TUESDAY, 23 OCTOBER 2001 __

          PROCEEDINGS OF THE NATIONAL COUNCIL OF PROVINCES
                                ____

The Council met at 14:06.

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

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! I would like to remind hon members that it has been agreed that there will be no motions, other than the one on the Order Paper.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS - see col 000.

               ESTABLISHMENT OF JOINT BUDGET COMMITTEE

                         (Draft Resolution)

The CHIEF WHIP OF THE COUNCIL: Chairperson, I move the draft resolution printed in my name on the Order Paper, as follows:

That, in accordance with Joint Rules 142 to 146 and subject to the concurrence of the National Assembly, a Joint Budget Committee be established as follows:

(1) Composition : The committee to consist of -

   (a)  15 Assembly members of whom 9 must be from  the  majority  party
       and 6 from the opposition parties; and


   (b)  8 Council members of whom 5 must be from the majority party  and
       3 from the opposition parties.

(2) Functions: The committee to -

   (a)  analyse and debate the Medium-Term Budget Policy Statement  that
       is to be tabled;


   (b)  conduct hearings on the Medium-Term  Expenditure  Framework  and
       the Division of Revenue Bill; and


   (c)  engage in the budgeting process throughout the budget  cycle  in
       order to allow Parliament to have an input during  the  drafting
       stage of the budget.

(3) Powers: The committee to exercise those powers in Joint Rule 32 that may assist it in carrying out its functions.

Motion agreed to in accordance with section 65 of the Constitution.

              DEBATE ON INTERGOVERNMENTAL FISCAL REVIEW

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! I take this opportunity to welcome all the special delegates present here and would also like to welcome the hon the Minister of Education and the Deputy Minister of Finance.

Ms Q D MAHLANGU: Chairperson, Minister Asmal, the Deputy Minister of Finance, MECs and special delegates, I rise with pride to table this report of the select committee and portfolio committees of both Houses to this august House. It is a product of intense discussions between the three spheres of Government, members of Parliament and provincial legislatures. However, the participation of local government was very minimal, and I think this House should take note of that.

The content of the report is contained in the Announcements, Tablings and Committee Reports of today. I would like to take this opportunity to thank, in particular, all the Ministers who participated in the debate, the Deputy Ministers who participated when Ministers were not available, and all the government officials who helped us.

I am not going to table the entire contents of the report because the report is about 31 pages long. My colleagues will go into greater detail about the content of the report. I will only touch on issues that are cross- sectoral and run across all government departments.

One of the things that we noted in the hearings was that, in many instances, there are competing priorities which all need to be financed with limited resources that we have as a country. In dealing with the issues that I am going to talk about, which my colleagues are also going to talk about later on, we have to take these issues into account. We have limited resources and, in that context, we have to make sure that those resources are spent wisely on the people that need to benefit and in a manner that is going to advance and improve their lives for the better.

Secondly, in the discussions during the hearings, it was quite clear that there is no integration and co-operation between the three spheres of government. We would like to see it happening to a greater extent, and the committees have recommended that that co-operation and integration should take place speedily, so that we avoid the unnecessary duplication and wasting of resources that we came across from time to time.

On the question of the departments that have not moved towards public- private sector partnership projects, it was felt that they should be encouraged to do so, and that they should use the examples of the National Treasury as a guiding process towards that, because there is value for money and efficiency that we are going to see at the end of the day. In addition, there is the transference of skills from the private to the public sector.

The problem that we identified at the beginning of the year, which continued to come up during the process of the hearings, was that there should be an investigation around the legislation with regard to the excess bank charges beneficiaries of social security grants have to pay, and the Ministry of Finance is being charged with the responsibility of investigating this possibility. There are also a lot of infrastructural backlogs and, as I said earlier on, we have competing priorities and in responding to these challenges around infrastructure, we have to make sure that we do not compromise some functions of Government at the expense of others, and that some provinces are not worse off than others.

I would very much like to thank all the staff and the researchers who helped in preparing this report, all the government officials, and all chairpersons of other committees in the National Assembly and the NCOP. [Applause.]

Mr P S SIZANI (Eastern Cape): Chairperson, hon Minister of Education, Deputy Minister of Finance and hon members, education transformation in the provinces, with co-operative governance in practice, can balance and accelerate our achievement of universal access to quality education, resulting in a better human resource base in our economy and greater equity in our society.

The financial stabilisation of provinces and improvement in provincial management results in the elimination of fraud and corruption, and this will augur well for better service delivery and the improvement of control measures to enable provinces to have resources for infrastructural development to eliminate physical classroom backlogs, and to acquire learner support material and teacher upgrading through in-service training. We are currently engaged with partners in the improvement of research and planning to enable us to be better informed on these issues.

Many people concerned with education financing will be curious to know why provinces that spend less on education seem to be obtaining better results, if one uses matric results as a measure. They will be shocked to note that, invariably, all such provinces only subsidise fee-paying communities, whereas most poor provinces fund everything since there are no sizable fee- paying parents to offset any budgetary shortages of the department of education.

We in the Eastern Cape do not like to be labelled a poor province. It is not something that we have caused or wished for, but it is something that we inherited. If we have no private sector to sponsor schools, to establish endowment funds for educational improvement or any other benefactors, it is not because we wished for it, but because we inherited that situation.

I must use this platform to salute Mr K S Birch who donated all his Eskom bonds to the Eastern and Northern Cape for the improvement of primary school education in these two provinces. Thanks to him, some primary school children have a roof over their heads and better qualified teachers in the Peddie and Port Elizabeth areas.

An HON MEMBER: Hear, hear!

Mr P S SIZANI (Eastern Cape): I take this opportunity to salute him and Mr Ludidi of Mount Frere, who built a school for rural poor children in his area. I wish them longer and healthier lives. The Eastern Cape needs more such people to come up and contribute to the cause of education. In this way, we can meet our target of universal primary education coverage by the year 2005.

The classroom-pupil ratio in the Eastern Cape, though improving, still needs a faster rate of delivery to reduce overcrowding. Our school building programme has been accelerated to respond to this. Our partners are spending more time and effort to enable us to meet our targets in this financial year.

We have, in collaboration with the department of roads and public works in the Eastern Cape, developed a clearer strategy and implementation plans for building and maintenance of schools in which school governing bodies, local government structures and nongovernmental organisations will be involved. In this regard I would like to thank DFID, which is the Department for Foreign International Development in the UK, which sponsored this particular plan. This will allow us better scope to increase the number of classrooms, which will relieve overcrowding and allow for the removal of mud structures in our rural areas. The report notes that only 16% of the schools in the Eastern Cape have computers, as opposed to 84% of schools in Gauteng, which is better endowed than us. This underlies the other fact: Not only do we have poor parents in our province, but these schools also have no buildings, no telephone lines, no water and no sanitation. They even have no fences to secure them. On this front we are facing an uphill battle, yet we cannot throw in the towel since children in the Eastern Cape deserve the best too.

In this regard I have prioritised the training of school governing bodies, which will intensify in the new year, so that they can take control of discipline and curtail burglaries, theft and violence in schools. We are also mobilising parents, who, in many rural areas, are illiterate, to participate in the education of their children. This will allow them more involvement in the protection of learners from sexual abuse and harassments. These children are facing communities and their own teachers harassing them.

Teenage pregnancies, HIV/Aids and a high dropout rate, especially among the girl learners, can be curtailed if we succeed in encouraging public representatives, including councillors, to be involved in programmes, led by school governing bodies, for moral renewal and the social regeneration of school community behavioural standards.

With this concerted effort by all stakeholders, rich provinces could be in for a big surprise from poor provinces, especially the Eastern Cape, regarding the 2001 matric results. [Interjections.] I agree with the Treasury view that says infrastructure involvement, systems improvement and maintenance precede the hiring of teachers. It is our intention to pursue this practice without neglecting teacher development for higher value for money, and management capacity- building for bigger delivery and better communication with our people so that they can know what is going on in their government in the country. [Applause.]

Ms O H ZILLE (Western Cape): Chairperson, it is my pleasure to speak in this debate on the Intergovernmental Fiscal Review, which has given us many very useful insights into a very valuable document indeed, and will continue to do so.

South Africa’s first democratic Government effected a decisive shift in the centre of gravity of the national Budget, from one weighted under apartheid towards defence and internal security, to a focus on the social services of education, health and welfare, and we warmly welcome that.

South Africa’s education budget, around 7% of gross domestic product, is high by any standards, placing us in the top 10% of developing countries. At the same time, Government achieved greater funding equity between provinces, and we in the Western Cape welcome that as well.

In die vroeë 1990s was die Wes-Kaap die provinsie wat by verre die beste befonds was. Daarom moes die Wes-Kaap ook gaan deur ‘n baie moeilike proses van rasionalisering. Op ‘n per-leerder-basis was die Wes-Kaap sowat 70% beter befonds as die land in sy geheel in 1994. Die situasie het sedertdien drasties verander. Die Wes-Kaap moes onder meer 8 000 onderwysposte verloor. Ons was so suksesvol in ons rasionalisasiepogings dat daar vandag twee provinsies is, Gauteng en die Noord-Kaap, wat beter befonds word as die Wes-Kaap, gereken op ‘n per-leerder-basis. Die gemiddelde leerder- opvoeder verhouding in die Wes-Kaap vergelyk tans goed met die land se gemiddelde.

Die oorsig toon die Wes-Kaap het ‘n lae persentasie van sy totale beskikbare bedrag aan onderwys bestee vergeleke met ander provinsies. Die WKOD bestee op ‘n per-leerder-basis die derde meeste van al die provinsies in die land. Een van die redes hiervoor is die provinsie se relatief beter uitslae wat tot gevolg het dat leerders vinniger deur die stelsel vloei. Nog ‘n bydraende faktor is streng beheer oor leerdergetalle en onderouderdomleerders. (Translation of Afrikaans paragraphs follows.)

[In the early 1990s the Western Cape was by far the province that had been funded the best. That is why the Western Cape had to go through a very difficult process of rationalisation. In 1994 the Western Cape was 70% better funded on a per-learner basis than the country as a whole. The situation has since changed drastically. The Western Cape had to, amongst others, lose 8 000 teaching posts. We were so successful in our rationalisation efforts that, calculated on a per-learner basis, there are now two provinces, Gauteng and the Northern Province, that are better funded than the Western Cape. The average learner-educator ratio compares favourably to the rest of the country’s average.

The review shows that, compared to other provinces, the Western Cape spent a low percentage of its total disposable budget on education. The WCED spends, on a per-learner basis the third most of all the provinces. One of the reasons for this is the province’s relatively better results which result in learners flowing through the system quicker. Another contributory factor is strict control over learner totals and underage learners.]

A fundamental value enshrined in our Constitution is equality of opportunity. This cannot be measured only by the level of resources transferred to poorer provinces and schools. The review states:

There is no necessary correlation between funds received and matric results. In fact, often provinces that direct a lower proportion of their budgets towards education produce better matric results.

The report continues to comment:

Funds alone do not guarantee effective education …

And:

… management of resources is a critical priority.

One of the most important lessons I have learnt in public life is this: Pouring money into inefficient systems does nothing to improve performance. It is just a waste of money. There are some schools in the Western Cape that would continue to produce pitiful results at every level, even if we were to quadruple their funding. This is obviously, therefore, the wrong strategy to follow.

Research by Professor Servaas van der Berg illustrated this principle very clearly. He compared the growth in matric passes of individual provinces to the growth in their budgets. He plotted the results on a graph. The result is more or less a straight line, but the line goes in the wrong direction.

Die grafiek dui aan dat hoe meer ‘n onderwysdepartment se begroting groei, hoe minder leerders slaag matriek, en omgekeerd. [The graph shows that the more an education department’s budget grows, the fewer learners pass matric, and vice versa.]

This cannot be taken as a rule, and I am very anxious that the brutality of our own rationalisation process in the Western Cape over the past few years may be one of the factors that leads to a decline in our matric pass rate. Another factor may well be the very substantial change in demography and the funding that is retrospective, which I do not think covers the number of learners we have by a significant margin. We welcome every learner who has a chance in this province to do well in the schools that we try to manage well for that purpose.

My point is that additional funds do not necessarily guarantee educational success. We have to look at outcomes to determine whether our money is being well spent. One of the very few indicators that we have of these outcomes currently is to see how many children survive until matric, and another is the matric exam itself. Many pupils do not survive in the system until the matric exam, but nearly half of the children who do, experience these exams as a devastating brick wall.

Although we do not have a systematic picture of what our children are, or are not learning in previous grades, that is before matric, what research does exist all points in the same direction. In our poorest schools in the Western Cape it would seem that there is a disaster happening in terms of performance levels in literacy and numeracy, the foundations on which all other forms of learning depend. Assessment of learning at the end of Grade 3 indicates that children are already a good two years behind what their teachers and administrators expect of them.

Louise Crouch, in a very good piece of research published at the end of 1999, calculated that it takes an average of nine learner years of effort to get to Grade 7. That is a serious indictment of the efficiency of our system - and obviously I am not playing one province off against another; I take it to apply directly to myself. To determine the value we are getting from the schools system, we can compare the progress of South African pupils with those of some of our neighbours.

Analysis indicates that South African schools are twice as inefficient as those of Senegal and Zambia, yet those countries are significantly poorer than we are. In terms of international comparisons we fare poorly at all levels. South African Grade 4 learners have amongst the worst numeracy, literacy and life skills in Africa.

Suid-Afrika ding nie net mee met Afrika nie, maar weens die aard van die ekonomie vandag ding ons mee met die hele wêreld. [South Africa is not only competing against Africa, but because of the nature of the economy today we compete against the whole world.]

Why have we achieved these poor learning outcomes? Louise Crouch and Mabogoane, two leading education policy analysts, concluded that the difference in the performance of schools is to a very large extent due to the differences in the quality of their management. Nick Taylor, the executive director of the Joint Education Trust, believes that the quality of the management of a school may account for around 50% of the variation in learning outcomes across schools. We will find schools in the same community with the same poverty indices, with very different learning outcomes. This confirms that, above a rather low threshold, providing additional resources to a school will not necessarily result in improved learning.

If it is true that the quality of management is such a major contributor to efficiency, we can understand why the significant redistribution of resources in the schooling sector and across the provinces since the advent of democratic rule in South Africa has not necessarily improved the education opportunities of all of our children.

This money was initially absorbed entirely in hiring new teachers and increasing salaries. Between 1995-96 and 1998-99 expenditure on personnel increased by 35%, while nonpersonnel expenditure decreased by almost 12%. If the Crouch-Mabogoane model is correct, then the hiring of additional teachers would not have more than a marginal positive effect on learning. The fact that the additional appointments were made at the expense of books would be to the detriment of learning. Budget spending on books and stationery showed a real decline of 14%. [Time expired.] Mev J WITBOOI: Agb Voorsitter, agb Minister en agb lede, daar is in Afrikaans ‘n spreuk wat lui: ``Geld wat stom is, maak reg wat krom is.’’ In die Suid-Afrikaanse onderwysstelsel is daar baie kromhede en in die vier minute tot my beskikking, wil ek net na ‘n paar aspekte kyk. Dit is belangrik om te verwys na die toename in die onderwysbegroting sedert die 1995-96 boekjaar van R32 miljard tot die huidige R56 miljard. Steeds is dit nie genoeg om te vergoed vir die vermindering van die koopkrag van die rand nie, met negatiewe gevolge in sekere sektore van ons onderwys.

Die nuwe kurrikulum is gebaseer op die veronderstelling dat elke leerder genoegsame toegang tot hulpmiddele sal hê. Daar is nie genoeg geld om hierdie aspek van onderrig aan te spreek nie. Ons doen ‘n beroep op die Minister dat daar opnuut gekyk sal word na die beskikbaarstel van geld om die hulpmiddele wat skole, en veral ons arm skole so broodnodig het, aan te skaf. ‘n Kind se grondslag moet reg gelê word. ‘n Stewige fondament verseker ‘n blink toekoms. Waarom sal ons toelaat dat ons onderwysbegroting voorskoolse onderrig soveel onreg aandoen? Wanneer en hoe gaan ons hiervoor vergoed? Geld wat stom is, maak reg wat krom is.

Daar is ‘n verbetering in ons matriekuitslae landswyd en ons hoop van harte dat die tendens ook hierdie jaar sal voortduur. Op die vakgebiede van wiskunde en wetenskap is daar enorme kromhede. Ek staan om te pleit dat ons in hierdie spesifieke vakrigtings meer geld beskikbaar sal stel sodat ons manne en vroue sal voorberei vir die mededingende wêreld daar buite.

In 1999 het die Minister van Onderwys belowe om binne vyf jaar die agterstand wat daar in die veld van volwasse basiese onderrig bestaan, uit te roei. Dit is nog ‘n kromheid, waarvoor geld wat stom is, bewillig moet word - anders sal dit bloot ‘n belofte bly.

‘n Ander groot leemte in die onderwysstelsel is die gebrek aan kennis, insig en ondervinding aan die kant van personeel in sekere van ons provinsiale departemente. Dit bring mee dat belangrike ondersteuningsmateriaal vir onderwys nie betyds, indien ooit, by skole afgelewer word. Die aanstelling van geskikte personeel moet saamgaan met doeltreffende opleidingsprogramme. Geld moet gebruik word vir die doel waarvoor dit aangevra word. Daar is ook ‘n Engelse spreuk wat lui: ``Put your money, where your mouth is.’’ Kom ons doen dit nou. Daar is nog te veel kromhede. [Applous.] (Translation of Afrikaans speech follows.)

[Mrs J WITBOOI: Hon Chairperson, hon Minister and hon members, in Afrikaans there is a saying that goes: ``Geld wat stom is, maak reg wat krom is’’ [Beauty is potent, but money is omnipotent]. In the South African education system there are many problem areas and in the four minutes at my disposal I want to look at a few aspects. It is important to make reference to the increase in the education budget since the 1995-96 financial year, from R32 billion to the current R56 billion. It is still not enough to make up for the reduced purchasing power of the rand, with negative results in certain sectors of our education.

The new curriculum is based on the supposition that each learner would have adequate access to resources. There is insufficient money to handle this aspect of education. We appeal to the Minister to take a new look at making money available for purchasing resources that are so desperately needed by schools, especially our poor schools. A child’s foundation must be laid correctly. A solid foundation ensures a bright future. Why should we allow our education budget to do pre-school education such injustice? When and how are we going to compensate for this? Beauty is potent, but money is omnipotent.

There is an improvement in our matric results countrywide and we hope with all our hearts that the trend will continue this year. In the subjects of mathematics and science there are enormous problems. I am standing here to appeal that we should spend more money on these specific areas of study so that we would prepare men and women for the competitive world out there.

In 1999 the Minister of Education promised to eradicate the backlog in the area of basic adult education within five years. This is still a problem, for which omnipotent money must be appropriated - or it would merely remain a promise.

Another major shortcoming in our education system is the lack of knowledge, insight and experience on the part of personnel in certain departments in our provinces. This causes the late or nondelivery of important educational support materials to schools. The appointment of suitable staff must go hand in hand with efficient training programmes. Money must be used for the purpose for which it is requested. There is also an English saying that goes: ``Put your money where your mouth is.’’ Let us do this now. There are still too many problem areas. [Applause.]]

Ms J MASHAMBA:(Northern Province): Hon Chairperson, hon Minister, hon Deputy Minister and the House at large, it is indeed a great honour to us as the Northern Province’s department of education to have been afforded the opportunity to come and share with the House our perspectives on a few issues.

Although we agree that the 1994 elections constituted the decisive qualitative break with the past, we dare not relax and say that all is over. We say that the education struggle must continue. As we celebrated that breakthrough we knew too well that although apartheid was dead we had not disposed of it. In fact, in death apartheid had become more onerous and ubiquitous. We knew that although we had witnessed the birth of democracy, we had not yet fully really achieved it. In its birth, democracy had in fact become more nebulous and fragile.

We come here to hold hands with members to continue with the education struggle until the doors of learning and culture are indeed open. We are not surprised that when one touches anything regarding apartheid, one hears people making a noise. One is reminding them of the past and it is difficult. They had better toe the line, because those days are over. We shall highlight certain commendable achievements by the department of education in the Northern Province within the past years and indicate how we intend to carry forward the transformation of our education system.

We say that it is commendable in our view that the department has been able to integrate the various racial and ethnic educational systems into a single, nonracial, nonsexist and democratic education system without any earth-shattering hiccups. This is not to say that it was all plain sailing. No, there has been resistance from all quarters, especially from right-wing communities and individuals. However, these occurrences have been more the exception than the rule.

The redeployment of educators has been a hard nut to crack, but tremendous progress has been made. But there is no denying that at the moment there are many qualified educators who are unemployed. However, in most cases their qualifications are not relevant to either the needs of our schools or those of the national economy. We are, however, doing all we can to redress this situation.

We will soon embark on a process of empowering and reorientating these teachers to play a critical positive role in the reconstruction and development of our country, in line with the new national Government’s Integrated Rural Development Strategy and the National Department of Education programme to turn our schools into centres for community development. It is for this reason that we have decided to accept a teacher corps from Cuba, not because, as it was rumoured, we intend to retrench South African teachers, but because we want these Cuban teachers to help us produce teachers who will be relevant to the demands of our times.

We are also happy to report that we have taken a decision to provide adequate infrastructure to our schools. We have first targeted the most needy, starting with those schools where we still have classes being conducted under trees. We are doing everything in our power to make sure that this is not just an empty promise. We think that, together with our communities and those magnanimous enough to donate funds for this purpose, we shall manage to have provided the necessary infrastructure to all the needy schools in the not so distant future. To improve the performance of our schools at all levels and particularly at matric level, we will continue to intensify the programme that we put in place last year.

