model of inclusive economic growth, which prioritises the extension of ownership, particularly, and the active participation of young people, even more particularly. Small business operators and ordinary workers within the mainstream economy must be supported.


We also look to our continent for inspiration. In Kenya, financial services have been made accessible to the poor and the rural through the extremely cost-effective M-Pesa system. M-Pesa is a phone-based service for the sending and storing of money. This system allows people to send and receive money quickly, efficiently and safely, at minimal cost. Registered users can pay bills and also make purchases. It is an innovative way to extend financial services to millions of people in rural areas who live outside the formal banking system. It has improved the lives of millions.


In Bangladesh, Nobel Peace Prize winner Muhammad Yunus pioneered a new system of banking, called “microcredit”. The microcredit system extends small loans to people who have no collateral to qualify for formal bank loans. The system extends credit services at a low interest rate to millions of impoverished people who require capital to start small home-grown enterprises. It is just one method to help formalise the informal sector and to extend opportunity and empowerment to those who desperately need it.


Many of the successes we see abroad could be replicated here. Nietzsche famously said that the most common form of stupidity is forgetting what we set out to do. This is as true of national renewal as it is of statecraft. [Applause.]


Mr L RAMATLAKANE: Chair, the situation in the world today is becoming more confusing by the day. The need for countries of the world to discuss the problems that are becoming more and more complicated is indeed very urgent. However, in order to begin a proper multilateral discussion, it is imperative that a single international agenda is obtained. This is necessary to achieve a crosscutting effect to allow all interests to be tabled. The redistribution of power and wealth is already taking place more by the force of events rather than through a collectively agreed script.


The intricacies of global power will of necessity require all parties to understand that the world in 2012 is very different from what it was after World War II. A new centre of power is emerging and this centre is in the East, not the West. This shifting in the balance of power, which is taking place through faster economic growth in the East, is already raising sharp challenges and fuelling new expectations among those who had no visibility before. In this regard, Africa is no longer seen as a lost cause but as the last remaining continent with a genuine possibility of growth.


Africa may not have been an important economic and political player in the past, but that situation is about to change. There is already tension in Africa as to which country will play a pivotal role in shaping the new dynamics.


For South Africa the intricacies become even greater. On the one hand we have had a longstanding relationship with the West. More recently we became a partner in Brics. We are also part of the African Union, AU. How South Africa maintains the delicate balance and remains onside each time will, of course, require deep thinking and skilful statecraft.


The importance of safekeeping and strengthening our own democracy in order to contribute significantly to consolidating global democracy is a matter of great strategic importance, which seems to be getting lost. The regressive steps that are being taken by governments worldwide in recent times will not only have implications for us domestically but also internationally.


The time has come in the world to increase political space in keeping with technological advances because that is how the younger generations will want it. Nothing will stand in their way and if our own thinking is regressive, we are doomed. The sad fate of Mubarak and Gaddafi, among others, shows clearly the need to march in the right direction, which is one of getting people involved.


The time we live in is characterised by great wealth and great poverty in the same physical space. South Africans visiting Greece, Italy and Portugal, among other places, are startled by the number of Europeans reduced to the kind of poverty people on our continent have borne forever.


It is an imperative of our time that the new world order is in tune with new technology. It is equally important to create a new economic order. As we are speaking, the world’s economic order is tottering. Unemployment in many parts of the world is escalating and the migration of people in search of employment has no new centre of attraction. We have reached an economic stalemate.


In conclusion, we in Cope are deeply concerned about the failure to attend to the complexities that face our nation and the world. We are alarmed by the lack of urgency in dealing with these complexities. We urge the attention of all nations to these matters as a matter of urgency. If we don’t do it, if we cannot step forward, if we keep our brains in the decade that is behind us, we are doomed.


Mr A M MPONTSHANE: Speaker, there is no question that there are enormous challenges in the world today at all levels of society, ranging from mounting economic crises to military conflict, terrorism and generalised human rights abuses. We are even witnessing alarmingly undemocratic outbursts in the very countries that have been the cradles of democracy and human rights protection.


The real question is what South Africa can do to make our world a better place to bequeath to our children. We cannot exercise a measure of economic power greater than many of the other countries in the world. We cannot exercise military power or financial power greater than that. In all these areas, we are limited by the circumstances of history and our own condition. However, we are not limited in respect of moral influence. We can and we must excel in exercising moral leadership in the world.


This requires pursuing the human rights agenda and holding dear the values of maximum democracy and freedom, even when other countries are subjecting these values to restriction, allegedly for reasons of national security or national interest. We must turn South Africa into the world capital of human rights protection.


Ms C C SEPTEMBER: Chairperson, hon members, guests and fellow South Africans, my contribution to this debate is to focus on the importance of Parliament’s interaction with civil society by looking at particular sectors such as the youth and women.

Increasing the opportunities for civil society organisations to interact with Parliament and improving Parliament’s willingness to consult with those organisations are important ways to enhance MPs’ ability to represent their constituencies and to ensure that national planning and budgeting reflect the needs of the people.


Nongovernmental organisations often play a critical role in advocating changes in law, in policy, in procedures and administrative rules. NGOs bring the stories of the individuals they serve to the process. These stories form an important part of the evidence needed to convince policy-makers of the changes that are needed.


The importance of interacting with civil society, especially with women and youth, is so that, together, we can realise our constitutional objectives of justifiable social and economic rights. Women and youth equally want to benefit from a clean and healthy environment, from access to land, from access to housing, from an end to arbitrary evictions and from access to sufficient water, health care and education.


Today we celebrate International Women’s Day, the story of ordinary women as makers of history. It is rooted in the centuries-old struggle of women to participate in society on an equal footing with men. In ancient Greece, Lysistrata initiated a strike against men in order to end a war. During the French Revolution, Parisian women calling for liberty, equality and fraternity marched on Versailles to demand women’s suffrage.


The ANC has a long history of engagement with civil society - the Freedom Charter, the RDP, to name but a few.


In South Africa, social and economic rights are enshrined in the Constitution and play an important role in motivating and sustaining political participation. Among the many challenges facing the new South Africa is the desire to develop a polity that represents and engages with the aspirations and needs of its entire people. The ANC’s strategy and tactics remind us of the importance of building social cohesion and of the values of a caring society. This provides a practical role for the involvement of women and youth in civil society. Democracy requires a pluralistic approach that can take into account the views of all people. Inclusiveness necessarily requires the views of women and youth.


The incorporation of youth concerns by means of youth mainstreaming and youth participation are emerging fields in a range of areas affecting development and governance and includes work undertaken by legislators and parliaments around the world. Progress in this regard, however, is uneven and not always easy to assess.


