MONDAY, 10 JUNE 2002 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY
                                ____

The House met at 14:00.

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

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS - see col 000.

                          NOTICES OF MOTION

Mr J F VAN WYK: Madam Speaker, I give notice that I shall move on behalf of the ANC:

That the House -

(1) notes with derision -

   (a)  the attempts of the DA to whitewash the embarrassing allegations
       against its leadership that it received funds and favours from
       international fugitive Jürgen Harksen; and


   (b)  its pathetic wrist-slapping of Gerald Morkel, the Mayor of Cape
       Town;

(2) recalls that the DA has presented itself as a party dedicated to fighting corruption, and has sought to belittle this Government’s very serious measures to fight corruption in both the public and private sector;

(3) recognises that the DA has since its formation failed to build mass support, failed to forge an opposition alliance and failed to set an example as an efficient and a corruption-free alternative to the ANC; and

(4) calls on the DA to retire gracefully from the political arena before it is resoundingly defeated at the polls.

[Applause.] Mr T D LEE: Madam Speaker, I hereby give notice that I shall move:

That the House -

(1) notes with disgust the cowardly actions of the Eastern Cape health department which suspended Dr Frederick Rank for daring to tell the truth about the appalling conditions in provincial hospitals in the Nelson Mandela Metropole;

(2) remembers other doctors, such as Dr Wendy Orr, who spoke out about government failures and abuses and who were victimised as a result; and

(3) therefore calls on the ANC provincial government to -

   (a)  stop victimising doctors in an effort to cover up their own
       incompetencies and mismanagement; and


   (b)  immediately reinstate Dr Rank.

Prince N E ZULU: Madam Speaker, I give notice that I shall move on the next sitting day of Parliament: That the House -

(1) supports the move by India and Pakistan that the escalation of war and war talk between themselves be scaled down in favour of negotiations;

(2) echoes such moves as negotiations are the only noble and focused means of solving political problems and establishing peaceful democracies in the world; and

(3) commends the two countries for their brave stand to save their countries from the holocaust of war and wishes them well in their chosen path.

Mr S PHOHLELA: Madam Speaker, I give notice that I shall move on behalf of the ANC:

That the House -

(1) notes that the South African Volunteer Corps was launched in Crossroads, Cape Town, this past weekend;

(2) further notes that at the launch the announcement was made that the Department of Agriculture and Land Affairs is launching youth development programmes, including one in which the department will provide groups of young people with land, seed and tools with which to start food gardens;

(3) believes that organisation, co-operation and a spirit of entrepreneurship are critical to job creation and prosperity; and

(4) commends the department for this exciting initiative which embodies the spirit of Letsema and Vukuzenzele, which is driving our communities to build better lives for all South Africans.

[Applause.]

Mr J DURAND: Madam Speaker, I hereby give notice that I shall move on behalf of the ANC:

That the House -

(1) notes the findings by the bureau for market research at the University of South Africa, stating that -

   (a)  more and more coloured and African South Africans are forming
       part of the economic middle class; and


   (b)  to remain viable, financial institutions will now also have to
       take cognisance of the purchasing power of black South Africans,
       and that loan and investment products will have to be designed
       to suit their needs;

(2) further notes that the Minister of Finance’s new tax regime and greater access to the labour market have made this possible; and

(3) believes this is confirmation that this Government’s policies to address poverty and unemployment are creating a better life for all South Africans.

[Applause.]

Ms ANNELIZÉ VAN WYK: Madam Speaker, I give notice that I shall move on behalf of the UDM:

That the House - (1) notes that the establishment of 25 sector education and training authorities was in response to the desperate need for skills in the South African economy;

(2) further notes that these Setas are funded by taxpayers through the skills development levy;

(3) expresses its concern that the criminal justice Seta has been on a downward spiral for the past two years; and

(4) welcomes the long overdue decision of the Department of Labour to intervene by, amongst others, calling on the Scorpions to investigate that Seta.

Mr M U KALAKO: Madam Speaker, I give notice that I shall move on behalf of the ANC:

That the House -

(1) notes that the Botanical Society of South Africa and Old Mutual have embarked on an extensive environmental outreach programme over the past decade, teaching over six million pupils to love and protect South Africa’s precious biodiversity;

(2) believes that environmental education plays an important role in encouraging civic responsibilities and a culture of service and voluntarism amongst children and the youth; and

(3) commends the Botanical Society of South Africa and Old Mutual for fostering a partnership with the Department of Environmental Affairs and Tourism to encourage children and the youth to protect South Africa’s precious biodiversity.

[Applause.]

Mr L M GREEN: Madam Speaker, I give notice that I shall move at the next sitting of the House:

That the House -

(1) notes with interest the recent out-of-court settlement reached between Icasa and Telkom;

(2) expresses its recognition for the work done by Icasa in bearing down upon Telkom to bring under control its projected tariff increases;

(3) further expresses its concern that the benefit to the consumer remains uncertain over the longer term as the current charges imposed upon the consumer, which are to be retained by Telkom, will in fact amount to an increased charge that would have been taken over a two- year period;

(4) further notes that there is concern that the battle between the two parastatals will impact on foreign investors in the telecommunications industry; and

(5) therefore proposes that the current dispute settlement be readdressed to -

   (a)  ascertain whether the consumer as the end-user is in fact
       benefiting from the current settlement;


   (b)  provide further clarity on the powers of Telkom in relation to
       the powers of protection that aim to safeguard the interests of
       foreign investors. Miss S RAJBALLY: Madam Speaker, I give notice that I shall move on the next sitting day on behalf of the MF:

That the House -

(1) notes that -

   (a)  the Aids statistics in KwaZulu-Natal are horrific, and that 35%
       of its population is HIV positive and that the figure is set to
       double within 10 years;


   (b)  Aids is eating away at our economy and work-force;


   (c)  in March a petition was sent to Government by concerned persons
       of the medical profession as to their inability to cope with the
       number of HIV/Aids patients;


   (d)  the South African Medical Journal has estimated 600 deaths per
       day in KwaZulu-Natal because of Aids; and


   (e)  a few months ago cholera in the area managed by the Disaster
       Management Act received four times the funding that Aids and HIV
       in the area receive;

(2) supports the petition for the earnest implementation of the Disaster Management Act to address the Aids issue with proper funding and dedication of parties concerned as during the cholera disaster; and

(3) expresses its disappointment that the case of nevirapine has been delayed once again.

Mr M R BALOYI: Madam Speaker, I give notice that I shall move on behalf of the ANC:

That the House -

(1) notes with grave concern the international survey released by KPMG which reports that South African companies compare unfavourably with the 250 global companies which report separately on social, environmental, health and sustainability performance;

(2) further notes that the second King report on corporate governance recommends that companies report annually and separately on the nature and extent of their social transformation, ethical, health, and environmental management policies and practices;

(3) believes that such a public disclosure is an essential feature of responsible corporate governance, particularly in a country engaged in a process of radical social and economic transformation; and

(4) calls on South African companies to take this report as a wake-up call to fulfil their corporate and social responsibilities.

[Applause.]

Mnr A J BOTHA: Mev die Speaker, hiermee gee ek kennis dat ek namens die DP by die volgende sitting van die Huis sal voorstel:

Dat die Huis -

(1) kennis neem -

   (a)  dat die Ouditeur-Generaal in die Vrystaat bevind het dat mev
       Annah Buthelezi-Phori, die voormalige LUR vir maatskaplike
       welsyn, en tans steeds 'n lid van die wetgewer, honderde
       duisende rande misbruik het, onder meer vir private vakansies;


   (b)  dat die gesteelde welsynsgeld bedoel was vir die armstes van die
       armes; en


   (c)  van 'n dringende behoefte aan morele herstel binne die senior
       geledere van die ANC;

(2) die ANC maan tot skoon regering deur mev Buthelezi-Phori onmiddellik te ontslaan; en

 3) die polisie versoek om kriminele klagtes teen haar te ondersoek. (Translation of Afrikaans notice of motion follows.)

[Mr A J BOTHA: Madam Speaker, I hereby give notice that on the next sitting day of the House, I shall move on behalf of the DP: That the House -

(1) notes that -

   (a)  the Auditor-General in the Free State found that Mrs Annah
       Buthelezi-Phori, the former MEC for social welfare and currently
       still a member of the legislature, misappropriated hundreds of
       thousands of rand for inter alia, private vacations;


   (b)  this stolen welfare money was intended for the poorest of the
       poor; and


   (c)  there is an urgent need for moral restoration within the senior
       ranks of the ANC;

(2) urges the ANC to establish clean government by dismissing Mrs Buthelezi-Phori immediately;

(3) requests the police to investigate criminal charges against her.]

Mr J H SLABBERT: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the IFP:

That the House -

(1) notes that a prominent Cape Town minibus taxi boss and a friend were shot dead in an ambush in the driveway of his Khayelitsha home;

(2) sends its condolences to the families of the deceased; and

(3) calls on the police to take the necessary steps in order to bring the murderers to book.

Ms N S MTSWENI: Madam Speaker, I give notice that I shall move on behalf of the ANC:

That the House -

(1) notes with concern the statement by the Minister of Social Development, claiming that there are approximately five million children who are eligible for grants but that these have not been applied for;

(2) further notes that the Department of Social Development is planning an awareness campaign to get the public to register children who should be receiving child support, foster care and disability grants; and

(3) calls on organised business, labour, religious and community organisations to join the Department of Social Development to encourage the public to register children who are eligible for these grants.

[Applause.]

Mr R S SCHOEMAN: Madam Speaker, I hereby give notice that I shall move at the next sitting of the House:

That the House -

(1) notes that -

   (a)  New NP national leader Marthinus van Schalkwyk is currently in
       Washington DC participating in the meeting of the party leaders
       of the International Democratic Union;


   (b)  other heads of state and party leaders participating in this
       meeting include, inter alia, President George W Bush, Vice
       President Richard Cheney and Australian Prime Minister John
       Howard; and

(2) congratulates the leader of the New NP for using this opportunity ahead of the G8 summit in Canada later this month to address the importance of the developed world’s support for the New Partnership for Africa’s Development (Nepad).

[Applause.]

Miss O N MNDENDE: Madam Speaker, I give notice that I shall move on behalf of the UDM at the next sitting of this House:

That the House - (1) notes that the annual winter flooding on the Cape Flats has commenced with the flooding of shacks in Joe Slovo township;

(2) further notes that this flooding occurs every year, and that Government even had to announce disaster areas last year to deal with the problem; and

(3) agrees that the extent of flooding and the consequent suffering that it causes will be a litmus test for the local, provincial and national governments, which will indicate how much the political intrigues and debacles of the past year in the Western Cape have impacted on delivery and whether it will now endanger the health and lives of the people on the Cape Flats.

Mr G P MNGOMEZULU: Madam Speaker, I give notice that I shall move on behalf of the ANC:

That the House -

(1) notes with alarm the report that the World Zionist Organisation will send Jewish communities from abroad to settle in the illegally occupied West Bank region; (2) believes that such immigration is in direct conflict with the Oslo Accord and will serve to heighten tensions and violence in the area;

(3) strongly condemns this action; and

(4) calls on the Israeli government to prevent such settlement which will surely result in further violence and loss of life.

[Applause.]

        INTERNATIONAL SUCCESS OF BAFANA BAFANA AND SPRINGBOKS

                         (Draft Resolution)

The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move without notice:

That the House -

(1) notes the international successes of two of our sporting teams this past weekend;

(2) recognises the magnificent Bafana Bafana win over Slovenia on Saturday in their second match of the World Cup as an historic achievement for Jomo Sono and the team;

(3) acknowledges that the sterling victory of the Springbok team over Wales on Sunday marks a new beginning for South African rugby;

(4) congratulates coach Jomo Sono and the Bafana Bafana team on their splendid performance; and

(5) congratulates Springbok coach Rudolf Straeuli and his team on their excellent match.

Agreed to.

            STREET PROCESSION TO HONOUR MARK SHUTTLEWORTH

                         (Draft Resolution)

Mr J J DOWRY: Madam Speaker, I move without notice:

That the House - (1) welcomes Mark Shuttleworth and his two fellow astronauts, Juri Gidzenko and Roberto Vittori, in Cape Town where they will participate in a procession; and

(2) congratulates Mark Shuttleworth for being a true ambassador for South Africa and believes that his enthusiasm is an inspiration to all South Africans.

Agreed to.

                        MOTION OF CONDOLENCE

                      (The late Mr P R Mokaba)

The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move without notice:

That the House -

(1) notes with shock and profound sadness the untimely death of the hon Peter Ramoshoane Mokaba, who passed away on 9 June 2002;

(2) recognises that Peter Mokaba was a South African patriot who, throughout his life, demonstrated a profound commitment to the liberation of the people of our country and the continent of Africa;

(3) remembers the hon Mokaba as one of the stalwarts and symbols of our people’s struggle for a non-racial, non-sexist, democratic South Africa;

(4) recalls that, as president of the South African Youth Congress and the African National Congress Youth League and a member of the National Executive Committee of the African National Congress, he was a robust, fearless, loyal and dedicated cadre who lived by the words, “rather die next to the enemy than let him pass”;

(5) acknowledges the dynamic contribution that the honourable Mokaba made to this House since the election of the first democratic Parliament in 1994, during which time he served as Deputy Minister of Environmental Affairs and Tourism and as Chairperson of the Ad Hoc Committee on Powers and Privileges of Parliament, which positions he served with dedication and passion;

(6) believes that he leaves a legacy that epitomises heroism and dedicated service, and that his untimely death has robbed South Africa of a great son who at his tender age still had a tremendous contribution to make to the reconstruction and development of our nation; and

(7) expresses its condolences to the entire Mokaba family.

Mr M S BOOI: Madam Speaker and colleagues, as our country prepares to commemorate the 26th anniversary of the June 16 uprising, we learn about the untimely death of one of our outstanding leaders, a fierce, courageous and stubborn fighter in our struggle for national emancipation.

A gallant fighter, a hero, and a devoted servant of our people has fallen at his post. A highly esteemed leader of the ANC, Comrade Peter Ramoshoane Mokaba dedicated his whole life to the revolution for the betterment of our people. He always led from the front and, together with the death-defying youth of our country, made a monumental contribution to the freedom of our people from the yoke of the racist and oppressive system of apartheid colonialism.