I do not want to say that although we are so determined to do all this, we do not have impediments on our way. Through the Minmec and the submissions to our provincial treasury, the department has already highlighted the financial problems facing it. If all expenditure items are to be fully funded, the department will require a further R500 million. The breakdown is as follows: LSM is R220 million, Abet is R50 000, the Skills Levy is R66 million and personnel promotion posts are R156 000. In 2003-04 this figure will in all likelihood rise as a result of the Curriculum 2005 implementation. The Northern Province will need R166 million for this. On the infrastructure issue, the department is working with Public Works to ensure that the full annual allocation is spent. The department’s budget is R181 million for 2002-03, which is an increase of 50% on the current allocation. Although classrooms are the major indicators, services such as water, sanitation and electricity also have huge backlogs. The department is working together with Water Affairs and foreign donors to address these problems.

Once more, we all know where we come from. We all know where we are and we all know where we are getting to. Nothing is going to deter us. We are going to do all we can to improve the quality of life of our people. [Applause.]

Mr N M RAJU: Chairperson, hon Minister of Education, hon Deputy Minister of Finance, hon MECs from the provinces, hon special delegates and dear colleagues, equity, parity, quality and all those positive words that describe a just dispensation were distinctly absent in a society characterised by the imperative of apartheid - a word that was really a poor euphemism for racial discrimination and subjugation.

One can therefore fully comprehend the enormity of the task inherited by the new democratic Government seven years ago, when, at long last and after many centuries of neglect of the greater number of its citizens, it had to address the questions of access to affordable, quality services for more and more South Africans.

When one surveys the apartheid landscape, one sees that the hallmark of education was the Bantu Education Act of 1953, one of the most obnoxious pieces of legislation ever written in the statute books of South African legislation. When it was introduced in this very Parliament, by one Dr Hendrik Verwoerd, sole inspiration of the apartheid philosophy and a failed sculptor of human destiny, he declared in high-pitched staccato tones that there was no place for the black man in European society above certain forms of labour. It was this piece of legislation that set the tone for the denial of access to good and wholesome education for generations of black South Africans.

Ministers of education in a democratic state have the unenviable task, almost insurmountable, of turning education around. The road to this destination has unfortunately not been paved with gold. The national Minister, who is well known for his penchant to take the bull by the horns, will not allow such impediments as tight resource constraints or weak management or unacceptably high numbers of poorly trained teachers or even recalcitrant councils of higher education institutions to impede his Ministry’s inexorable progress towards equity, quality and a skills base commensurate with the needs of a global economy.

A cursory reading of the IGFR chapter on education gives an objective analyst’s confirmation of the view that the Education Ministry, though far from singing, ``My troubles are over,’’ has nevertheless extricated itself from the quite untenable situation that existed during the last seven years. We applaud the Minister and will continue to do so in his sustained efforts to establish greater stability in education. It would be naive not to acknowledge that education is being turned around.

In his informative prelude to the IGFR on education on 12 October 2001, the hon the Minister was candid in admitting, like Ulysses of old, that though much has been done, much abides: the challenges of poverty, the challenges of the incidence of HIV/Aids, the challenges of bringing bureaucratic management to controllable levels, the training of middle management, the spending of funds to improve infrastructure, and more importantly, to ensure that maintenance of existing infrastructure is equally critical and vital if new levels of stability are to be achieved.

It must, however, be admitted that, by and large, it is the provincial MECs who are ultimately responsible for the development and maintenance of infrastructure. Unfortunately, in my province, KZN, the constant changes in the appointment of the MEC for education have stalled progress in meeting the challenges of good management and delivery of services. There seems to be an inordinate delay in the appointment of the superintendent-general. One can understand the frustration of the national Minister of Education when he correctly called for a greater will and determination to be shown by political superiors in the different provincial departments. Good management is absolutely crucial to ensure that priorities in education are realised.

We all agree that no child should be learning under a tree. No child should be denied fresh water and electricity. No child should be deprived of basic learning materials. No child should go hungry in school. The failure of school feeding schemes, the shortage of school learning materials, the selling of textbooks by every butcher, barber and baker continue to mar the physiognomy of our education. The MECs must certainly take responsibility for all such shortcomings and become proactive in initiating efforts to eradicate them.

Mr Z P TOLO (North West): Chairperson, Deputy Minister, hon Minister of Education, hon members, the Department of education in the North West province appreciates the work behind the Intergovernmental Fiscal Review. The type of information and analysis provided in this piece of work is very instructive and indeed helpful in pointing the way forward, assisting us in reflecting on expenditure patterns over the past seven years or so. We take it as an important reflection and a mirror to assist us. We are very proud that we are currently involved in one of the most important service delivery projects, namely the provision of education.

Though education still remains in some respects underfunded, the type of budget allocation that we get is indeed very helpful in assisting us to address especially the challenges inherited from the apartheid government. Education transformation is currently under way, and I would like to mention that a lot of work is being done in achieving this objective. We are indeed living through very exciting events in dealing with the transformation of the education of our children in the country.

I would like to commend in particular the point raised in the report with regard to HIV/Aids, because if we cannot deal with this monster which is currently creeping into our schools and our society, we will indeed have no one to teach and no one to be taught not long from today. Therefore it is important that resources be made available and a greater effort be made to deal with this monster.

In the beginning the question of rationalisation and the redeployment processes within the Department of Education were very important and very difficult. I would like to say to the House that though we talk of excess educators we should, in fact, refer to these educators as being excess to the budget. The need for personnel is still felt in our schools and needs to be addressed.

We still need counselling officers in our schools to deal with the trauma young people experience due to various incidents that take place on school premises, and we still need sports administrators and educators who can assist children in curriculum redress and to address issues such as arts and culture.

The situation in farm schools needs urgent attention. Plans are being put in place. What is needed is to direct more resources to deal with the situation in our farm schools. Farm schools in South Africa are a reflection of where we come from. They reflect the negligence that prevailed under the apartheid government. It is a pity that Ms Zille is not here, because she would have clearly understood, if she cared to hear, the difficulties we experience in addressing the situation, especially in our farm schools.

Another important issue raised by the report is the decline in learner enrolment. It is true that we have experienced a pattern of decline in learner enrolment. We intend to take advantage of the situation and direct resources properly in order to close the gap that has developed as a result of this.

The drop in learner enrolment will afford us an opportunity to address curriculum redress within the school situation. We will intensify the reskilling of our teachers through in-service training. We will be in a position to provide more resources like learner support and better equipment in the classrooms, and we will also increase the average expenditure per learner within the school system.

One of the critical challenges facing us currently is the need to introduce information technology. In the previous century we talked about the 21st century being the century of information technology. We therefore say that this new challenge seeks to ask that whatever resources may be saved during implementation should be directed towards information technology in our schools.

In terms of creating infrastructure, which is much more needed, we all agree, at all levels, that no learner should attend school under a tree. All our learners, all our children, must be afforded better facilities that will enable proper learning and teaching to take place.

In the North West province we have established the North West Education Development Trust. Jointly with the private sector we are able to mobilise resources. All these resources are directed towards creating the much- needed, suitable and comfortable infrastructure for our children.

We have also gone a long way in providing laboratory equipment. I can announce here that all our schools in the North West province, starting with the rural schools, have been provided with laboratory equipment. This is intended to improve the performance of our children in science subjects, which have proved to be very difficult in the past.

The transformation of education remains one of the greatest challenges facing us. Those of us who are involved with this task at grass-roots level, at the level of implementation, say it is a very exciting moment. We are grappling with all the challenges facing us. [Applause.]

Mr D M KGWARE: Chairperson, hon Minister, hon Deputy Minister of Finance, hon colleagues, hon MECs from the provinces, under the ANC Government South Africa has made enormous progress in turning education around.

This has proved to be an arduous task, as apartheid denied millions of blacks access to equal and quality education. The transformation of education is about equity, quality and a skills base adaptable to the demands of the global economy. All this has to be achieved in a context of weak management experience, tight resource constraints, poorly trained teachers and a culture in which learning has fallen by the wayside.

Initiated in 1999, the Intergovernmental Fiscal Review has become the barometer of provincial and local governmental fiscal trends. Not only does it inform us on the trends in spending and revenue, but it also supports our committee in its assessment and debates on the critical aspects pertaining to delivery.

The review emphasises the department’s significant consolidation over the last five years, specifically transformation balanced against the need for universal access, greater equity and improved quality. This is well managed through co-operative governance.

What is of particular significance is that, in terms of the historical spending trends since the 1996-97 financial year, when education spending went up by 22% in real terms, there has been a 2,4% decline between 1997-98 and 2001. This can be ascribed to a variety of factors, for example teacher rationalisation, improved financial management, greater powers being given to parents in the managing of schools and the launch of the Tirisano campaign. This has resulted in a much more stable education system in which budgets are more balanced and sustainable.

While we continue to face serious challenges, we are beginning to see the benefits arising from our efforts to turn our education system around. This is evident in our spending-per-learner average, which is currently estimated to be R3 658. I hope Antoinette is listening. The average spending per learner is the highest in the Northern Cape, Gauteng and the Western Cape, whereas in KwaZulu-Natal, the Eastern Cape and the Northern Province, spending is among the lowest. These disparities can largely be attributed to the disparities in enrolment rates, the cost of teachers and other priorities.

Poorer provinces are encouraged to work harder in this regard. However, we would urge the department to consider these factors when allocations are made to these provinces and find ways to bridge these gaps.

The teacher-learner ratio has declined in all provinces, from 33,7 to an acceptable 32,7. Antoinette must note that. However, in some provinces the classroom-pupil ratio is still significantly high due to excess teachers. For example, the Northern Province has an oversupply of teachers and undersupply of classrooms. During the public hearing this was one thing that was brought up. We believe that this problem can be addressed through a human resource strategy to ensure that the various education departments work together in a co-ordinated way. Since 1996, about 25 102 new classrooms have been built. A significant increase in the provision of telephones, sanitation, running water and electricity can be reported. I hope our achievements are also noted.

What is of particular concern is the decline in the physical condition of our schools. For example, the amount of schools requiring repairs went up from 10 500 to 12 100 and those classified as weak from 3 000 to 7 000. What is encouraging is that the number of schools with computers went up from 2 241 to 6 581. As an achievement, this is enormous progress. I want to mention that those who usually say that we do not deliver as the ANC Government should start to learn that we are moving forward.

Crime has also caused provinces a loss of R155 million in the year 2000, with 2 540 burglaries. Five thousand assault cases were reported, of which 1 860 were serious crimes. We believe, in this regard, that communities could play a meaningful role by taking ownership of schools and that school governing bodies can also greatly contribute.

The matric results for the year 2000 were, on the whole, impressive. However, the number of candidates not passing mathematics and science is cause for concern. A major cause of concern is the low number of females taking up these subjects. There is also growing concern that the female child learner is still experiencing discrimination, which is reflected in the levels of high school dropouts. This problem is compounded by these learners having to travel to school over long distances, resulting in their being exploited by bus and taxi drivers. We therefore propose that the provincial departments take a serious look at the possibility of providing safety nets for these learners.

The review admits that a great deal of improvement has been made in terms of delivery in education, which we endorse without reservation. However, a number of challenges remain, for example, the shortage of learner support material, insufficient transport, inadequate ablution facilities at rural schools, a shortage of suitably qualified teachers in certain provinces, and a lack of mathematical and scientific literacy.

What is actually of major concern is the extent to which bureaucratic tape and poor financial management systems hamper delivery in some provinces. Moreover, the slow procurement and distribution of learner support materials and annual roll-overs in budgets leave a lot to be desired.

In conclusion, Antoinette, the success achieved in stabilising the education system …

The CHAIRPERSON OF THE NCOP: Order! Hon member, I wish to remind you that we do not refer to members by first name in the House. It would be appropriate to refer to ``the hon member’’ and a surname if necessary, but not the first names of members. We do not do that.

Mr D M KGWARE: Thank you, Chairperson. In conclusion, the success achieved in stabilising the education system and in improving management should provide accelerated enhancement in the quality of schooling. [Applause.]

Mr C N M PADAYACHEE (Mpumalanga): Chairperson, Minister of Education, Deputy Minister of Finance, hon members, ladies and gentlemen, it is common knowledge that the previous regime left us with an education system laden with a daunting variety of backlogs as millions of our people were denied access to decent and quality education. However, the ninety-degree turnaround we have managed to achieve within a very short period is attested to by the expenditure patterns reflected in the IGF review, including the education of many adults who were previously denied the right to education.

I take for granted hon members’ profound knowledge of the funding patterns of the provincial education department in Mpumalanga over the past three financial years. At face value there is a discernible increase in the budget allocation, whilst in real terms this represents a decline of about 0,5%.

If I may refer to the period 1999-2000, education received 43,1% of the equitable share for provincial expenditure, of which R14 million was on conditional grants. For the financial year 2000-01, 42,8% was received, with the same amount on conditional grants. If a variety of other important factors such as salary adjustments, severance packages and the inflation rate are not taken into account this surely may be misconstrued as a substantially significant increase of 6,6% from the overall provincial budget allocation.

However, despite the situation, there have been notable developments, which have positively and qualitatively accelerated the transformation agenda for education provisioning. Financial management has improved. Greater equity was achieved in the deployment of educators, and personnel costs are being brought down. For instance, in 1999-2000 the total actual personnel expenditure was 92%, whereas for the current financial year 98% is budgeted for personnel costs. We are determined to ensure strict adherence to the national ratio of 85 to 15, a budgetary guideline recommended by the Financial and Fiscal Commission. Next year’s budget will see us reduce our personnel costs to 87%, and the year thereafter to 85%.

As there is everywhere in the country, there are, however, serious physical infrastructure backlogs, which are still hampering effective learning and teaching. An amount of R107 million has been earmarked for infrastructure development for the financial year 2002-03 to bring much-needed relief to the majority of our learners. This represents 32% more than the current financial year, and 186% more than the previous financial year.

Also, as a result of the increased learner enrolment over the past years seen against a backdrop of serious backlogs in classroom provisioning, 4 000 classrooms must urgently be provided in the province. This was not catered for after 1994, and is due to the previous system wherein the majority of people were denied proper building facilities. [Interjections.]

Obviously, this will happen within integrated development planning, in conjunction with the relevant authorities, for the proper determination of areas of critical need, taking into account social movement patterns, as well as the development of new residential settlements.

The province is also looking at alternative funding methods in order to speed up the delivery of classrooms that are so needed. The 2001 Intergovernmental Fiscal Review document indicates that in 1996 only 49 schools indicated that they had critical classroom shortages, whereas in 2000, 59 schools indicated shortages. However, since 1997 many classrooms have been built. For instance, in the financial year 1998-99, 332 classrooms were built; and in 1999-2000, 420 classrooms were built. As we speak now for this year, 420 classrooms, including toilets and so forth, are being constructed.

As we continue striving to provide adequate learning facilities, we are acutely conscious of the plight of the learners in farm schools.

Scholar transport is a critical and most pivotal area of need that requires redress. Towards meeting this basic need for these learners, my department has, in terms of actual expenditure, spent R7,2 million for the financial year 2000-01 and R8,2 million for the year 2001-02, and for the next financial year R13,5 million will be allocated for this purpose. As an indication of my department’s commitment to deal with this challenge, the expenditure for the two latter financial years has increased by 100%.

Our budget allocation and expenditure trends towards the procurement of learners’ support material for schools are showing a steady increase. For instance, the expenditure for 2000-01 was R60 million for 2001-02 it was more than R68,5 million, and for next year it will be more than R100 million.

As I speak now, stationery for all schools in Mpumalanga has already been delivered in preparation for next year’s learning. Underlying these efforts is my department’s commitment to create a conducive environment for the decisive delivery of qualitative and efficient teaching and learning to take place.

Amongst our priorities, we will continue with the development of professional quality educators, ensuring the success of the active learning process through outcomes-based education, the creation of a vibrant further education and training system, breaking the back of adult and youth illiteracy, urgently and purposefully dealing with the HIV/Aids emergency, and eliminating the backlog in infrastructure.

The CHAIRPERSON OF THE NCOP: Order! Hon Padayachee, I would have thought that members would applaud you at the point where you announced the delivery of textbooks and other materials. I hope that it does not mean that hon members wish to go and check the storerooms of Mpumalanga. [Laughter.]

The MINISTER OF EDUCATION: Chairperson, members of the NCOP, and members of the executive councils who are here, I wish to begin by commending the National Treasury, through the Deputy Minister, for the very valuable Intergovernmental Fiscal Review of 2001. On 12 October I participated in a very lively and useful hearing on this review with the NCOP’s Select Committee on Finance, which was ably conducted by the chairperson of the standing committee, and it was a pleasure to meet him for the first time, and, of course, my old friend the hon Mr Kgware.

The discussions and questions today are equally useful. Members should remember that this is a very interesting constitutional device that we were discussing. I think it is to the credit of the Treasury and our democratic order. But today we are looking at the policy aspects of expenditure. This attests to the success of the publication in facilitating effective parliamentary oversight on Government’s policies, budgeting and expenditure. This is quite different from the portfolio committees and standing committees. Those are, rather, fairly incestuous bodies, if I may say so. It is very important that we should come to the House itself, because we should not be talking about education by just talking to each other only.

I think that the general political oversight is important, so I welcome this opportunity to respond to the questions posed in this debate. I will deal with the matters covered by the review. I would be very excited if I had to look at other issues, but I think that it is the review that is under scrutiny.

I do this secure in the knowledge that the review confirms very important achievements of the Government in the area of education and training in the country since 1994. One of the extremely notable achievements is that we can now confidently say that we have turned a corner with regard to provincial education expenditure trends. Problems associated with the very sharp increase in provincial expenditure in 1996-97 have been dealt with. In the past, I have mentioned in this House the dire effects of the overexpenditure and the cutbacks that took place, in what is known as the incidental areas of early childhood education, specialist education, literacy, and Abet, and the devastating effects on those areas.

We did this through discipline, hard work, leadership and support. In this regard, I want to reiterate my appreciation for the efforts and leadership displayed by the provincial education MECs and the much condemned and maligned provincial MECs of finance also.

But I want to say very clearly, particularly to the deniers and critics, that the quality of education in South Africa in the last eight years, for the vast majority of our people, has improved to a considerable extent. As for those who had privileged access to the former Model C schools, nobody said that the position had deteriorated. Of course, what we have had are higher school fees, because their parents or governing bodies insisted on getting additional staff. But for the vast majority of our people, though, in the rural areas and in the townships, the provision of better school facilities, for the first time, learning materials and computers - we will come to these in a moment - especially in the primary schools in order to cater for the first postapartheid generation of kids have all been major improvements. These had enormous effects on them. So we must not subscribe to this propagandist nonsense that everything had deteriorated, particularly in education. It is just not true. It is one of those great political lies and distortions. It does not do good to the health of the country.

As I said during the finance committee hearing, we are now poised to reap the fruits of success in stabilising the provincial education expenditures. The MTEF’s projection shows that we can look forward to improved budgets for education which will allow us to address the many pressures that arise directly from a constitutional mandate for education. It will be a real, not nominal improvement in the next year and the year after that.

The key areas of education mandate such as infrastructure development and maintenance; adult basic education, training and literacy; early childhood development; and the supply of textbooks and stationery are some of the expenditure items that must receive urgent attention. I drew the attention of the MECs in yesterday’s meeting of the Council of Education Ministers. We shall hold them to the promise that they will give to us in December as to when the books will be delivered and when they have been ordered. And I will publish their statements about the promises that they will make in December, because we no longer can countenance children not receiving their books when schools begin. I will hold all the MECs to the undertaking as made next month when the promises are given and the money is allocated. And I look forward to Mpumalanga’s spending of R100 million next year. Of course, we must improve service delivery and services to the poor. We have developed complex mechanisms and institutions to give effect to the notion of co-operative governance as stated in the Constitution. The system of intergovernmental fiscal relations is predicated on co-operative governance. The priority to make co-operative governance work is in no way more profound than those functions of Government such as education, but which are based on concurrent powers.

However, the integrity of Government’s function to deliver on its education mandate is seriously undermined on two grounds. The first one is inefficiency in some of the provinces, as in relation to the quality of education and expenditure of money; and, secondly, in a province like the Western Cape, every effort is made to ensure that provincial perspectives on priorities override national perspectives at the expense of the poor. Let us not have this. This case for provincial autonomy is used largely to affect the poor. I would like to tell the hon Versfeld not to shake her head, she should listen to these facts. They are there.

Regarding the education component, nationally, 41% of the block grant of the provincial equitable share is given to the provinces. I even made a mistake, by the way, in 1994 by having a block grant because, in fact, there is no control over the expenditure. Let us look at the Western Cape. It has only spent approximately 34,9% out of 41% allocated for the 2001 budget on education. This is a real scandal. This is the lowest when compared to all other provinces and significantly lower than the national average of 39,3 %.

The hon Zille has apologised to me. Her premier - I do not know how long he will remain as premier - has called her back. [Laughter.] I think this is a shameful thing on the part of the premier to call someone away - this is disrespect for this House - because she has raised very important points which I want to reply to.

I think he owes it to the honour of this House that she be here. It is not her fault. It is this provincial premier who may not be there in the next few weeks. [Laughter.] But judging from the medium-term estimates, it appears the Western Cape will spend an even smaller percentage on the MTEF. Now, I have no doubt that these trends, coupled with the Western Cape’s profound dislike for poverty-targeted strategies, represent a threat of further hardship to the poor learners and families in this province.

The press are not here. She really is the darling of the press, the hon Zille, in the Western Cape. Let me say quite clearly that the statement by Ms Zille that additional funds do not guarantee education success is not true. One must go round the country: additional funds are needed for laboratories. The vast majority of our schools do not have laboratories. If one provides the laboratories, their science results go up.

With regard to the intervention programmes, the Western Cape is not notorious for intervention programmes in science and mathematics. In Gauteng and the Northern Province last year the intervention programmes had remarkable effects on matric results and they were modest, small-scale intervention programmes. There are no literacy programmes as the Western Cape does not allocate money to large-scale literacy programmes.

If one goes to other provinces one sees the extraordinary flowering of the genius of 30-year-olds, 40-year-olds, particularly women. Suddenly they acquire control over the environment. It is not true, by the way, that money is not followed by improvement. It is a justification for the Western Cape going on the least served road of taking money from education and putting it into this idea of job creation.