It is important to recognise that a number of factors influence the level and quality of public participation of youth with the legislature. It should not, for example, be assumed that a low level of education or socioeconomic status translates into an inability to participate. The youth is not a homogenous entity and additional efforts should be made to secure the participation of those subgroups that can be described as more marginalised than others. This underscores the importance of a proactive approach to developing youth-public participation.


Youth participation determines the extent to which young people can influence processes and projects undertaken by any particular institution. Youth participation entails the involvement of young people at all stages, from the identification of needs to the formulation, implementation, monitoring and evaluation of policy and programmes.


There are core benefits of youth participation and they are identifiable. In South Africa’s harsh socioeconomic climate, where opportunities for South Africa’s youth remain limited, parliamentarians should be wary of the cost of not incorporating youth concerns into their work and of excluding their participation from the process. The need to augment outreach and public participation is recognised in a number of domestic and international parliamentary programmes. In addition, many parliaments run educational programmes intended to expose students to political and parliamentary processes.


Consultation and participation are valuable yet distinct activities. Consultation entails directly asking either women or youth, whichever is the case, about their views. Participation refers to the extent of women’s and youth’s involvement in decision-making. Consultation may be undertaken without regard to participation but may equally be accompanied by efforts to promote involvement in the decision-making process.


The importance of consultation on youth and gender itself is self-evident. Engagement by Parliament resuscitates citizens’ involvement and leads to greater participatory democracy.


Mrs C DUDLEY: Chair, the agenda of the debate on the Inter-Parliamentary Union speaks of parliaments and people bridging the gap. In South Africa, the gap we speak about, and our biggest hindrance, is perhaps the ghost of our colonial past, which manifests itself in many different ways.


In yesterday’s Portfolio Committee on International Relations and Co-operation seminar, Dr S Zondi from the Institute for Global Dialogue, IGD, pointed out that the way Brazil managed to deal with its colonial past was to significantly reduce poverty. It seems we can do what we like, but until poverty is reduced to where this becomes noticeable, nothing will change in our attitudes, perceptions and behaviour. Business was, of course, the key to Brazil’s success and Zondi expressed the view that business and government, working together, could put apartheid in the dustbin, where it belongs, if they wanted to. He also attributed China’s reduced poverty to the fact that government and business work together – a hurdle South Africa must still get over.


Growth in South Africa generates growth in all of sub-Saharan Africa and increased exports to SADC could generate 150 000 jobs by 2020. The mutuality of interest in business and government working together in the SADC region and beyond is indisputable. The need for diplomacy in Africa to deal with deep-seated negative perceptions about South Africa and South Africans is acknowledged generally. With this in mind, Zondi’s view that South Africa completely misses the enormous opportunity it has to engage in diplomacy by failing to reach the large numbers of people from other countries that reside in or visit South Africa is relevant in bridging this gap.


In bridging the gap, both Parliament and people will need to embrace today’s digital world. The German Bundestag has stated that Internet services have closed the gap between its parliament and citizens. Youth in even the poorest area in South Africa have access to cell phones and the Internet and 4 million South Africans are active on Facebook, growing at 4% per month. Social networking, as it evolves, is a major medium of communication and the so-called Arab Spring is a classic example.


I have run out of time. Of course, the political, economic and social situation globally is a topic that two minutes could never do justice to. Thank you.


Mr H T MAGAMA: House Chair, I will speak on the economic situation in the Eurozone and its impact on South Africa, Africa and developing economies.


The ANC’s 2007 strategy and tactics document was indeed correct and forward-looking when it stated:


South Africa’s interests in a complex and unpredictable global environment necessitate the building of capacity for strategic as well as rapid responses to changes in our region.


It goes on to say: “Such responses should be anchored in the development of Africa and the developing world.”


Out of this era of many contradictions and fluidity in the international environment, both Africa and the global South have greater opportunities to make further progress and to extricate themselves from the shackles of global apartheid, poverty and underdevelopment.


As we can see, when the crisis of capitalism is exposed to its inherent, internal, moral and ethical contradictions, placing the capitalist hegemony under threat as a result, trading blocks enter into battle with each other over the decisive and ongoing shifts taking place in the key centres of productivity and accumulation, which, indeed, are broadly shifting away from the historical economic powerhouses of North America, Japan and Europe to, as that hon member said, Southeast Asia. This is manifested in the escalating trade and investment and, to a lesser extent, the current currency wars within and among the major powers, who are seeking to retain their global dominance, privileges and access to natural resources - all this in the face of competition from new centres of dynamic production.


The ANC’s foresight and vision to break with this trend was a conscious one, informed by an accurate assessment of the international balance of forces and resultant tectonic shifts in the economic and political spheres. This firmly places South Africa on an entirely new trade and economic investment trajectory. Our response to this global economic crisis has been to clearly articulate that we cannot be solely dependent on traditional trading partners in the North. Rather, we must intensify our efforts to increase economic development in Southern Africa, in particular, and recognise that our core economic partner for the future is indeed Africa and the expansion of our trade with Brics and other developing economies.


The South African economy is deeply interconnected and part of an integral system of global trade. We exist in a network. We are part of a network and since this network is out of balance in one place on the globe, it is out of balance everywhere. The chief executives of South Africa’s four big banks, namely Absa, Standard Bank, First National Bank and Nedbank, admitted that they feared that they would also be affected by what they call the contagion effect in the Eurozone because South Africa’s economy is inextricably entwined with that of Europe and the rest of the globe.


Eurozone contagion will not only affect equity markets but will hit the entire South African economy because the European Union, as a block, is our single biggest trading partner. European consumers acquire a great deal of South African goods and South Africa has a strong economic connection with major European economies, in particular Germany and France. As the Eurozone governments face the sovereign debt crisis, they implement austerity measures. They cut back on expenditure and, as a result, business conditions are continuously deteriorating globally. Consequently, this increases unemployment in trading partner countries like South Africa.


Our government’s multibillion rand infrastructure spending over the past years, coupled with the Industrial Policy Action Plan 2,

Ipap 2, have to an extent cushioned the South African economy during the worst of the crisis. Ipap 2 is meant to resuscitate industrialisation as a catalyst for economic growth. The ANC-led government is conscious and alert to the fact that the crisis can destabilise the welfare of the most vulnerable people in society.


However, we applaud the fact that the Framework for South Africa’s Response to the International Economic Crisis has strong principles that seek to protect the poor, the vulnerable, the unemployed and the low-income workers; to strengthen capacity to grow decent work into the future; to maintain high levels of investment and to intervene in a timely, tailored and targeted manner. It has created room for broader participation of the private sector in investment and entrepreneurship and for the transformation and integration of the informal sector into the formal mainstream economy.


There is a legacy and consensus built around the fact that public investment in infrastructure can respond positively to lessen the effects of the economic downturn. Where possible, a labour-intensive approach must be used to ensure that the best possible social employment and economic benefits are accrued by the larger society.