Peter Mokaba skipped the country in 1980, was trained and equipped by uMkhonto we Sizwe and sent back to the country to build underground political and military structures. He was part of the political military council in the Northern Province, today known as Limpopo Province. He was later arrested and sent to Robben Island. He was released after three years when comrades refused to testify against him.

Upon his release he made contact with the ANC frontline in Botswana and resumed his leadership responsibility in the ANC’s underground structures. He made his contribution in building the mass pillar of our struggle and formed leadership collectives among the youth, traditional leaders and community organisations.

He became the voice of young people in March 1987 after the clandestine launch of the South African Youth Congress here in Cape Town during the state of emergency. He was elected president of Sayco and, true to his devotion to the ANC, led the entire national executive of Sayco to meet with the ANC leadership in Lusaka. This was clearly in defiance of the laws of apartheid South Africa, and the regime was looking for him high and low.

Meanwhile, during the state of emergency our people were looking for his leadership. Peter Mokaba became the death-defying voice of the youth and of our people, and a leader to all of us. He remained loyal, honest and dedicated to the cause, always championing the interests of young people.

There would be times when the public would be told that he had been called to Shell House or Luthuli House to be disciplined, but for those of us who served with him in the National Working Committee and for other office bearers it was a different story. We knew that when he received a call to come and account, he was given a chance to explain again the role of young people in the organisation and how the NEC of the ANC had to understand that.

I will just indicate to the House two incidents when he was called, after he made the statement brick by brick'' in Tembisa and after he made the statementKill the boer, kill the farmer’’. On both occasions Comrade Nelson Mandela and the ANC’s National Working Committee disagreed with him and the leadership of the youth, but he would listen to the older generation in the movement and then they would support our views. He never compromised regarding his understanding of these events.

When he motivated for the ANC chairpersonship to be taken up by Thabo Mbeki after Oliver Tambo, he differed with many people in the ANC NEC, but he stood his ground because he knew it was what the youth wanted. The youth sent him to the NEC from 1991 until today, and they continued to support him because they trusted and had confidence in him.

We knew that he was loyal, honest and dedicated to the cause of the people. His legacy was to defend the ideology of the ANC and even defend the ANC sometimes at his own peril, making him unpopular with those who differed with the ANC.

My first contact with Peter Mokaba was in the trenches as we were preparing for the formation of the youth movement, giving leadership to Cosas and building the mass movement. It is befitting that we lay him to rest this weekend when we commemorate the youth uprising of June 16. We send our condolences to the family of Comrade Peter Mokaba. May his soul rest in peace. [Applause.]

Mr D H M GIBSON: Madam Speaker, the DP supports the motion of condolence on the passing of the hon Peter Mokaba. There is always a sense of shock and disbelief when a person dies an untimely death at a very early age. Peter Mokaba was a colourful, vibrant and controversial figure.

He achieved public prominence and, one must say, notoriety in certain areas because of his speeches and statements, particularly in the years before 1994 when he came to this House. In later years he was less of a firebrand, but he never hesitated to express strong opinions on issues, both inside his own party and outside of it.

Peter had recently been spending most of his time on party-political organisational work for the ANC, and his passing will certainly create a void.

We on this side of the House convey our sincere condolences to Peter’s family and friends, and to his party. He will be missed. [Applause.]

Mr M A MZIZI: Madam Speaker, it is customary amongst us family in Parliament that when one of us moves on, we are all collectively saddened, and we mourn together with the bereaved family and friends.

Mr Mokaba was a very special politician. Some of the things he said, others dared not say. Nobody ever doubted his sincere dedication to the cause in which he believed. We found him to be a friendly, open-hearted and well- behaved colleague. He made valuable inputs in this House and its committees. We extend our deepest condolence to his family, and we say:

Peter Mokaba, hamba kahle!'' Sithi emndenini,akwehlanga lungehli, lalani ngenxeba. UNkulunkulu ubephile, uNkulunkulu uthathile.’’ [Go well, Peter Mokaba!'' We would like to say to the family,Be comforted. What has happened cannot be reversed. The Lord gave, and the Lord has taken away.’’]

Mr J J DOWRY: Madam Speaker, I rise on behalf of the New NP to support the motion that the House notes with sadness the untimely death of the ANC MP Mr Peter Mokaba. Death is always unexpected, especially when it is the death of a young person such as Peter. He was a respected politician, and during his political career Mokaba fought hard for what he believed in. He was never scared of speaking his mind. His commitment to the struggle and the formation of a democratic South Africa established him as a fearless leader. The death of this young man is a great loss.

Ons innige meegevoel en simpatie gaan dus aan sy familie, sy vriende en sy partygenote gedurende hierdie moeilike tydperk. [Applous.] [Our sincere condolences and sympathy therefore go to his family, his friends and his fellow party members during this difficult time. [Applause.]]

Mna M N RAMODIKE: Mokgapa o mogolo o wele, dithaga di lla bošogošogo. Peter Ramoshoane Mokaba, Mokaba sephetho ke tšea saka. Ge ke tšea sephetho, ka melodi ya makaba ke a foša.

Ke tsebane le Peter Ramoshoane Mokaba e sa le morutwana Yunibesithing ya Leboa a dira molao, gomme a palelwa go phetha dithuto tša gagwe ka kgatelelo ya maburu. O ile a golelgwa gantšintši. Ke šomile le yena ge a be a le mokgokaganyi wa ANC le baetapele ba setšo gore ba kgone go šomišana le mokgatlo wa ANC ka ntle ga naga. Ke šomišane le yena ge e be e le pampanyane ya ANC, go tutuetšwa baetapele ba ‘bantustan’ tša maloba go šomišana le ANC in exile. Ke šomišane le yena go rafa ditokomane go tloga Union Building le gona mo Tuinhuys go di išetša baetapele ba ANC in exile.

O kgonne ga ntšintši go loga maano a gore nna le mohu Morena Enos Mabusa re romele baemedi ba rena kua Lusaka go kopana le baetapele ba ANC gore re kgone go ba loma tsebe ka tšeo di diregago ka gare ga naga. O kgonne go loga maano gore tokomane yeo Mopresidente wa maloba, Morena De Klerk, a be a re le ga tee e se ke ya tsena diatleng tsa mokgatlo wa ANC, ra e rafa Tuinhuys ra e romela go Mopresidente wa maloba Morena Mandela. Peter Mokaba, the lion of the North, ratšhatšhatšha le raditšita wa dipolotiki, molwela le mohlabanela tokologo, senatla, moetapele wa bohlale le mahlale. Robala ka khutšo tlou! [Legoswi.] (Translation of epedi speech follows.)

[Mr M N RAMODIKE: A great tree has fallen down and birds are particularly doomed - Peter Ramoshoane Mokaba, Mokaba sephetho ke tsea sa ka. Ge ke tsea sephetho ka melodi ya makaba ke a fosa!

I have known Peter Ramoshoane Mokaba since he was a law student at the University of the North where he could not, however, complete his studies because of the pressure exerted on him by the Boers. He was a jailbird and spent most of the time in prisons. I worked with him while he was the ANC’s anchorman who linked traditional leaders with the liberation movement in exile so that they should work hand in hand. I also worked with him when he was an ANC cadre whose task it was to encourage the then bantustan leaders to work with the ANC in exile. I also worked with him when we smuggled some of the former regime’s secret documents from the Union Buildings, and from here in Tuynhuys, to the leadership of the ANC in exile.

He succeeded, on many occasions, in getting the late Mr Enos Mabuza and I to send our representatives to Lusaka to meet the leaders of the ANC in exile so that we could inform them of what was going on in our country. He also succeeded in smuggling from Tuynhuys a secret document which former President De Klerk had vowed not to reveal to the ANC, but we got it from under his nose and sent it to the former President Mandela. Peter Mokaba, the lion of the North, a scholar and politician par excellence, a freedom fighter, a hero, a leader with vision and a renowned scientist, rest in peace, tlou! [Applause.]]

Adv Z L MADASA: Madam Speaker, on behalf of the ACDP, we support the motion of condolence on the passing of Peter Mokaba. We were shocked by the sudden departure of Peter, a fellow parliamentarian. Peter played a huge role in the fight for political liberation. He was an inspiration and a hero to the majority of the youth of our country. We would like to express our heartfelt condolences to his family and the ANC. May his soul rest in peace. [Applause.]

Mnr J P I BLANCHÉ: Mev die Speaker, wanneer ons ‘n jong kollega soos mnr Peter Mokaba verloor, moet ons wat voortleef kennis neem van die min tyd wat ons gegun word om bydraes te maak, om ons landgenote se welsyn en welvaart te bevorder en ons land te help ontwikkel. Ek is seker dat Peter Mokaba sommer nog baie voorstelle wou maak om van die nuwe Suid-Afrika ‘n beter omgewing te maak vir die mense wat hy hier verteenwoordig het. Hy is nie langer tyd gegun om hierdie land te help vorm nie.

As voorsitter van die Ad hoc-Komitee oor Bevoegdhede en Voorregte van die Parlement waarop ons albei gedien het met hom as voorsitter, het hy my altyd met die uiterste respek behandel. Ek gaan hom liewer so onthou as vir die uitsprake wat hy gemaak het, en daarom wil ek vandag namens die FA aan sy kollegas ons meegevoel oordra en ook aan sy naasbestaandes sê dat ons saam met hulle voel in hierdie tyd. [Applous.] (Translation of Afrikaans speech follows.)

[Mr J P I BLANCHÉ: Madam Speaker, when we lose a young colleague such as Mr Peter Mokaba, we who continue living must take note of the little time we are allowed to make contributions, to promote the well-being and prosperity of our fellow countrymen and to help improve our country. I am sure that Peter Mokaba would still have wanted to make many suggestions to turn the new South Africa into a better environment for the people whom he represented here. He was not granted a longer time to help shape this country.

As chairperson of the Ad Hoc Committee on the Powers and Privileges of Members of Parliament on which we both served, with him as chairman, he always treated me with utmost respect. I would rather remember him like this than for the statements he had made, and that is why I would like to, on behalf of the FA, convey our condolences to his colleagues and we would also like to sympathise with his next of kin during this time. [Applause.]]

Miss S RAJBALLY: Madam Speaker, it is never easy to lose a member. The news of the hon member’s death at his Sandton home yesterday as a result of natural causes has come as a shock. It is like a machine losing one of its crucial mechanisms.

The passing away of the hon Peter Mokaba may be regarded in the same light. His work as a dedicated comrade in the struggle made great contributions. The hon member was president of the SA Youth Congress and the ANC Youth League until 1994, then taking up the position of Deputy Minister of Environmental Affairs and Tourism.

The hon Mokaba’s dedication as a member of the national Parliament and the ANC, and as chief election strategist of the ruling party is remarkable, and these posts have certainly suffered a major loss with the death of such a great asset to the Government.

The MF expresses its sincere condolences to the bereaved family, friends, loved ones and the ANC on the loss of such an admirable soul. [Applause.]

Mr P J NEFOLOVHODWE: Madam Speaker, South Africa has lost a fighter, a soldier and a son of Africa whose whole life was dedicated to the struggle for the emancipation of the downtrodden. With this is mind, Azapo salutes Comrade Peter Mokaba for his sterling contribution to our people’s struggle. The country, the ANC and all those who knew him have indeed lost a son who joined the liberation struggle when there was little hope of any kind of beneficial reward. We joined at a time when, in fact, instead of rewards, imprisonment, banishment and death were high on the agenda of the managers of the apartheid system.

Comrade Mokaba was also known for his independent thinking. Even those who were not in his party had no difficulty knowing what his view were within the ANC because he expressed them publicly.

This demonstrated his understanding of democracy. At the same time, we in Azapo have always interpreted him as a very loyal and dedicated member of his party. Therefore, Azapo joins the ANC in paying our last tribute to a comrade whose commitment to the struggle of our people was never in doubt. He was a leader in his own right. At this moment of sadness, Azapo sends its deeply felt condolences to his family. [Applause.]

The DEPUTY SPEAKER: Order! Hon members, I wish to report that I communicated with the Speaker, who is in Sweden at the moment, about the death of the hon member Peter Mokaba. The Speaker and I wish to express our shock and sadness and echo the words that have already been uttered here in this Chamber.

We will convey the condolences of the House to both the family and the ANC.

Debate concluded.

Motion agreed to, all members standing.

                         APPROPRIATION BILL

Debate on Vote No 8 - National Treasury and Vote No 13 -Statistics South Africa. The MINISTER OF FINANCE: Madam Speaker, hon members, this a very important time in the history of the global economy. As we debate these budget votes this afternoon, it is very clear that the fortunes of various countries are shifting, that there is a very rapid rebalancing of currencies around the world, there are changes to the rules of engagement between countries, as witnessed by very important decisions taken in Doha at the ministerial meeting of the WTO, the rules of supervision are changing in order to improve issues of corporate governance, and as we saw last week, the development of issues relating to Nepad is growing in leaps and bounds. These are very lengthy issues and they could hold us here in discussions for a very long time.

The key today is the three departments that resort under the Ministry of Finance, namely Statistics South Africa, the National Treasury and the South African Revenue Service. All three are in the throes of modernisation and change.

Parliament has to express a view on how capable and equipped these departments are to face the changes and drive new changes. The submissions have already been made in some detail to the Portfolio Committee on Finance. In examining the changes before us, we have to recognise that just two years ago the National Treasury was formed out of the former Departments of Finance and State Expenditure, and the South African Revenue Service was formed just four and a half years ago, changes that reflect on the one hand a merger and on the other an unbundling. Both of these processes have been complex and stressful, but both, I submit, have yielded rich dividends already.

In respect of the National Treasury, we have succeeded in welding together diverse elements, accountants and economists, policy analysts and financial managers, advisers and record keepers, into a single cohesive team. In respect of the SA Revenue Service, we see this organisation growing from strength to strength. No single measure stands out more than the performance in respect of revenue collection, but we also need to recognise the changes in respect of the broadening and modernisation of both the structure and the resilience of tax law and administration.