Job creation, obviously, is the advertisements one puts into newspapers as to why one is honourably remaining as mayor of the city council of Cape Town. [Laughter.] This is an obstruction of national policies, really. But did she ration expenditure here? Our attempts, for example, deal with the abhorrent system of initiation in education institutions, though the establishment of an effective regulatory mechanism is being frustrated by the Western Cape’s continual harping on about wanting more and more power at the national level.

Yesterday we received the Wessels report from the Human Rights Commission about the obscenity of initiation ceremonies. All the MECs said national Government will have to pass regulatory mechanisms. And these newspapers that adore the Western Cape MEC should note that, rather than saying uno voce, uno duce - one voice, one leader - that is what the DP is. [Laughter.] One voice, one leader! [Laughter.] And he says so. He said yesterday. [Applause.] This is flouting the leader Prinzip. We do not have a leader Prinzip in the ANC. I am free. I am free to say what I want.

Let me therefore come to something very important. I want to be quite clear to the NCOP, that we must succeed in improving the quality of spending. I would like to say with great respect to the hon Mashamba that she will not get R500 million, from anywhere. The Northern Cape is spending less and less on education compared to 1994. In fact, over a 10-year period, the province’s spending would have fallen by 8%. It is for her to fight in the province for more allocations, because if one drops expenditure on education, effectively one is affecting the poor. That is the effect of that.

It is for each MEC to contest the ground. The best way of dealing with poverty is by education. The best way of dealing with all the areas - health, Aids and all - is by education. We must have better capacity. We must have effective education management bureaucracies. Absolutely. I joined the hon Sizani in the pain he felt in 1994 when we saw the degradation. I remember as Minister of Water Affairs and Forestry in that suddenly we realised that 16 million people did not have water. We never knew that before then.

It is not good enough for those two hon gentlemen, who have now left, to say, ``Tell us something new’’ and that they never knew this. So it is always new for them, telling them again and again the shock we felt when we suddenly realised not only that there were two countries in South Africa, but that it was worse than that. There was a country which had all the privileges and good life, and a country that had no hope. Our job in the ANC was to put that hope into them. We have done it, but it is not good enough now, I say to the hon Sizani. It is not good enough now to rely on that. We must get efficiency here. For instance, schools in the rural areas, as I found yesterday, are in a dangerous condition - a really dangerous condition. I saw not only kids under the trees, but actual physical danger.

Therefore, I think, MECs must give greater political direction, with some passion, actually, to ensuring that these degrading conditions are not there. We must make sure that things are used effectively to ensure that the right of all learners to effective teaching is protected.

I want to say also to the hon Witbooi - and I was very pleased by her wonderful contribution today - that my intervention last time has had very good results. [Laughter.] There was a little shift. Of course we must improve the maths and science results. Let me assure her that what we have done in the last two or three months - and I want to assure Mr Kgware too - is that we have initiated a maths and science project, which will focus on 100 schools in South Africa. The project is being launched in three provinces today by the Deputy Minister. I deputed the Deputy Minister to run this, and he has oversight responsibility for this.

We are going to target these 100 schools, which have been chosen from all over South Africa, to ensure that these schools will benefit from special intervention programmes. The 60 Cuban instructors are in fact being interviewed next week when a large delegation from the provinces goes to Cuba. There is enormous enthusiasm in Cuba. However, they must be people who meet our standards of English proficiency and mathematics proficiency.

So we are doing these kinds of things, and I am grateful to the hon Witbooi for raising this matter, because we must all be involved in this.

This has been a more than useful exercise. Again, I say that we are on the route to doing things which no other country has been able to do. We take great pride in our 100% enrolment rate of school entry. We must, of course, work harder to ensure that they stay in school. Secondly, we are very pleased that the technical college system, which is not referred to in the Intergovernmental Fiscal Review, will be totally recast. Thirdly, we move next year to the further education and general education and training certificate. This will be very important, because it will point the way to our young people that there is a life beyond academic learning by rote in the matric examination. There are other opportunities open to our kids there.

Most important of all, which we could not discuss here, is that there is a fundamental change in the value system of education. People forget this - that the education system the minority inherited in South Africa was not the best in the world. As I have said to hon members before, my standards do not come from apartheid, which was racist and patronising. My standards are because of exile. They come from other countries which had democratic assumptions, which dealt with human rights and fundamental freedoms.

I think the merging of the different traditions of our state schools will show, especially to the private sector, that we can really create a South African education system. To do that, of course, we need more resources, which are coming. However, most important of all, as we showed this weekend when we had this excellent conference on teacher development and teacher education, the whole teaching system must be based on a new kind of teacher to serve the needs of a much more complex society, whose values do not come from Big Brother, by the way, but come from the Constitution, whose values do not come from the insolence and the crudity of Big Brother, but from the much more fundamental values that drove us in our liberation struggle. I hope, therefore, that our educational system itself will reflect that. Thank you very much, Chairperson, for this opportunity to address you. [Applause.]

Ms N C KONDLO (Eastern Cape): Chairperson, hon Ministers, MECs from the different provinces, members of this House, ladies and gentlemen, the Department of Social Development, and the Eastern Cape province in particular, mentioned the critical areas that need an injection in terms of financial resources in the committee meeting two weeks ago. The areas of concern that we raised in those meetings, we believe, will assist the province of the Eastern Cape in particular and the department in general, in terms of delivering more effectively on its mandate.

The focus of those areas, if closely examined, is in fact about fighting poverty and having self-reliant people. Coming closer to the province of the Eastern Cape, the provincial priorities that were identified and the subsequent budgeting to that effect, clearly indicate our focus as a province on social service delivery, that is, health, welfare and education.

As provinces, we carry more responsibilities in terms of implementing policies, whose formulation resides nationally. If the responsibility of implementing these policies resides at a provincial level, then in terms of the vertical split this should be reflected as such. But, if one looks at table 1.1 of the IGFR 2000-01, the actual vertical split for provinces was 58.4% during the financial year 1999-2000, and for the financial year 2000- 01, it has gone down to 56.4%, indeed reflecting a decrease, which contradicts the responsibilities that the provinces have to carry, if we talk in terms of implementing policy. If this vertical fiscal imbalance continues it will have serious implications for the implementation of our policies, the more so when we look at the tax base of provinces, which is far more compact than that of the national Government.

Policy formulation poses financial challenges for provinces in general, and for social development in particular. Policies driven by other departments often have a direct bearing on social development, hence the importance of balanced budgeting on such crosscutting policies. It is for this reason that we believe, and propose, that there should be some policy funding mechanism that has to be put in place to address these issues.

In our endeavour as a province, and as a department in particular, we once more want to indicate our commitment, as we did in the committee. We also want to highlight some of the challenges that we raised that we are faced with, which we referred to as cost pressures for the coming financial year. The chairperson has spoken about all these issues: HIV/Aids, panels, the rising child support grant, etc.

We believe that amongst other issues that should be dealt with, regarding our province in particular, are the human resource challenges that we are faced with, in terms both of recruitment and of the retention of personnel. As an example: as we speak today, the current ratio of social workers in the Eastern Cape is 1:26 000 people, as opposed to the expected norm of 1:5 000. This situation impacts negatively on the service delivery that is related to social development.

Since the delinking process and the establishment of the department of welfare it has been operating from prefabs, or temporary structures, as well as containers donated by Transnet. This has a serious bearing on access to those offices in general, because many of the people that we deal with are people with disabilities. This lack of infrastructure is not only evident in the welfare department; at the Department of Home Affairs offices the situation might even be worse.

For many of our communities, access remains a task that has to be dealt with head-on, both provincially and nationally. Paypoints in many communities are nonexistent. Whilst we believe that the norms and standards will indeed address some of these problems, the question of budgeting for those nationally driven policies will definitely make a difference in terms of the realisation of some of these policies. Some of the other problems, or cost pressures, are as a result of the lack in the areas that I have touched on.

Regarding the transformation of welfare services, the 80:20 average on expenditure which the department expects is something that we are working hard at achieving. Indeed, the average for the past three financial years has been between 93:7 and 92:8. This must be coupled with the province’s own objective factors: to name but two, the fact that the province is poor and the fact that the levels of unemployment are high.

The major challenge for all of us is an integrated approach to all our actions, from formulation of policy to budgeting, from budgeting to implementation and from implementation to monitoring. By so doing, we will see the impact of our policies in terms of changing the lives of our people. An integrated approach has three simple, but critical, aspects to it. These are things like planning together, intra- and interdepartmental communication, the interconnectivity of our IT systems between government departments and the co-ordination of our activities. We believe that if more effort can be put in in those areas, at all levels of government, we will definitely see the change in terms of the impact we want to see where we put our money.

Lastly, regarding Chapter 5 of the IGFL report, we, as the department of welfare in the province, want it to be noted by the National Treasury that there is some information that was not necessarily reflected in the document itself, and for record purposes we wish this information to be captured so that it is available for further reading and reference.

Xa ndiza kuhlala phantsi, ndiyafuna kwakhona, njengeSebe eMpuma Koloni, sivumelane nayo ngokupheleleyo ingxelo kwisahluko 5 ngokuphathelele … [Before I sit down, I want us, as a department in the Eastern Cape, to agree fully with Chapter 5 of the report which is about …]

… what is referred to as the key financial management challenges that we are faced with as social development in general. But indeed many of those financial management challenges are challenges that we are faced with in the province of the Eastern Cape. We are doing a lot of work in terms of addressing some of those challenges. [Applause.]

Ms L JACOBUS: Chairperson, please could I get clarification? I was under the impression that we were going to deal with social development first. [Interjections.] Very well.

Hon Minister, MECs, special delegates and members, it is indeed an honour and pleasure to once more address hon members on this ground-breaking occasion of the debate on Intergovernmental Fiscal Review, tabled by the Minister of Finance two weeks ago. For the first time, provinces had an opportunity to engage on this document in a meaningful way that can contribute to the budget process.

In the hearings that preceded this debate, officials from the Treasury, the relevant government departments and we, as lawmakers at national and provincial level, interacted on the priorities that we have set for ourselves, our spending patterns as they relate to these priorities, the challenges that we are facing and some recommendations to address these challenges.

To quote the Minister of Finance when he addressed this House on a October:

The fiscal system cuts to the heart of co-operative governance, which requires a close alignment of policy, budgeting and planning. Co- operative governance will succeed because we are able to co-ordinate and reconcile the priorities of the different spheres and transfer sufficient resources to enable provincial and local governments to provide basic services.

We also hope that as we engage in discussion this afternoon the recommendations that will be put forward will be further interrogated and consulted by the executive and ourselves.

During our discussions, provinces focused on their priorities, spending patterns, and achievements, as well as challenges facing them. For the purposes of this debate, I want to focus on some of the common challenges identified by many, if not all, provinces that participated in these hearings.

Dealing with Chapter 5, which focuses on social development, we find that the transformation process of the Department of Social Development has moved considerably since our first democratic elections in 1994. People who had previously been denied access to the various services now have that access. The shift away from a welfare to a developmental approach has brought dignity and self-pride to beneficiaries of these services.

One of the challenges identified is that of the child support grant. We understand the principle behind the introduction of the grant and its detail. One of its limitations is that it is only accessible to a child under the age of seven years. With the growing number of unemployed, single- headed and sometimes orphaned households, this becomes a serious problem. The steady increase in the uptake since 1999, as tabulated in table 5 of the IGFR, bears testimony to this. A general recommendation was made to increase the age limit to 18, taking into account the needs of a school- going child such as food, clothing, school fees and other requirements, but we are also mindful of the fact that this requires substantial financial resources.

I am just going to touch briefly on other recommendations because my colleagues from the other provinces will also substantiate this. Regarding the issue of orphaned children, with an increasing number of children being orphaned, especially by HIV and Aids, we are continually been confronted by child-headed households. Our social security system, at this moment, does not make provision for those households to access social security grants.

The review also addresses the increase in foster care applications because of this pandemic. Provinces are concerned that the increasing number of orphaned children will add further strain of their already strained budgets. Linked to the previous challenge I have just highlighted is the greater demand on the social security budget. Table 5.8 confirms a general steady increase in social security beneficiaries. It is an average of 8% over a period of four years, to be precise.

The Minister’s appointment of a committee to investigate a comprehensive social security system is, therefore, welcomed. One of the key terms of reference of this committee is to explore and define options for extending the social security net amid affordability constraints. Amongst the alternatives that could be explored, is the basic income grant, which should be subjected to serious interrogation, discussion and consultation.

With regard to the distribution of lottery funds, the Department of Trade and Industry must, as a matter of urgency, consult with the Department of Social Development on the criteria of who qualifies for these funds. Government has identified the vulnerable groupings as women, children, the disabled and the elderly. Distribution of these funds is to follow these prioritised categories.

Regarding infrastructural development, rural provinces have identified that social development offices and service points are not easily accessible. To access the services, people often have to travel long distances, which places an added financial burden on beneficiaries. Furthermore, the lack of electricity and other basic services makes it impossible for these service points to operate. The Intergovernmental Fiscal Review also acknowledges the uneven spread of facilities amongst provinces.

I do not think I need to say more on the impact of HIV and Aids on the spending budget for social development. It is acknowledged that HIV and Aids will impact dramatically on poverty and household vulnerability, and especially on the need to care for orphans who have lost their parents due to Aids. This is something I have touched on earlier. Current estimates are that we will have over two million Aids orphans by the year 2010. This quantifies the magnitude of the challenge that we are facing.

In conclusion, I just want to address some crosscutting challenges, which are challenges for this department, the Department of Health and other departments as well. The first challenge is personnel expenditure. Tables 4.18 and 5.14 show a steady increase in personnel expenditure over the past three years. We need to assess whether this increased expenditure contributed to improved service delivery and a better quality of care.

Regarding interdepartmental communication, which I think is another crosscutting challenge, I wish to say that what is seriously lacking is a single information system of government. Each department at the moment has its own information system and database, which is inaccessible to other departments. Because the various departments’ information systems are not linked to each other, Government stands to lose millions, if not billions, of rands annually, due to people fraudulently accessing multiple services, and this goes unnoticed. I therefore recommend that Government should move speedily towards the setting up of one information system and database.

Finally, we all welcomed this opportunity to interact with this Intergovernmental Fiscal Review and found it very enlightening. In the course of our discussions we were clearly able to identify some of the concerns and bring them to a wider forum for a more intense debate. All of us found value in this process and we hope that the recommendations will be taken into account when future budgets are formulated and finalised. [Applause.]

Mr C R REDCLIFFE (Western Cape): Madam Chair, I am going to deal with both health and social services in this speech. Allow me to deal with the social services component of the debate first.

Unfortunately, the Minister of social services and poverty relief in the Western Cape, Mr David Malatsi, is not able to be present here due to a long-standing official engagement out of town. On behalf of the Minister I thank you for the opportunity to give the Western Cape’s response to the Intergovernmental Fiscal Review Report of 2001.

The department of social services in the Western Cape has had to perform its function despite a strong real decline of its budget over the past three years. The maintenance grant was discontinued without a replacement amount added to this budget for developmental programmes. The department used its poverty funding and the national poverty fund to design a safety net for these mothers so that they will be skilled for targeted employment.

The Western Cape has tried to reach the 80:20 principle, that is 80% social security and 20% welfare services, despite the decrease in its budget in real terms. It is currently at 82%, as evidenced on page 65 of the review.

The following spending pressures in social security could result in this objective not being achieved: firstly, the rapid take-up of the child support grant if compared to the original national target set for the purpose. The child support grants had to be completed over a five-year period in line with national targets set for the provinces. In terms of this, the Western Cape had to reach about 76 000 children by 31 March 2002 and 90 000 children by 31 March 2003. As evidenced in table 5.9 on page 66 of the review, in July 2001 there were already 68 837 beneficiaries.

Our current status is that we already had 90 000 children in payment by October 2001, and, based on current trends, this will increase to 109 000 by 31 March 2002 and 163 000 by 31 March 2003. We will need additional funds for this purpose for the MTEF period, an amount over and above the original amount that had to be budgeted based on national projections: for 2001-02; R23 million; for 2002-03, R102 million; for 2003-04, R182 million; and for 2004-05; R229 million.

Secondly, the implementation of the disability grant assessment panels in the place of pension for medical officers will require an approximate amount of R10 million per annum. For the current financial year an amount of R4 million will be required to implement the system. The required funds are as follows: for 2001-02 R4 million; for 2002-03, R10 million; for 2003- 04, R10,6 million; and for 2004-05; R11,3 million.

The third major additional and unplanned expenditure amount which will have a carry-through effect during the next MTEF years is the payment of back pay as a result of the settlement of a case lodged by the Black Sash against the Department of Social Development. The settlement also adds interest on the backdated amount to be paid.

Based on preliminary information received from the national department, the provincial funding required to implement this settlement grant will cost between R300 million and R400 million. Consultation must still take place with the province to determine how the costs will be spread over the MTEF period.

We concur with the sentiments in the fiscal review report with regard to the improvement of the management structures and the financial arrangements in the head office of the department. This has been strengthened by the permanent appointment of a CFO, as illustrated on page 71 of the review. In the Western Cape we would like to extend this improved financial management to all our district offices. In order to achieve this, we would require an additional allocation. A work study investigation has been completed and recommendations made with regard to the improvement of staff establishment, which can only lead to improved customer services. We would like to embark on a process of computerisation of our registry to deal with the lost-file syndrome. The total cost of these two strategies is in the region of R20 million.

Whilst there has been a lot of improvement in the social security system with the promulgation of the new regulations which will be effective on 1 December 2001, the developmental social services, with particular reference to children involved in sexual exploitation and children involved with the law, still remain a worrying factor. The policy framework, financial resources and personnel available are insufficient to render a service to children in line with all the international declarations we have signed. More social workers need to employed by Government to address the protection, development and survival of our children.

We further call on this House to support our recommendation and increase the age cohorts of the child support grant from 7 to 18 years. We would also recommend that the foster grants used for children infected by HIV/Aids be supplemented by an additional amount to cater for specialised care, nutrition and medical expenses.

The Western Cape health department has faced budgetary pressure in the interests of interprovincial equity since 1995. We have lost 9 000 staff and closed 3 000 hospital beds in this province. The brunt of these measures has fallen on the tertiary hospitals. The financial savings have gone unnoticed by the large salary increases over several years. The price that we have had to pay has comprised quality of care, as is evident from increasing patient complaints and long waiting times, and from the huge distortions in the skill mix of our staff, with a shortage of nurses of between 1 000 and 1 500 compared to acceptable norms and obvious stresses and strains on our dedicated staff at all levels of our service. The situation is not helped by the luring of skilled staff, especially doctors, nurses and pharmacists, by the private sector and developed countries, and the difficulty in recruiting these categories to our services.

The province confronts an increasing burden of HIV/Aids trauma and chronic diseases with an explosion of new TB cases. Patient activity trends show a significant increase at primary health care services and regional hospitals, and decreases at the tertiary hospitals. The senior management of the department has been reviewed, restructured and strengthened by the filling of additional posts. A chief financial officer was appointed and a departmental accountant function strengthened. A business manager has been appointed to develop plans to attract private patients to our facilities to establish a forum where the private sector can liaise with the medical schemes in order to develop favourable arrangements, to develop improved billing systems and to improve debt management.

We have made good progress with decentralised management. A significant number of financial personnel and procurement delegations to regional directors and hospital managers have been instituted. The provincial Cabinet has supported the principle of a municipality-based district health system and the transfer of public health care services at 35 facilities with approximately 624 staff to the unicity as a first phase. These services would be governed by mutually acceptable service level agreements.

A revenue incentive framework has been created and the department is currently allowed to retain 50% of the amount allocated above its revenue budget. This has incentivised our institutional managers, and we have reversed a trend of many years of decline in revenue from private patients. In 2000-01 we collected R60 million above our target. We are currently negotiating with the provincial treasury the possibility of retaining 100% of the revenue above target.

The spiralling costs of health care in the private sector, amendments to the Medical Schemes Act and the possible introduction of social insurance all provide an opportunity to the public sector to increase its revenue generation efforts. We agree that the department has significantly downsized over the last seven years and cannot be expected to do so further, without seriously damaging services provided to the population of the Western Cape and beyond.

The provincial health department requires an additional R100,6 million in 2000-03 to sustain the current health service level in the province. The department is attempting, against great odds, to save R41,03 million in 2000-02 to partially address the above-mentioned requirement. This presumes no additional spending pressures will be accommodated during the 2000-02 financial year and no expansion of services or filling of additional posts in the 2000-2003 financial year.

The inequities in funding and access to tertiary or quaternary services between the provinces need to be addressed urgently. However, major cuts in the conditional grants in the Western Cape and Gauteng are being proposed without a national vision and a plan addressing many questions, including: What tertiary and quaternary services can the country afford? Where should these be provided? How do we ensure equitable access to them? How do we maintain economies of scale and technical quality at these centres of excellence? [Time expired.]

Mr M V NGEMA (KwaZulu-Natal): Chairperson, I thank you for this opportunity to address this august House in the debate on the Intergovernmental Fiscal Review. I will focus on the area of social security, which houses a lot of problems for the province. We think that we need to focus much of our attention on this area. The social security programme budget accounts for about 94% in our province. This means that only 6% of the budget is left for the other programmes, which include key programmes such as social services rendered by the department; the social assistance programme, which deals with the funding of private welfare organisations; and social development, which seeks to create self-reliance among the citizens of the province.

As a province we see the value of ensuring that within the 6% the capacity of our people to reduce reliance on social grants needs to be built and sustained. Programmes such as social development need to be targeted, and in this case the flagship programme in particular holds much hope for making the required impact on the lives of the people of poor communities.

The increase in the number of children in receipt of child support grants has been sustained throughout the expenditure year, as is illustrated by the following figures: In April we made 264 448 payments; in May, 295 235; and in August, 352 630. In September the figure was 386 116 and since 13 October, we have made 390 856 payments.

While the above growth is very encouraging, concern about its financial implications is being expressed. The nationally set target for this province is to have 60 000 children in payment by March 2003. Based on the trends in the growth of child support grants, this target is likely to be reached by August 2002, some six months ahead of target.