Emerging markets are being affected by the slow market growth and stability, even though the policy-makers of emerging economies have more tools available to support their economies. Indeed, while trade links to Europe have slowed in recent years and emerging economies have started to trade more with each other, they have not decoupled completely from Europe and remain dependent on the developed market’s global outlook. While further trade and exports to Europe remain significant, developing countries have started to focus more and more on other forms of investment.


Finally, the effect of the downturn on the African agenda is and indeed should remain a matter of preoccupation. Economic growth is a prerequisite for the prevention of conflict on the continent. Already, interstate trade with the rest of Africa is insignificant, with a crisis bound to decrease trade with the North. Africa is at a disadvantage. To bear fruit, economic diplomacy into Africa must be met with stable markets and growing economies. Economic dependency that is being reinvented by the crisis is a sad reality and a challenge to Africa.


The presidential infrastructure project and the North-South corridor championed by President Zuma must be supported because this will facilitate and expand intra-Africa trade, deepen integration, resuscitate economic growth and the interconnectedness of Africa, marking a decisive moment in the African continent’s own reconstruction and development and shifting the focus from traditional trade routes meant to serve the whims and whiffs of the continent’s former colonial masters. [Applause.]


Mrs I C DITSHETELO: Chair, I would like to focus my input on the status of political, economic and social situation in Africa for obvious reasons, perhaps. That there are problems in Africa even after many countries in the continent went through transition from colonialism to independence is not a deniable fact. I would like to assert, though, that the African situation is not as bleak as portrayed by the media, especially the international media. It is true that the continent continues to have political difficulties which have consistently continued for over a century.


However, what is usually overlooked is that key issues of African politics are linked to leadership in the continent. Africa has heroes and always had, but sadly we have seen African heroes and heroines turn into dictators, plundering natural resources. We have the political exclusion of Africans by Africans and dominance over each other. Be that as it may, we have consistently seen Africans tilting the scales. We have seen ordinary Africans expressing discontent with regimes imposed upon them. We have seen Africans gallantly fighting oppression and I dare say that that makes me hopeful about the African situation.


The economic situation is very much linked to the political situation. The hunger and deprivation experienced in Africa is a direct consequence of political and leadership instability because it engenders disease, warfare, misgovernment and corruption.


Africa is said to be very rich in minerals and other natural resources. However, the standard of living does not correlate with the continent’s wealth. Quality of life and human development are at low levels. The United Nations’ ranking of African states is significantly low because the continent sees greater inequality than any other region in the world.


Of course, the social situation and analysis in Africa is heavily influenced and affected by the political and economic instability. Africans have a high burden of disease and their living conditions, on average, are far from desirable. However, I would like to assert that Africans are beautiful, loving, colourful people and whatever challenges they are faced with, they are sure to overcome. [Applause.]


Mr E M MTHETHWA: Chair, comrades and distinguished guests, during World War II delegates from the 44 allied nations gathered for the United Nations’ Monetary Financial Conference at Bretton Woods in the United States to set up the fundamentals. Some of those things were the rules, institutions and procedures to regulate the international monetary system. They established the International Monetary Fund and the International Bank for Reconstruction and Development, which today is part of the World Bank.


As far as the structure of the African economy is concerned, Dr Daniel Tetteh Osabu-Kle of the Carleton University in Ottawa expressed the view that it is the product of centuries of Western disturbance, which has messed up the continent. During the 400 years of slavery, the diversified economies of Africa’s social formations were transformed by the Western political and economic forces into production captives for Western enterprises. He contends that the structural adjustments in Africa does not conform to natural justice but is about organising for the human project in which decisions about who gets what, when and how becomes the source of this power struggle between the Bretton Wood institutions and the African leaders. This struggle may be conceived as an attempt by the Bretton Wood institution to recolonise Africans on behalf of their allies, while African leaders strive to resist that new form of colonialism.


The independent evaluation group who reported on the World Bank’s agricultural programme in sub-Saharan Africa between 1991 and 2006 levelled a series of withering critiques at the bank’s work and concluded that despite its presence of more than two decades in several countries, the World Bank’s support has so far not been able to help countries increase agricultural productivity sufficiently to arrest declining per capita food availability.


A report by Oxfam International includes criticism of forestry operations in Uganda, in which the International Finance Corporation has a stake. More than 20 000 villagers claimed to have been unjustly evicted from their homes by the UK-based company to make way for plantations. The Ugandan case highlights how the current system of international standards, designed to ensure that people are not adversely affected by large-scale transfer of land or unused rights, does not work.


Chair, a so-called gentlemen’s agreement between Europe and the United States, dating back to the Second World War, ensures that the president of the World Bank is always an American and only an American, with a European being the managing director of the International Monetary Fund.


The World Bank needs serious and genuine reform. The way the World Bank picks its president and the International Monetary Fund, IMF, its managing director is a place to start. Reacting to the announcement that Robert Zoellick is stepping down as World Bank president, a global collusion of campaigners has called for an open and merit-based process to elect the next World Bank leader and for developing countries to determine the selection. However, the impression that the rich governments who have run the IMF thus far are dragging their heels on this enormously important issue is hard to avoid.


At the close of the IMF African Conference held in Dar es Salaam in March 2009, the then South African Minister of Finance, Comrade Trevor Manuel, said that the global crisis was about to cause severe damage to the African economy. He demanded that developing countries and emerging markets be given a major voice in the governance of the IMF.


In conclusion, the delegates at the conference agreed that Africans must be part of and fully represented in the solution to the global economic crisis. There must be a closer synergy between the activities of Bretton Woods institutions and those of Africa’s own institutions, like the African Development Bank and religious and economic communities. It will put us in a better position as an international community to meet the target we have set for ourselves in the Millennium Development Goals. It will put us in a better position as an international community to meet all our goals.


Comrade President Jacob Zuma has reiterated the need to reform the United Nations, particularly the Security Council and the Bretton Woods institutions. We have over the past decade been engaged more in a battle of ideas than in attempts to transform the Bretton Wood institutions.


We believe that the world needs a reformed and more stable financial architecture that will make the global economy less prone to instability and more reliable in future crises. We believe that there is a greater need for a more stable, predictable and diversified international monetary system. We will strive to achieve an ambitious conclusion to the ongoing and long overdue reforms of the Bretton Woods institutions.


Mr G D SCHNEEMANN: Chairperson, the adoption of the Millennium Development Goals, MDGs, by world leaders gave hope to millions of people throughout the world that their lives would change for the better, in particular MDG 4, which is committed to reducing child mortality; MDG 5, committed to improving maternal health; and MDG 6, committed to combating HIV and Aids, malaria and other diseases. With just three years to go, we need to take stock of where we are and whether or not we are going to achieve these goals.