Of course, a minority of South Africans, the very wealthy amongst them, would prefer the old poor administration and poor tax laws, but we have news for them. The news is the kind of thing we saw on Friday, when a very wealthy South African was sequestrated for failing to pay tax.

We believe that we must continue to do this because it is right and good and in the interests of the poorest of our people that everybody contributes a fair share to the taxes required of individuals and companies in terms of the legislation passed by this Parliament.

In respect of Stats SA, the organisation has graduated to a new status. It is now a Schedule 1 department - a full department - in terms of the Public Service Act. An organisational overhaul is in progress, focusing on internal capacity, but also, very importantly, in support of the function of Stats SA which involves the co-ordination of the statistical functions of all of Government. I do not this afternoon intend to cover much of this ground which has been submitted to all Members of Parliament on the strategic plans and the chapters of the Estimates of Expenditure. What I would like to suggest here is that the direction of these organisations over the next three years is quite clear.

Turning then to Vote 13, on Stats SA, it is important that we continue to equip this Parliament, especially, to be able to measure progress in respect of the demographics and the quality of life of all South Africans. How many houses have we built? How many houses have people built for themselves? How many of these are occupied? How many have water? How many have electricity? Similarly, how many young and old South Africans are involved in the education system? Who have jobs and who do not have jobs? We need general and specific information which will allow us to take appropriate action and decisions about how to allocate resources.

This House is invited this afternoon to appropriate R272 million for the fiscal year 2002-03 for three main programmes of Stats SA: about R59 million for administration, R114 million for the regular stastistical services and R99 million for completing processing and analysis of Census 2001.

Looking at Stats SA, clearly, there are areas which are undergoing improvement at the moment, but which are continually in need of improvement. At the top of the list here is the national statistical system. This is clearly a longer-term objective. It is a strategic objective and one that involves partnership across Government departments. It is an objective for which the team, led by the Statistician-General, Mr Pali Lehohla, has committed and developed a practical programme of action for the three years ahead.

Five elements of the development of the national statistical system stand out. The first amongst those is the development of the new business register with the Sars, the Department of Trade and Industry and the Department of Labour. The Second is an audit of all Government statistics which will be initiated in the course of this year. The third is building on the success of the work done for Census 2001 by focusing on the promotion of statistical literacy in schools. The fourth is links with the universities, to focus on education and training in applied statistics. The fifth is broadening out on the introduction of the new data processing technologies which were introduced for Census 2001, which will ensure that we have the results of Census 2001 both earlier and more accurately, but which will also provide a new platform that will assist us in achieving paperlessness in respect of data capture. In respect of the national statistical system, again it is important to emphasise that it is broader than Stats SA alone and that it involves all other Government departments. What we need right in the middle of this is a centre that is focused on both systems and quality for data collection. In respect of the organisational transformation of Stats SA, last year the focus was very much on census 2001 and this year it is on organisational transformation. A quality and methodology unit has been established to provide advice on all aspects of statistics; collection, sampling, analysis and quality control. Also a programmes and projects office has been newly established to strengthen the capacity to deal with large projects.

Thirdly, in respect of international co-operation, Statistics South Africa is now a full participant in the United Nations Statistics Division, which resorts under the United Nations Economic and Fiscal Commission. The Statistician-General was recently elected to chair the Partners for Statistical Development in the 21st century, the so-called PARIS21.

In respect of SADC, Statistics South Africa remains a focal point for the co-ordination of, very importantly, a big project to harmonise the statistical systems and services across all of the SADC region. We believe this will make a key contribution to Nepad going forward.

We would like to invite all Members of Parliament to be involved in monitoring progress as we continue to transform this organisation.

Turning to Vote 8, which deals with the National Treasury, we are asking Parliament to appropriate two sums of money. Firstly, in respect of Programmes 1 to 5, which deal with departmental administration, economic planning, budget co-ordination, debt management, financial systems and the Accountant-General’s office, we are asking for R605 million for the fiscal year 2002-03. In respect of Programmes 6, 7 and 8, which deal with provincial and local government transfers, civil and military pensions, contributions to various domestic and international funds, transfers to the SA Revenue Service and the Financial and Fiscal Commission, the secret services accounts and the newly established Financial Intelligence Centre, we are asking for R9,389 billion for this fiscal year.

The management of the National Treasury has proven to be a huge test for both the reach and robustness of the Public Finance Management Act and the associated regulations.

In respect of budget reform, the format for the budget review, the estimates of national expenditure and also the now annually published Inter- governmental Fiscal Review, clearly speaks of a process of huge reform in respect of fiscal management. Ahead, we want to focus on improving the measurement of the quality of service delivery and the refinement of both the quality and the integrity of financial and non-financial information.

In respect of the improvements we witnessed over the last period, there has over the past three months or so been quite a big discourse in South Africa on the issue of underspending. It is important to recognise that appropriations measure the maximums that an accounting officer may spend. There are many causes for underspending. In some instances, and clearly on the bad side, there are project delays due to administrative weaknesses, but on the other hand there are also savings achieved through prudent management or good fortune such as, for instance, lower debt service costs. What is important to recognise in respect of the issue of underspending are improvements that we can measure. Last year the departments requested R1,6 billion and the previous year R2,8 billion of rollovers.

In respect of reinforcing financial management, the focus is on improved service delivery and better planning and budgeting. We have now established the Accounting Standards Board and they are developing guidelines for asset management purposes.

This brings me to the issue of asset and liability management, which is a big programme within the South African Revenue Service. Good progress has been made in reducing our annual borrowing requirement. It is important, though, to recognise that the total loan debt of Government is R450 billion. In fact, we have turned around the rising debt-GDP ratio, and interest costs for Government are now falling. This is partly due to the restructuring of State assets, and we would like to advise again that Telkom’s initial public offering will go ahead during this fiscal year. In respect of the asset side alongside the management of liabilities, this includes asset management, the co-ordination of cash management, a focus on improved corporate governance, co-ordination of investment and borrowing plans, and negotiation of dividend policies with Government parastatals.

Public-private partnerships also form part of the work of the National Treasury. It is an important new area of work, given the fact that Government, at national and provincial levels, spends about R50 billion on the procurement of supplies, services and construction work. Almost all of this is still through conventional procurement contracts.

We are beginning to change this. Public-private partnerships are an important element of this and these often, we need to recognise, take some 18 to 24 months to negotiate.

Turning to macroeconomic policy, tax and international policy development, there is a large agenda. The macroeconomic team is involved in liaison with business, labour and communities in Nedlac on a whole range of issues, from agricultural pricing to financial services, national growth strategy, budget priorities, employment creation and labour markets. Also, this part of the department chairs the SADC tax subcommittee and is involved in a series of other international issues focused on macroeconomic convergence in SADC. It is involved in the Southern African Customs Union, a very strong element of Nepad, and we chair the Development Committee of the World Bank and the IMF.

It is very important that, as we take on these international challenges, there is a very clear role for the Reserve Bank as a partner. I would like to submit here this afternoon that there is a clear and consistent complement between fiscal and monetary policy. We said in the Budget that the depreciation that we witnessed in the last quarter of last year will feed into CPIX.

This week the monetary policy committee at the Reserve Bank will outline how to bring inflation back into the target range, but the inflation trend that we have seen over the past few months was anticipated when we tabled the Budget in February. It is important therefore that the wage adjustments announced by Minister Fraser-Moleketi last week be seen in the context of an inflation trend that we had anticipated. The inflation trend is purely within the bounds of what is possible and has been provided for.

It is necessary that we continue to focus on the improvement of the salaries of teachers, nurses, police members and other public servants, but that excludes us as members of Parliament, of course. That is important.

We have to continue to work to retain the high quality of skills that we can draw into the Public Service. The inflation trend was indeed anticipated and we have provided. The increase does not, as some analysts suggest, exceed inflation trends. Some have even commented that this might suggest a mismatch between fiscal and monetary policy. I want to assure this House that I am very comfortable with the announcements that were made last week.

With regard to the SA Revenue Service, the record revenues that we have seen over the past few years speak of the improvements that have come about through a better organisation and far-reaching organisational changes. For the 2001-02 financial year, the Sars collected R249,2 billion - that is R15,2 billion over budget. The cost of this was less than 1,2% of the revenue collected. For 2002-03, Sars is asking this House to appropriate R3,417 billion. That is just under 1,3% of anticipated revenues. The key changes in the period ahead involve both further organisational changes and investment in technological improvement. Last year we saw the establishment of new processing, compliance and taxpayer service centres in KwaZulu-Natal. This year, under the Siyakha programme, we will see the roll- out of a similar centre in the Western Cape.

In the 2001-02 fiscal year we processed 3,3 million income tax returns, and tax assessment backlogs were dealt with through the establishment of ``war rooms’’. Taxpayers also benefit through the e-filing which is now possible for VAT, PAYE and provisional taxes.

The high-profile Woodmead project resulted in the collection of R4,3 billion, and inroads have been made through more focused and targeted compliance. Big changes, also in respect of tax law and administration reforms, include the implementation of the new capital gains tax regime which was approved by this House, and very important changes in respect of customs which will increasingly need to focus on matters of law enforcement.

In the period ahead a rigorous programme that will involve further improvements in client service, roll-out of further enforcement, the broadening of the taxbase and the implementation of a taxpayer education programme.

For us covering these three departments, the challenges ahead are, firstly, to equip Government to better engage with its counterparts around the world; secondly, to focus on the quality of life by providing better public services and more resources, and by knowing where exactly we are spending and where we need to spend better; and thirdly, to ensure that Government has available the best policy advice to take these decisions. It is a large agenda and we have no laurels to rest on in this regard.

In conclusion, I would like to thank the three heads of departments and their teams, namely Maria Ramos, Director-General of the National Treasury; Mr Pravin Gordhan, the Commissioner for the SA Revenue Service; and Pali Lehohla, Statistician-General of Statistics South Africa.

I would also like to express my sincere appreciation to all members of the Portfolio Committee on Finance for their work over this past year, especially Barbara Hogan for her stewardship, leadership and diligence in leading this Portfolio Committee on Finance through very troubled waters. I thank Barbara very much and all members who took the trouble to listen this afternoon, even for one minute. I thank hon members for their patience. [Applause.]

Ms B A HOGAN: Mr Chairperson, it is really welcome that you are sitting in that Chair, because your predecessor, Mr M J Mahlangu, went a very long way in working with a group of us to explore ideas on how Parliament could better engage with the budget process. He performed by example and produced an exemplary document which outlined Parliament’s potential role in the budget process.

The Minister has outlined, in his speech to us, the remarkable reforms which National Treasury has been able to bring about in the budget process as it takes place in the executive. The question that I want to ask today is: To what extent is Parliament rising to this challenge? Those of us who were here in 1994 will recall that the budget documentation that we received that year was much thicker than the documentation we are having now. I am showing members only one document of several others that is much thicker than this one. But there is also a difference to this document that we have.

It is not just a list of figures and columns; it has a narrative. It explains what each department is doing, what the policy developments in each department are and what each department sees as its outputs. It lays bare before all of us here in Parliament the very preliminaries, the basis, for parliamentary oversight over the executive.

That is what our Constitution envisaged. Our Constitution in section 55(2) states that:

The National Assembly must provide for mechanisms -

(a) to ensure that all executive organs of state in the national sphere of government are accountable to it; and

(b) to maintain oversight of -

   (i)  the exercise of national executive authority, including the
         implementation of legislation; and


   (ii) any organ of state.

Furthermore, the Constitution, in section 77(2), provides that national legislation must be passed to prescribe how Parliament must amend the budget. That national legislation must be passed within a reasonable period of time of the Constitution being passed. This Constitution was passed in 1996; we are in 2002 now - it is six years since then.

Mr Chairperson, I ask of you, as Chairperson of Committees, that you take this as one of the most serious tasks, as Mr M J Mahlangu, your predecessor, did, because only through these reforms that Mr M J Mahlangu pioneered can we see to it that Parliament can play a more important role in the running of this country.

We can talk about amending the budget, we can talk about a lot of these nice-to-haves, but we have to think through very carefully what powers this Parliament wants, and which oversight functions it should and ought to have. There was a time, when we first arrived in 1994, when many of us thought that the powers should be that the executive presents its budget and we just amend it as we like. We have grown wiser and more serious since those days. Firstly, to amend a budget which has been drawn up by people with expertise and years of experience in managing complex departments, simply to go and amend that without that background and experience, would be irresponsible. Therefore, Parliament does need to develop its capacity to exercise oversight over the budget. It needs professionals to assist it. It needs a professional budget office.

We need to think further than simply amending the budget in that simplistic way that I outlined earlier on. Amending a budget is often associated with an emphasis on what goes into the budget. If we think that R500 million is not enough for the police, we make it R550 million and that will mean that they will do their job better.

We have sobered up. We have learned that simply increasing the budget does not mean that there is necessarily an increase in service delivery. We have to maintain oversight over what the objectives of that department are, what it is promising in terms of outputs. That is what is in this very thick document. These are the promises of these departments with regard to what they are going to do to improve the lives of South Africans.

Without sounding outraged, I simply say that it is a disgrace in this Parliament that we are not rising to the occasion as public representatives and assist the executive to focus on those very things that the executive is trying so hard to deliver, to improve quality of life. We have sat through three months of debate in this House on budgets. As the Minister said, those who care to listen hear a little trickle of a debate. We have had three hours of debate on some of these budgets. Can we really call that a debate? Can we really say that that debate emerges out of detailed scrutiny, out of a really strong commitment to ensuring that we exercise our oversight role and are answerable to our constituencies? No, we cannot say that. At best, the way we are dealing with the Budget at the moment is perfunctory. It can almost be seen as rubberstamping.

Let it not be believed that I am an advocate of a parliament simply having amending powers and accepting no responsibility. There are various models that are used throughout the world, and every legislature has a different way of amending and dealing with its budget. I would wish to argue - and I know Mr Mahlangu was in agreement on this - that proper parliamentary oversight over a budget means that Parliament must be engaged prior to the drawing up and tabling of the budget.

One cannot simply receive a budget in February and be expected to be fully cognisant and ready to debate within a month’s time, and to feel that one can then have an influence. If we examine our heart of hearts, what influence have any of us really had through the numerous speeches that each of us have made on the budget that will be presented for the future here? Very little.