Of major concern is the effect that this sustained growth has on the budget. It was estimated that there would be a shortfall on the current budget of approximately R295 million for grant payments. This matter has now been brought to the attention of both the provincial and national treasuries.

We support the proposed review of the age limit, starting from the age of 7 to 18 years. However, we are mindful of the fact that this will also have immense financial implications. The department notes with concern that poverty, mostly in the rural hinterlands, causes an alarming growth in the young population as a result of the available funds from this scheme. Coupled with this is the increase of orphans, brought about by the HIV/Aids pandemic facing our societies.

The growth in the number of foster care grants paid is steady, but not nearly as significant as the CSG. This causes concern as we know that there is a significant number of children in alternate care who should have access to this form of support.

One of the areas of concern, apart from the lengthy process required for children to be placed in foster care, is the fact that some commissioners of child welfare at children’s courts will not consider kinship placement. The impact of this is that these children do not even get to the social security section to apply for the grant as the placement is not confirmed by the court.

In the absence of a court order, no grant can be paid. This is contrary to the spirit of the Child Care Act of 1983. We are happy to note that this is being addressed in the comprehensive child care legislation currently being drafted.

The following figures illustrate the position regarding foster care grants in the current financial year. In April this year, 8 900 grants were paid out; in May, 9 112; in June, 9 285; in July, 9 521; in August, 9 785; in September, 10 485; and in October, 10 845. It must be noted that the figures mentioned reflect the number of grants, not the number of foster children in payment. Each grant can reflect a payment to as many as six children.

Statistics on the number of foster children in payment are not available from Socpen, although we have requested this. A comparative number can be given for January this year, when a total of 8 191 foster care grants were paid in respect of 15 880 children.

I thank the House on behalf of the province of KwaZulu-Natal. [Applause.]

Ms E C GOUWS: Madam Chair, hon Ministers and hon members of the House, thank you for the opportunity to interact in this fiscal review.

South Africa’s revenue is based on a national fiscal system, with provinces largely dependent on transfers from the national Government. What we see is that national Government’s role is mainly that of policy-making with provincial and local governments responsible for the implementation of major social services, including academic and regional hospitals and primary health care, social grants and welfare services.

Since these functions have limited or no cost-recovery potential, provinces are largely dependent on transfers from nationally raised revenue. The private and public health sectors comprise about 8% of South Africa’s GDP and the public health sector more than 13% of total government expenditure.

The public health sector is of great importance because 84% of the population is not covered by medical aid schemes. The limited access to private health care is illustrated by the fact that only 10,2% of the population in the Eastern Cape has medical schemes. This is the second- lowest figure of all the provinces.

Primary health care is the most significant component of the district hospital programme. In the Eastern Cape, with its sparsely populated rural areas, we have, quite rightly, the most clinics: 676 facilities and 120 mobiles. The problem is that these clinics are understaffed and doctors’ availability to clinics is very low.

The following are significant inequities in the Eastern Cape and need attention: the frequent unavailability of a number of important tests; the unavailability of emergency transport; the absence of basic equipment; the interruption of telephone services and electricity; the absence of running water at many clinics; and the occasional unavailability of some key drugs.

Although the emphasis in the health sector has shifted towards primary health care, expenditure on hospitals still comprises at least 46% of total provincial health expenditure. In the Eastern Cape there is evidence of inefficiencies with low bed occupancy, stays in hospitals that are longer than desirable and inefficiencies of staff.

What needs to be addressed is the fact that the proportion of patients admitted with HIV/Aids has grown substantially. This means that even real growth in health budgets will not be adequate to deal with the increase in demand for services and the impact of the disease on resources in the health sector.

The social development departments in provinces are responsible for social security programmes. In the Eastern Cape - and, I presume, in other provinces too - the social development department is always at the end of the line in the rendering of services. The inability of other departments, for example Home Affairs, to deliver has an influence on the effectiveness of the service. More than 216 000 children get grants in my province and a lot more need grants, but access to certificates is problematic.

The Government should reconsider the age limit for the child grant. Many older children also need grants. These children have to attend school whilst hungry.

HIV/Aids has a huge impact on social development. We cannot allow people to suffer because we do not plan and manage the budgets properly.

The departments of social development and health have jointly embarked upon the implementation of home-based care programmes in their budgets, especially in the area of HIV/Aids. We must remember the increasing number of child-headed households which, in normal circumstances, could be excluded from accessing Government grants. [Time expired.] [Applause.]

The MINISTER OF SOCIAL DEVELOPMENT: Chairperson, hon members of the NCOP, ladies and gentlemen, since 1994 the Government has prioritised redressing socioeconomic inequalities and reducing poverty in this country. The trends, analysis of service delivery and concerns raised in the 2001 Intergovernmental Fiscal Review reflect the continuing priority Government gives to this issue.

This commitment to reducing poverty and inequality is reflected in both the big picture of provincial spending patterns and the snapshots of spending trends in the four key areas of social development. While the consolidated provincial expenditures show increases over the past three years, there are still major gaps in per capita expenditure between provinces. For example, Gauteng spends just more than double per poor person than the people living in the Northern province.

The snapshots of spending trends within social development budgets focus on four key areas identified by the Council of Social Development Ministers, that is the Minmec. Minmec has identified four focus areas for social development budgets in the 2002-03 period. These focus areas are: strengthening the safety net; improving service delivery; transforming welfare services and responding to the impact of HIV/Aids in our society. The budgeting expenditure patterns and service delivery in these four areas were also extensively discussed in the joint social development-finance Minmec in August this year.

It is vital that the members of the NCOP debate the trends and issues in all four of these focal areas. Although we may talk of focal areas and snapshots, we are talking about real human beings and the work Government is doing to build a caring society.

The rights, aspirations, dreams and experiences of the most vulnerable members of our society must be in our hearts and minds as we debate these trends and issues. I will speak to all four of these focal areas in turn. With respect to the strengthening of safety nets, the point of departure for our discussion has to be the importance of social grants in poverty alleviation. Social grants are the major and often sole source of income for many poor households in South Africa. The direct transfer of social grants to beneficiaries forms a significant part of Government’s poverty alleviation strategy.

Not only is the system of social grants more equitable than was the case prior to 1994, the number of beneficiaries has increased over the past few years. As of July 2001, there were nearly 4 million people benefiting from social grants. This increase can be attributed to the expansion in the number of care-givers receiving the child support grant, which was introduced in 1998.

In 1999 there were approximately 60 000 children benefiting from the child support grant. There are now over 1,2 million beneficiaries of the child support grant. This is thanks to the stellar work of MECs, parliamentarians and civil society organisations, especially the NGOs and the faith-based organisations, in mobilising care-givers to access the grant.

We face a number of challenges in the area of social grants. The current system of social grants does not reach all poor children and adults. The child support grant does not cover children of school-going age and, in addition, people experience problems in obtaining the required birth certificates and ID books.

At the other end of the scale, adults are not covered until they reach the age of 60 years for women and 65 years for men. These are among the issues being investigated by the Committee of Inquiry into Social Security which was established by Government last year. We expect to receive the committee’s report within the next two weeks.

Another challenge is to effect affordable increases in the value of grants. Last year the grant increases were at the level of inflation. This has been a positive move. We are discussing possible increases with our counterparts in Finance and we will be meeting again next month to consider the options. At the same time, we are improving access to both the disability grant and the foster care grant.

The assessment procedures for disability grants have posed a problem for people who do not have access to district surgeons, especially in rural areas. We have amended the Social Assistance Act regulations to allow for assessment by a panel for those who do not have access to district surgeons.

There is an increased demand for the foster care grants owing to extended families and others having to take care of orphaned children through Aids- related illnesses. Court procedures are lengthy and applicants experience difficulties with magistrates.

The SA Law Commission has been requested to finalise the new child care legislation. We have been expecting that them to report to us by the end of this year but, unfortunately, from our experience and more importantly from the report that we received from the portfolio committee, it seems to me and it seems to the portfolio committee that the Law Commission is not ready at all. It seems to us that it only woke up to its duties when we started talking about this issue in public.

An increasing number of households are experiencing distress through unemployment or the loss of breadwinners. Provinces are under pressure to provide social relief to these households with modest social relief budgets. The need to improve service delivery in the area of social security has been highlighted by the Ministerial Committee on Abuse, Neglect and Ill-Treatment of Older Persons. Services delivered through contractors have, on the whole, been unsatisfactory up to today.

We have developed norms and standards for service delivery, which have been approved in principle by Cabinet. The implementation details are under discussion, and some of the technical work such as the standardisation of processes between provinces will commence this year. We are also working on improving the conditions at pension paypoints. An audit of the infrastructure at paypoints, which will assist in planning and rolling out these improvements, is close to completion.

Traditionally, capital expenditure in the social development sector has been limited. It will be necessary in the future to incur such expenditure. We anticipate and plan to share infrastructure with other departments, such as Home Affairs, where appropriate.

As indicated in the Intergovernmental Fiscal Review, financial management in the provinces has been steadily improving. Provincial departments of social development have been given conditional grants to improve their financial management. This is beginning to yield positive results. Our work with the provinces, however, has highlighted serious capacity constraints. Provinces do not have the requisite number of officials to carry out required functions. In other words, the number of public servants working in this sector is not enough. The third focal area in social development budgets for the year 2000-01 is welfare services. This is an area in which the pace of transformation needs to be rapidly increased. On average welfare services account for 10% of the budget of provincial departments, with social grants accounting for 90%.

With increased pressures on the social grants component of the budget, there has been limited growth in the budgets for welfare services over the past few years. Because of poverty and the continued vulnerability of older people, women, children and disabled persons, provinces and NGOs are experiencing an increase in demand for welfare services and cannot respond effectively because of budget constraints. This is compounded by the fact that access to services in rural areas and in the poorer provinces is very, very limited.

In the face of this challenging reality, the Council of Social Development Ministers, Minmec, has agreed upon a comprehensive programme of transformation that includes the review and revision of policies, the assessment of the adequacy of existing legislation, audits of subsidised organisations and the development of norms and standards for welfare services.

A national task team on financing policy consisting of four social development MECs has concluded that the financing for developmental social service and welfare must be reviewed as there are indications that it will not fundamentally change the 1994 status quo. Based upon a rapid appraisal, the MECs have concluded that the financing policy provides principles to guide resource allocation in a developmental direction. It does not provide mechanisms that can translate these principles into action.

The adequacy of existing welfare legislation is also being examined. Much of the current legislation was developed prior to 1994 and numerous amendments have resulted in fragmented legislation. We are also auditing subsidised organisations to determine the extent to which services are being transformed. The audit of homes for the elderly has been prioritised.

In addition to these, norms and standards for delivery of welfare services will be developed along similar lines to those developed for social security. It is expected that a substantial part of the work will be completed by the end of the financial year.

I would like to conclude by addressing our focus area, the impact of HIV/Aids on our society. The Intergovernmental Fiscal Review states that the impact of HIV is visible and highlights the impact of HIV/Aids on social security. As part of an ongoing and concerted response, the Council of Social Development Ministers has focused on four issues: firstly, options available to infected and affected people; secondly, access to the foster care grant; thirdly, home and community-based care alternatives; and lastly, the use of the poverty relief programme to support community initiatives.

The committee of inquiry into comprehensive social security has been investigating and costing the various options for providing effective coverage for people infected and affected by HIV/Aids. I have also spoken about the issue of foster care grants. It is essential that we remove the insensitive obstacle to accessing the foster care grant.

An essential component of our response is a provision of support for home and community-based care alternatives. The joint health and social development Minmec has agreed to implement a programme of support for home- based and community-based care and conditional grants have been made available for this purpose.

In addition, the poverty relief fund has been used to support initiatives in this area by community-based and faith-based organisations. The departments of health and social development, at national and provincial levels, are working to expand this programme rapidly.

In conclusion, I would like to underscore the fact that the Council of Social Development Ministers, that is, the Minmec, appreciates the projected increases in the social development budget in the MTEF period. But this budget still needs to take the following into account: increases above inflation; the desired extension of the child support grant to all children up to the age of 18; the provision and upgrading of the infrastructure; development and increase of human resource capacity, specifically, in the former Bantustans and in the provinces; the need to pay better subsidies to welfare organisations; and the need to improve the provision of social relief to people in distress in general throughout the country.

We remain committed to the delivery of our priorities and I call upon the hon members of the NCOP to join us in this effort. I think that it is the duty of all of us. We know very clearly that what brought the ANC to power was mostly our commitment to serve the poorest of the poor. I can openly and very clearly say that there is no government in the world, specifically in the developing world, which has come out very openly on the problems that face our people, particularly the people that voted the ANC and the IFP into power, regarding the issue of poverty.

We are the only country in the world that comes out and says openly and very clearly in each and every forum that our main battle is against poverty in South Africa, and that we will do everything in our power to overcome it. As such, from the NCOP we expect and demand, as the ANC, that members should join the executive in ensuring that the views, concerns, aspirations and hopes of the poorest of the poor do get a reflection in the work that we do. Hon members should raise the people’s point of view and go back to their provinces and to their people, not only in the capitals of Bisho, Durban or Pietersburg, but also in the far-flung villages in this country where there is no water and electricity, and where most of the people have nothing to eat. And we should all know that we are servants of those people, and that, as the IFP and the ANC, it is our only duty in this country and in this Government. [Applause.] Ms L JACOBUS: Chairperson, hon Minister of Health, Deputy Minister of Finance, MECs here and special delegates, although we have all noted that considerable strides have been made in the provision of health care to our people, especially primary health care, we still need to pay attention to particular challenges facing us. I will go into these challenges immediately. We will follow the same procedure as in our previous debate in order to highlight and propose some recommendations around some of those challenges.

Most of the provinces have reported staff shortages in human resource development and management. In many provinces, this was the case, especially if one looks at the doctor/nurse-patient ratio. The appointment of CEOs at the hospitals who will have the power to hire staff to fill vacant funded posts will go a long way to alleviate this problem.

It is noted in the Intergovernmental Fiscal Review that there has been very slow progress in the accessing of the R243 million allocated as a health management grant over a period of three years to assist CEOs to improve hospital management. We should also invest in the upgrading of skills of especially our nursing personnel and identify areas of speciality, for example, psychiatry and other areas where there is a need.

Closely linked to the issue of human resources is service delivery and the quality of care. Shortages of staff and a lack of equipment and medication are often reported at facilities throughout the country. This surely impacts on service delivery and the quality of care that our people are subjected to.

Regarding the inequity in health care spending, I want to refer colleagues to tables 4.7 and 4.8 of the Intergovernmental Fiscal Review. As indicated in table 4.7, large per capita spending differentials still remain. Per capita spending in Gauteng is nearly twice that of Mpumalanga and 1,6 times that of the Northern Province. Inequities in expenditure are reflected in the quality of service delivery at all levels. Mpumalanga has 0,9 specialists per 100 000 of the population whereas Gauteng has 30,9 specialists per 100 000 population. I refer hon members to table 4,8. These inequalities suggest large differentials in access and point to variations in quality of service.

Regarding the recruitment and retention of health care personnel, we are bombarded on a daily basis in our newspapers by reports suggesting a brain drain, etc, particularly of health care personnel to the UK, Saudi Arabia, Canada, etc. Noting that it is also said that our health care personnel are amongst the best trained worldwide, it is almost to be expected that they would be poached by other countries.

We should put our heads together, though, to strategise on how to retain trained personnel. One possible way is to, at the level of tertiary institutions through the curriculum, instil the value and spirit of patriotism and service to the community. Another possible way is to relook at the conditions of service and incentives especially for those working in rural areas.

With regard to the fiscal impact of HIV/Aids, we need to do an in-depth evaluation of the cost of HIV/Aids on our health budget. Already the National Treasury is collaborating with the Department of Health to develop a more effective financing strategy for a public health response to this epidemic.

We are looking forward to more details on this financing strategy and the mechanisms that would assist provinces to implement programmes, such as home-based care, mother-to-child transmission prevention, life-skills and other innovative programmes.

We need to find ways and means of addressing the financial impact HIV/Aids will have on our health care facilities, the staff, the health budget and the economy of the country at large, since those dying are largely within the economically active age group of roughly 20 to 45 years of age.

With regard to hospital construction and rehabilitation, the process of hospital and clinic rehabilitation and reconstruction has to be speeded up. A constant inventory of facilities in need has to be compiled and updated on a regular basis and, of course, resources have to be made available to upgrade those facilities.

Regarding private-public partnerships, private sector health care is provided by individuals, general practitioners, specialists, private clinics and hospitals. This service is usually provided to people with medical aid coverage or to people who can afford such cash payments. It is estimated that about 84% of the population is not covered by medical aid. The gap between private and public health care needs to be narrowed through a partnership between the two, through a basic package of emergency services that can be provided to any patient at any private institution. This, we believe, will broaden access to appropriate and much-needed services.

Last, but not least, on the monitoring of our achievements, to many of us this might not seem as important, but it is only through monitoring what we have achieved that we will come to know how far we still have to go in service delivery to the poor and most vulnerable.

We need to set up a mechanism in terms of which we will monitor and evaluate the implementation of our policies and learn through basic practices from our colleagues in other provinces. We believe we all have something to learn from each other’s experiences and best practices to improve the quality of life of our people. [Applause.]

Dr P J C NEL: Voorsitter, heel aan die begin wil ek die Departement van Finansies bedank vir die wyse waarop hulle vanjaar hierdie belangrike onderwerp aangebied het. Dit gee vir ons, as lede van die NRP, ‘n baie beter insig oor hoe die belastingbetaler se geld in die provinsies aangewend word, en wat die standaard van dienslewering is in elke provinsie. (Translation of Afrikaans paragraph follows.)

[Dr P J C NEL: Chairperson, at the outset I want to thank the Department of Finance for the way they presented this important subject this year. This gives us, as members of the NCOP, far better insight into the way in which the taxpayer’s money is being utilised in the provinces, and what the standard of service delivery in every province is.]

According to the report under the heading ``Provincial Health Spending’’, the total actual provincial health spending for 2000-01 was R26,4 billion. This reflects an increase of R2,3 billion or 10% compared to the previous year. But this was still more than R0,8 billion or 3% lower than their adjusted budgets. Some provinces even spend less than their voted budgets.

As far as conditional grants are concerned, according to the report the provincial health sectors received the largest share, with transfers totalling R6 billion in the year 2000-01. It is, however, with concern that one notices that during the past two financial years these grants were grossly underspent. On the integrated nutrition programme alone the amount underspent over the past two years was R305 million. In spite of the fact that it is estimated, according to the report, that approximately 40% of hospital facilities require replacement or major repair at the cost of approximately R12 billion over the next 10 years, there was underspending over the past three years on hospital rehabilitation grants.

The provinces, however, cannot be blamed solely for the underspending, as the nontransferral of budgeted funds is to be blamed for this to a large extent. One can only hope that this situation will improve as the effective utilisation of grants should be a high priority.

The Intergovernmental Fiscal Review produced a detailed breakdown of exactly how and where HIV/Aids is affecting provincial governments. The report of the Medical Research Council’s recent study is quite clear on the fact that HIV/Aids is already the single biggest killer in the country. Owing to this, according to the IFR, patients with Aids are progressively replacing or crowding out other patients. According to the hon MEC in the Free State, this is already the situation in the Free State. If the status quo is maintained and all Aids patients are treated in hospitals within the next three years, all hospital beds will be occupied by HIV/Aids patients and there will be no place to care for patients with other ailments.

It is also quite clear from the IRF that most of the provinces have failed to plan for this progressive replacement of other patients in public hospitals. One can only hope that this report will be a wake-up call for all the provinces to start taking specific measures to reduce the impact of Aids and for the Government to provide them with adequate funds, and to inspire the provinces to spend them. [Applause.]

Mr H T SOGONI: Chairperson, Ministers, MECs present, hon members, in the annual reports of the departments of health 2000-01, inequality, the impact on HIV/Aids and the provision of quality health care services were identified as challenges facing these departments. The serious task and commitment of this department to meet the challenges is reflected therefore in the rate of spending on social services, which dominates provincial spending, accounting for over 80% of the total spending in the provinces.

During the session on the Intergovernmental Fiscal Review, provincial MECs and chairpersons of standing committees in the provincial departments also fell in line with the national department, as their priorities also related directly to equity, access to care, quality care and primary health care services, HIV/Aids programmes and infrastructure development in order to address the past imbalances.

While it is appreciated that steps are reported to have been taken to reduce overspending in the past or to improve the capacity to spend by means of improvement in budget processes and proper finance management systems, particular note was taken during the review process when provinces made proposals that could really make the difference and strengthen their strategies to improve service delivery. The following areas of attention immediately come to mind. The impact of HIV/Aids on our communities is quite heavy. I fully agree with the view that it is a major fiscal challenge and that, as one provincial representative clearly stated during the fiscal review, ``We need to move at an abnormal speed to find solutions to the scourge.’’ There is indeed provision for HIV/Aids programmes in all the departments of social services, but the observation made in the constituencies is that there should be a more visible or measurable indication of integrated and co- operative planning, implementation and monitoring by departments of health, education and social development together.

Infrastructure development and maintenance of the existing ones in many areas of service delivery is extremely necessary. To cite one example: There is a reported case of a pregnant mother who gave birth at the back of a bakkie on her way to St Mary’s Hospital in Ixopo, because the vehicle got stuck in the mud for hours. Ambulance services in the poor rural communities are indeed poor owing to the condition of our roads infrastructure, which does not suit the services.

Finally, all the efforts by the departments to fulfil their service delivery obligations become fruitless if corruption and criminal activities are not eliminated in the departments. Theft of drugs in hospitals, fraud involving officers … [Time expired.] [Applause.]

Mr M M MAMASE (Eastern Cape): Chairperson, hon Minister of Health and Deputy Minister of Finance, hon members of the House, hon MECs, over the past three years the Eastern Cape department of health has not experienced any real growth in budgetary terms. We have experienced a decline in human resources. As a result, as we continue to rise to the challenges facing us, our ability to do so efficiently and effectively is hampered by the lack of professional staff, more especially doctors, dentists, pharmacists and physiotherapists.