I would like to address three particular goals, the first being MDG 4. In 2003 the mortality rate in children under 5 in sub-Saharan Africa stood at 172 per 1 000 births. In 2009, the mortality rate among children under 5 had been reduced to 129 per 1 000 live births. The Department of Health here in our own country has introduced measures to reduce child mortality through the use of the primary health care approach to provide early and quality antenatal and postnatal services, as well as essential infant and child health services and nutritional advice. These steps will help to reduce the high maternal and child mortality rates in our country. In addition, the Department of Health has increased vaccine usage among infants and has also introduced new vaccines.


Regarding MDG 5, in 2008 in sub-Saharan Africa the maternal mortality rates stood at 640 per 100 000 births, while in 2000 they stood at 790 per 100 000 births. The Department of Health has implemented a number of initiatives to reduce maternal mortality. These include the provision of universal access to reproductive health. Two further contributors to maternal mortality are HIV and Aids, which are being addressed through the provision of antiretrovirals; as well as bleeding after birth, which is being addressed through the improvement in blood supply in all district hospitals.


Finally, with regard to MDG 6, in 2001 the number of new HIV infections in sub-Saharan Africa per year per 100 people in the age group of 15 to 49 years stood at 0,57, while in 2009 this had been reduced to 0,40. According to the 2011 report on progress in Africa towards the MDGs, South Africa is among five countries that showed a significant decline in HIV prevalence among young men and women. These are just a few examples of some of the advances that have been made towards achieving the MDGs.


While successes are being recorded and advances are being made, a lot of work still has to be done. In the 2011 United Nations report on the MDGs, the United Nations Secretary General, Ban Ki-moon, said: “Between now and 2015 we must make sure that promises made become promises kept.”


Here in our own Parliament we need to reassess whether we are constantly mindful of the MDG targets as we undertake our everyday work. We will shortly be scrutinising the budgets of departments and we will need to ensure that sufficient emphasis and resources are being provided and utilised in helping South Africa to ensure that it not only meets these targets but also goes well beyond them.


In 2011, during an address at a seminar on the role of Parliament and the provincial legislatures in attaining the MDGS, Minister Manuel said:


In our case, the commitments to development are therefore less about the pledges made by successive presidents to the United Nations on our behalf, but the commitment that we, as legislators, have made to our people.


He went on to say:


If we look at our progress against the MDG indicators, then in many instances we are not only meeting targets but have exceeded them.


As we carry out our work as legislators we need to ensure that the services of government are properly and effectively delivered. But our work goes beyond what we do here in Parliament. Each one of us - and I can certainly speak on behalf of the ANC - is deployed to a particular constituency area. I’m not sure about the members on this side of the House. What we need to do is check how far the implementation of the MDGs has progressed in the communities within which we work. Part of our responsibility is to alert the various departments and Ministers of where interventions may be required. A collective effort from members in this House will go a long way in ensuring that we achieve all the commitments that were made back in 2000.


Millions of people around the world look to legislators to take up their concerns and needs, and we form part of this group of legislators. Together we can make a difference, together we can build better communities, and together we can create a better life for the people of our country. In the coming three years – in the lead up to 2015 – let all of us here in this House ensure that our people experience the realisation of the attainment of the MDGs in their daily lives. [Applause.]


Debate concluded.


The House adjourned at 17:49.







National Assembly


The Speaker


1.         Referral to Committees of papers tabled


(1)        The following papers are referred to the Standing Committee on Appropriations in terms of the Money Bills Amendment Procedure and Related Matters Act, 2009 (Act No 9 of 2009):

           (a)         Estimates of National Expenditure [RP1-2012]


           (b)         Budget Review 2012 [RP2-2012]


(c)        Speech of the Minister of Finance on the National Annual Budget [RP3-2012]


(2)        The following papers are referred to the relevant portfolio committees for consideration in terms of their respective mandates and the Money Bills Amendment Procedure and Related Matters Act (No 9 of 2009):


(a)        Vote No 3 – Cooperative Governance and Traditional Affairs – to the Portfolio Committee on Cooperative Governance and Traditional Affairs for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(b)        Vote No 4 – Home Affairs – to the Portfolio Committee on Home Affairs for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(c)        Vote No 5 – International Relations and Cooperation – to the Portfolio Committee on International Relations and Cooperation for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(d) Vote No 6 – Performance Monitoring and Evaluation – to the Standing Committee on Appropriations for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012]


(e) Vote No 7 – Public Works – to the Portfolio Committee on Public Works for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(f)         Vote No 8 – Women, Children and People with Disabilities – to the Portfolio Committee on Women, Children and People with Disabilities for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(g)        Vote No 9 – Government Communication and Information System – to the Portfolio Committee on Communications for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(h)        Vote No 10 – National Treasury – to the Standing Committee on Finance for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(i)         Vote No 11 – Public Enterprises – to the Portfolio Committee on Public Enterprises for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(j)         Vote No 12 – Public Service and Administration – to the Portfolio Committee on Public Service and Administration for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(k)        Vote No 13 – Statistics South Africa [Minister in The Presidency: National Planning Commission] – to the Standing Committee on Finance for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(l)         Vote No 14 – Arts and Culture – to the Portfolio Committee on Arts and Culture for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(m)       Vote No 15 – Basic Education – to the Portfolio Committee on Basic Education for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(n)        Vote No 16 – Health – to the Portfolio Committee on Health for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(o)        Vote No 17 – Higher Education and Training – to the Portfolio Committee on Higher Education and Training for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(p)        Vote No 18 – Labour – to the Portfolio Committee on Labour for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(q)        Vote No 19 – Social Development – to the Portfolio Committee on Social Development for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(r)         Vote No 20 – Sport and Recreation South Africa – to the Portfolio Committee on Sport and Recreation for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(s)        Vote No 21 – Correctional Services – to the Portfolio Committee on Correctional Services for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(t)         Vote No 22 – Defence and Military Veterans – to the Portfolio Committee on Defence and Military Veterans for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(u)        Vote No 23 – Independent Police Investigative Directorate – to the Portfolio Committee on Police for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(v)        Vote No 24 – Justice and Constitutional Development – to the Portfolio Committee on Justice and Constitutional Development for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(w)        Vote No 25 – Police – to the Portfolio Committee on Police for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].

(x)        Vote No 26 – Agriculture, Forestry and Fisheries – to the Portfolio Committee on Agriculture, Forestry and Fisheries for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(y)        Vote No 27 – Communications – to the Portfolio Committee on Communications for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(z)         Vote No 28 – Economic Development – to the Portfolio Committee on Economic Development for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(aa)       Vote No 29 – Energy – to the Portfolio Committee on Energy for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(bb)      Vote No 30 – Environmental Affairs – to the Portfolio Committee on Water and Environmental Affairs for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(cc)       Vote No 31 – Human Settlements – to the Portfolio Committee on Human Settlements for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(dd)      Vote No 32 – Mineral Resources – to the Portfolio Committee on Mineral Resources for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(ee)       Vote No 33 – Rural Development and Land Reform – to the Portfolio Committee on Rural Development and Land Reform for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(ff)        Vote No 34 – Science and Technology – to the Portfolio Committee on Science and Technology for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(gg)      Vote No 35 – Tourism – to the Portfolio Committee on Tourism for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(hh)       Vote No 36 – Trade and Industry – to the Portfolio Committee on Trade and Industry for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(ii)         Vote No 37 – Transport – to the Portfolio Committee on Transport for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].