We have to tighten up our abilities to do this. I would say that Parliament needs to identify critical moments in the year, prior to the presentation of the budget, at which Parliament should have its say. Now I am not saying that Parliament should have its way, but Parliament should have its say, so that Parliament can play a role in shaping that budget. That has to be delicately handled. We have to expect the right of the executive to draw up its budget.

However, once that is concluded, once we have received that budget, Parliament’s job is then to exercise oversight, to see that the money that was received the previous year delivered the particular objectives that were set for that money. So one has got to look backwards. One cannot only look forwards to the next budget. So one has to look at the previous Auditor-General’s reports, look at previous spending and then look at the budget of the future years.

This is a massive exercise. This is not something that one can simply engage in for a couple of days in a committee. It should involve the entire energies of Parliament and its committees. And here I think the role of committees becomes critical. There is very little dialogue in committees. There is very little that committees bring together into a whole, so that the different deliberations of committees come into a general statement by Parliament.

Surely we should be looking at the potential role that committees can play in the budget process, the way they can bring together various clusters of committees, for instance, that can make a comment and come to an agreement about what it is that they are going to be saying to Parliament.

There is no doubt, in our minute examination of the potential that Parliament has to exercise over the budget process, that there will have to be an extensive restructuring of the way committees operate and the rules that govern committees. At the moment the structures and functions of committees are not friendly to legislative oversight over the budget process.

However, it is not simply that; we also have to look at what this Parliament does when it has received that budget. We have before us a section of the Constitution that says that Parliament must prescribe legislation which will show how we will amend that budget. I would wish to argue that our amending powers should be the powers of last resort.

If a committee has raised an issue time and time again, and yet, for instance, a particular department has simply been unable to address the issue or to rise to the occasion on the issue, that committee should be able to bring in certain amendments. We can look at the parameters in which those amendments are offered so that we do not affect the fiscal balances in the country or undermine the economic programme of this country. There are all kinds of things: ceilings on budgets, on what can be amended - often it is just 3% of the budget. There is a whole range of issues.

There are other issues as well. Should we be allowed to amend the revenue Bills at the same time that we table the expenditure Bills? I would argue not. We should not be making revenue subordinate to expenditures. Revenue, what we take from people, must be consistent and honest. We should not in election years suddenly raise revenue so that we can meet expenditures to make us come back to power.

There are a range of issues. I have only skimmed over the surface. What is the role of the NCOP? What is our relationship to the NCOP? At the moment they have dealt entirely with the division of revenue. Is that how we foresee it? Will the NCOP have any say in the national Parliament’s budget?

I would appeal to hon members that we do need to take seriously the constitutional issue before us. It is six years since we passed the Constitution. As far as I know, Parliament has taken no steps towards effecting the legislation which is required of us, and this cannot just be a little committee that sits somewhere. Parliament as a whole needs to engage in this exercise because this is the future which is going to be facing those who will come in after us in 2004. I felt I had to raise these issues because we are not responding to the wealth of information that is provided to us by departments and the National Treasury, and we do them and the people we serve an injustice.

I also want to speak of a tour that we undertook as the Portfolio Committee on Finance to the SA Revenue Service and Statistics South Africa. Our committee does not travel often; we are often laden with work.

It was an inspirational tour. I do not believe that many of us know the circumstances under which our public servants operate: some in the most dreadful corners, in the most dreadful corners in the most dreadful buildings.

We went to those offices. We did not ask for fancy presentations. We went to see people where they were working. It was astonishing. We saw young and old, black, white, African, Coloured, men and women, hard at work, with a kind of enthusiasm that is seldom seen or appreciated in this House. It was astonishing to see the conditions under which people work and what they were able to effect.

It was also astonishing to see what leadership did for a public service in transformation, in affirming those workers, and for producing the results that we are seeing. The Sars in particular has gone through a massive restructuring programme. There are 10 000 people employed by the Sars.

It is awe-inspiring to see what is being done there. The results that we see of a R15 billion excess in collection, are the result of the work of every single one of those individuals.

Statistics South Africa is going through a transformation and we wish it well. It has been doing amazing things in changing the statistics that it collects for us, and we see it going through the organisational changes that the Sars went through a few years ago. We look forward to the transformed Statistics South Africa that we are already able to see in the kind of information that they make available to us.

Finally, I wish to speak of the National Treasury. Seldom is a committee able to work with such a competent, responsive and progressive team of people. I would like to thank the Minister, the Deputy Minister, the Director-General, the Commissioner of the SA Revenue Service and the Statistician-General for the work that is being done for this country and for their management of this economy. It has been a privilege to work with them. [Time expired.] [Applause.]

Ms R TALJAARD: Chairperson, hon members, I think there are not regular occasions in this House where members from different parties can stand at this podium and say categorically ``I agree’’, but I would like to say to the chairperson of my portfolio committee that I agree with every single sentiment she expressed around the role of this institution and the budgetary process. I just came back from a very insightful trip to France, where they are going through exactly the same debate, both in their senate and in their national assembly, and indeed they have just received powers to amend their budget last year. So I would like to agree with every sentiment the chairperson of the portfolio committee expressed.

On a recent visit to the French national treasury for discussions on the introduction of the euro, and specifically the notes and coins process in January 2002, I was told that some older Europeans, feeling uncertain about the workings and the value of the new euro, had opted instead - and some still do - to hold onto their French francs, their marks, their lire and so forth, for dear life, out of sheer suspicion of the new currency and its value.

Subsequent events, and possible dollar-euro parity, must leave many doubters flabbergasted. With a tinge of irony I thought that many South Africans, irrespective of their age group, do not know what to do with our beleaguered currency, the rand. Swinging wildly from the world’s worst performing currency to the world’s best performing currency could leave one quite perplexed as to whether to cling to or bury one’s rands.

On a more serious note, however, the impact of the dramatic depreciation of the rand in the fourth quarter of 2001 has had, and continues to have, a fundamental impact on the daily lives of all South Africans. Sadly, and while it is quite clear that the bulk of the overdue tax relief given in this year’s budget has been targeted at the lower and middle income earners, it is clear that the ravages of inflation and the depreciating currency reverse any income gains made through tax relief. For those in the higher tax bracket, the high tax levels constitute yet another reason to seek greener pastures in the context of global skills mobility, with further consequences for our economy which seeks high growth rates from the tertiary sector of the economy, a sector that requires highly skilled individuals.

With a third interest rate hike close to a formality, pending the outcome of the MPC deliberations this week, South Africa’s home owners and consumers are in for a tight squeeze. In a context where jobs are scarce and any disposable income for the poorest even more precious, the negative impact of inflation cannot be underestimated.

While recent rand strength may have ameliorated some of these effects, the recent rand gains were not due to fundamentally improved sentiment, but rode largely on the back of dollar weakness and a move to safe havens of gold and Swiss francs, both changeable factors, with more possible currency instability as a consequence as global factors change.

Similarly, some of the potential negative sentiment factors in the South African economy remain, such as uncertainty on exchange controls, the festering crisis and food shortages in our neighbouring country Zimbabwe, and the need to ensure a successful listing of Telkom, with requisite regulatory certainty and a clear competitive framework for all role- players, including the second national operator and Sentech in place before the IPO prospectuses can be issued.

In a recent Article IV Consultation Report, the IMF draws attention to the fact that the South African rand is undervalued. This is undoubtedly very welcome news, but unlike the unseemly final-stage events at the Myburgh Commission and its fatally flawed terms of reference, the IMF bluntly, while conceding a market overreaction in December, attribute last year’s currency crisis to three main factors: The easing of monetary policy, delays in the privatisation programme and market confusion about exchange control policies.

It is clear from the fund’s comments, and some select evidence at the Myburgh Commission that did not focus solely on the controversial Deutsche deal, that the real debate ought to be an intelligent debate on exchange control liberalisation. Such a debate should be had where it belongs - in Parliament, between the National Treasury and the Portfolio Committee on Finance. Instead of the committee being brought into the debate that raged in the public domain on exchange control liberalisation, MPs follow these debates vicariously in the press. This, sadly, is par for the course for the second democratically elected Parliament and its oversight role.

Equally, Parliament has to exercise a far greater oversight role over privatisation policy delivery. In the previous budget the Minister for Public Enterprises was set a target of R18 billion, which was missed, without as much as a whisper of concern from the relevant committee. This year once again an ambitious agenda was announced and tabled in this House. We watch. We wait. More delays will cost us dearly as we need to further reduce debt and, importantly, the net open forward position.

Having chosen the option of inflation targeting, we have to stick to its implications and tailor all Government’s actions accordingly. The Minister said in his letter to the Governor, when the policy was introduced, and I quote:

The success of the inflation targeting regime will require the participation of all of the South African public, its firms, unions, NGOs and civic groups.

Unfortunately the Minister left out of this equation his Cabinet colleagues. Their co-operation is equally critical and, while I take on board the comments he made around the 9% increase that he feels completely comfortable with, the critical question is whether the Governor of the Reserve Bank feels comfortable with this wage increase and the precedent it can set for the private sector, and the possible impact it could have on a secondary round of inflation. That is the question: Does the Governor feel as comfortable as the Minister does?

There have been calls from many quarters for the monetary policy committee to end its hawkish stance sooner rather than later, as it could choke the paltry and insufficient levels of economic growth South Africa suffers from. The pursuit of the target must not become in itself a messianic exercise with little regard for whether South Africa reaches the growth and employment levels we require so as to alleviate poverty on a meaningful scale.

Inflation targeting is a new phenomenon for developing countries, with little data available on its success or failure, and it needs to be implemented with circumspection. Having said that, it also need to be implemented with the requisite levels of co-ordination and consensus.

The SA Revenue Service is in a constant state of change and improvement. The wide-ranging Siyakha organisational change project has to be undertaken in a challenging context of policy change, where the effects of the implementation of the change to a residence basis of taxation and capital gains tax have been radical. The portfolio committee is currently dealing with the employment incentive and this will add yet further administrative challenges to the SA Revenue Service.

It is clear that some of the new taxes such as capital gains tax, and indeed some of the new and necessary incentives, add to the administrative complexity of the tax system, both for the Sars and taxpayers, and for small business in particular, despite the colourful DIY kits printed in the press today and over the weekend. On a recent visit to the Sars, we were impressed by the work that is being done in relation to the tax gap project, and the focus of specialised offices such as the Woodmead office and the compliance centre in Durban.

However, in pursuing the tax gap project and looking at the longer-term project of broadening the tax base, we need to ensure that our compliance focus does not remain on the tax gap in the formal sector merely because the lack of data makes the informal sector so much more difficult to tackle. That would send a very bad signal in relation to tax equity and would have a negative impact on tax morality in the formal sector. We need data on the informal sector as a matter of urgency to ensure that in tax equity terms we do not merely penalise those who find themselves in the formal sector through tax policy measures that are easier to pursue in enforcement terms in the formal sector.

Moving to Statistics South Africa, the eyes and ears of sound policy, good policy requires sound and reliable statistics.

Apart from the exhaustive work of the census and of ensuring that policy can reliably look at any changes in income, urbanisation and other factors between Census 1996’s baseline and Census 2001, Stats SA has a bold vision for the implementation of a national statical system. The work of Stats SA forms the bedrock of many other policies and must remain, at all costs, independent, with Stats SA remaining the critical arbiter of all statistics, and I mean the critical arbiter of all statistics.

While there is merit in the arguments to ensure a strong link between the national statistical system and government departments in compiling statistics and in gathering data, it is critically important that Stats SA continue to adhere to its legal mandate of being the key proprietor of statistical information in South Africa.

This means that in any statistical dispute, Stats SA’s version must be instructive, and that Stats SA will play a critical role in setting internationally acceptable measurements. The importance of this role, the legal mandate and the role of the Statistics Council set up in accordance with the Act, cannot be overestimated. It is therefore a welcome development that increased allocations focus on the role of the National Statistics Council. The role of the Statistics Council will be critical in ensuring the integrity and reliability of the data generated by the newly proposed national statistical system.

The hon Minister touched on a number of international challenges and I would like to briefly dwell on one or two of them. The National Treasury’s role in international debates, ranging from our involvement in the G20, the IMF, the World Bank and as the chair of the development committee of the bank as well as the new challenges under the auspices of Nepad’s development, all have resource implications for the National Treasury.

In a sense National Treasury is in a catch-22 situation, as it cannot increase its own budget exponentially without setting a bad precedent vis-à- vis other departments. However, as this work is of critical importance because it shapes many global debates and poses a tactical opportunity for our country, we need to critically interrogate whether it is being adequately resourced, and whether single individuals in the National Treasury are not carrying a disproportionate burden of responsibility and of requisite and concomitant workload. In relation to Nepad, South Africa’s National Treasury will have to play an advocacy role to ensure that the right signals are sent to ensure that under the auspices of Nepad, foreign direct investors find an attractive investment environment that prioritises rates of return.

There are a number of challenges in terms of credibility which Nepad at its implementation will have to confront, key among which will be sending the correct signals on governance, socioeconomic and political stability, the strength of the peer-review mechanism and popular support for this endeavour.

Where the National Treasury can, it must play a role, particularly in the economic structures and debates within Nepad around the critical confidence interface between politics and economics. This also means that at home we need to send investor-friendly signals. The Mineral and Petroleum Resources Development Bill, as well as the Electronic Communications Transactions Bill which was passed by the National Assembly on Friday, send the wrong signals in this regard.

For Nepad to succeed, we need to be consistent in sending positive signals to potential investors. The National Treasury therefore has an additional key role to play in this regard of acting as an advocate, under the auspices of Nepad, of what constitute both bad and good signals to investors, both domestically and under the broader auspices of Nepad. [Applause.]

Ms S B NQODI: Chairperson and hon members, I also rise this afternoon on behalf of the ANC to support the Budget Vote under consideration. My input in the debate will focus on the functions, achievements and challenges facing the National Treasury. The aim of the National Treasury is to promote economic development, good governance, social progress and rising living standards through the accountable, economic, efficient, equitable and sustainable management of public funds.