The two major challenges are to resource the department of health and rehabilitate the infrastructure. This will allow the department to effect its mandated position without hiccups. It is, however, important for us to realise that, having said that there is a decline in staff in the department of health, we have managed to put the following in place: We have revised and put in place a new establishment reflecting the needs of the department. We have strengthened the management capacity in the head office to meet the PFMA and human resource requirements. We have prioritised and targeted 10 institutions to turn them around to effect service delivery. We are also processing the amalgamation of the nursing colleges not only to reflect the current training needs, but also to incorporate the transformation of services.

The department of health has been tasked to co-ordinate the social needs cluster in the province, with five prioritised programmes, ie HIV/Aids, district development, victim empowerment, poverty alleviation and urban renewal. We have prioritised HIV/Aids and TB services as the top requirement for quality care services.

With regard to current services, our communities have benefited tremendously from better access to essential primary health care services. Most of our clinics provide nine basic services over a five-day period, and access to women’s and children’s health services is enhanced. Our clinics currently see 14 million people annually. The department has a fleet of 149 emergency vehicles and a crew of 800 men and women.

The department is finalising the provincialisation of the emergency medical rescue services. These services are still provided at local municipality level. To consolidate these services in the province, as well as improve and beef up the fleet and the training crew, we have established service partnerships with donors, NGOs and the private sector for the mobilisation of resources and by focusing on one objective - effective delivery of services to communities.

We have worked out with Cohsasa, in more than 19 hospitals, piloted norms and standards in 10 district hospitals, and we have extensively publicised and launched the Patients’ Rights Charter in all our districts.

The following are currently our most pressing challenges: Human resource development remains our major challenge in the department. The most affected areas are recruitment and retention of staff, especially in the previously disadvantaged areas. The need to appoint personnel, particularly in critical posts, cannot be overemphasised. This will constitute 84% of our establishment.

With regard to the equitable delivery of services, the Eastern Cape province is one of the poor provinces in the country, but the budget did not grow in real terms in the last three years to meet provincial demands for health services. There is still intraprovincial inequity. The former Transkei and Ciskei areas still have major infrastructure backlogs and hostile road terrain.

It is critical to realise that without a substantial improvement in addressing infrastructure backlogs, information technology, capital works and equipment, the province will always play a catch-up role. Investment in infrastructure will not only improve service delivery, but will also have a direct beneficial role in rural development.

The refurbishing of hospitals is of critical importance. For this reason we are now accelerating the hospital rehabilitation and reconstruction programme and the introduction of information technology, if our request is approved by the provincial treasury. [Applause.]

Rev M CHABAKU: Chairperson, I am delighted to participate in this debate on behalf of my beloved MEC for health in the Free State province, Mrs Mantsheng Tsopo, who would have been here but is unable to attend. We are able, as permanent delegates, to execute the duties on behalf of such people.

The past three years represent a continuous conquest of milestones in the department of health in the Free State. We have grappled with a number of challenges ranging from the backlog in assistive devices and emergency services vehicles to the availability of medical consumables and pharmaceuticals in our institutions.

In the presentation to this House on 16 October 2001, our provincial department focused on our priorities and spending trends over the past three years. In this debate, I would like to focus on the challenges that lie ahead to address the shortcomings raised by the review. It must certainly be a generally known fact that these challenges are what we are grappling with as the ANC-led Government during this historical review.

One of the issues that we need to look into is the question of equity - providing equally. The first challenge is around this issue of equity. According to the review, that was made on 16 October 2001 in the Free State, the per capita health expenditure is R792, which is above the national average. The health component of the provincial budget is about 23%, almost the same as the national average. However, the Free State receives less than its share of the Central Hospital Conditional Grant, and believes that this anomaly will be corrected in the next financial year, as the department often accedes to our humble requests.

The inequities between districts and the urban-rural divide remain a challenge. The development of a formula towards an equitable distribution of resources between provinces remains a priority. The formula should take into consideration the demography, backlogs and the disease profiles of each district.

One other thorny issue is that of transfer payments to local authorities. The essential primary health care package shall be implemented and the transfer to local government should be in terms of a service level agreement.

It is our most firm belief that quality health service delivery will not have been achieved if the rural poor are still not reached through this service. The department is thus reviewing the rendering of rural health services and is planning to improve access to 24-hour services, which will go a long way in providing access to health services for all those in dire need.

The Free State is on course with implementing the district health system, DHS. We have put the necessary and relevant governance structures in place in line with the DHS. Members of the provincial health authority were appointed in terms of section 5 of the Free State Health Act, Act 8 of

1. The first meeting of the provincial health authority, or PHA, will be held before the end of November 2001. The PHA board was constituted in terms of section 11 of the Free State Health Act.

District health authorities for the five health districts will be constituted before the end of this financial year. District managers have been appointed and the districts are aligned to the five new district municipalities. Hospital boards are in place at all 31 public hospitals in the Free State province, which is quite an achievement.

The challenge, therefore, remains in the effectiveness of these governance structures to ensure meaningful community participation. We are nonetheless moving with speed in this direction.

The HIV/Aids epidemic is without doubt something that we have to deal with head-on. The following co-ordinating structures have been established to help handle the HIV/Aids epidemic in the Free State province: the Free State Province Aids Council, the Interministerial Committee on HIV/Aids and the Interdepartmental Committee on HIV/Aids. District Aids councils will all also be launched by the end of July 2002.

The impact of the HIV/Aids pandemic on health services is probably one of the biggest challenges we are facing. The department is implementing comprehensive home and community-based care, as well as step-down facilities. We are currently looking at the provincial budget on HIV/Aids, which has been tabled and discussed with the provincial treasurer.

The department received an infrastructure grant of R7 million. This amount is being used to address the backlog in maintenance of our facilities, including the replacement of incinerators to meet the legal obligations. The challenges of maintaining our facilities and building new ones remain the same. In total 49 projects to a total value of R61 970 million are being undertaken in the province. We are thankful and very proud of the capital stock we have, and we invite any member of this House to visit our facilities to see how we can look after ourselves.

The recruitment and retention of health professionals remains a challenge. We are looking forward to the roll-out of community services to other health professionals. There are 16 management posts in the senior management service, 63% of which are already filled by indigenous black people, 32% of them by women. However, representivity amongst professionals still remains a challenge.

The department is also concerned about how low revenue collection is this year. The hospitals have on average managed only 50% of the levied revenue. A revenue task team has been appointed to propose strategies to improve revenue generation.

In conclusion, I would like to thank the executive council of the Free State Provincial Government for its support and understanding. I also want to thank the management of the Department of Health for their dedication and commitment. Lastly, but not least, I want to thank all the health workers in the department for unselfishly serving the communities of the Free State.

I have no doubt that this road we have travelled was filled with many milestones. We have been able to pass several of them. Our success in doing so has given us more confidence to deal with the remaining challenges. It is our resolve that we will forever remain vigilant and never for a moment lose sight of the dynamic nature of health service delivery. In this path we have travelled with friends and supporters, and we hope that they will always be there with us until the journey is complete.

God needs us all. Health is everybody’s right. We must continue to care, to share and to be united. Irrespective of who one is, one is a special gift of God, God’s child, and we need everyone to be very healthy in order to make miracles happen in this country, so that God can begin to rule again in our lives and in this country. [Applause.] [Interjections.]

The CHAIRPERSON OF COMMITTEES: Hon members, I did not give the speaker even one extra minute. There are people who seem to be doubting that. [Laughter.]

The MINISTER OF HEALTH: Chairperson, Deputy Minister of Finance, MECs present here, members of the NCOP, ladies and gentlemen, I would like to take this opportunity to thank members of the NCOP for affording me the opportunity to address them.

In starting, I must congratulate the Minister of Finance and his team from Treasury on the hard work that has resulted in a very good and comprehensive document.

In the course of developing the Intergovernmental Fiscal Review, the Department of Health has been given an opportunity to make comments specifically on the chapter that deals with health. The fiscal review comes soon after the completion of another major review of financing and expenditure trends, an exercise that has produced a set of figures that we refer to in the department as the national health accounts.

The recent national accounts study covers the three financial years from 1996-97 through to 1998-99. The work has afforded us the opportunity to take a step back and to examine how things have been progressing in the department. As such, it allows us to have a better assessment of expenditure patterns.

The study has highlighted several significant improvements in health sector developments that are in line with the broad goals that we have set for ourselves. But the national health accounts also highlight a number of challenges that are emerging within the health sector. We have taken a decision to institutionalise the process of compiling national health accounts and health expenditure reviews in the department.

We shall sit as the health Minmec on an annual basis and review expenditure trends against our priorities. This practice should not only significantly improve our understanding of the functioning of the health sector, but also lend significant support to the National Treasury in its interpretation of the needs of our sector.

Let me outline some important landmarks and challenges with specific reference to areas highlighted in the fiscal review. With regard to access to care I might just say that since 1994 the introduction of free care policies has seen significant resources being channelled into primary health care. This is reflected in the fact that 19% of health sector spending in 1998-99 was related to primary health care as against 11% in 1993-94. Removing the barrier that fees pose to the poor was only the first step in improving access to care. A review undertaken within the Department of Health not so long ago showed that since 1995 more than five million people have experienced significantly improved access to primary health care services.

Much of this effort has been concentrated on improving access in underserved areas and historically disadvantaged areas. However, significant though our efforts have been and as the Intergovernmental Fiscal Review points out, this task is far from complete. There are still many challenges ahead and we are actively seeking to address them.

With regard to the distribution of resources, a significant problem exists in the maldistribution of health professionals. This inequality is quite stark when we start examining differences in the numbers and categories of health professionals practising in urban and rural areas. This factor has significantly undermined our efforts in attempting to rapidly improve service delivery.

A key policy that has been introduced to address this is that of community service. Initially community service applied only to doctors, but it has now been extended to pharmacists. They are doing a valuable job in the rural areas.

This policy seeks to place newly qualified health professionals in categories of work that are key to service delivery in areas where they are needed most. At the last health Minmec we took a decision to expand community service to other health professions, beginning in January 2003. Next year we shall be tabling amending legislation to facilitate this programme.

A related phenomenon hampering transformation is that of the migration of skilled professionals. This takes the form of internal migration between provinces and between public and private facilities, and also migration beyond the borders of South Africa.

This outflow of professionals from services that desperately require them is something that needs urgent attention. It highlights the need for a strategy across the health sector and I would like to call upon members of the NCOP for their support in addressing this problem. We have, as Commonwealth health Ministers, established a task team that is going to investigate this problem, because most of our health professionals tend to migrate to New Zealand, Australia, Canada or the United Kingdom. The UK has taken a position on this lately.

A third priority area is that of quality of care, especially in the Public Service. We are committed to making significant improvements in this area between now and 2004. We have recently adopted a comprehensive policy on quality of care. Many of the elements that are contained in the policy have begun to be implemented in a range of provinces, but they require reinforcement and constant monitoring in order to ensure that they are sustained and expanded.

Fundamental to these initiatives is the Patients’ Rights Charter, which was launched about 18 months ago. Another set of interventions relates to institutional reforms that we have implemented in conjunction with our statutory bodies to promote and build professional development. We are now busy refining a standard complaints mechanism within the public health system and are promoting the practices of clinical audits and peer review.

On the issue of the revitalisation of hospitals, we include the quality of care issues referred to earlier, but also, in general, improving and rehabilitating the physical infrastructure and improving the management and organisational development components of hospitals.

Indeed, we are concentrating on health technology. I would invite members to visit a number of hospitals in which we have already had some achievements with regard to revitalisation. Members would have watched when we launched the Kimberley hospital. It looks like a hotel. We need to congratulate them on that. [Applause.] One would also see the same thing in Witbank and Pietersburg, because a number of hospitals are being revitalised. I would just like to acknowledge the assistance that we are getting from the Japanese, particularly with regard to technology in Mpumalanga, the Northern Province and KwaZulu-Natal.

There was also reference to ambulances and emergency medical services. Some members have already referred to the fact that we are busy upgrading our ambulance fleet and we have moved them away from the fire brigade services to the departments. That makes it easier for us to be able to respond with this very important and necessary service.

These initiatives are interdependent within the life and functioning of hospitals and we believe it is fruitless to address them in isolation. They require a single umbrella framework. Certainly the Department of Health has a crucial role to play, but we believe that the Treasury and the Department of Public Service and Administration also have valuable contributions to make.

In the final instance, however, the hospital revitalisation programme must be led by the Department of Health and positioned firmly within our policy imperatives and service priorities.

I would like to address the question of inequities referred to by most members. Indeed this is a problem, and there are major challenges in the health sector which stem from the deep and persistent inequities that exist within the financing of health care - inequities between the public and private sectors and also between and within provinces in the public health system.

We are currently reviewing the relationship between the public and private sector, with the aim of realigning our activities to promote greater access and equity. Discussions on this matter will form a major theme at the forthcoming national health summit to be held in November this year.

When it comes to inequities between provinces within the public health system, we are seriously concerned about the inequities in per capita expenditure across provinces. In the face of significant growth in public health spending, there has been a worrying decline in per capita spending, and this disproportionately affects the poor provinces.

The system of fiscal federalism, which is a feature of our Constitution, makes it very difficult for us in the health sector to address issues of equity in financing of health services. Since the introduction of fiscal federalism we have seen a reversal of the trend towards equity that we initiated in the early years of our democracy. This divide between the poorer and richer provinces is again growing wider and wider.

Although the National Treasury has initiated a process of reviewing the formula that is used to determine the horizontal division of revenue, we need to do significantly more work in order to achieve equity in the financing of health care.

Again, I would like to appeal to members of the NCOP to assist us in addressing these complex issues.

Another issue that was raised is that of equity and conditional grants. We have already embarked on a process of restructuring the conditional grants that are allocated to fund central hospitals, other tertiary services and the training of health professionals. A review of the funding of tertiary services has been undertaken and it highlights substantial inequities in the way we fund these services. We have proposed a revision to the grant framework to ensure provinces are funded on a like-for-like basis.

It is completely unlike what Mr Redcliffe said, namely that we have no vision. We have a vision. His MEC also attends these meetings and is part of these discussions. I do not understand how on earth he could say that the department has no vision. We do have a vision. Unless, of course, the MEC does not report back to the province.

This is seen only as a first step towards achieving equity in the financing of tertiary services and we have proposed a three-year period to correct the allocations. In addition to this, I have asked the director-general in the presence of all the MECs to develop a comprehensive strategy for the equitable funding and provision of tertiary services within 24 hours.

This is a very painful process as members could hear from Mr Redcliffe, claiming that we have no vision. It is painful for them. It is a painful process and even at this early stage, there are signs of reluctance from the better-resourced provinces. Let me just explain what they do. They provide health care services at inappropriate levels of care, and, of course, that becomes very expensive. I can hear hon members moaning about long waiting periods for patients in the wards, but let me say that the Northern Cape, which has the least resources as compared to the Western Cape, has been able to reduce waiting periods to only 15 minutes. The premier has undertaken that it shall be done. [Applause.] They have also reduced absenteeism. I therefore think it can be done. We do not have to wait for resources to be sent to those provinces which are already better resourced than others.

Regarding personnel spending, I want to address the challenge relating to personnel budgets. Spending on personnel will always be an important element in the budget of the health sector. There seems to be some debate on the extent and exact proportion of spending on personnel. If present trends continue unabated, it will put a squeeze on nonpersonnel financing available for the effective delivery of health services.

It is important, however, to recognise the fact that personnel expenditure is projected to fall to levels of around 60%. In the light of past and current trends in wage policy, we need to question whether this is a sustainable goal. Both service needs and budgetary constraints have focused our attention on the need for a strategy to ensure that midlevel care workers begin to play a significant role in our planning of human resources for hospitals, clinics and community services.

I would like to deal with emerging and re-emerging diseases, which are, of course, extremely important for us. I have listened very carefully to all the members talking about HIV/Aids. What I would have loved to hear was these members articulating what they themselves do regarding participation in the implementation of Government’s programme to ensure that we fight the spread of HIV/Aids. I do not think it helps if all of us sitting here together only say ``this is not done, that is not done’’. I think we need to say what we ourselves are doing to ensure that we make a meaningful contribution to the fight against HIV/Aids.

We have made a concrete proposal to the Treasury for funding designed to secure an enhanced response to HIV/Aids, sexually transmitted infections, tuberculosis and malaria. Hon members should remember that we are signatories to the Abuja Treaty. Our focus is much broader than just HIV/Aids. As part of the Abuja Treaty we signed all these things and committed ourselves, as part of the continent, to doing them.

The document motivating for particular allocation was tabled to the joint health-treasury Minmec about two months ago. HIV/Aids indeed contributes significantly to the mortality and morbidity burdens on the public health sector. This is squeezing out resources previously used for other health interventions. We need to recognise this and act consciously to alleviate this pressure. This requirement is at the heart of the current discussions between Treasury and ourselves as reflected in the fiscal review.

The area of tuberculosis is significant in its own right as a major cause of morbidity and mortality in South Africa and it is also important because of the complex relationship that exists between tuberculosis and HIV.

Sexually transmitted infections are a priority too. There is indisputable evidence that one of the more effective health sector responses to HIV transmission is the aggressive treatment of sexually transmitted infections. However, it is important that, as we deal with the issue of HIV/Aids, TB and sexually transmitted infections, we do not make the mistake of restricting the challenges of the health sector only to these major problem areas.

It has repeatedly been shown that we have a complex burden of disease, and this is not negated by the growing toll of HIV/Aids and related infections. Needless to say, poverty is a major contributor to the burden of communicable diseases. We are also strengthening our disease surveillance systems and our epidemic response, especially when dealing with malaria and cholera.

Our success in dealing with cholera primarily through public health interventions and intersectoral action with other departments who are responsible for water and sanitation is evidence of this fact.

Recently our efforts were recognised when South Africa received an award from the World Health Organisation for our malaria programme, which is run in collaboration with our neighbours Swaziland and Mozambique, especially through the Lebombo special development initiative.

The Minister and the Department of Health remain committed to ensuring that we continuously seek initiatives that compliment or advance Government programmes designed to eradicate poverty. The department’s poverty alleviation fund represents another opportunity to go beyond our current rand-based approach to providing support for micro financing initiatives targeted at the poorest of the poor. I urge Treasury to really assist us in this regard. I think the area of micro financing initiatives is a very important one. I am convinced that we should not leave it to the NGOs, but Government must also participate meaningfully in this initiative. Sustained focus on the poorest among us will ensure that the impact of HIV/Aids is reduced in our communities. This will no doubt contribute to the improved health access of our underserviced communities.

The fiscal review’s health chapter contains a number of subjective elements which I must address before closing. One relates to inefficiency. I would be the first to concede that there are areas of inefficiency in terms of our spending in the public health system. However, it must be recognised that we are constantly striving to improve efficiency and good stewardship of resources.

We are making a concerted effort to bring about management reform with strict adherence to the Public Finance Management Act. This work includes developing audit trails and appointing chief financial officers. Let me say that I think there was a slight mistake in the fiscal review which indicated that we were way behind with regard to chief financial officers. I think we are on track. We just need to accelerate the pace, but I think we are doing very well and I hope Treasury can give us an incentive for that.

We are also trying to decentralise management functions. Several control systems have been developed to address wastage, especially in the area of pharmaceuticals and medical supplies. Several provinces have already moved ahead with a significant delegation of management powers to institutional level. We will promote this kind of management empowerment in the remaining provinces.

Management decentralisation could be enormously enhanced if the various treasuries could move more rapidly to allow revenue retention as is already happening, for example, in Gauteng and the Northern Cape, where I think they have been allowed 100% revenue retention. Better alignment of activities of the public and private sectors should be a significant factor in boosting efficiency.

There is still a lot to be achieved in this area. However, there are numerous examples of partnerships that are being forged, and we discussed this when we made our submission to the select committee. Many of the efficiency measures are very new initiatives and in most cases we have yet to reap the fruits of our efforts.

The last area that I want to touch on is somewhat sensitive. My provincial colleagues raised it during the select committee discussions. I think it would answer some of the questions and concerns that have been raised around conditional grants and other grants that we manage.

This relates to spending on infrastructure and specifically the role of the Department of Public Works in this regard. We plan to further engage our colleagues on this issue.

Another issue that needs immediate attention is the low level of investment on maintenance of our capital stock. I would be short-sighted to allow this to continue, and major effort is necessary to reverse this trend.

In conclusion, let me again acknowledge the importance of the work done by the National Treasury and congratulate Minister Manuel. In spite of all the challenges, I am satisfied that we are discharging our duty to our country. In this regard I would also like to thank my colleagues, the MECs for health, for their teamwork in addressing the daunting task of providing quality health care for all our people. [Applause.]

The DEPUTY MINISTER OF FINANCE: Chairperson, I would like to begin by thanking all the members, the MECs present - I see that their numbers have dwindled - representatives of provincial legislatures, representatives of organised local government and all the members in this House for the work that has been done over the past week and a half or so in embarking on a comprehensive process of hearings on the Intergovernmental Fiscal Review.

The Intergovernmental Fiscal Review points out that the provinces are pivotal players in delivering social services. A significant portion of allocated funds for health, education and social development flows through the provincial departments and they employ substantial staff contingents to administer these services. The review provides a picture not only of progress, but also of very real challenges. Meeting these challenges requires the necessary funding, yes, but more importantly, also forces us to address the very institutional and management issues at hand.

Solutions do not lie in money alone, and in this regard the example that was given of the Northern Cape managing to reduce the waiting time to 15 minutes is, I think, a case in point. The real test is whether we can mobilise and apply the resources with the required focus, efficiency and innovation that would make every rand go further and bring out the best of every staff member.

Regarding the specific sectors on which we are focusing today, the Ministers have, of course, responded adequately to the issues that have been raised. I would just like to pick up on a few points in each of the sectors that we have been dealing with today.

As far as education is concerned, and given the legacy of apartheid education, the transition in education over the past five years has been a tough one. Not only has management improved and finances become more sound, but race, gender and geographic location are no longer determinants for access to decent schooling. Provinces have done well to provide access to a large number of learners. Although equity in the system is improving it still has some way to go, and key programmes aimed at improving quality are under way.