(jj) Vote No 38 – Water Affairs – to the Portfolio Committee on Water and Environmental Affairs for consideration and report, as well as Responses to Recommendations in Budgetary Review and Recommendation Reports [Budget Review 2012].




National Assembly and National Council of Provinces


1.                     The Minister of Health


(a)        Strategic Plan of the South African Medical Research Council (MRC) for 2012/13 – 2016/17.


Please Note:     The above report has been submitted to Parliament on 7 March 2012.


2.         The Minister of Justice and Constitutional Development


(a)        Strategic Plan of the Legal Aid South Africa for 2012 – 2017.


3.         The Minister of Labour

(a)        Strategic Plan of the Unemployment Insurance Fund (UIF) for 2011/12–       2015/16 and Annual Performance Plan for 2012/2013.


4.         The Minister of Social Development


(a)        Strategic Plan of the Department of Social Development for 2012/13 – 2014/15 [RP 93-2012].


5.         The Minister of Defence and Military Veterans


(a)        Executive Authority’s Overarching Annual Strategic Statement for 2012 [RP 90-2012].


Correction:        The above entry replaces item 5(b) under Tablings in the name of the Minister of Defence and Military Veterans in the Announcements, Tablings and Committee Reports of 7 March 2012, on p 520.


National Assembly


1.         The Speaker


(a)        Letter from the Minister of Defence and Military Veterans dated December 2011, to the Speaker of the National Assembly explaining the delay in the submission of the Financial Statement for the Special Defence Account and reasons thereof in terms of section 65(2) of the PFMA.




1.         I hereby report to the Speaker that as indicated in the Department of Defence’s Annual Report for the year ended 31 March 2011 which was tabled on the 30 September in terms of second column on page 172 the reasons for not tabling Annual Financial Statements on the SDA are as follows:


2.         Since 1974, with the establishment of the SDA, the SDA transactions were recorded in the books of the DOD in such a manner so as to enable the DOD to determine the surplus to be retained by the DOD as prescribed in the Defence Special Account Act, Act No 6 of 1974 as amended. These transactions were recorded in terms of the cash basis of accounting.


3.         Various accounting frameworks were utilised in the past to prepare the financial statements for the SDA, such as general-purpose financial statements, special-purpose financial statements and entity-specific financial statements. The entity-specific accounting framework implied that the Department could determine its’ own Generally Accepted Accounting Practise (GAAP).


4.         The National Treasury (NT) informed the DOD on 06 June 2011 that the accounting framework for the SDA should be GRAP as prescribed by the Accounting Standards Board (ASB) with retrospective effect from 01 April 2011.  




5.         Since then the department has embarked on the process of reconstruction of these financial statements for the past three (3) years, a process that has been concluded, and submitted them to the Auditor-General for auditing. The Auditor-General is completing the auditing process and it is anticipated that the audit report will be concluded by the end of February 2012 and these financial statements will then be tabled accordingly to the National Assembly for consideration


6.         Yours sincerely








(b)        Letter from the Minister of Water and Environmental Affairs dated 23 February 2012, to the Speaker of the National Assembly explaining the delay in the submission of the Annual Reports of the Water Boards in Parliament.




In terms of section 55(l)(d) of the Public Finance Management Act, 1999 (Act No 1 of 1999) (PFMA) the accounting authority for a public entity must submit within five months of the end of the financial year, i.e. 30 November of each year, to the executive authority responsible for that public entity its annual report and financial statements for tabling in Parliament.


In terms of section 65(1) of the PFMA the executive authority for a public entity must table in the National Assembly the annual report and financial statements of the public entity not later than 31 December of each year.

In terms of section 65(2) of the PFMA if an executive authority fails to table within the prescribed period, the executive authority must table a written explanation in the legislature setting out the reasons why the annual reports were not tabled.


Botshelo Water failed to submit its annual report and financial statements within the set timeframe. The Auditor-General started on time with the audit, but got delayed because of issues relating to the financial system that had been identified by the Audit Committee and the Board, which had to be addressed first. Thereafter, the Auditor-General had to send their files for pre-issuance review, which normally takes up to two weeks to complete. The annual financial statements subsequently needed to be adjusted after the audit had been completed. Thereafter the Audit Committee had to finally review the changes and recommend the annual report to the Board for approval. Only after Board approval, could the final version be sent to the printers for printing. Botshelo Water indicated that it would not be able to submit its annual report before February 2012.



Yours sincerely








2.         The Minister of Energy

(a) Letter setting out reasons for delay in tabling of the strategic plan and annual performance plan of the SA National Energy Development Institute (Sanedi), as required in terms of the Framework for Strategic Plans and Annual Performance Plans and the Money Bills Amendment Procedure and Related Matters Act, 2009 (Act No 9 of 2009).


Referred to the Portfolio Committee on Energy.


3.         The Minister of Finance


(a) Letter setting out reasons for delay in tabling of the strategic plans and annual performance plans of the National Treasury, Accounting Standards Board (ASB), Cooperative Banks Development Agency, Development Bank of Southern Africa (DBSA), Financial Intelligence Centre (FIC), Financial Services Board (FSB), Government Employees Pension Fund (GEPF), Independent Regulatory Board of Auditors, Land and Agricultural Bank of South Africa (Land Bank), Pension Fund Adjudicator, Ombud for Financial Services Providers, Public Investment Cooperation (PIC), South African Special Risk Insurance Association (Sasria) and South African Revenue Service (Sars), as required in terms of the Framework for Strategic Plans and Annual Performance Plans and the Money Bills Amendment Procedure and Related Matters Act, 2009 (Act No 9 of 2009).


Referred to the Standing Committee on Finance.




National Assembly




The Standing Committee on Appropriations, having undertaken a follow-up oversight visit to the provinces of Limpopo and Mpumalanga from the 5 to 9 September 2011, reports as follows:


1.         Introduction


The follow-up visit took place from 5 to 9 September 2011. The delegation was as follows: Hon E M Sogoni (Chairperson of the Committee); Hon R J Mashigo; Hon G T Snell; Hon M Mbili; Hon L Yengeni; Hon L Ramatlakane; and Hon N N P Mkhulisi.  The delegation was accompanied by the following parliamentary officials: Ms TP Xaso and Mr D Arends (Committee Secretaries); Mr M Zamisa and Mr P Dlomo (Committee Researchers); and Mr F Bulawa (Committee Assistant).