The National Treasury’s legislative mandate, which is found in the Constitution, the Public Finance Management Act and several other Acts of Parliament, puts it at the centre of the promotion and co-ordination of the national Government’s fiscal and microeconomic policy framework.

Because of this constitutional responsibility, it has to exercise control over the implementation of the annual national budget, and also facilitate the implementation of the annual Division of Revenue Act. Over and above all this, amongst other things, it has to monitor the implementation of the provincial budgets, and promote and enforce transparency and effective management in respect of revenue, expenditure, assets and liabilities of departments, public entities and constitutional institutions.

Against the background of the fiscal consolidation that has been achieved over the past five years, the key problems facing South Africa remain the pervasive poverty and the inequality generated by the past apartheid regime. Statistics reveal that according to the UN Development Programme 200, South Africa is the third most unequal society in the world. About half of all South Africans, some 18 million, live in households that earned less than R350 per month in the mid-1990s. Regions that include the former homeland areas such as the Eastern Cape, that we so often hear about in this House, account for over two thirds of all poor households in South Africa. Hence, despite all the exhaustive and meaningful efforts by provincial governments under whose jurisdiction these areas fall, no noteworthy progress can be seen.

From these observations, therefore, it can be seen that South Africa faces a classical poverty trap, and this department, as a policy-oriented department and as the custodian of the nation’s finances, has to try to find ways and means of escaping from this poverty trap. Our achievements in the first five years of our democratic Government have placed our public finances and economy on a sound footing. This was due to a concerted effort of these departments, other national departments and the other two spheres of government, namely provincial and local government structures. This is highly applauded. We have to maintain the momentum.

However, more than anything else, the biggest challenge facing us is to filter down the benefits of these achievements so that the men and women on the street can begin to see the changes in their lives due to the multiplier effects of our new budget reforms and the macroeconomic strategy which, as we have been informed in the Medium-term Budget Policy Statement, is committed to poverty eradication, infrastructure development, job creation, skills development and so on.

Without constant monitoring and enforcement for compliance by other departments, at both national and provincial government levels, and also by the newly established municipal councils, the effects of our sound and stable macro and fiscal policies will remain to be seen by our electorate. I say this because, as we have heard from the speeches of the members of the social development cluster, corruption is still rife in the management of public finances in our Government.

Fortunately, however, Government has managed to put in place anti- corruption measures and instruments, and this department, in particular, has to see to it that they are implemented. It is hoped that much more effort and funds will be allocated for capacity-building programmes and workshops, especially on money Bills and the envisaged municipal finance Bill for local government structures, in particular.

It was encouraging to hear from the National Treasury’s Budget presentation that they have started working on the restructuring of the State Tender Board office, which is to be substituted by a common service provider which will be a standard-setting and monitoring institution responsible for data collection at all levels of different departments and provinces. Hopefully, this will help to eliminate all forms of corruption in the Government’s tender or procurement process.

Given the scope and complexity of the mandate of the National Treasury, it is clear that this department can only succeed in carrying out its duties if it is well resourced, not only in terms of finances, but also in terms of capacity and human resources. Most of the workload of this department is highly technical and professional by nature. It demands a cadre of highly skilled and qualified professionals who will be able to help, advise and contribute good policy initiatives and properly plan, control and manage our public finances in all the departments, provinces and local government structures. Unfortunately, we are very underresourced when it comes to this calibre of employees.

Apartheid left South Africa with both lower skills levels than most economies at a similar level of productivity, and with a racially skewed qualifications profile. In these circumstances skills development, through both basic education and the provision of training and qualification for adults, is crucial for economic growth, equity and employment creation. Because of this, I would like to plead with the department to seriously consider the impact of global competitiveness when it comes to the salary packages and benefits of these public servants, otherwise we are facing the risk of losing them to the higher bidders internationally, as is happening already.

On the other hand, I would also plead with the department to offer more bursaries, especially to the previously disadvantaged people in our society who were deliberately denied access to some career paths by the Bantu education system under the previous regime. A recruitment strategy that will mobilise students from the rural provinces as well needs to be developed. Surely, this will contribute a lot to proper financial management in Government as a whole.

In conclusion, one of the most fundamental concerns in our economy, seven years down the line of our newly found democracy, is the fact that black people remain excluded from the financial and economic resources of this country, not only because they do not have money, skills or education, but because of the continuous discriminatory policies and barriers to access to credit by the white-owned and -managed financial institutions.

This selfish and deliberate economic disempowerment of the people in our country is morally unacceptable, because inequality negatively impacts on our ability to attract investment and to grow the economy. One of the challenges, therefore, facing this department is to translate words into action when it comes to the promotion of black economic empowerment and SMMEs. This should and must remain a noncompromising issue when it comes to the transformation of the economy. It should be prioritised in our macroeconomic reform strategy which targets the advancement and development of our people as a whole.

We all know that one of the features of apartheid was the systematic exclusion of blacks from wealth creation. The low rates of economic growth so far have resulted in development backlogs, rising levels of unemployment and poverty. These, combined with the processes of globalisation, which favour those who already possess capital and skills, leave our people in a worse-off situation. I want to appeal to this department to accelerate the pace of promoting and capacitating SMMEs and black economic consortia through the implementation of the policy on the restructuring of state- owned enterprises as is already happening in the telecommunication industry. [Time expired.]

Mr H J BEKKER: Chairperson, my speech will follow some of the content of the hon Taljaard’s speech. The major difference, however, would be that she sees the proverbial bottle as half empty while I see it as half full.

At the beginning of this year, South Africa’s economic outlook was indeed fairly bleak. The rand had tumbled against the currencies of our major trading partners, the inflation rate had shot up and increases in the interest rate were announced. Consumers bore the brunt of the downturn as food and petrol prices skyrocketed, and the cost of borrowing became virtually unaffordable. Most analysts adjusted their economic growth predictions downwards, and industry had little hope for job creation and increased output.

But just to illustrate the vagaries of modern economic life, the outlook has suddenly become much more positive over the past few weeks. The rand has almost made up all of its lost value and continues to strengthen. This has, of course, had a positive impact on the petrol price and the cost of other imported commodities. The Government, the private sector, as well as consumers must be congratulated for the continuing improvement in the value of the rand.

In the past week or so, the gold price has also surged to new heights, while the international price of platinum is at an all- time high.

Gold and platinum exports play a vital role in the economy of our country. The higher prices will, no doubt, add to our foreign exchange reserves and will enable the industry to preserve jobs and make new capital investments.

The upshot of the recent positive economic indicators is that we can hopefully expect increased prosperity and even a growth rate of three to four per cent in the next annual financial cycle.

The IFP wants to remind the Minister and Government that improved economic growth is the best catalyst for job creation and for fighting poverty. The IFP also wants to express its hope that the improved economic outlook will have a positive effect on the rate of inflation, and that an interest rate increase can be avoided.

At this point, we want to remind the Reserve Bank Governor, Mr Tito Mboweni, that an interest rate increase could undo all the recent economic improvements. The IFP understands the reasoning behind raising the Reserve Bank’s repo rate, and thereby increasing interest rates on the volatile short-term money markets. There are often sound economic reasons for doing so, but what we cannot understand is why the long-term lenders and particularly borrowers with mortgage bonds have to be punished at the same time. The unruly speculators and our hard-pressed homeowners are being painted with the same brush. Surely that is unfair?

I believe that it is possible to differentiate between long-term interest rates, and short to medium-term factors. I stress again: Why must the innocent homeowners or long-term lenders be punished because of the misbehaviour and the speculative nature of the short-term lenders and money market speculators?

In a previous debate, I have said that if Government is unable to find an administrative method of separating long-term interest factors from the short-term money factors, I believe there are other ways to accomplish this. One possible way would be for the Government to subsidise long-term housing by the equivalent of the relevant rate increase. Should the cost factor be too high for Government, then the increased portion of the interest rate on the short-term factors could be treated as a penalty or form of taxation in order to supply the necessary funding for the required subsidisation of long-term bonds. This can be done by a penalty against short-term lenders and speculators who are really the cause of our problems.

My worry is that we are sending the wrong message to business developers and entrepreneurs when we increase interest rates. They still very clearly remember that, a few years ago, interest rates escalated to more than 20%, with devastating effect on their capital repayments. They had no chance of competing with American, European and Japanese companies with a comparative interest rate of below 6%, and almost zero devaluation in their currency value.

The tendency during 2001 of lowering interest rates gave them a respite, and they were excited by that. One could have seen already the increase in business activity, but then they were devastated again by the repo rate increases since January 2002.

Business and long-term borrowers’ greatest worry is that their long-term capital commitments would be negatively affected by another spate of interest rate increases. This would have a devastating effect on their confidence, new business development, and job creation and preservation. South Africa simply cannot afford such economic negativity, and the IFP therefore calls on the Governor of the Reserve Bank to very carefully weigh up all the factors before increasing the repo rate.

I think we all recognise that the national Treasury, under the guidance of the Minister of Finance, laid the basis for sound management of the fiscus four years ago. The Minister established priorities and has since then relentlessly pursued the fulfilment of these priorities. He has brought us from the edge of the debt abyss to a situation where our national debt is more under control than that of a number of developed countries. Our budget deficit has become increasingly modest, and we are making some progress with an annual reduction of the national debt. This has led to a fall in the percentage of our annual budget having to be used for servicing the debt, which means there is more funding available to take the country forward. The Minister is holding his course on these important matters, and we can only salute him for doing so at this time of the year.

The National Treasury and the Minister of course have their detractors. There are those who believe the inflation rate and the budget deficit targets that the Minister subscribes to are a disadvantage to the economy on the one hand, and on the other hand to the poor. There is no doubt that theoretically they have a point, but in the bigger scheme of things we support the longer-term goals of the Minister, which we see as ultimately achieving more to help the lot of the poor.

One concern we have is that a number of the Minister’s more significant achievements, such as a reduction of marginal tax rates, increases in social spending, the creation of various funds, and indeed the shrinking budget deficit, were to a significant degree made possible only through the exceptional performance of the SA Revenue Service over the past four or five years. The exceptional performance of the Sars must be applauded, but there must come a time when the efficiency gains and tax broadening exercises have been taken as far as they can go, and when there will no longer be higher- than-inflation revenue targets in the budget, and annual revenue collection overruns on top of that. If our economy is not yet on a strong 5% plus growth path, when that time comes we might find ourselves facing some very painful spending constraints.

The Minister is obviously a man who sees the bigger picture and who takes the lead in providing his department with clear direction. What most sets him apart from many of his colleagues in Cabinet, is his ability to surround himself with the right people. The very accomplished Director- General aside, each of the National Treasury’s eight budget programmes are headed by bright, talented and committed individuals who continually push the boundaries of their performance.

Another feature of the National Treasury which elevates it above most other departments, is that its activities and associated attitudes authenticate the vision, the mission and the values it espouses in its strategic plan. These are more than just wonderfully worded intentions.

The Vote before us reflects the reorganised department and its eight definable areas of activity. Of particular interest to the IFP are those programmes which take management of the state’s finances and assets forward. Much of this falls under Programme 4: Procurement Management, Financial Systems and PFMA Implementation and Co-ordination.

We recall the Minister in his budget speech earlier this year stating that the management of public finances would move higher up his department’s agenda in the current year. Well, true to his word, we now have the Municipal Finance Management Bill before parliamentary committees, and we see in the Estimates of Expenditure the National Treasury’s current activities regarding the ongoing implementation of the PFMA and the development of a new set of procurement regulations.

Regarding the PFMA implementation, we must compliment the Treasury on the success they have had with keeping to the implementation programme they produced two years ago for this most difficult process, which involves the introduction of very different and often very technical arrangements right across all national and provincial government institutions. This progress is all the more noteworthy when we think of how much legislation passed by this House is never fully or properly implemented.

The acceleration and accreditation of teaching institutions through the IPFA has not been well thought through and is going to disappoint. The criteria for accreditation are vague at best, and there appears to be no quality check of what the institutions are really teaching. Hundreds of thousands of taxpayers’ rands are being given to some very obscure training bodies.

Moving to the long-awaited procurement regulations, when we consider that a considerable portion of our approximately R300 billion budget is to be spent in accordance with these new modernised PFMA-aligned regulations, we would have hoped for greater urgency in their production.

By all accounts, the pilot projects which recently experimented with devolving tendering and procurement arrangements to certain departments were very useful. It is therefore hoped that the Treasury will soon find itself in a position to finalise the development of these regulations.

Notwithstanding our concerns, the IFP will support the Budget Vote of the National Treasury.

Mrs R R JOEMAT: Chairperson, hon members, speeches heard in this House on the various Votes clearly show that we are on track to direct our income to those who are most vulnerable, the poor. We must and will continue to push for more resources for the poor.

The majority of members in this House drive to the airport on the N2. On our way, we see in the Langa and Guguletu areas that there are still communities living in squatter conditions. These types of living conditions are also prevalent in other provinces, especially in the rural areas. Therefore, the Government’s response, both to the increase in joblessness and insufficient economic growth, is very clear. We are delighted to see the many targeted programmes laid out by our departments to alleviate poverty and to grow a sustainable economy. This approach is also reflected both in the Budget and in the President’s speeches.

Our departments outlined their strategic plans for the years 2002-05 in glossy brochures, but if the revenue is not forthcoming, then they will not be worth the paper they are printed on and we would fail the nation and the African continent. What I am saying is that successful revenue collection is the pivotal driving force behind any country’s economy. A weak revenue base will produce a weak country with poverty and deprivation, and that will erode our work as Government.

The National Treasury Vote comprises eight programmes. I will deal with the SA Revenue Service in this Vote which falls under Programme 8 - Fiscal Transfers. Fiscal transfers make funds available to public authorities and our institutions. The SA Revenue Service is one of the domestic public authorities that receive funds from this Vote.

The SA Revenue Service employees, under the leadership of the Commissioner, Mr Pravin Gordhan, have continued to make significant progress in enhancing the administrative capacity of the Sars in order to make it a world-class tax and customs administration that is capable and effectively responds to the challenges of globalisation. The result is that tax collections in 2001- 02 have exceeded the original budget estimate.