Secondly, following some stagnation in education expenditure since 1996-97, partly due to the 1996 salary agreement, the 2000 Budget marked a shift towards renewed growth in provincial education spending and this positive trend has continued in 2001.

Real growth of 1,7% is projected for 2003-04. A further shift in resources towards provincial government over the next few years will add impetus to this level of growth. Hon members must understand that when one speaks of real growth of 1,7% in the context of a budget which is above R50 billion, one is actually talking about a substantial amount of money. So we must not think that because the figure is 1,7%, that it is a small increase, because it is actually quite a substantial amount of money.

The third point I would like to raise is that key to achieving a sustainable budget outlook has been the reduction in personnel costs in the field of education. The rationalisation and redeployment programme initiated by agreement with teacher unions has allowed provinces to improve the distribution of teachers within provinces and has allowed for a reduction in teacher numbers in certain provinces.

This effort has improved the prospects for nonpersonnel spending in education departments, with both capital and other recurrent spending, such as textbooks, growing strongly in real terms over the next few years.

The hon Sizani from the Eastern Cape raised the issue of the importance of donor funds for the province to be able to embark on programmes such as school building. We do not often recognise just how important the donor funds that we receive are in enabling us to reach areas where our budgets are often unable to reach. I know that a few years ago the Eastern Cape actually did not have a capital budget for schools, and the only money that was available was money from various donor countries, from the EU, Japan and so on.

I do want to record in this House that we do receive substantial amounts of donor funds and they play a very important role in supplementing the budgets that provinces and departments have. What we have sought to do has been to try to ensure that there is some co-ordination with our budget priorities. In many cases we have managed to make those donor funds become actual budget support. That is how the degree of alignment has progressed in certain areas.

If the hon member Helen Zille had been here, I would have agreed with her on a number of points she raised. She raised the point about the efficiency of spending. She even compared us to Senegal and Zambia. That is true. Part of the legacy of South Africa, in the fields of education and health for example, is that while we spend more resources than countries that are comparable to us, the outcomes thereof have been poorer in South Africa than in some of those countries. So, I would have agreed with her on that point, and this applies to both education and health.

But, of course, she must also admit that this is a historical problem. It is not a new problem. It is part of the legacy that we are trying to deal with. I think that these are some of the things which our trade unions should also be seized with to ensure that we improve the effectiveness of the spending of the resources that go into education, including our school governing bodies and other stakeholders. The other point which I would have liked to pick up on was the point about the Cuban core of teachers to help us develop our own teachers. I know some people sneer at the idea of getting experts from Cuba. The point about it is that best practice does not always necessarily reside or does not only reside in the traditional developed countries. So we will go for best practice where we believe that it will benefit us.

Regarding social development, the expanding role of the social grant system in fighting poverty cannot be doubted. Compared to most other middle-income countries, South Africa has a large state welfare system. I want to emphasise this. This is a unique programme that we have in South Africa, especially the non-contributory old age grant. One does not find this in many countries comparable to us. The biggest component focuses on the payment of noncontributory old age grants, disability grants and child grants to poor people.

Each month close to 4 million people, or nearly 10% of our population, receive cash grants. Numbers are growing by more than 60 000 a month as the child support grant is phased in, and will reach more than 6 million over the next two years. Welfare services’ funding of private welfare organisations and state-provided services for aspects such as placement of orphans, institutional care, rehabilitation and counselling play a smaller but critical role.

Social development expenditure continues to fluctuate around 90% of total provincial expenditure, and ranges from as high as 22,5% in the Eastern Cape to around 14% in Gauteng. The different proportions reflect different demographic structures and levels of poverty. For example, KwaZulu-Natal has a bigger proportion of older people and, as a result, a lot of the budget is consumed by ensuring that one gets these grants to those people.

These are some of the demographic differences. The explanation for this is that amajaha [well-built men] of my age go and work in Johannesburg, but when they get older they come back to the province. These are some of the things that we are beginning to see in the differences in the budgets spent by different provinces. This is why Gauteng is spending, for example, 14% on welfare payments.

On average, more than 90% of Social Development expenditure goes towards cash grants. Some provinces, such as Gauteng and the Western Cape, manage to spend larger proportions on social welfare services. In spite of some progress towards greater equity between provinces in levels of expenditure, spending per poor person between the provinces remains, however, unequal and requires further attention.

Following slower spending since 1997, the year 2000-01 reflects a turnaround with real growth returning to the aggregate welfare budget after two years of real decline. So, we do accept that there has been a decline in welfare budgets. This trend continues over the medium-term. Over the three-year period, nearly 3% real growth per year is expected. Again, the most significant growth is generally in the provinces where there are backlogs and where access needs to be facilitated, for example, Mpumalanga, the North West and the Northern Province.

The administrative system, payment system and paypoints in particular have received substantial attention. This relates to unsatisfactory conditions at paypoints, for example, the unavailability of shelter and sanitation, the outsourcing of grant payments to private firms, fraud and administrative actions in some provinces.

The national department is currently taking initiatives to support improvement in service delivery. Chief financial officers are in place at appropriate levels in most provinces and requirements for submission of financial statements were generally complied with. This is one of the positive results that we are beginning to see from the implementation of the Public Finance Management Act because now, two months after the end of the financial year, most departments are able to submit their financial statements. Previously, it could be anything from six to 18 months before financial statements could be submitted. This is a positive development. Change and the introduction of new things always create difficulties, but I think that we must acknowledge those areas where there has been improvement. [Applause.]

The adequacy of the social safety net and the fact that many poor South Africans do not qualify for benefits are currently being investigated by the committee of investigation into a comprehensive social security system. A variety of options are being analysed for addressing, in a comprehensive way, the problems of poverty and inequality. Some initiatives are already in place to deal with the impact of HIV/Aids, such as the funding of community- and home-based care options.

The issue that I would want to pick up in the matters raised by the hon members here is that of the child support grant. A point has been raised about the fact that the child support grant only goes up to the age of seven. Yes, that is true. Another point about the need for us to consider raising that age to 18 has also been raised. I think that that was one of the Minister’s parting shots, if I can put it like that.

What I would just like to raise with members of this House is that, as we look at this issue of the child support grant which supports children up to the age of seven, we must not close our eyes to the fact that we do have the primary school nutrition programme, and part of the challenge is to make sure that that primary school nutrition programme functions much more effectively. We can extend its reach and ensure that we give better food to children at school. I just wanted to caution hon members that we do not only have to at the issue of extending the age, but also look at the other instruments that we have in order to deal with children who are disadvantaged.

I also think that we must recognise that we are a government. A government does many things. There are trade-offs. We can make any decision around this issue. We could decide to extend the age to 18, and recognise what that will immediately do to the numbers. The numbers will increase substantially. At the same time, the Minister was demanding increases in the amounts as well. I think that part of what we need to do is to recognise that there are trade-offs to be made, and we must approach these things collectively so that the decisions that we make are decisions that will ensure that we are also able to fulfil our other responsibilities.

We must always recognise the fiscal impact of the decisions and choices that we make on other sectors. I have just said that we are a Government and have many responsibilities to look after. I think that part of the issue that faces us is: What is it that we are trying to do as a country or as Government? Surely, we are not constructing what can be called a welfare state. We would not like to generate a nation of people who are dependent. Part of what we do in the short to medium term to alleviate issues of poverty, etc, is to do all the other things that will ensure that people have employment opportunities and generate income for themselves. That is part of the challenge. I am saying that we must cast our eyes wide when we deal with these issues and not just look at one particular instrument that we have.

Another issue that I wanted to pick up - unfortunately the hon Kondlo has left - is the decline in the provincial share. [Interjections.] Who is the hon member pointing at? [Interjections.] No, I am referring to hon Kondlo from the Eastern Cape. Maybe I should have said it in isiXhosa. The point is about the decline in the provincial share. It is only a temporary phenomenon and already, over the medium term, we are beginning to see the provincial share rising over the three-year period. I did want to point that out.

Regarding the issue of information that was not reflected on the Eastern Cape in the Intergovernmental Fiscal Review, we are fairly confident that the information that we have in this fiscal review is reasonably accurate. The reason for that is that the process of compiling all of this information is a collaborative process. We do not just sit in the Treasury and compile these numbers. We get these numbers from the departments at national and provincial levels. So I think that if there is something that we did not reflect it may be because that thing was not supplied to us. Even after drafting the document, we supplied the departments with the relevant chapters so that they could comment. I think that hon members have heard the Minister of Health saying so.

But one of the things that this Intergovernmental Fiscal Review raises, because there are areas where we have difficulties in getting information, for example specific information on the budgets of hospitals and around some of the nonfinancial information, is just the centrality of information. The importance for all of us at local, provincial and national government level - all departments - is to collect and disseminate information. This is because part of what the lack of availability of information means is that even our managers at those levels at which we do not have the information do not use that information. It is critical that one of the things that we learn from this process is that it is important for us to collect information, because information is an important instrument, even enabling us to evaluate our policies or to refine our policies, and sometimes perhaps to even change the direction and so on. So I wanted to highlight those particular points as far as social development is concerned.

As far as health is concerned, there is a marked resumption of growth in health expenditure. After some stagnation again in the area of health, health expenditure increased by 9,6% in 1999-2000, and 2000-01, and by 8,8% in 2001-02.

Strong real growth in health budgets occurred prior to 1997-98. But the impact of salary negotiations put substantial pressure on this sector. The result was strong cutbacks in health personnel, constraints on capital and maintenance spending, and real declines in spending on supplies, particularly medicines. This is reflected by the expenditure data of 1998-

1. I hope that this helps us to recognise the importance that we must pay to managing our spending on personnel, because it is easy to spend on personnel. It is one of the easiest things to do. It is much easier than it is to spend on building a school, clinic, road or something like that, because those require certain skills, more planning and more time. It is important that we really pay attention to the issue of managing personnel spending.

Provincial health budgets are set to grow again by 1,7% per year in real terms over the medium term. This turnaround will be strengthened by more moderate growth in personnel expenditure as the costly wage progression system comes to an end. While the proportion of provincial expenditure going towards health strengthened in 1999-2000, the share of the sector comes under pressure over the period 2003-04.

Following the comments in the hearings, I would like to bring to members’ attention how the various concerns that had been raised are being dealt with. Firstly, there is much co-operation between the Treasury and the Department of Health to ensure that health budgets are adequately catered for. This includes ensuring adequate funding for the primary health care budgets, which can be dealt with through more detailed budget information for what are programme 2 items: district health care in provincial health budgets. Subprogrammes will provide more information, and strategic plans to be tabled with the budget could provide better district information. These reforms should also ensure better information on the school nutrition programme.

Secondly, detailed work has been undertaken with the Department of Health to support restructuring of the central hospitals grant. The aim is a more equitable funding of tertiary services and improved access to tertiary services.

Thirdly, a detailed research project has been undertaken on the distribution of tertiary services expenditure in the country. This shows certain inconsistencies between existing grant allocations and expenditure. For example, the Eastern Cape province spends R481 million on tertiary services, but only receives R13 million. Proposals are close to finalisation to integrate the central hospitals grant fund and the redistribution of specialised services grant into a new national tertiary services grant. These will be detailed in the Medium-Term Budget Policy Statement. Also, infrastructure rehabilitation and maintenance remain high on the agenda, and financing mechanisms will be reviewed over the next 12 months.

HIV/Aids is currently being confronted in the health sector, mainly through expenditure by provincial health departments on Aids-related illnesses and opportunistic infections, and through prevention activities funded by the national Department of Health, and through the special allocation for an integrated plan.

The special allocation flows mostly to provinces as conditional grants. While most of the required initiatives are in place, there is a need to build on this basic capacity, move beyond piloting and expand the scale of programmes. Substantial work has been done to allow progress in this regard in the current budget process.

In spite of important gains in the health sector, equity remains a pressing concern. Both spending figures and other indicators of input, for example the availability of highly skilled medical staff that the chair of the committee was talking about and hospital beds by province, illustrate unequal access to services and quality differentials between provinces.

The National Treasury is interacting with the Department of Health to address pressing inequities in specialist medical personnel, and further information on this will be released in the Medium-Term Budget Policy Statement. It must be noted that many of the underlying problems may not be financial, as the distribution of doctors and specialists indicates.

Resolving these nonfinancial problems, like attracting and retaining personnel, is critical to ensuring progress towards better equity. Substantial progress has been made towards a greater focus on primary health care. Policies introduced include, of course, free primary health care, free services to mothers and young children, a large clinic-building programme and restructuring of hospital services.

Service levels received ongoing attention as well. There is, for example, increased availability of ante-natal care, improved turn-around times for various tests and wide implementation of the directly observed treatment system for tuberculosis. There has also been an improvement in availability of doctors at clinics, a marked increase in availability of electricity at clinics, and some increase in availability of condoms, oxygen, penicillin and oral contraceptives. Some concerns remain, including record keeping and basic equipment.

I have a few final points that I would like to make. Firstly, I would like to address myself to the hon Ackermann. With quite a loud voice he said that apartheid was being blamed for everything. What I would like to say is that what is most important about this Intergovernmental Fiscal Review is that it is about us, what we have done. It is about us evaluating what we have done since we became the new Government. [Interjections.]

And so one must never glorify apartheid or even pretend that things were better during apartheid, because many people in this House will tell one how different that reality was. The most important thing is that this is a much more open society, a much more open and transparent Government and we report about what we do; we even report about our own failures, and that is very important.

I think that the issue about this Intergovernmental Fiscal Review is that the overall picture that emerges from this document is one of progress. It is one of progress and also of challenges. It also reflects a growing and maturing intergovernmental system as shown by more and better quality joint Minmecs. We have had quite a lot of joint Minmecs in the course of this year, with education, with health, with social development, with housing and so on.

The quality of these joint Minmecs has improved. So I think that there is also a maturing of the intergovernmental system. Part of what we must recognise particularly as this House is that there is a series of documents that we now have in the course of the year at our disposal. With the budget, we table the Estimates of national expenditure, which essentially give us the policy priorities, the programmes, and the budgets of departments, and what departments plan to achieve over the medium term.

This is an important document that we must interact with. We also have the Intergovernmental Fiscal Review and the Medium-Term Budget Policy Statement. At the end of the day, all of these documents must mean something to us. They must assist us in the work that we are doing. It is important to emphasise that this Intergovernmental Fiscal Review should not be the end of it. It is something that, as committees, we should continue to work with in the provinces, our legislatures and local governments and so on, because it really gives us important non-financial information as well. To end, I really must thank all of the members and express the hope that following this particular debate we can continue reflecting on what this document has highlighted. The last point that I would like to make is that a member here made reference to a report of the Medical Research Council. The point that I would like to make is that when one talks about that report, it is not as though Government is sitting and doing nothing about establishing the impact of HIV/Aids on our society. In fact, the Medical Research Council was part of a wider process involving Statistics SA and so on.

That process is still on course and we expect its results. It must not be as though, because the Medical Research Council has decided to table this report, the Government is not doing anything to try and measure what the impact of HIV/Aids is on our country. [Applause.]

Debate suspended

          FINANCIAL INSTITUTIONS (PROTECTION OF FUNDS) BILL
            (Consideration of Bill and of Report thereon)

Dr E A CONROY: Chairperson, Deputy Minister of Finance, special delegates and colleagues, this Bill is, in essence, an updated streamlining of the Financial Institutions (Investment of Funds) Act of 1984, which will now be repealed. The Financial Institutions Act is a statutory codification of the law of trusts as applicable to financial institutions and deals with the fiduciary duties of persons dealing with funds and trust property controlled by financial institutions.

These include aspects such as good faith, proper care and diligence, declaration of private interests and the requirement that third-party funds or trust property should be invested separately. In Chapter 1 of the Bill, the provisions of the Financial Institutions Act relating to the safekeeping and administration of funds and trust property by financial institutions have been refined and rewritten in clearer language.

The second chapter of the Bill makes significant extensions with regard to the registrar’s powers against contravening parties and provides for more effective enforcement measures and oversight by the Financial Services Board. In the first instance, the powers have been extended to enable the registrar to act also against parties functioning outside the regulatory net. It will now be possible to establish a curatorship over the so-called associated institutions and/or unregistered institutions.

Although the Act previously contained provisions granting the registrar locus standi to institute civil proceedings such as to interdict a party from contravening the law, the Bill now makes provision for further powers which, inter alia, enable the registrar to call for specified information, or to require a party to appear before the registrar for questioning and even to apply to a court for an order restraining the conduct of business. The registrar is, furthermore, given the power to declare certain practices irregular or undesirable, and to have the names of transgressors published after certain audi alteram procedures have been applied.

This ``name and shame’’ possibility will serve as an additional deterrent to individuals who may contemplate improper behaviour. In addition to a severe penalty of 10 years which may be imposed on a transgressor, such an individual may be ordered by the court to refund profits made or to compensate whoever suffered damage as a result of the contravention.

The Bill does not have any organisational or personnel implications for the state, other than to reduce the burden of the courts in removing the duty to exercise control over curators, neither does it have any financial implications for the state.

No objections were received by the Select Committee on Finance, and it was passed unanimously. The select committee recommends that the Bill be supported.

Debate concluded.

Bill agreed to in accordance with section 75 of the Constitution.

                   ALEXKOR LIMITED AMENDMENT BILL

            (Consideration of Bill and of Report thereon)

Mr S L E FENYANE: Chairperson, I know it has been a hard long day. However, I have no choice but to go through my speech. Hon members should bear with me.

We indeed live in exciting times. Success in any endeavour is not certain, neither it is guaranteed. Successful concerns in the private and the public sector are those that are able to embrace the philosophy of the futurists, when they posit cogently that:

The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.

Business concerns and the broader public are presently challenged, in the words of Prof. Nick Binedel:

... to identify  what  practices  and  skills  will  work  in  the  new
 environment, which is rapidly propelled hither and thither  by  furious
 technological development. They are expected to identify practices that
 do not work. Thereafter,  they  should  forthwith  abandon  those  with
 clinical precision and, in the process, learn a whole new set of skills
 that are necessary  to  survive  even  the  outbreak  of  unanticipated
 eventualities, such as the September 11 New York city catastrophe.  The
 modern world readily punishes those who  do  not  plan  and  anticipate
 probable future scenarios.

It is against the backdrop of these factors and other realities that the Department of Public Enterprises has introduced the Alexkor Limited Amendment Bill to Parliament. The Bill in front of us seeks to amend the obsolete provisions of the Alexkor Limited Act of 1992. That Bill effectively imposed restrictions on the disposal of Alexkor shares held by the state, in that it compelled the Minister to first list Alexkor shares, and only then could he/she dispose of those shares. The proposed amendment enables the Minister for Public Enterprises to sell the state’s shares in Alexkor without having to traverse the listing route.

The Bill is not prescriptive, but merely enables the Minister to restructure Alexkor within the broader restructuring policy framework of the Government. I would also like to indicate that, at this point in time, Alexkor is operating at a loss and that the Government is painfully aware that the greater Namaqualand community depends entirely on Alexkor for its livelihood. Government will try everything in its power to maintain the economic viability of Alexkor for the benefit of the Namaqualand community. This will be done in partnership with the community in a manner that is transparent and fair. Various options will have to be considered, but it should be stated that, contrary to perceptions, the Government is not privatising Alexkor. It should be noted, in particular, that this endeavour by Government to resuscitate the economic revival and self-sufficiency of Alexkor is not a nuanced attempt to shed jobs. I would like to indicate, without implying any subtle pun or equivocation, that the intention of the Government is to save jobs and promote the economic revival of Alexkor.

The local government there has been duly consulted on this, and it fully supports Government on this aspect. I would therefore like to urge the House to support the passage of this Bill.

In the interests of saving time, seeing that members are very tired right now, I would like to move that we support this Bill. [Applause.]

Debate concluded.

Bill agreed to in accordance with section 75 of the Constitution.

             REPEAL OF VOLKSTAAT COUNCIL PROVISIONS BILL

            (Consideration of Bill and of Report thereon)

Order disposed of without debate.

Bill agreed to in accordance with section 75 of the Constitution.

The Council adjourned at 18:03. _____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

                     WEDNESDAY, 17 OCTOBER 2001

ANNOUNCEMENTS:

National Council of Provinces:

1. The Chairperson:

 Kgoshi M L Mokoena has  been  elected  as  chairperson  of  the  Select
 Committee on Security and Constitutional Affairs with  effect  from  20
 September 2001.

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Speaker and the Chairperson:

 (1)    Report and Financial Statements  of  the  Special  Investigating
     Unit for 2000-2001.


 (2)    Supplement to the Report and Financial Statements of the Special
     Investigating Unit for 2000-2001,  including  the  Reports  of  the
     Auditor-General on the Financial Statements for  2000-2001  and  on
     the achievements by the Special Investigating Units for 2000-2001.

1. The Minister of Arts, Culture, Science and Technology:

 (1)     Report  and  Financial  Statements  of  the  National  Research
     Foundation for 2000-2001, including  the  Report  of  the  Auditor-
     General on the Financial Statements for 2000-2001.


 (2)    Report and Financial Statements of the Human  Sciences  Research
     Council for 2000-2001, including the Report of the  Auditor-General
     on the Financial Statements for 2000-2001 [RP 102-2001].

                      THURSDAY, 18 OCTOBER 2001

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The Joint Tagging Mechanism (JTM) on 18 October 2001 in terms of
     Joint Rule 160(3), classified the following Bill as  a  section  75
     Bill:


     (i)     Labour Relations Amendment Bill [B  77  -  2001]  (National
          Assembly - sec 75).


 (2)      The   Minister   of   Trade   and   Industry   submitted   the
     Wysigingswetsontwerp op Loterye [W 81 - 2001] (National Assembly  -
     sec 75) to the Speaker and the  Chairperson  on  18  October  2001.
     This is the official translation of the  Lotteries  Amendment  Bill
     [B 81 - 2001] (National Assembly - sec 75),  which  was  introduced
     in the National Assembly by the Minister on 16 October 2001.