The Committee met with the following departmental officials at various sites during the oversight: Dr C Ruiters (DDG:NWRI); Ms Z Y Mathe (Chief Director: Finance); Mr V Monene (Parliamentary support); Mr J Van Niekerk (Design Representative); Mr M Nitzsche (Advisor to contract Manager); Ms M J Musekene (Director: Regulations); Mr G Siziba (DWA Mpumalanga); Ms Z R Mdluli (HR Practitioner); Mr J Wilkins (Site Manager: Inyaka Dam); Mr M M Ratanda (Inyaka Dam); Ms M Khensani (Chief Development Expert); Mr D Mokone (DD: Finance); Mr B T Khoza (ASD Communication); Mr W Matsabe (Scheme Manager); Mr A Msimango (Senior Water Control Officer); Ms P G Mkhonto (Senior Water Control Officer); Ms E S Nkosi (Senior Water Control Officer).


2.         Background


On 6 September 2011, the Standing Committee on Appropriations (the Committee) undertook a follow-up visit to the Limpopo and Mpumalanga provinces. The aim of the visit was to follow-up on a similar visit undertaken by the Committee in the year 2010. Central to the 2011 visit was the need to determine the extent of progress in respect of various projects done by the Department of Water Affairs (the Department). These included the Nandoni Water Treatment Works and Distribution Network, the De Hoop Dam, and the Inyaka Water Treatment Works. Previously the visit had been informed by ongoing interactions between the Committee and the Department during the in-year monitoring of its expenditure. The Committee had observed a trend wherein the Department was reporting under-expenditure which subsequently led to requests for rollovers of funds.  During that exercise the Committee met with the Department and a number of findings and recommendations were made with regards to the implementation of the three projects. The Committee also wanted to follow-up on issues such as the construction of the pipeline at the Nandoni Dam; the construction of De Hoop Dam; and the construction of the Inyaka Dam Water Treatment Works. Due to a slow pace in implementing the recommendations of the last visit, the Committee decided to undertake the follow up visit on the 5-9 September 2011.


3.         Terms of reference


Section 27(1)(b) of the Constitution provides that everyone has the right to have access to sufficient water. As such government has embarked on a number of strategic policies and projects aimed at ensuring that all South Africans, whether rural or urban, enjoy this right to water.  Accordingly, budget allocations for the Department have been crafted to cater for this constitutional mandate. The 2011 Estimates of National Expenditure (ENE) reported that the spending focus for the Department over the Medium Term Expenditure Framework (MTEF) would be on infrastructure and bulk distribution in order to provide a reliable supply of water. It added that since the 2007/08 financial year, spending had grown from R4.8 billion to R8.2 billion in the 2010/11 financial year. This increase was driven by spending on the development of bulk water infrastructure including the construction of the De Hoop Dam and ancillary infrastructure such as the distribution pipelines, and the rehabilitation and repair of existing bulk infrastructure.  Spending over the MTEF was also expected to increase from R8.2 billion to R10.9 billion at an average rate of 9.9 per cent. This included the additional allocations of R1 billion in 2011/12, R1.3 billion in 2012/12 and R984.2 million in 2013/14 to be spent as follows over the MTEF:

* R245 million for the completion of the construction of the De Hoop Dam;

* R780.3 million for the bulk distribution system of the De Hoop Dam; and

* R520 million for the replacement of the Nandoni pipeline. 


According to the 2011 ENE the estimated costs for the completion of the De Hoop Dam were approximately R3.1 billion. Of the estimated budget, R2.1 billion had been spent up to 2010/11 and R926.4 would be spent over the MTEF period. Construction of the Dam started in 2007 scheduled for commissioning by the end of 2012. Commissioning was delayed by a year due to poor foundation conditions and industrial actions. Approximately 3 million people in the domestic sector would benefit from this Dam in the Greater Sikhukhune, Waterberg and Capricorn district municipalities.


The distribution system in respect of the De Hoop Dam had an estimated cost of R13.1 billion. Of this amount, R391.8 million had been spent up to 2010/11. A further R780 million has been allocated over the MTEF period. This further allocation was subject to the Department finalising the signing of off-take agreements in 2011/12. In addition to the baseline, the total budget available for the distribution system over the MTEF is R1.9 billion.


The Nandoni Water Treatment Works and distribution system was a project aimed at augmenting the water supply to the Vhembe District Municipality in Limpopo. According to the 2011 ENE, the total value of the project was R2 billion of which R532.9 million has been allocated over the MTEF period. The project commenced in 2006/07 and was scheduled for completion during the  2013/14 financial year.


The Nandoni pipeline project aimed to convey water for domestic use in the Vhembe District Municipality. This part of the project also commenced in 2006/07 and was scheduled for completion in the 2012/13 financial year. Delays on this front were attributed to the poor quality of pipes which have increased the project cost from R200 million to R720 million. R520 has been allocated over the 2011 MTEF period.


Table 1: Allocations for Nandoni, De Hoop Dam and Inyaka Water Treatment


Programmes and Projects

















De Hoop Dam: Phases 2C-G construction












De Hoop Dam: Phases 2A construction
















Nandoni Pipeline : Construction
















Inyaka Water Treatment Works











National Treasury (2011)


3.1        Inyaka Water Treatment Works


The Committee was informed that Phases 1 and 2 of this project had been completed. The Department anticipated that Phases 3 and 4 would be completed by May 2013. The budget allocations for phases 1 and 2 were R93 million and R120.56 million respectively. Both amounts were at 100 per cent spending at the time of the visit.


Phases 3 and 4 of the Inyaka Water Treatment Works had a contract price of R427 million of which R115 million had been allocated for the 2011/12 financial year. An expenditure of R244.4 million or 57 per cent of the total budget was recorded at the time of the visit from the commencement date of the contract which was 1 September 2008.


Progress in terms of construction stood at 67 per cent with two contracts for the Raw Water Pipeline and the Mechanical and Electronics scheduled to commence before the end of the current financial year. These contracts were awarded to external service providers.


In respect of job creation for the local people, it was reported that a total of 316 people were employed on the site, with 240 being male and 76 being female. Out of the 316 employees, only 37 came from elsewhere in the country with the rest being local people and 66 employees received training ranging from operators to graduates with B-Tech degrees during the 2011/12 financial year. However, it was noted that while the training of staff was a fairly easy exercise, the retention of the trained staff was a challenge since the private companies offered more lucrative contracts.


The Regional Branch of the Department reported that the construction of the Achornhoek Bulk Pipeline had commenced in August 2011. This pipeline would service 410 000 people in 19 villages and would be financed through the Regional Bulk Infrastructure Grant. This pipeline would be completed by August 2012. Concern was expressed in this regard since the completion of the water treatment works would be completed by May 2012. This would delay the distribution of water to the communities even further because there were funding gaps for the reticulation of water.