In 2002, the Sars implemented its most expansive transformation programme to date, Siyakha, that will improve operational efficiency and meet the needs of all taxpayers. The roll-out of the Siyakha programme will continue during this year. This underpins efforts by the Sars to consistently exceed collection targets, improve border controls and facilitate international trade.

An article in Business Times carried the heading: ``Tax dodgers beware’’. Well, they must beware, because the new Sars system, as well as our new database software capability, strengthens the fight against tax dodgers. The Receiver of Revenue is set to become more effective in rooting out tax dodgers with the implementation of the database software that will speed up the organisation’s investigations into the risky behaviour of those who do not comply.

The Geographic Information System will enable the Sars to integrate different databases such as those of car registrations and of the Deeds Office into one programme.

The capability to search public databases allows the Sars to identify people who warrant deeper investigation. For example, a person who declares an individual income of R80 000 per annum, yet owns six cars and a property valued at R2 million, would obviously be a candidate for investigation.

The Sars will also investigate unintentional tax dodgers. These include persons who fail to submit income tax returns, fail to pay VAT or PAYE or submit fraudulent VAT or PAYE returns. This type of accounting network will enable the Sars to track taxpayers and tax dodgers.

The Sars cannot only depend on its approximately 12 000 employees. There are other important sources to support our operations. Firstly, the public is an important source. For example, for disgruntled former spouses, partners or business partners, a phone call to the hotline of the Sars may just be the right thing to do.

Public assistance is important; therefore, even if political parties such as the DP/DA receive large amounts as donations from dubious sources, the first thing that should be asked is: Is Mr Harksen in good standing with the Sars? But no, they do not ask these questions, or are they too busy trying to hide their sources? [Interjections.] Now they are not sure who knew and who accepted the donation or what the amount was. [Interjections.]

Secondly, the media are also an important source of information. There can be a story about an individual who has defrauded a company or was successful in being awarded a large tender. The Sars will then check if the company or the individual is in good standing with the Receiver.

Thirdly, it should be an automatic moral and patriotic responsibility to pay our taxes. If one loves one’s country, wants transformation to succeed and one wants to see the eradication of poverty, one pays and does not dodge tax. The most important point here is that it is everybody’s moral responsibility, as part of a democratic South Africa, to be in good standing with the Sars. In this area we would want to further educate the nation about such values. Members of Parliament can also assist the Sars by encouraging and educating people in their constituencies to register. Some MPs can recall that as children we played ``cowboys and crooks’’. Some of us will not remember because it was many years ago. In this game it was not acceptable to be the crook because one lost out. Therefore we appeal to the revenue crooks: they should not get shot down by the Sars. They must come forward and be heroes of the people, and give the revenue that is due.

The budget for the Sars for 2002-03 is R3,417 million, compared to the amount collected in the previous financial year, 2001-02, of R249,3 billion in total revenue, and the total expenditure incurred, which amounted to R2,863 million, 1,15% of total revenue collected. That is very profitable. If one’s expenditure is only 1,15% of one’s income, that is good business.

Vote 8 is definitely supported by the ANC. [Applause.]

An HON MEMBER: ``Malibongwe!’’ [Praise!] [Laughter.]

The DEPUTY MINISTER OF FINANCE: Chairperson, I am really honoured today if, when I am about to speak, the women say: ``Malibongwe’’.[Praise!] [Laughter.] [Interjections.]

The year that has passed has been one of the most momentous. Apart from the dramatic events of September 11, the world has suffered a series of spectacular corporate failures, not just in the United States. It has been proven once again that ``credit-addicted’’ countries such as Argentina are not immune from bankruptcy, and all emerging markets have experienced some degree of instability.

Here in South Africa we are quietly optimistic. Despite the sudden depreciation in the value of the rand late last year, and global market instability, our economy has managed to move from strength to strength. Our currency has shown resilience beyond anyone’s expectations. Our capital markets have remained stable and robust throughout, and we have managed to keep the interest rate from dampening our collective spirit. Business confidence has recently shown a marked increase, which bodes well for our economic future.

This is possibly the best time to reflect on the progress made since the last budget. Firstly, I would like to start by referring to developments that have taken place in our financial markets. The link-up between the JSE and the London Stock Exchange is on everyone’s mind in the financial world. A common trading system for both exchanges, which are located in the same time zone, is a significant development.

There are so many options and possibilities to be explored and developed through the sharing of technology. The transaction is a first for the London Stock Exchange, and they have indicated that they will apply their experiences gained from the JSE venture to similar arrangements with other exchanges. Other exchanges have also followed the developments with keen interest.

This is a very important moment for us, but we would also like to alert hon members to a perhaps less publicised, but equally important event that took place this year: The dematerialisation'' of share certificates, which means putting all paper share certificates in the shredder, and creating electronicshare certificates’’ instead. The process of dematerialisation began in 1998 with legislation to create South Africa’s first Central Securities Depository and ended just a couple of months ago. The objective of dematerialisation is to reduce the risk of theft, and the cost and time delays of exchanging vast amounts of paper. Trading in South African equities has just become significantly less risky, a lot more cost effective, and now we are in a position to move towards compliance with the very last international standards we have yet to comply with, namely settlement in three days after trade, or the so-called T+3.

Looking ahead, we are pleased to state that the Financial Services Board, in conjunction with the Treasury, has developed two new Bills, namely the Collective Investment Schemes Control Bill and the Security Services Bill. The latter Bill does not relate to the security forces, but to financial instruments. The state law adviser is currently certifying the Collective Investment Schemes Control Bill.

The Security Services Bill will be tabled in Parliament within the coming months and should be ready for promulgation by the end of this year. It will arguably be the most important piece of financial services legislation on the portfolio committee’s agenda for the coming half year, because it not only consolidates and codifies five pieces of existing legislation into one Act; it also represents a whole new, or modern, policy approach to the institutional structure of our financial markets.

The Bill also makes provision for an exchange to demutualise and for the Financial Services Board to assume any responsibility that is currently within the domain of an exchange, for example the regulation of listings.

Moving on to the other side of the spectrum, the process of protecting and educating the users of financial services: for the consumers, pensioners, workers, policy-holders and investors, this year has been one of concern, but also reason to rejoice.

Perhaps I should start with the reason to rejoice. We have almost finalised South Africa’s first piece of legislation to regulate the conduct of financial advisers and intermediaries, the Financial Advisory and Intermediary Services Bill. I am pleased to state to the House that the regulatory impasse experienced in relation to this Bill is hopefully over, and that it is anticipated that it will be on the agenda of the Portfolio Committee on Finance for its formal consideration and adoption.

Preparations for the enactment of the Bill have largely given impetus to the establishment of a new division within the Financial Services Board to deal with consumer education and the conduct of financial service providers, intermediaries and advisers. This step is testimony to our supervisory commitment to ensuring that consumers are not vulnerable to unscrupulous brokers chasing commission at the expense of their clients’ financial needs.

There are numerous other legislative initiatives still in the pipeline, for example, the Financial Services Ombuds Schemes Bill, which provides for the creation of ombuds for each category of financial services to provide recourse for aggrieved consumers. The implementation of the Bill is anticipated after the enactment of the Financial Advisory and Intermediary Services Bill.

Protecting consumers through education and the regulation of the conduct of intermediaries and advisers is one approach to ensuring that people do not lose their money unnecessarily.

The other side of the equation is good corporate governance and the integrity of the auditing and accounting professions. Whilst we have concerns, we want to be constructive about the problems in the auditing and accounting professions.

It is no secret that globally the accounting and auditing professions are in the throes of a profound crisis. Confidence has been shattered and, to quote from a recent statement by Prof Arnold Schilder, the executive director of the Netherlands Bank and chairman of the Basel committee’s accounting task force:

Enron has seriously shaken our confidence. This is a grave matter, because it means confidence has weakened in rules and regulations, in supervisory authorities and in the functioning of the financial system in general.

The biggest shock is that no warnings were issued - and yet it happened. So the reputation of directors is at stake. The Enron executives are subject to public enquiries - but many other directors outside Enron suddenly face greater scepticism about their assurances. The slightest unclarity about financial statements may cause considerable confusion. Because it is no longer taken for granted that they can be trusted. As Government, we must be seen to act in the public interest, meaning in the interests of end users - depositors, policy holders, small investors and workers. There is a need for a more disciplined and realistic information feed to the public, which is the heart of the matter. Michael Groom, head of the Institute of Chartered Accountants in England and Wales, recently stated that the objective of any reform should be to ``ensure high quality audit, strengthen accounting standards and codes of ethics and to introduce credible independent oversight - this is what defines commitment to the public interest’’.

There are two Bills that are Government’s primary tools for addressing the problems in the profession, namely the Financial Reporting Bill and the Accounting Professions Bill. While the Accounting Professions Bill has been in the pipeline for a long time, the time is right for us to expedite the process of finalising the Bill so that it reflects a well thought-out response to the current problems facing the auditing and accounting professions.

In a speech to Saica at the beginning of May 2002, the Minister of Finance highlighted the main policy issues Government is concerned about that relate to the auditing and accounting professions. These issues require resolution before we can finalise the Accounting Professions Bill. The issues to be dealt with within the ambit of the Financial Reporting Bill are also matters that we are going to be giving consideration to.

On the Financial Intelligence Centre, hon members will recall that the centre was established through the Financial Intelligence Centre Act of 2001 to counter money-laundering activities in our financial system. The implementation process is under way and consultations have been held with the affected industry bodies on the regulations and other issues.

Government remains steadfast in its resolve to take appropriate steps to ensure that our financial system is secure, efficient and consumer friendly. Honesty and market integrity in our financial system are undermined by efforts to launder money through our banks, brokers, insurers and so on.

It is worth restating that the Financial Intelligence Centre Act introduces a comprehensive anti-money laundering regime in the Republic of South Africa which satisfies the major Financial Action Task Force recommendations. This task force, which is the de facto international coordinating body responsible for combating money laundering, consists of 29 member countries and two regional bodies. This task force has developed a set of recommendations which sets out the principles of the body and acts as a global standard for the combating of money laundering and of the financing of terrorism. These recommendations have become known as the FATF 40+8 recommendations.

Cabinet has given approval for South Africa to take its rightful place as a member of the Eastern and Southern Africa Anti-Money Laundering Group, which membership is important for South Africa for a number of related reasons. Firstly, while Government has demonstrated that it is committed to combating organised crime and money laundering by passing the Prevention of Organised Crime Act and the Financial Intelligence Centre Act, we have to be fully compliant with the FATF requirements, and to gain international acceptance for our anti-money laundering stance, it is necessary to become a member of the Eastern and Southern Africa Anti-Money Laundering Group.

Membership of such regional bodies is a requirement for membership of the Financial Action Task Force, should South Africa wish to take up such membership. South Africa’s membership will also further strengthen its anti- money laundering mechanisms and it will give the Financial Intelligence Centre easier access to other financial intelligence units on a continuous basis, thereby enabling it to share information and expertise.

Since our last report, we have passed the Pension Funds Second Amendment Act of 2001 which concerns the apportionment of actuarially determined surpluses and minimum benefits in private pension funds. The National Treasury and the Financial Services Board are focused on the implementation issues surrounding the Act, and on ensuring that the Act in its present form is given practical effect through a process of speedy implementation. This is required in order that the Act may live up to its promise of equitably apportioning and distributing the surplus in pension funds to those entitled by the Act to receive them. Accordingly, the necessary regulations to effect many of the provisions of this Act are in the process of completion.

However, I would like to say that we are not going to allow any of the stakeholders to use this process to win issues that were lost or unresolved during the lengthy negotiations. We will proceed with implementation and draw lessons from practical implementation and experience. These will help to guide our actions.

I see that my time is running out. One of the last issues I was going to talk about is the issue of the reform of our procurement system. We have conducted a joint country procurement assessment review together with the World Bank, which has released its first draft report and whose recommendations are being considered at the moment. Based on the findings and recommendations in the draft report, current work in the Treasury is focused on the following areas: firstly, enhancing the uniformity in procurement practices in all organs of state; secondly, promoting uniformity in interpreting Government’s preferential procurement policy; and thirdly, refining current regulations to the Preferential Procurement Policy Framework Act. These are some of the areas where we will be doing further work. [Time expired.] [Applause.]

Dr P J RABIE: Mr Chairman, hon Minister, hon Deputy Minister, hon members, Statistics South Africa is one of the key Government departments which is tasked to collect, process, analyse and implement empirical statistics - crucial prerequisites for sustained socioeconomic development and the promotion of democracy.

A modern sophisticated economy such as South Africa depends upon vital official empirical statistics in various respects. Regular surveys of information are essential to compile indices such as the producer price index, the consumer price index, trends in employment, and business and investor confidence.

South Africa is also one of the few countries that conduct a five-yearly population census which provides demographic, social and economic data. The Portfolio Committee on Finance paid a very informative visit to Stats SA in Pretoria. It is important to mention that a number of noteworthy programmes will enhance the statistical capacity of Government and will be implemented over the next three years.

According to the strategic plan for 2002-03 to 2004-05, 50 000 public servants require some training in information management and statistics, which in itself is a very daunting task. At present, Stats SA is busy modernising the management system for statistical information. Technology is also being developed to use scanners to process all Census 2001 questionnaires.

It is also in the national interest that a globally competitive national statistics system be developed in order to meet user needs. We are part and parcel of a global economic village. A competitive edge can only be attained if a sound representative database is accessible to all the respective role-players.

The SA Revenue Service operates in a dual economy, namely a formal and an informal economy. There are a number of structural constraints. Only about 6 million individual people can be categorised as taxpayers. According to the labour force survey for 2001, 16,3 million people can be categorised as economically active. What is cause for concern, however, is that less than 45% of the formal sector contribute tax to the fiscus.

Regrettably, we find a low tax morality amongst some members of our society. This phenomenon can be attributed to a legacy of a pervasive culture of noncompliance. A distinction between tax avoidance through legitimate means, which enables taxpayers to pay only what is due under the law, and tax evasion must be made. Tax evasion constitutes a crime under common law and is not acceptable.

Allow me to congratulate the hon the Minister and the DG on the Siyakha transformation programme. The portfolio committee conducted an on-site inspection in Durban, where we saw how the Siyakha transformation programme optimised staff performance.