1. The Chairperson:

 Message from National Assembly to National Council of Provinces:


 Bills passed by National Assembly on 18 October  2001  and  transmitted
 for concurrence:


 (i)    Demobilisation Amendment Bill [B 5B - 2001] (National Assembly -
       sec 75).


 (ii)   Termination of Integration Intake Bill [B 6B -  2001]  (National
       Assembly - sec 75).


       The Bills have been referred to the Select Committee on Security
       and Constitutional Affairs of the National Council of Provinces.

1. The Chairperson:

 The following papers tabled are now referred to the relevant committees
 as mentioned below:


 (1)    The following papers are referred to  the  Select  Committee  on
     Security and Constitutional Affairs:


     (a)      Report   and   Financial   Statements   of   the   Special
          Investigating Unit for 2000-2001.


     (b)     Supplement to the Report and Financial  Statements  of  the
          Special  Investigating  Unit  for  2000-2001,  including   the
          Reports of the Auditor-General on the Financial Statements for
          2000-2001 and on the achievements by the Special Investigating
          Units for 2000-2001.


 (2)    The following papers are referred to  the  Select  Committee  on
     Education and Recreation:


     (a)     Report and Financial Statements of  the  National  Research
          Foundation for 2000-2001, including the Report of the Auditor-
          General on the Financial Statements for 2000-2001.


     (b)     Report and  Financial  Statements  of  the  Human  Sciences
          Research Council for 2000-2001, including the  Report  of  the
          Auditor-General on the Financial Statements for 2000-2001  [RP
          102-2001].

National Council of Provinces:

COMMITTEE REPORTS:

1. Report of the Select Committee on Land and Environmental Affairs on the Agricultural Debt Management Bill [B 54B - 2001] (National Assembly - sec 75), dated 16 October 2001:

   The Select Committee on Land and Environmental Affairs, having considered the subject of the Agricultural Debt Management Bill [B 54B - 2001] (National Assembly - sec 75), referred to it, reports that it has agreed to the Bill.

                    FRIDAY, 19 OCTOBER 2001
   

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The Joint Tagging Mechanism (JTM) on 19 October 2001 in terms of
     Joint Rule 160(2), classified the following Bill as a  constitution
     amendment Bill (section 74):


     (i)     Constitution of the  Republic  of  South  Africa  Amendment
          Bill [B 68 - 2001] (National Assembly - sec 74).


 (2)    The Joint Tagging Mechanism (JTM) on 19 October 2001 in terms of
     Joint Rule 160(3), classified the following Bill as  a  section  75
     Bill:


     (i)     Lotteries Amendment Bill [B 81 - 2001]  (National  Assembly
          - sec 75).


                       MONDAY, 22 OCTOBER 2001

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Arts, Culture, Science and Technology:

 (1)    Report and Financial Statements of the Foundation for Education,
     Science and Technology for 2000-2001, including the Report  of  the
     Auditor-General on the Financial Statements for 2000-2001.


 (2)    Report of the Africa Institute of South Africa for 1999-2001 and
     Financial Statements for 2000-2001.

COMMITTEE REPORTS

National Council of Provinces:

1. Report of the Select Committee on Local Government and Administration on the Repeal of Volkstaat Council Provisions Bill [B 59 - 2001] (National Assembly - sec 75), dated 19 October 2001:

   The Select Committee on Local Government and Administration, having considered the subject of the Repeal of Volkstaat Council Provisions Bill [B 59 - 2001] (National Assembly - sec 75), referred to it, reports that it has agreed to the Bill.

2. Report of the Select Committee on Finance on the National Treasury submission of the Intergovernmental Fiscal Review 2001, dated 22 October 2001:

   The Select Committees on Finance, Public Services, Provincial and Local Government, Housing, Education and Social Services having considered and examined the Intergovernmental Fiscal Review 2001, referred to the Select Committee on Finance, reports as follows:

   Chapter 1 Introduction

   This intergovernmental fiscal review provides the unique opportunity for the NCOP to exercise an oversight and monitoring function over executive in Parliament. It affords the members of parliament and civil society to interact with the issues below with the view to strengthen the oversight role of members of Parliament. It provides a platform for all spheres of government to raise issues on the provision of basic services and value for money and to what extent has it translated into improving the lives of the poor. To try and answer questions posed by the Minister of Finance raised on the 9 October and the constitutional mandate of government on improving peoples lives.

   In line with the hard decisions made in 1996 through the adoption of GEAR. The following questions arise: what are the challenges that are confronting us as government and the nation at large.

   Competing Priorities

   There are a great deal of competing priorities that we as a country needs to be financed, yet we have so much. The question is which ones are the most important and which ones are not.

   Chapter 2 Key issues for committee consideration

   2.1 Roads development

   Roads and transport planning remains one of the key post-Apartheid challenges. The challenge relates not only to backlogs, but also to the spatial environment and the quality of community life. There has been a historical backlog in the maintenance and improvement of roads. Road development is disaggregated as national, provincial or local government responsibility; Current institutional arrangements are inadequate to further develop or build new roads because the categorization of national, provincial, rural access, minor and roads further complicates road upgrading, maintenance and building.

   National government will build a road in a province but does not take responsibility to maintain the road. On the other hand provinces are not provided with the finances to maintain the road. For example in the case of rural roads there is no ownership as a consequence it remains neglected. There should be clearer guidelines governing the National, Provincial and local roads especially where national roads run thorough rural towns and are not maintained by anyone. Trucks regularly exceed the 56 ton allowed by SANDRA. Traffic officers need to bring the perpetrators to book because overloading seriously damage the roads.

   Subsidy on buses, taxis not subsidized government should be looking at subsidizing transport for the poor. More money goes to busses and yet people who are being subsidized use taxis. A review of the subsidies becomes necessary.

   Moreover, the Department is keen to promote the concept of inter modular forms of transport with special emphasis on commuter rail, which implies the leveling of the field between road and rail form of transport. In this light, commuter rail is being restructured and its recapitalisation requirements are being addressed. A capital expenditure programme was initiated to renew ageing rolling stock and enhance safety levels. Metrorail coaches have also been upgraded. 2.2 Social Development

   Social Development is the one area where government can directly attempt to remove or at least try to eradicate poverty and inequality. In keeping with the restoration of equity and poverty eradication, the National Budget is primarily dedicated to health, education and social development. Expenditure on Social Development was in 2000/2001 was R20.929 billion and the clearest indication that Social Development is geared towards strengthening safety nets and improving the quality of service delivery. Presence of refugees gives rise to Xenophobia. ANC Policy to take care of all regardless of origins especially those from the continent who assisted ANC in exile.

   2.2.1 Response to HIV/AIDS

   Transforming our response to the impact of HIV/AIDS has become fundamental when the statistics show that more people are dying of AIDS than had previously been the case. The strength of the response will not only lie with ensuring that medicines and medical care is being directed to those who have the disease but becomes more holistic.

   Caregivers are fundamental in the departments response. In keeping with African tradition, the caregivers come from the local communities and surviving relatives who have to give up jobs to take care of the sick and dying. The department’s response combined with those of the Department of Health has been to develop a comprehensive Home-and Community Based Care programme.

   The Minister of Social Development and most of the MEC’s and provinces have raised concerns that the Social Security System is not tailored for HIV /AIDS pandemic and careful decisions need to be made for the allocation of funds need to slot into key programmes such as the Home and Community based programmes, care for AIDS orphans, financial assistance for children headed households and education geared towards the prevention of new cases of HIV positive individuals.

   The Director General of Social Development has indicated that the implementation of Home and Community based care has not been smooth and this is an area but that the matter is receiving urgent attention. But the intention from the departments of Health and Social Development is that this program covers both a stipend for the caregiver as well as a medical kit and food parcel for the patient.

   2.2.2 Social Grants

   This section, for most of the provinces, represents about 90% of provincial budgets. Often this grant is the only source of income for many impoverished people especially those in the remote rural areas. Government has recognized this need and thus social grants forms part of governments’ poverty relief strategy directed at improving the lives of people.

   The system of social grants is more equitable now than before 1994 and the number of beneficiaries have increased dramatically since then, but some inter-provincial inequities still prevail. The per capita allocation differ dramatically when one compares the richer provinces like Gauteng and the Western Cape with the poorer provinces like Free State.

   Despite the inequities the figures show that by July 2001 there were approximately 4 million beneficiaries receiving social grants. The dramatic increase in this grant is due primarily to the phasing in of the Child Support Grant. These grant applications have reached the 1 million mark. Most social grants have increased to the level of inflation but serious discussions are currently being held between the Ministers of Finance and Social Development in an attempt to increase the designated amount. There is currently a Committee of Inquiry investigating a comprehensive social security system and part of their brief is to take into account the age implications. This report will be due shortly.

   The introduction of Norms and Standards that have been developed by Social Development is currently being piloted and will ensure that grants will be administered in the same or similar way in every province.

   2.2.2(a) Child Support Grant: The phasing out of the Child Maintenance Grants have highlighted some of the challenges facing social grants because the current CSG system does not reach children over 7 years and those receiving the grant complain that it is very low. A number of provinces have recommended that both the amounts for these grants be increased as well as the possibility of raising the cut off age, possibly to the age of 18 years.

   Most provinces that have large rural components raised concerns about the tenuous relationship between Home Affairs and Social Development. Of necessity a very strong inter departmental understanding should exist. In the instance of Child Support Grants the lives of babies are literally dependent on both departments acting speedily to process and administer these grants.

   Documents such as Birth Certificates and ID books for parents are important tools necessary for efficacy in the administering the CSG. Some provinces have cited delays, few Home Affairs offices and incompetence within the department of Home Affairs jeopardizes the application process leading to, in the worst-case scenario, fatalities or in most instances, continued hardship for the poor.

   A concern raised by the Director General of Social Development was that should all provinces overcome the current inefficacies and the levels of processed applications finally reach all the areas they ought to, the department will have to reexamine the allocation for CSG’s because the demand will exceed the allocation.

   2.2.2(b) Disability Grants: Some of the amendments to Social Security Act take into account those provinces that do not have easy access to District Surgeons. What the Department seeks to provide in the absence of District Surgeons, are panels that would be able to access and adjudicate those applicants who hope to qualify for disability grants. This process was piloted in a few provinces and will be implemented in December 2001.

   2.2.2(c) Foster Care Grants: There is an increasing demand for Foster Care Grant from relatives and community members having to care for children who lost their family and friends through AIDS related deaths. Currently court procedures are complicated and lengthy and applicants experience difficulties with magistrates. The South African Law Commission is investigating the matter and will report to the Minister of Social Development. There are also ongoing discussions with the Minister of Justice to assist in alleviating the problem.

   2.3 Education

   2.3.1 Introduction

   The Review emphasizes the Department’s consolidation over the last five years, specifically transformation balanced against the need for universal access, greater equity and improved quality. This has been well managed through cooperative governance.

   What is of particular significance, is that in terms of historical spending trends since the 1996/7 financial year when education spending went up by 22% in real terms, there has been a 2,4% decline between 1997/8 and 2000/1. This can be ascribed to a variety of factors, for example teacher rationalisation, improved financial management, greater powers were given to parents in the managing of schools and the launch of the Tirisano campaign. This has resulted in a much more stable education system in which budgets are more sustainable and balanced.

   2.3.2 Non - Financial Indicators in Education

   Non-financial indicators give the public additional information to judge provincial education departments’ performance. Recent years have seen an improvement in the data available on a range of issues such as those listed below.

   2.3.2(a) Per learner comparisons and enrolments

   As for spending per learner, the provincial average is estimated at R 3 658. With the average learner spending in the Northern Cape the highest. Gauteng and the Western Cape are amongst the highest whereas KZN, the Eastern Cape and Northern Province are amongst the lowest. It is therefore important that consideration is given to these factors when allocations are made to the poorer provinces. Government should find ways to bridge this gap. These disparities can largely be attributed to the disparities in enrolment rates, the cost of teachers and relative priorities. Poorer provinces are encouraged to work harder in this regard. In general the school enrolment increased from 1994 with a peak of 12.3 million in 1997, but it is set to fall to 10 million in years.

   2.3.2(b) Teachers and classrooms

   The teacher-learner ratio also declined in all provinces from 33,7 to 32,7. However, the classroom-pupil ratio is still significantly higher due to excess teachers in some provinces. For example the Northern Province has 20% more teachers than classrooms, hence a good pupil-ratio but classrooms are still overcrowded.

   When it comes to allocations, poor provinces are to be considered first need fluid ways to bridge these gaps.

   2.3.3 Physical infrastructure

   Since 1996 about 25 102 new classrooms have been built and significant increase in the provision of telephones, sanitation, running water and electricity can be reported. It is however, a decline in the physical condition of schools that is of particular concern, for example schools needing repairs went up to 10 500 to 12 100 and those classified as weak from 3000 to 7000. The number of schools with computers went from 2 241 to 6 581. Gauteng being one of the financially stronger provinces tops the list with only 16% of schools with no computers as opposed to the Eastern Cape with 84%.

   2.3.4 Crime

   Crime has cost provinces a loss of R155 million in the year 2000 with 2 540 burglaries while 5000 assault cases were reported of which 1860 were serious crimes. Communities should take ownership of schools and school-governing bodies should be properly empowered to drive this initiative.

   2.3.5 Matric results

   The results for the year 2000 were on the whole impressive, however the number of candidates not passing maths and science is cause for concern. Ditto for the low female learners take-up of these subjects. There is growing concern that the female learners are still experiencing discrimination reporting high school drop out rates, exchanging sexual favours for lifts to school and accepting gifts from bus and taxi drivers. Provincial departments must look at providing safety nets for these vulnerable learners.

   2.3.6 Conclusion with regard to the education sector

   The tough consolidation period is over resulting in a more stable and a better managed education system. The budget trends over the MTEF look positive. Treasury advised that investment in infrastructure, systems and maintenance precede the hiring of teachers.

   While the Review admits that a great deal of improvements have been made in terms of delivery in education a number of challenges remain i.e. shortage of learning support materials, insufficient transport, inadequate classroom ablution facilities at rural schools, shortage of suitably qualified teachers in certain provinces and a lack of mathematical and scientific literacy.

   The Honourable Minister Asmal expressed his concern about the extent to which bureaucratic red tape and poor financial management systems hampered delivery in the provinces. He was especially concerned about the slow procurement and distribution of learning support materials. No province was singled out but it was in clear reference to those provinces that are annually left with rollovers in their budgets. As a means to address these weaknesses he proposed that the various departments introduce training programmes and facilities for especially those officials at middle mangagement levels. He also undertook to set up a scrutiny committee to deal with the general state of laxness in the some of the provinces.

   2.4 Housing

   2.4.1 Institutional challenges

   Housing remains one of the key post apartheid challenges. The challenge relates not only to backlogs, but also to the spatial environment and the quality of community life. Alongside national and local government, provinces play a role particularly in providing housing. Since 1994, government has contributed to over 1,2 million low cost houses, providing shelter to over 5 million people. This reduced the housing backlog significantly and translates to providing shelter to an estimated one out of every eight people. These new housing projects could be the conduit to deracialising societies.

   The housing sector faces notable institutional challenges of delivery and accountability; these include the consolidated municipal infrastructure programme (CCMIP) and social and economic infrastructure that contribute to the development of sustainable human settlements. Under spending over the last three years has improved largely as a result of improved capacity in the provinces. However, highest under spending during 2000/01 was recorded in the Northern Province as the result of floods.

   2.4.2 The housing subsidy grants

   The 1999 October household survey shows certain patterns in access to housing, water and electricity. These patterns partially reflect the impact of housing delivery on overall quality of life. The proportion of households living in formal dwelling showed a gradual increase from 65,8% in 1995 to 69% in 1999. On the other hand the number of household living in informal dwelling has also increased, as the pressure for shelter is experienced across all types of housing. The 2001 review informs us that no new homes were constructed during the current financial year in the North West province. The MEC informed the meeting that 8379 homes were built in the year under review.

   The variation in the pace of delivery is also evident of rollovers in housing subsidy funds. Where provincial housing departments had rollovers over 2,2 billion or 71 % of allocated housing subsidy funds in 1995/96, they have estimated rollovers of 590 million of 15% in 2000/01. It is clear from this that certain obstacles to sustainable delivery has been identified and government continues to explore ways to speed up deliver and to contribute to the development of sustainable human settlement.

   Financial management in the sector has improved. Further steps are being taken to improve and streamline the funding arrangements for housing programmes. These include converting the housing into a conditional grant resulting in all funds received by provincial housing departments being deposited into the appropriate provincial revenue fund, improving accountability over such funds. It must also comply with national norms and standards.

   2.4.3 Obstacles to delivery

   One of the most problematic obstacles to delivery is the delay in land transfer process, which is necessitated by legal aspects of land transfer.

   The recent local government elections had impacted badly on delivery of houses and municipality delays in approving new housing programmes as a result of non-payment of property rates. This projects a negative picture, which government does not care about the poor.

   Secondly, with regard to programmes approved and subsidies allocated, it has been established that there is a lack of communication from the provinces to the people, such that people are not informed of their allocations and they take part in land invasions, whereas their houses are ready for occupation.

   Natural phenomena such as floods and tornadoes resulted in under utilisation of conditional grants (Department of Housing in the Eastern Cape, Northern Province and Mpumalanga). Although the duration of natural disasters was short, the periods in delays were logically beyond the incidence of the disaster itself.

   • One of the most critical obstacles is the double allocation of houses.

   • Lack of co-ordination across the sphere of government and sectors.

   • Fraud and corruption should be addressed in the allocation of houses.

   2.5. Health

   2.5.1 Primary health care budget:

   The Conditions in Clinics for primary health are not of the standards that government has expected. The principles of Batho Pele are not adhered to with patients being treated without the quality of care contained in these principles. Care must be taken to ensure that patients’ rights are not trampled upon. The minister of health appealed to all parties in all provinces play the necessary oversight and monitoring role to ensure that the rights and principles contained in the Patients Rights Charter are protected and adhered to thereby ensuring that patients are treated with care.

   2.5.2 Hospital Reconstruction and Rehabilitation:

   Currently income generated by hospitals are not retained by hospitals but revert back to treasury. Maintenance funds should not be transferred to Public Works, but the department of Health. The department of health relies almost exclusively on the department of public works to maintain health facilities. This handicaps the department of health who has to rely on the programme of public works before necessary upgrades and repairs can be done. Provinces have appealed that this should be reviewed and that maintenance and upgrades should be the responsibility of the department of Health and not Public Works. Some hospitals are under severe pressure because of infrastructural problems because infrastructure is not properly maintained.

   Provinces have developed the ability to spend and procurement takes six months so it is crucial that provinces have medium to long-term plans for reconstruction and rehabilitation plans. However all of these plans need an indication from Treasury if province will be eligible for money.

   The minister encouraged provinces to examine private/public partnerships to fund priority projects.

   2.5.3 Recruitment and Retention of Skilled personnel: The legacy of apartheid still manifests itself in the skewed distribution of professionals in the country. The emigration of young professionals is a major cause of concern. They cite the increase in crime as a reason for leaving, however crime is a global phenomenon.

   The enticement offered by other countries is a universal experience. The quality of training in South Africa is very high so countries like England offer package deals to potential emigrants in the hopes of enticing them to England. South African professionals should follow the example set by Cuban doctors deployed to the remote rural areas of our country who display a sense of duty and commitment to their own country and also to ours.

   The Minister and some of the provinces thought that it was important that the Minister of health offer incentives to both community doctors and those who have been around for a while to encourage equity between provinces. Because rural provinces experience difficulties in retaining doctors both the Minister and the MEC’s appealed to these people to develop a sense of patriotism and consciousness so that they could give back to the communities what they had learned.

   The spread of doctors across the country favour those provinces with a large urban areas leaving the rural provinces with a skewed patient to doctor ratio. The rural provinces have doctor to patient ratios that are well below the requirements of the world health organisation requirement for developing countries. Need to development a sense of patriotism coupled with incentives.

   2.5.4 Human Resources Development Programme:

   Leg and rank promotions have presented enormous constraints on provincial budgets. Already personnel expenditure is a very large percentage of the budget. The department needs to examine if the high cost for personnel is justified in terms of value for money. And on the flip side, are staff members encouraged to stay because salaries are market related. The health sector has reported that they experienced loss of key posts.

   The employment of Chief Finance Officers has helped provinces to manage better fiscal discipline. Some rural provinces would not have been able to cope with the demands for doctors had it not been for the departments policy of Community Service and use of foreign doctors. The minister is speaking to Treasury to retain incentives without perverse taxation liabilities,

   2.6. Local Government

   2.6.1 South African local government has been undergoing some profound changes in the past years. Transformation at local government has happened in several ways e.g. financially, institutionally and developmentally. Municipalities are playing an increasingly important role in service delivery, eradication of poverty and improving the social and economic conditions of South Africans. Many new functions are being decentralized to local government, giving municipalities a more integrated package of services and functions to manage. A major fiscal challenge is to support these roles through effective revenue mechanisms.

         Together with the  White  Paper  on  Local  Government,  the
         Municipal Demarcation Act, the Municipal Structures Act  and
         the Municipal Systems Bill are the  building  blocks,  which
         have created the vision and the way forward  for  the  post-
         transitional local governance.
   
   
         This system of governance is based on:
   

   • Working with local citizens and communities to find sustainable ways to meet their needs and improve the qualities of their lives;

   • Finding new ways to accelerate and sustain the delivery of services, particularly to the poor.

   The Intergovernmental Fiscal Review therefore provides an important step in looking at the effectiveness of and efficiency of resources applied in different spheres of governance so as to make sure that, transformation does take place. It also highlights the following fiscal realities that need to be considered and addressed to secure the sustainability of transformation:

   • Demarcation has created 284 new municipalities, each of which now has to amalgamate staff from previous structures, refocus strategic plans and budgets and align themselves organizationally to new roles. The shifting functions and changes to boundaries have distinct financial and personnel implications.

   • In line with the constitution, many national and provincial departments are considering which of their functions are best performed in the local sphere. Functions under review include housing delivery, primary health care and the district health system, water and municipal policing. Personnel and financial implications must be considered before deciding on such decentralization.