The Committee was informed that Phases 3 and 4 of the project had lost a total of 312 days of work. This was attributed to 201 days lost as a result of rain and 111 days lost due to industrial action. The industrial action was caused by unhappiness among the employees who would not receive gratuity packages on completion of the project. The Inyaka Dam employees were made aware that employees at the Nandoni Dam project would receive such a benefit and also demanded the same. The Department argued that gratuity packages were not part of the agreement that was made with employees at the inception of the project. Despite the fact that the CCMA ruled in favour of the Department, the Committee expressed its concern at the different standards applied in respect of workers at the two projects, Nandoni and Inyaka. 


The point was made that 836 904 people and 120 211 households would receive water from the Inyaka Water Treatment Works upon completion. The facility would be handed over to the Bushbuckridge Water Board after completion which would then be responsible for the distribution of water to the communities on behalf of the municipalities. The Committee expressed concern at the fact that the Bushbuckridge Water Board was not represented at the meeting. It was reported that only the Bushbuckridge and Mbombela municipalities had agreements with the Water Board. This was a cause for concern for the Committee since it would create a gap in the distribution of water to the targeted communities. The regional office of the Department stated that there were delays in the finalisation of the Service Level Agreement between the municipalities and the Bushbuckridge Water Board as a result of historical debt.


The Department reported that the Bushbuckridge Municipality (the Municipality) had acknowledged the debt and committed to pay 50 per cent of the R190 million of the outstanding amount.  The Municipality had further committed to start paying R5 million towards the committed 50 per cent of the debt from January 2012. According to the Department there was a short-term Service Level Agreement between the Municipality and Bushbuckridge Water Board at the time of the visit.


The Committee commended the Department for the construction of the access road to the treatment works. It however noted with concern that there was a lack of coordination between the local municipality, the provincial government and the Department regarding the construction thereof.


3.2        De Hoop Dam


The Department reported that it was in the process of installing pipes for the distribution of water to the communities that are to be serviced by the dam. It added that R131 million would be spent during the 2011/12 financial year for that purpose. The completion date for the construction of the dam was scheduled for September 2012. The Burgersfort pipeline would be completed by the end of December 2011, with the date for the completion of the whole water distribution network being mid 2013.


The Department reported that the Municipal Infrastructure Grant (MIG) funding would not be sufficient for the reticulation of water to all affected communities. Proposals had been made to the National Treasury regarding a new funding model for the dam in order to cover the whole distribution network. The Committee was concerned that there was a gap in funding for the distribution and reticulation of water to communities. It was stated that there was a lack of planning within the Infrastructure Cluster. 


Apart from the prevailing water shortage in the area, the most concerning issue was the fact that most rivers, from which communities sourced water, contained high levels of zinc. This was a major health risk.


Even though there were funding gaps regarding the distribution of water from the De Hoop Dam, progress has been made on the construction thereof. The finalisation of the Service Level Agreement with the mines, which included the funding model and arrangement still needed to be addressed.


3.3        Nandoni Dam


The Nandoni Water Treatment Works in Limpopo commenced in 2009 and the completion was originally set for 2010. This project and its distribution scheme would supply water to the Vhembe District Municipality. At the last visit which took place in March 2010, the Committee was informed that the various components of Nandoni Dam had been completed and the water treatment works had been commissioned. In a written response submitted after the visit, the Department explained that its timeframe is now to provide treated water to the NR6 Reservoir by March 2012, to the NN20B Reservoir by March 2012, to the Vuwani Reservoir by December 2012, to the Valdezia Reservoir by December 2012 and to the Lukalo-Lambani area by March 2012. It added that the bid process had taken much longer than initially anticipated because the National Treasury must, as from beginning June 2011 provide its concurrence to all bid processes. Therefore in view of the new arrangement, it was anticipated that the above mentioned dates may not be met. A revised project schedule would be submitted in that regard.


An amount of R750 million has been allocated over the 2011 MTEF period towards this dam. Of this amount, R200 million is for the replacement of the faulty pipes. In the outer year of the MTEF, the Department anticipated that an amount of R245.6 million would be shifted. For the 2011/12 Financial year, the Department received an allocation of R203 million. This amount was there to cover the expenses of the new steel pipes which were to be laid parallel to the existing pipes. Of this amount, a total of R22 million has been spent albeit not on infrastructure, but on project management expenses. It was reported that consultants had been appointed and that the design and tender bid stages were 80 per cent complete. The Department reported that contractors would be on site by the end of 2011 to commence with the installation of the new pipeline. Out of the 13 communities meant to benefit from the Nandoni Dam, 6 were affected by the challenges relating to the pipes. These six communities were thus not receiving water.


The Department also reported that there was an increase in the number of communities to be supplied by the dam. Initially, the dam was meant to supply 750 000 people once completed, but would now supply 1.2 million people. The Committee was concerned about whether the initial 750 000 people were already benefiting from the project before the additional population could benefit. In a written response submitted after the visit, the Department reported that the initial 750 000 people were already receiving water. It added that this amounted to 195 000 people or 43 050 households in 33 communities who were being supplied. The Thohoyandou community was already benefiting from the supply of water, despite the six communities which were still unable to receive water.


Part of the problems at the Nandoni dam included the failed pipeline which needed to be re-installed. It was noted that at the inception of the project, the original plans were to use steel pipes, however this changed to the glass reinforced pipes (GRP’s) at the advice of engineers within the Department. The Department had however reported challenges in respect of the GRPs provided by one service provider for the distribution of water. These challenges led to a design change from GRP’s to back to the initially intended steel pipes. The Department was undertaking legal action to recover money lost in this regard. It was also looking at the possibility of invoking the liability clause which formed part of its agreement with the service provider. The Committee was also informed that there were other countries that had used the same suppliers and were experiencing similar problems in respect of the quality of pipes supplied.

The Committee sought to determine whether the problems in respect of the pipes emanated from the factory process or from the design of the pipes. The Department reported that the problem was identified to be at the manufacturing stage. This was only discovered once the pipelines had been laid and were being pressure tested by the Contractor (Chief Directorate: Construction Management). A review by a panel of experts indicated problems with manufacturing quality of the supplied pipe product and inadequate quality control and assurance by the supplier that together resulted in the delivery of pipes with deficient structural and hydrostatic integrity of the pipe wall. Some manufacturing defects identified were of the type that could not be detected even at the factory without detailed testing (e. g. ultrasonic testing), which was part of the Supplier’s quality control program. Other defects (e.g. resin starved areas, porosity and damaged pipe ends), however, were also manifested on the exterior of some pipes awaiting installation and these should have been corrected or culled by the supplier. These could have been identified by the engineer, contractor and the supplier’s Representative through inspections upon delivery as called for by the specification.