Een van die rigtinggewende kenmerke van die 2002-03 Begroting was dat persoonlike belastingkorting vir alle inkomstegroepe aangekondig is. Hierdie positiewe verwikkeling kon plaasvind omdat daar ‘n beter verhaling van belastingopgawes plaasgevind het. In hierdie verband moet vermeld word dat die beoogde teikenbelastinginkomste van R12,6 miljard oorskry is met R13,2 miljard. Hierdie verwikkeling is prysenswaardig.

Een van die sleutelvereistes vir volhoubare ekonomiese groei is ‘n regverdige verbruikersvriendelike stelsel van belastingheffing. Suid-Afrika is ‘n ontwikkelende ekonomie wat moet meeding betreffende internasionale belegging. Die skakelwerk wat die inkomstediens en die media raak en belastingsgeletterdheid, inkomstebelasting, voorwaardelike en residensiegebaseerde belasting inisieer is belangrik, in die sin dat die belastingbasis verbreed en ‘n kultuur van pro-belastinggerigtheid geskep word.

Die toepassing van ‘n breë verskeidenheid tegniese belasting is ‘n komplekse aangeleentheid. Internasionale belastingooreenkomste is vandag aan die orde van die dag, binne en buite die SAOG-handelsgemeenskap. ‘n Belangrike vraag wat egter gevra moet word, is of belastingtoegewings vir sekere periodes vir voornemende beleggers in lande soos Mauritius en Namibië, vergelykbaar is met belastingtoegewings in die grootste handelsland in Suider-Afrika, of word voornemende beleggers nie ‘n onregverdige, mededingende voordeel deur die voorafgenoemde lande verskaf nie?

Vergun my die geleentheid om te versoek dat die in van en die betaling van belasting, en die insamel van statistiek wat in almal se belang is en onaanvegbare sosio-ekonomiese statistiese beginsels is, nie vir korttermyn politieke gewin in dié verband gebruik word nie. (Translation of Afrikaans paragraphs follows.)

[One of the directive characteristics of the 2002-03 Budget was that personal tax rebates for all income groups were announced. This positive development could take place because there was an improved recovery of tax returns. In this regard it must be mentioned that the envisaged target tax revenue of R12,6 billion was exceeded by R13,2 billion. This development is praiseworthy.

One of the key prerequisites for sustainable economic growth is a fair, consumer-friendly system of taxation. South Africa is a developing economy which has to compete with regard to international investment. The liaison work which affects the revenue service and the media and which initiates tax literacy, income tax, provisional and residence-based tax, is important, in that the tax base is extended and a culture of pro-taxation is created.

The implementation of a broad variety of technical taxes is a complex matter. Today international tax agreements are the order of the day, within and outside of the SADC trade community. However, an important question which must be asked, is whether tax concessions for certain periods for prospective investors in countries like Mauritius and Namibia are comparable with tax concessions in the biggest trade country in Southern Africa, or are prospective investors not being given an unfair competitive advantage by the aforementioned countries?

Allow me to request that the collection and payment of tax and the gathering of statistics, which is in everyone’s interests and are indisputable socioeconomic statistic principles, not be used for short-term political gain in this regard.]

In conclusion, allow me to appeal to the National Treasury, and to the Minister in particular, to investigate section 78 of Act 55 of 1962 in order to grant amnesty to persons who have removed funds from South Africa in an unlawful manner, to legitimise the assets they currently hold abroad. We have had a number of different amnesties in South Africa recently. An exchange control amnesty will encourage those citizens who have unlawfully removed funds from South Africa to legitimise funds and to disclose incomes derived from such funds. I am of the opinion that this will be in the interests of South Africa. [Time expired.] [Applause.]

Mr F C FANKOMO: Mr Chairperson, hon Minister and hon Deputy Minister, hon members, our Constitution lays down a framework for the division of responsibility between national, provincial and local government. Hence, it prescribes an equitable division of revenue between these three spheres of government.

Since 1994, several major reforms have been undertaken of the structure and organisation of South African public finance. South Africa has introduced a three-year medium-term expenditure framework to allow more transparency and certainty with regard to the budget process, as well as strengthening the links between policy priorities and Government’s long-term plans. The seriousness of the Government was seen in the appointment of an independent entity to play a role in reviewing, advising and making recommendations regarding intergovernmental financial relations.

The Government has prioritised its spending to deliver services more equitably and address infrastructure backlogs at provincial and local government levels. For this to take place, the Government has established a public entity in terms of section 220 of the Constitution and of the Financial and Fiscal Commission Act, Act 99 of 1997. This commission does not generate funds, but is funded by way of a transfer payment from the National Treasury. The duties and responsibilities of the commission are to advise and make recommendations on financial and fiscal matters to Parliament, the provincial legislatures and any other Government institution, where necessary. Thus, the advice concerns issues such as fiscal policies and allocations for all spheres of government, taxes which provinces intend to impose and borrowing by local government.

According to the Constitution, the division of revenue, as set out in section 214, provides for the equitable distribution of revenue raised nationally among national, provincial and local government to ensure that provinces and municipalities are able to provide basic services and perform the functions allocated to them.

During the period 2000 to 2001 the SA Revenue Service has made significant progress in enhancing its administrative capacity and overcoming problems of tax collection. It is estimated that tax collected during this period exceeds the original budgeted estimate by 1,4%. This is attributed to the improvement in revenue collection.

Other achievements are the implementation of a new trade agreement, a successful campaign against tax fraud in the retail industry, and a merger in the internal restructuring programme, Siyakha. This project was piloted in KwaZulu-Natal to ensure improved services for compliant taxpayers and a crackdown on tax evaders.

The Division of Revenue Bill focuses on the broad policy priorities of the Government, with the emphasis on public spending and the reduction of poverty to alleviate inequality and vulnerability. Thus, there is a strong increase in the equitable share allocation to both provinces and municipalities, recognising their critical role in the development of social development, basic household services and infrastructure.

The Government is committed to the rebuilding of local government and meeting commitments to ensure that free basic service delivery remains the key objective, with municipal infrastructure financing receiving a substantial increase in the allocation over the next three years.

The ANC-led Government further takes the necessary steps to improve financial management capacity, accountability and improvement of the quality of public service delivery across all spheres of government. During this period, a real growth in Government spending of 1,4% took place. Positive real growth in all three spheres of government will take place. The national allocation increased to R6,6 billion in the year 2002-03.

Whilst the provincial allocation share increased from R5,3 billion to R7 billion, the local government share increased from R1,6 million to R2,4 million over the same period. During the past financial year, provinces showed a remarkable improvement in provincial financial management and spending on social infrastructure. This is the result of the recommendation by the Office of the Auditor-General that the department should receive strong support to endeavour to improve financial management measures. The national share remains stable, from 40,6% of the national collection revenue after the top slice of the year 2001-02, to 40,5% in 2004-05, whilst the provincial share over the medium-term expenditure framework grows by 7,9% per year. There is a decrease in the provincial share for the 2002-03 financial year from 56,4% to 55,8%, partially because of the once- off R2 billion for the social security grant administered by the National Treasury that is being phased out.

However, there are two changes that have been made in the equitable share formula. Firstly, there is an increase in the weight of welfare by 1%, at a cost of economic weight, to take into account welfare spending in provincial budgeting. Secondly, the educational enrolment data have been updated, as per FFC and Government recommendations. Here are seven components of the equitable share: The education share is 41%; health care, 19%; social security, 18%; basic share, 7%; backlog component, 3%; economic component, 7%; and institutional component, 5%.

Comparing the 2001 actual spending share to the equitable share formula, one notes that the education share is 2% less than the formula, while the health care share is 5% more than the formula. The social security share is 1% more than the formula. However, local government, due to its movement to stability in 2002-03, has shown the fastest growth in allocation from the pool of the national collection revenue. Thus the 2% of the budget share of 2001-02 has been doubled in the 2002-03 division of revenue.

Regarding local economic development and poverty alleviation, the Minister for Provincial and Local Government, Mr Sydney Mufamadi … [Time expired.] [Applause.]

Dr G W KOORNHOF: Mr Chairperson, hon members, the nearly R10 billion appropriated for the National Treasury represents one of the highest appropriations in the national Government. The budget of the National Treasury also includes the very important transfers to local and provincial government, as well as fiscal transfers.

It is, therefore, an honour and privilege for me to participate in this debate today. My congratulations go to the Minister and the Deputy Minister of Finance, the Director-General of the National Treasury and the department for the comprehensive documentation that accompanied this Budget Vote.

One of the key objectives of the National Treasury is to promote economic growth. The problem is that our current economic policies do not promote economic growth which stimulates job creation. As a matter of fact, it promotes jobless economic growth. The most recent GDP figures highlight a structural change towards a more services- and export-orientated economy. This change will not deliver enough jobs to cut into the huge pool of unskilled labour.

We have no alternative but to design programmes to absorb unskilled labour. In this regard the Government has a crucial role to play by intervening in a responsible way in the economy. This state intervention can best be brought about by the creation of infrastructure delivery initiatives.

What we need is planned sustainable development programmes that create jobs on a large scale whilst developing and maintaining infrastructure for the whole of South Africa. Such a new infrastructure delivery programme is so important for South Africa that a presidential council should be established to co-ordinate its development.

A second key objective of the National Treasury is financial accounting and reporting, which sets Government accounting policy and standards. Related to this aspect - and the hon the Deputy Minister has referred to this - is the fact that the audit profession has lately been under intense scrutiny.

The recent collapse of the US energy giant Enron, together with the alleged role of the auditing firm Arthur Andersen in this affair, has rattled the confidence in the financial systems of the world, even more so than the events of 11 September 2001.

In South Africa we have also experienced collapses in the form of Masterbond, Regal, Leisurenet and Macmed in which large auditing firms were allegedly implicated. It has left the auditing profession with a tarnished public image and some spiky issues to confront.

We know that a new accountancy profession Bill is being considered at the moment, and the other Bill that the Deputy Minister has referred to, although this Bill was finalised before the Enron catastrophe. My question is: What do we do until the Bill is approved? How do we actively manage the process in the interim, and how does the Minister propose to consult with all the stakeholders with regard to the updating of this Bill?

In conclusion, let me make a short remark about the SA Revenue Service and Statistics South Africa. On a recent Portfolio Committee on Finance visit to the Sars and Stats SA, we were highly impressed by the activities of this organisation, the Sars, especially their Woodmead office and the revamped Durban office. The manner in which the Sars has brought technology forward is commendable, as well as its efforts to establish tax morality.

All credit is due to the Commissioner of Revenue Services, Mr Pravin Gordhan and his team. We are really proud of them.

If there is one Vote that is underfunded for work that they are expected to produce, it is Stats SA. With a meagre budget of R272 million they are performing miracles. It is unthinkable that any policy of Government can be complete without being based on reliable statistics, be it labour statistics, social development statistics or mortality statistics. We are equally impressed with the statistical reports that are in the pipeline from that particular department. If there is one department that is in need of an increased budget, it is Stats SA. The Minister should lend them a responsive ear.

The UDM supports the Budget Vote on the National Treasury. [Applause.]

Mr B A MNGUNI: Mr Chairperson, Minister and colleagues, we cannot shy away from the fact that the Budget is a major tool to implement the policies and objectives of the political organisation in power, for the benefit of the electorate across the colour line and despite political persuasions.

In our fledgling and new democracy, we are unfortunately faced with the daunting task of allocating these scarce and valuable resources to the needy and the greedy equitably. The question arises: how can we successfully do this with the minimum hue and cry from those living in abject poverty, as well as those who control the means of production?

Looking at the National Treasury programmes and other Votes that have been debated thus far, it becomes evident that all departments are grappling with this question. Some departments can do this to the exaltation and applause of the population, and others are doing it with much vigour and determination to the deafening silence of the electorate.

The National Treasury is basically dealing with policy issues that very few in our constituencies can easily grasp, and they do not celebrate the victories that have been achieved by the department thus far, as there are few deliverables that can be seen by the ordinary man in the street. Cases in point are Programme 3: Asset and Liability Management, and Programme 5: Financial Accounting and Reporting, which affect every individual in the country, but not everyone knows and understands how these programmes have impacted on their lives and will continue making their lives better in the cities where they live, and in the remote areas less accessible due to a lack of infrastructure. The development and maintenance of this asset are key to economic growth and poverty alleviation. Therefore it is imperative for the department to ensure that reporting on additional funding for provincial infrastructure development is timeous and accurate from the provinces and local government structures, to enable the National Treasury to make the necessary interventions should problems arise. Likewise, the transfer of funds to other Government structures, reporting thereon and accounting thereof will be enhanced by the management information system known as Vulindlela.

The department is making an enormous contribution to the job creation strategy of Government as a whole. It further wants to ensure that small entrepreneurs are introduced into the mainstream economy through the Preferential Procurement Policy Framework Act, elaborated on by the Deputy Minister, and the general overhaul of the procurement system. The support given to SMME will go a long way in making an impact on the unemployment rate and increase the gross domestic product.

Today it is generally known by many that for the country to prosper economically, the informal business sector is a crucial ingredient. We do not only need this for economic growth, but to fight poverty and continue making the lives of the people better.

Juan Somavia said at the UN World Summit for Social Development in 1995, and I quote:

The unfinished business of the 21st century is the eradication of poverty.

As I mentioned earlier, different programmes of the department are trying to address this issue. In line with the ANC document on strategy and techniques of 1997, a public-private partnership has been set up in the department to develop expertise and synergy with other departments to fight the scourge of poverty. The same can be said about other organs within the department.

The SA Revenue Service is playing a major role in income distribution to the poorer sections of the population. The success of the Sars in revenue collection has already been highlighted. However, what the public should take note of is the impact the institution is making in changing the lives of the needy. Unfortunately, the greedy who are trying, by hook or by crook, to accumulate and consume their riches will feel the heat.

As much as there are structural problems within Stats SA, as highlighted by the chairperson, the work this institution is doing is really outstanding. As part of the departmental organ, it must support the overall objective of Government. It has recently embarked on the development of the national statistics system, referred to by the Deputy Minister as well, to enhance the capacity to formulate and evaluate policy decisions. The institution has already established a quality unit to improve collection and sampling techniques in order to ensure high quality of data to inform socioeconomic planning in South Africa.