   • The transfer, movement and placement of staff in newly amalgamated municipalities have added upward pressure to equalize salary and other employer benefits. Already personnel costs have been the foremost cost driver for municipalities in recent years. This affects the scope to expand service delivery as budgets come under pressure.

   • The major urban municipalities have distinct revenue generating powers and are only marginally dependant on transfers from national government. Many rural and smaller urban municipalities however have much weaker fiscal capacity and depend considerably on transfers from national government. Government’s commitment to assist in the provision of free basic services requires implementation of focused and targeted fiscal and other programmes in all spheres of government. This does not however alleviate the need for improved financial management locally and for municipalities to spend within their budgets and collect revenue due.

   • Local government budget information is often not reliable and is currently fragmented as the newly demarcated municipalities are amalgamating. Outdated budgeting systems and inconsistent accounting or budgeting practices and systems translate into poor recording of data and inaccurate planning and make benchmarking, comparisons and tracking of funding flows difficult.

   • Affordability is a major issue and the situation has been aggravated by ongoing increases in bulk prices (e.g. electricity and water) that ultimately are passed onto municipalities and their consumers. For example, the government has contributed to more than 1,1 million housing opportunities since 1994 and provided many social and basic services, but the beneficiaries can often not afford municipal service charges.

   • The impact of HIV/AIDS is becoming more visible and is likely to be severely impacting in the provincial and local spheres.

   • Although budgeting on the expectation of collecting all their revenue, many municipalities do not collect a significant portion of revenue due. This results in deficits at the end of the financial year, undermining the financial stability of municipalities.

   • Capital spending has been declining as a percentage of total spending. High personnel spending means less is available for service delivery and capital development.

   • Net private lending to the municipalities has remained virtually flat for at least four years. Investors have also had doubts about the financial viability of municipalities in transition and about the legal regime related to municipal debt. DBSA and INCA currently dominate the market.

   • Local government budgets often show clear intent to address backlogs and poverty alleviation, but poor spending capacity often results in these intentions not being realized. This is particularly true of poorer provinces and weaker municipalities.

   2.6.2 Municipal transformation challenges

   (i) Cross border problem The existence of cross border municipalities is the outcome of the recent demarcation process of local government institutions. The boundaries extend to more than one province thus causing problems as to which municipality is accountable.

   (ii) Service Delivery

   Municipalities face a range of competing pressures on resources available for service delivery. Reforms to municipal planning and budgeting processes are being introduced to assist municipalities to make these trade offs on the basis of clear policy priorities and local context.

   The key trade off required is the relative importance attached to service quality and equity objectives. On the one hand, municipalities must maximize resources available to expand and sustain access for the poor households. However, non-poor consumers also demand improvements in the quality of services to which they already have access. These consumers provide the economic base of a municipality and thus continue contribute significantly to its revenue. Declining service quality is likely to undermine both local economic performance and payment morality, thus jeopardizing the effective tax base of a municipality and its ability to pursue equity objectives.

   As with other spheres of government, resources available to meet these pressures are limited in the short term. This highlights efforts to effect medium to long-term adjustments to expenditure pressures facing municipalities.

   The importance of establishing effective local government in rural areas cannot be overstated. In these areas, the absence of formally planned settlements means that revenue generation potential is low, institutions weak and service provision differently structured and priced. The local revenue sources are limited and do not adequately cover basic administrative requirements. During the current year, these municipalities have also been affected by uncertainties associated with the transition and funding of free basic services. This situation is under review at ministerial level.

   (iii) Expenditure Pressures

   (a) Personnel Challenges: Municipalities employ in total over 200 000 people: about 109 000 in category B municipalities and 8 000 in district councils. Despite concerns that the large share of personnel threaten to squeeze out service delivery, salaries continue to make up the largest share of municipal expenditure and continue to rise faster than inflation.

   (b) Shifts in municipal powers and functions:

       *   Powers and functions of  non-metropolitan  municipalities:
           The shifting of powers and  functions  between  categories
           of   non-metropolitan   municipalities,   either   through
           demarcation or sectoral policy reforms, is  a  significant
           challenge.
   
   
       *     Decentralization   or   devolution   of   functions   to
           municipalities: Restructuring of service delivery is  also
           under  consideration  in  various  sectors,  with   likely
           implications for municipalities. Proposed  initiatives  to
           transfer water  services,  devolve  health  functions  and
           regionalize electricity distribution  could  fundamentally
           alter  the  role   of   municipalities   with   associated
           implications for staffing and expenditure needs.
   

   (c) Free basic services: The challenges of municipal service delivery are broader than the commitment to free basic services alone. These services are critical inputs to local economic activity and thus national economic growth and development.

   (d) Allocating subsidies efficiency: The efficiency with which services and subsidy resources are allocated among households has a significant impact on the total cost of service delivery. The challenge is foremost to ensure that poor households are primary beneficiaries of the free service policy and associated resources.

   (e) Bulk Supply Costs: Price increases for bulk service purchases by municipalities have placed pressure on municipalities, as they cannot always pass higher bulk of costs on to consumers without experiencing a rise in non payment levels, political resistance or lower demand for services.

   (iv) Transitional Costs associated with amalgamation

   Transitional costs associated with amalgamation: Amalgamating former municipalities involves some complex issues, such as consolidating assets and liabilities on a single balance sheet and balancing extended service provision with levying of taxes, fees and charges across diverse communities. Vastly increased property rates and service charges could affect the affordability of services, particularly for poor households.

   2.6.3 Intergovernmental Fiscal Review Hearing on Local Government I. Key issues discussed

   (i) Department of local Government

   The government’s priority of transforming society was expressed. The commitment to improve the lives of people was also reassured. The Deputy Minister stressed the importance of the budget used as a tool to address the legacies of the apartheid. She reaffirmed the importance of reforming the budget, because the way in which the system of local government was structured in the past was such that it catered for the best interest of the minority at the expense of the majority. Thus, there was and there still is the need for restructuring. She highlighted some of the consequences of the past apartheid legacy, namely, backlogs, poverty in the rural areas, urbanization etc.

   The following concerns were expressed:

   • That some of the critical pressures are on expenditure as it is felt that it is spent more on personnel. The minister expressed that there is a need for more efficient, effective and accountable personnel for implementation but a balance has to be stricken between the expenditure on personnel and the governments commitments to service delivery. Therefore, in determining the budget, the two have to be weighed.

   • The importance of investment in the rural areas.

   • The clarification of the functions and powers of district and local municipalities to assist planning and budgeting and to create certainty for investors.

   • Grants need to be coordinated and better targeted.

   • A distinct clarification of the role of Traditional leaders and municipalities, as there have been reports of overlapses and clashes, which have caused problems in some of the provinces.

   • That, an empirical study in each municipality is being conducted to look at their financial structure to assist in the budget allocation. People involved include, Departments, Provinces, FFC, demarcation boards.

   • There are also certain functions passed by the national governments on local governments but they are not followed by finances.

   • That, local government plays an important role in the delivery of basic services especially with regards to free basic service. This area requires adequate financing.

   • The most impoverished areas at the moment are the Northern Province and the Eastern Cape. The need for sufficient funds allocated in the impoverished provinces was expressed. What is crutial is that delivery should be able to provide services in an integrated setup. The measuring inequalities present the greatest ongoing challenge.

   • Provisions like electricity be accompanied with finances for infrastructure. Not all areas can get private sector participation. A problem of loans by the Development Bank and INCA to larger municipalities was expressed.

   • That municipalities must develop credible IDPs that link to their budgets and that take available resources into account. IDPs should be used to determine backlogs.

   • Cross boundary issues are becoming a problem.

   • The need to accelerate budget reform was expressed. With regards to the Budget reform, no final plans have been made. Probably be done by 2002 March. Not an easy process as some councils are still new and others new to this area. The fact that Reform takes time was expressed. They are looking at a period between 5-10 years.

   • The need for use of information technology in collecting data so as to minimize the inaccurate data. The programme that is envisaged at the moment is networking forum.

   • There was concern expressed with regards to the Regulation council. It was proposed that the Revenue Collection System be improved to look at monitoring people to pay services. It was acknowledged that the main reason that people do not pay for services is poverty.

   • Upgrading of services and the quality of services was expressed but that also needs funding.

   • The Department is concerned about the decrease in spending on capital infrastrure in municipalities. This can affect delivery of service. The uniform approach to budge is important.

   • With regards to equitable share, there has been some increase but it is not enough. Ideally it should be used for the provision of delivery of basic services. Now it is used for personnel expenditure.

   • Rationalization of transfers. Transfers are being consolidated to ensure that they effectively support a municipal sphere that serves communities best and that addresses the needs of the poor. The report shows that however, many transformation issues require very careful consideration to ensure that the new structures are fiscally sustainable.

   (ii) Department of Water Affairs

   The Minister highlighted the following areas of provincial and local government as areas in which they work:

   • Waste management and control over water pollution;
   • Support to irrigation farming;
   • Conservation forestry;
   • The Department’s Working for Water Programme is essentially a focused nature conservation programme and nature conservation is a concurrent function with the provinces;
   • Water supply;

   • Sanitation service provision. The following were identified as areas in which the department of Water Affairs works with Department of Local government:

   • Providing basic funds for basic needs water schemes.
   • Operating water sanitation schemes where local government is not yet willing or able to take them over.
   • Establishing a family of regional utilities, water boards, multi jurisdictional service providers to provide services where local government does not want to provide the service itself.
   • Training capacity building for local government at the levels of councilor, official, technician and artisan.

   The following concerns were raised:

   • That the review’s focus is on urban municipalities where the bulk of expenditure occurs rather than on the rural and district system where the major challenges of service delivery and poverty eradication are located.
   • That revenue generation potential in the rural areas where majority of the people reside is low, institutions are weak and service provision is generally both more complex and more costly as a result of the absence of formally planned settlements.
   • That the funding available to municipalities serving such communities is limited and does not adequately cover their basic administrative requirements. As a result funding intended for this purpose is used for other purposes.
   • That these municipalities have been affected by uncertainties about the mechanisms for the allocation of the equitable share.
   • The report does not recognize the importance of directing resources towards building up local government as a sphere of governance. The vertical split of nationally revenue raised is as follows: National Government (R84,3b), Provincial Government (R117,4 b) and Local Government (R6,5b). To expect local government to both become properly established and to function as the key developmental wing of government requires resources on a larger scale. The equitable share (R3,4b), infrastructure grants (R2.4b) and current transfers (R0,6b) need to be doubled to address the transformation needs of local government.

   2.6.4 Cross-sectoral issues in the provinces

   Many of the issues that provinces and local governments face transcend sectors and departments. This section of the report focuses on these more general issues.

   2.6.4.1 Integrated Development Strategy

   The crucial element of any integrated strategy is that while co- operation is required within the social sectors, coordination amongst the different spheres of government is equally necessary. There has to be both vertical (across sectors) and horizontal (across spheres) co-ordinations simultaneously. This is the most daunting task confronting any government in transition and no blue print exists for such undertaking.

   2.6.4.2 Public-Private Partnership (PPP)

   The PPPs are dependent on at least three conditions:

   • An operational need for private sector skills to deliver the service
   • An identifiable market of private sector bidders prepared to compete for the project
   • Appropriate allocation of risks

   In order for PPPs to be approved by the relevant Treasury, they must demonstrate:

   • Affordability
   • Value-for-money
   • Transfer of appropriate financial, technical and operational risk to the private party

   2.6.4.3 Beneficiaries of social security grants and bank charges

   Members of the Select Committees were concerned that poor beneficiaries of social securities are still burdened with bank charges if their social grants are collected from the conventional banking sector.

   2.6.4.4 Redistribution of personnel to rural areas

   For example in the health sector, although the extension of primary health care has made basic health care more accessible to all South Africans, significant inequity remains. Private health care system only allows access to less than 25% of all South Africans. With less funding the public sector has to care for a much larger number of people than the private sector. The Review tells us that the distribution of all health professionals - doctors, specialist, dentists and nurses is highly uneven across provinces and between urban and rural areas. The 2001 Review tell us that just over 50 percent of fixed clinics, 46 percent of satellites and 69 percent of mobile clinics serve rural areas.

   2.6.4.5 Maintenance of existing infrastructure

   There can be little argument against the maintenance of existing infrastructure. There is also a general believe that it would make economically more sense to invest in the maintenance of existing infrastructure and to do so immediately when deterioration is first detected. A delay in response to the deterioration of infrastructure will only increase the economic costs of maintaining such infrastructure.

   It may also cancel out some of the benefits government sought to give previously disadvantaged communities through the many infrastructural development initiatives it implemented in terms of the RDP. The maintenance of these infrastructural development programmes is essential if previously disadvantaged communities are to continue benefiting from those developments.

   Recommendations

   With regard to local government, the Select Committee on Finance argues that while the 2001 Review provides useful material on past municipal budgets, the focus from next year on will shift to the post-demarcation bodies.

   The Select Committee on Finance would recommend the following for the future issues of the Intergovernmental Fiscal Review:

   • Future reviews should include data for the newly amalgamated municipalities with a greater focus on non-financial performance measures to help gauge efforts to address the service delivery goals.

   • The Review should continue to be developed as a source of information on progress with reforms, such as service delivery, systems reform and redistribution in the local sphere. As this year’s shows, priorities are:

   • A national study with regard to the subsidization of the poor over and above the concept of free basic services for all, be undertaken within all municipalities to determine the extent thereof.

   • While a significant amount of cost is funded through local taxes, a vast number of municipalities do not have adequate tax bases to address these challenges. SALGA is of the view that an alternate source of revenue be identified to finance the gaps in social and economic development.

   • The equitable share must be increased to make provision for allocation to District Municipalities.

   With regards to the transport sector the Select Committee on Finance recommends the following:

   • A more detailed study should be undertaken by the Department of Transport to assess what is the maximum load permissible on our roads. Excess roads do damage road surface and South Africa has the second highest maximum loads permissible in the SADC region;

   • The appropriate Select committee should assess what progress has Department of Transport made establishing new institutional arrangements for roads development. The real issue is whether our institutional arrangements are appropriate to ensure that money budgeted for roads are actually spent!

   • Approach the National Treasury for a written comment on the slowness of cash flows during the disaster period;

   • Attempt a follow-up with the transport department on their progress to reform the bus subsidy programmes;

   • If other modes of transport (such as bicycles and rail) are priority, then a redirection of grants should receive serious attention;

   • Pursue the appropriate national departments on the committee alternative suggestions with regards to combing appropriate provincial MECs or have a dedicated road institution.

   Education recommendations:

   The bureaucratic tape and poor financial management systems should be eliminated in order to fast track delivery. Procurement and distribution of learning support materials should be prioritised. A means of addressing these weaknesses is to introduce training programmes for especially those officials at middle-management level.

   Housing:

   An in principle policy decision has been taken that 0.5% - 07% of the provincial budget has to deal with emergencies such as disasters.

   • All applications should be captured in a database, which link all the provinces to avoid this double allocation. It is both the National and Provincial government working together to solve such problems as housing delivery is a priority for both National and Provincial departments.

   • The department has shifted from its policy of quantity to quality as envisaged by the fact that speeding up delivery compromises the quality of houses.

   • MEC’s have to facilitate the problems related to bureaucracy such as delays in approving new housing programmes as a result of property rates.

   • The Minister has also recommended that women in housing are promoted and not marginalized.

   • Due to the increase in shelter demand, the upgrading of informal settlements should be prioritised so as to bring water and sanitation.

   • It has been agreed that provinces should indicate problems they experience so that the Minister can be aware of them such as in the case of the Minister of land affairs who is helping with the issue of R281 certificates to speed up the process.

   • There should be a standard payment system in place to minimise fraud.

   • Guidelines with regard to the special needs of certain categories of historically disadvantaged people such as women and the disabled, in the allocation of houses, should be a priority.

   • Local government should comply with National norms and standards in housing and not raise standards which have caused the collapse of projects.

   • Local government should avoid paying a lot of money to consultants.

   • The devolution of responsibilities should be accompanied by reciprocal funding.

   With regards to the cross-sectoral issues in the provinces, the following have to be investigated:

   • A discussion document on both vertical (across sectors) and horizontal (across spheres) co-ordinations be produced;

   • Investigate the progress in provinces towards finalisation of PPPs;

   • Appeal to provinces, national and provincial departments to display better utilisation of allocated financial resources instead of continuously demanding for additional assistance;

   • Investigate the possibility of instituting legislation with regard to excess bank charges for beneficiaries of social security grants;

   • Explore what pressure still exists to expand personnel costs;

   • Explore whether rural health facilities are adequately equipped for incoming medical personnel to carry out their functions;

   • Pursue the feasibility of national department undertaking the functions of child feeding scheme.

   Hospital Reconstruction and Rehabilitation:

   • Maintenance funds should not be transferred to Public Works, but the department of Health.
   • Maintenance of all health institutions should be the responsibility of the department of Health and not Public Works.
   • Now that provinces have developed the ability to spend and procurement takes six months, it is crucial that provinces have medium to long-term plans. However all of these plans need an indication from Treasury if province will be eligible for money.

   Recruitment and Retention of Skilled personnel:

   • Need to develop a sense of patriotism coupled with incentives Equity.
   • Identify clear targets as in IGFR coupled with a sensible increase in conditional grants.
   • Low per capita spending should be redressed with the new census figures so that provinces that have received low allocations can have their budgets increased based on more realistic population figures.

   Local Government:

   • The role and responsibilities of local government needs to be clearly defined to facilitate Integrated Development Planning.

   HIV/AIDS Conditional Grant:

   • Should be immediately implemented in all provinces.

   District Health Services and Municipal Health Services:

   • The process of District Health Services should be accelerated.
   • Municipal Health Services should be defined quickly in consultation with municipalities and their related associations.

   The Select Committee on Finance together with other relevant Select Committees should undertake a visit to provinces to investigate the following:

   • Upkeep of State owned properties
   • Conditions of classrooms
   • Availability of water and sanitation facilities
   • And any other matters relating to infrastructure provisions

   C) Conclusion

   We would like to thank the National Treasury on the release of the third the Intergovernmental Fiscal Review 2001. It has helped members to look at the social services sector critically and has observed that committees need to play an active role in their oversight work over these issues. We hope that the next IGFR will be released on time so that more discussions could take place and cover other sectors like agriculture, environment and tourism etc.

   The 2001 review offers a good start, and is a fertile ground for comprehensive and robust analysis since this non-financial approach to assessment of programme is in its infancy. Further adjustments can be expected in future Reviews.

   This report will form part of the discussion documents during the MTBPS hearings due to be conducted by the budget committee.

   This was the first of its kind and there is room for improvement.

   We would like to thank all the participants for their contributions in particular the Ministers, MECs and provincial standing committees. We thank all the researchers, committee section and government officials for their sterling work in preparing for the hearings and this report.

   Annexure 1 A.1) Register

   The following stakeholders were amongst the participants: Ministers: Transport, Social Development, Education, Public Works, Health and Housing

   Deputy Ministers: Finance

   Provincial Ministers (MECs) Education: Western Cape, Mpumalanga and Eastern Cape

   Provincial Ministers (MECs) Transport: Free State, Northern Province, Western Cape and Mpumalanga

   Office of Auditor-General: Auditor-General, Legal Advisor, Centre Manager

   Provincial Head of Department: Gauteng (Transport)

   Director-General: Health, Public Works, Housing, Education (& Deputy Director-General), National Treasury (Deputy Director- General)

   National Treasury Official: Director, Deputy Director

   Provincial Treasury Official: Senior Financial Officer

   Provincial Head of Department: Dept of Local Government & Housing (North West), Northern Province, Acting Financial Officer: Education (Mpumalanga), Chief Financial Officer: Education (Northern Province)

   Provincial Ministers (MECs) Housing: North-West, Eastern Cape

   Chairperson Provincial Standing Committee: Development Local Government & Housing (North West), Housing & Local Government (Eastern Cape), Housing Committee (Gauteng), Local Government & Housing Committee (Northern Province), Local Government & Housing (Mpumalanga), Portfolio Committee on Finance (Northern Province), Local Government Housing (Free State Legislature)

   Education Provincial Standing Committee: Eastern Cape (Chairperson), Free State, KwaZulu-Natal, Mpumalanga, Northern Cape, Northern Province (Chairperson), North and West (Chairperson)

   The Select Committee on Finance is mindful that there is clearly a role for cross-cutting Ministers, like the Minister of Public Service. The Minister should participate in the general session, as well as in education and health.

                   TUESDAY, 23 OCTOBER 2001
   

ANNOUNCEMENTS:

National Council of Provinces:

1. The Chairperson:

 Bills passed by National Council of Provinces on 23 October 2001: To be
 submitted to President of the Republic for assent:


 (i)    Financial Institutions (Protection of Funds) Bill [B 23B - 2001]
       (National Assembly - sec 75).


 (ii)   Alexkor Limited Amendment Bill [B 29 - 2001] (National  Assembly
       - sec 75).


 (iii)  Repeal of Volkstaat  Council  Provisions  Bill  [B  59  -  2001]
       (National Assembly - sec 75).

1. The Chairperson:

 Message from National Assembly to National Council of Provinces:


 Bills passed by National Assembly on 23 October  2001  and  transmitted
 for concurrence:


 (i)    Private  Security  Industry  Regulation  Bill  [B  12B  -  2001]
         (National Assembly - sec 75) (introduced as  Security  Industry
         Regulation Bill [B 12 - 2001]).


         The Bill has been referred to the Select Committee on  Security
         and  Constitutional  Affairs  of  the   National   Council   of
         Provinces.


 (ii)   Diplomatic  Immunities  and  Privileges  Bill  [B  40B  -  2001]
         (National  Assembly  -  sec  75)  (introduced   as   Diplomatic
         Immunities and Privileges Amendment Bill [B 40 - 2001]).


         The Bill has been referred to the Select Committee on  Economic
         Affairs of the National Council of Provinces.


 (iii)  Interim Rationalisation of Jurisdiction of High Courts  Bill  [B
         44B - 2001] (National Assembly - sec 75).


         The Bill has been referred to the Select Committee on Security
         and Constitutional Affairs of the National Council of
         Provinces.