At the time of the visit the matter was still before the courts. It was reported that the State Attorney was proceeding with legal action against the two companies who provided the defective pipes and summonses had been served on them on 5 May 2010. The Committee expressed its concern at the slow progress in respect of the legal action.


It was the Committee’s view that the Department should have a system in place to test the quality of pipe material before the actual installation. Concerns were expressed that engineers within the Department had given incorrect advice which led to changes in the scope of the project, not only once, but twice. Needless to say, this has also led to increased expenses as well as delays in the delivery of water. Questions were therefore raised on how the Department would ensure that technical errors of a similar nature do not re-occur.

In its written submission, the Department reported that the NR6, Vuwani, Valdezia and the Raw Water pipelines (No. 3, 4, 5 and 8) were originally designed as continuously welded steel pipelines. However, the Lukalo-Lambani, NN20B, NR5 and MW3 to PI9 pipelines (No. 1, 2, 6 and 7) were originally designed as GRP pipelines. The raw water, NR5 and MW3 to PI9 pipelines have been commissioned and are delivering water, without any technical impediments.


The Contracts Manager: Construction North (CM: CN) was the Contractor on all the pipelines. The CM: CN advertised a bid for the NR6 pipeline’s originally designed steel pipe materials (Bid W9041) during August 2006. The GRP suppliers provided an alternative offer for GRP pipe material, for R11 million (final cost = R13,308 million) , which would have been R 8 million cheaper than the lowest offer of R19 million for steel materials. Steel pipes would have a delivery period of between 4,5 to 9 months from the date of order due to the requirements of the Vaal River Eastern Sub-system Augmentation Project (VRESAP) scheme.


Apart from the time consideration, the GRP’s had certain advantages in that they were lighter and did not require cathodic protection as the steel pipes did. Thus, it would have been easier to work with the GRP’s given the urgency of the situation.


The DWA Term Contract at the time, W8891, included the supply and delivery of GRP pipes and these pipes were available in a shorter period, three weeks, as the bid process was not required. The equivalent size steel pipes were not available on the Term Contract.


The manufacturer and supplier factory was deemed ISO 9001 compliant, its products bearing the SABS mark, hence there was no reason for concern about the quality of its products. Therefore a due diligence investigation was not done on the factory to establish the quality of GRP pipes manufactured. Another important consideration was the fact that the recipient community of Thohoyandou was urgently in need of additional treated water from this proposed pipeline.


For the abovementioned reasons, the Contractor CM: CN requested the Engineer Directorate: Civil Engineering to change the pipe material from steel to GRP for NR6 pipelines. The Directorate Civil Engineering was hesitant and concerned about granting the approval to use the GRP pipes on large diameter high pressure primary pipelines. Thus, it was specified to the Contractor that the NR6 pipeline must be laid and tested strictly in accordance with Specification DWS1150 and that the Manufacturer must provide an extended ten year guarantee on their products.


3.4        Supply Chain Management issues


The Committee was informed that the nature of operations within the Department was such that the Supply Chain Management and the Finance Offices were not involved in the preparation of specifications. In a normal environment, the options analysis prior to the procurement of goods or services is done by the engineers and the Finance Office in order to come up with the most efficient options that deliver effectively. At the time of the visit, the Committee was informed that both specifications and options analysis were done solely by the engineers. Moreover, the Department did not have a Bid Specification Committee. It was also reported that where an amount of R1 billion or more was being spent on capital projects, there ought to be a capital expenditure committee. It emerged that the Department was operating without a functional Capital Expenditure (CAPEX) Committee which is supposed to take major financial decisions. The Committee was further informed that these were amongst the reasons which contributed to the Department receiving a disclaimer in the Auditor-General’s report.


It was reported that the Department had an internal construction unit which carried out its infrastructure projects. Challenges in this regard were that this structure did not have adequate capacity. Often it outsourced projects to external contractors without following procurement procedures. Further challenges of failure to comply with supply chain procedures were reported in respect of this unit. The Committee was concerned that the way in which this unit operated was in conflict of the provisions set out in the Public Finance Management Act, No 1 of 1999.


The National Treasury reported that since 1 July 2011, a practice notice had been put in place with government departments. In terms of this, the National Treasury would be invited to make an input in the procurement of all services exceeding R10 million.  The National Treasury confirmed that the Department had numerous challenges especially pertaining to its funding model. It added that it was taking drastic measures to ensure that the Department spent its funds effectively, efficiently and economically. However, the Committee recorded its displeasure at the National Treasury’s role as a custodian of state finances as it related to this matter; and this was particularly the case with procurement related issues as these reside directly with the National Treasury.


4.         Findings


The Standing Committee on Appropriations made the following findings:


4.1 The Committee found that the Department’s internal construction unit was not in compliance the procurement processes and payment prescripts as set out in the Public Finance Management Act 1999 (No 1 of 1999).


4.2 The Department failed to operate in a well coordinated and integrated manner in the construction of the Inyaka, Nandoni and De Hoop Dams and thereby failed to exploit the economies of scale and buying power.


4.3 There was a lack of integrated planning and coordination between the Department, the Provincial departments and the municipalities since there was no links between the construction of the dams and the reticulation of water by municipalities.


4.4 There was a lack of coordination between the Department’s internal units within the Infrastructure Cluster and this impacted negatively on the total value chain of the projects. 


4.5 The Service Level Agreement between the Department and the mines that would benefit from the De Hoop Dam had not been finalised and this impacted negatively on the cost of construction.


4.6 The failure to lay the distribution pipes from the Nandoni Dam to benefiting communities and the resulting court case between the Department and the service provider impacted negatively on the delivery of essential services.


5.         Recommendations


The Standing Committee on Appropriations recommends as follows:


5.1 The Minister of Finance should ensure the following:


5.1.1 That the National Treasury assists the Department of Water Affairs to ensure compliance with the Public Finance Management Act and the National Treasury Regulations by ensuring that all committees required to comply with supply chain management procedures are in place;

5.1.2 That the National Treasury reports to Parliament on progress in this regard within three months from the adoption of this report by the House.The National Treasury submit an extensive report to Parliament outlining what it perceives to be constraints in respect of the Nandoni project. This report report must include capacity constraints; and

5.1.3 That the National Treasury submits a progress report on the finalisation of service level agreement, in particular the shared costs, with the mines that would benefit from the De Hoop Dam; and


5.2 The Minister of Water and Environmental Affairs ensures that the Department of Water Affairs submits a progress report on the court case between it and the service provider regarding the glass reinforced steel pipes.

6.         Conclusion


All the requested reports as set out in section 5 above need to be submitted to the National Assembly within 90 days of this report being adopted in the House. 


Report to be considered.





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