We must be proud of Stats SA, as it is the only statistical institution on the continent that conducts a population census every five years. This ensures that planning and implementation of policy are based on updated and accurate data to minimise the error margin.

At its lekgotla on 20 to 21 November 2000, Stats SA adopted a programme called ``An agenda for change’’. Let us hope that that change will bring a better life for all South Africans wherever they live. In his book on economic development, Michael Togorato says, and I quote:

The basic issue, however, was and is not only how to make gross national product grow, but also who would make it grow, the few or the many. If it were the rich, it would most likely be appropriated by them and poverty and equality would continue to worsen. But if it were generated by the many, they would be its principle beneficiaries and the fruits of economic growth would be shared more evenly.

As we wholeheartedly support this Vote, we should think about those who are at the receiving end of crippling poverty, and whether the policies we formulate, espouse and implement, will at the end of the day make their lives any better. We should not forget that a hungry nation is an angry nation. [Applause.]

Mr C M LOWE: Mr Chairman, the Democratic Alliance acknowledges that the greatest challenge we face is to create sustainable jobs for our people and to eradicate poverty so that every single family can afford the basic amenities which so many of us take for granted.

As my colleague the hon Reinette Taljaard has already ably demonstrated, where the Minister succeeds in promoting ``economic development, good governance, social progress and rising living standards’’, to quote the hon the Minister, we shall not hesitate to applaud these achievements and play our full part as a loyal and committed opposition in ensuring that they are maintained and improved upon. But likewise, where we believe policies are wrong, ineffective or misguided, we shall speak out. Where change is required, we shall highlight shortcomings and offer alternatives, and where we believe that delivery can be better effected and results more efficiently achieved, we shall stand up and debate the real issues.

For while much of the vision, mission and values set out so eloquently on page 1 of the Treasury’s strategic plan is laudable, and while the sweeping semantics and happy hyperbole contained in the glowing wording of the Minister’s policy statement on page 2 make us all want to stand up and wave our national flag as we bask in the warm glow and reflected glory of a Minister who truly knows best and has no hesitation in saying so, the hard, cold fact is that unless and until those fine words and phrases, crafted no doubt at some considerable cost to the fiscus by men and women of some creative and marketing ability, unless and until those visions and values produce measurable results, unless and until those visions and values give us real effect to healthy and sustained economic growth rates, until they really do produce good governance across line departments, and until they really do ensure rising standards of living and a better quality of life for millions of South Africans who have seen nothing of the promise of a better life for all, then they are bogus and meaningless, and they fail the very litmus test to which the Minister refers.

We are in deep trouble, and for the poor and the destitute particularly, it is going to get a lot worse.

The MINISTER OF FINANCE: [Inaudible.]

Mr C M LOWE: You will have your chance just now, sir.

Economic growth is way down on budget predictions, while inflation is spiralling, no doubt to be spurred on even further by the 9% public sector wage increase announced last week. Unemployment levels are staggering, and more bad news for consumers battling to repay debt and already suffering from high food prices is an almost certain further interest rate hike.

The Minister is also quite wrong when says that the budget is simply the executive’s responsibility. In his briefing to journalists ahead of the Finance Committee’s hearings on 13 May, he said that it must be accepted that the budget remained one of the core responsibilities of the Cabinet, and he did not think the executive could ever abdicate its responsibility for drafting the budget. Surely, under the South African Constitution, it is Parliament, not Cabinet, that is supreme. It is Parliament, comprising the democratically and freely elected representatives of the people of South Africa, which is constitutionally responsible for implementing and passing a national budget. It is Parliament that holds the executive to account, and in terms of section 77 it is an Act of Parliament that gives rise to the policy and procedural statements contained in the annual budget.

There are many who would claim that Parliament has become nothing more than a rubberstamp of the ANC’s national executive council, and this attempt to marginalise the role of the legislature is unfortunate, but nothing new, and something that the ANC has learned very well from their previous apartheid masters, who also treated Parliament with contempt and ruled by autocratic and imperial presidential decree. [Interjections.] We have seen the establishment of the Budget Committee, designed to usurp the role and powers of the Portfolio Committee on Finance, and undermine the sterling work that has been done by its members over the past few years, a neat bit of fancy footwork to ensure that the probing minds and independent voices of the Finance Committee were replaced with more muted and respectful tones from a Joint Budget Committee. [Interjections.]

So history, as always, repeats itself, and notwithstanding the carcasses of other failed political grand plans, like Rhodesia, the ruling party attempts to subvert, convert or control everything in its path, and it is only to be expected that the national Budget would be forced into line. [Interjections.] Well, Abraham Lincoln said that while force is all- conquering, its victory is short-lived, and the DA still believes it is this House that ultimately passes the Budget and therefore calls on the hon the Minister, even one as fearsome and formidable as the hon the Minister, to acknowledge that it is Parliament, not the executive, that is supreme under our Constitution, to repudiate his views, and to listen to the voices of those of us this afternoon who have spoken up to let this legislature truly do its job.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon member, before you go, could you just remain there? Would you please clarify, if you look again in your speech, something about the masking abilities … I think it was a reference to the officials in the department. Would you please just look at that again?

Mr C M LOWE: Mr Chairman, I am afraid I am at a loss for words for once. I am not sure to what you are referring. I did refer to previous apartheid masters. Would that be what you are referring to?

The DEPUTY CHAIRPERSON OF COMMITTEES: No, it was a reference to officials of the department.

Mr C M LOWE: Mr Chairman, to the best of my knowledge, there is no reference to any officials of the department, and no reference to any masking. I have made use of the word ``masters’’. In fact, we have nothing but good words for the officials.

The MINISTER OF FINANCE: Chairperson, may I invite you to check the record, and ask that Mr Lowe withdraw that. Because a suggestion that officials from any of the departments I represent could mislead members of this House is something that cannot be countenanced.

The DEPUTY CHAIRPERSON OF COMMITTEES: There was a reference. We will check that out and I will come back to you.

Mr C M LOWE: Mr Chairman, I would be happy to do that. With respect, I think the Minister is jumping to conclusions. [Interjections.]

Mr N M NENE: Chairperson, hon members, I do not want to glorify what Mr Lowe was saying here by responding to it. I will leave it to the Minister. I know for a fact he will have to withdraw his entire speech. [Interjections.] It is always encouraging to participate in the debate on this Budget Vote, mainly because of its importance in bringing about a better life for all South Africans.

The objectives for National Treasury have been outlined by speakers here before me, and I need not repeat them. But I would like to amplify one or two of them, which are good governance and procurement.

These objectives are catered for under Programme 4 and 5 of this Budget Vote. In pursuit of our policy of empowerment of previously disadvantaged individuals, the ANC Government has put in place institutions and mechanisms, such as the Preferential Procurement Policy Framework. This came into effect in the year 2000 and the regulations were promulgated in August 2001. These regulations promote uniformity in the preference systems applied by all organs of state. The National Treasury oversees the implementation of these regulations, and their implementation will increase the involvement of historically disadvantaged individuals in the public procurement systems and also contribute to the achievement of other reconstruction and development objectives, such as the promotion of small, micro and medium enterprises. Of course, this does not come without its challenges. One of the problems encountered in this empowerment endeavour is that of fronting, commonly known as ``rent-a-black’’, which defeats the very purpose of this important framework. We call upon our emerging entrepreneurs to take advantage of this opportunity and the spirit of addressing the inequities and disparities of wealth distribution as enshrined in the Freedom Charter and our Constitution.

In the same spirit, our black business people are encouraged to join their established business counterparts to extend their interaction with the rest of the region and the continent. This should see them participating in the process our continent is pursuing through Nepad.

The implementation of the Public Finance Management Act remains paramount in this programme, and the results are encouraging. In 2000-01, 70% of national departments submitted their annual financial statements for auditing two months after the end of the financial year, and the rest within 30 days after the prescribed date. Similar success was also achieved in the provincial departments.

The Auditor-General reported several areas of improvement in financial management, which can mainly be attributed to the implementation of the Public Finance Management Act. The benefits of proper financial management are enormous and will result in Government being able to stretch every rand to meet the needs of our people and to push back the frontiers of poverty even further.

Key in the implementation of the Public Finance Management Act is capacity, hence the National Treasury is encouraged to assist departments with capacity-building initiatives related to this, as reflected in the strategic plan.

The other programme, which complements clean governance as envisaged in the PFMA, is financial accounting and reporting, and that is Programme 5. Its main objectives are the following. The first objective is to develop and enhance existing accounting policies and practices so as to comply with the generally recognised accounting practices, GRAP, standards issued by the Accounting Standards Board. The second objective is to improve financial accountability through the issue of frameworks, policies and guidelines.

The main activities in this regard are going to be the following. The first activity is financial reporting on national accounts, the focus being on accounting of the National Revenue and Reconstruction and Development Programme Fund; banking services for national Government; developing and implementing accounting policies; and preparing consolidated financial statements. In this subprogramme we see an increase from R9,6 million to R30,1 million to enable restructuring in order to implement and monitor generally recognised accounting practices. We welcome this.

Financial management and improvement is the second activity. This entails financial management training, internal audit services and assistance to the Institute for Public Finance and Auditing. The third activity is the monitoring of service charges by banks in respect of deposit accounts by all departments.

The fourth activity is the Management Information System called Vulindlela, which enables the accurate and timely reporting in terms of the Public Finance Management Act and the meeting of the reporting requirements of Government Financial Statistics. Here we see an increase from R29,5 million to R40 million which is also welcome, as additional functionality is provided to support the reporting requirements of the PFMA and of Government Financial Statistics.

Last but not least is the programme dealing with integrated financial systems, which provides for the identification, acquisition and implementation of the integrated financial systems to meet the requirements of section 216(1) of the Constitution and of the PFMA. This will replace the existing transversal system. This subprogramme increases from R26,6 million to R50 million to provide for the technical resources needed to develop the business requirements and to determine the capacity of the technical infrastructure throughout Government. This is but one of those systems that the ANC-led Government will continue to perfect for the benefit of all Africans on the continent, especially those in the region.

It is also encouraging to note that all departments have developed their strategic plans that outline their plans up to the year 2005. We are looking forward to the implementation thereof. In the spirit of Vukuzenzele all sectors of society are expected to follow suit, business and civil society alike. It is hoped that all corporate entities will adopt the King report on corporate governance, and civil society will embrace the moral regeneration initiative and build the confidence this country needs.

The ANC owes it to the electorate and the entire populace to provide the kind of leadership that realises the aspirations and expectations we were mandated to address when we took over the reins of government.

The ANC supports this Budget Vote without reservations. [Applause.]

The MINISTER OF FINANCE: Mr Chairperson and hon members, it is gratifying that there is such a broad body of support for the Budget Votes here before us this afternoon. Of course, there is always a joker in the pack. We know who the joker is this afternoon, and I am sure that he meant to try to amuse us because things were rather tiresome in the House by that time. We will treat it as such. It is not worth dealing with it in any other way.

In respect of the contributions of members, some of the proposals are interesting, but clearly cannot be dealt with as yet. The hon Bekker’s proposal on interest rates will clearly require an enormous change to financial intermediation in this country. It is part of the problem that we are dealing with, of the over-zealousness of the 80s when building societies collapsed, and funding, consumption and investment all came out of the same pot. It is almost impossible to try to disaggregate this, whether by means of a subsidy or anything else. The changes would be much too big, but some of the policy-makers, even of that period, recognise just how disastrous those decisions were.

Similarly, hon Rabie’s request, I think not for the first time, for an amnesty, is one that we will continue to apply our minds to, without making any commitment. The risk, of course, is that if one provides amnesties in the tax system too frequently, one wears away the veracity of tax law. However, we are not closed to these ideas and I think we need to engage in further discussion on them.

Some of the issues raised by hon Koornhof clearly have to be work in progress. The issue of job creation is a challenge, and it is not just a challenge for Government. Hopefully, the growth and development summit will engage with that issue again, without wanting to go where we were with the job summit, but the reality of South Africa right now is this huge contradiction between the demand for jobs, probably about 500 000 jobs, at a high skill, and a few million South Africans with virtually no skills. It is that mismatch which presents us with the biggest challenge. I think around the world countries with similar development profiles to ours would be facing similar challenges.

On the issue of the accounting professions, we have had discussions in the past few weeks with both SAICA and the Public Accountants’ and Auditors’ Board.

I think that their understanding as well is that one cannot have the public accountants and auditors delegitimise this profession. They have a common interest in this, and I think by spotlighting the issues in the way that we have, there is a common cause. They are looking to change some of these issues, even ahead of the legislation, and it is important that we are ad idem with the kind of changes that will happen.

In respect of Parliament and the budget, I think this will remain the subject of ongoing consultations. I do not apologise for the fact that we had drafted legislation in terms of section 77, but the draft has not been accepted by the committee and so we are sitting without that.

However, I say again without fear of contradiction that one wins an election in order to make policy and to form an executive. One of the first functions of the executive is to make a budget and one does not give it away. One invites the opposition to win an election in order to do it. It is as simple as that. If they cannot win an election, they are not going to have it here. [Interjections.]

In respect of the public service and salaries, I think it is important to draw the attention of the hon Taljaard to the fact that we are dealing with a three-year agreement that was signed in good faith. We know that inflation has gone up now, but it will come down, and we want to go through that same process with a clear conscience and know that we can deal with the restructuring of the Public Service at the same time.

I am actually quite tickled by the point she raises about old, insecure people in Europe who are still hanging on to their deutschmarks and French francs. I know some political parties which are doing the same. [Laughter.]

I would like to thank all parties for supporting these Votes. [Applause.]

                 PLANNING PROFESSION AMENDMENT BILL

                       (Second Reading debate)

The DEPUTY MINISTER FOR AGRICULTURE AND LAND AFFAIRS: Chairperson, earlier this afternoon the Deputy Minister of Finance referred to the accounting and auditing professions. Perhaps by way of introduction I should just make one small observation about professions in general. It goes back a long time. When one looks at the really old professions, lawyers and doctors, that is where part of the problem still lies today. One will see that they really belong to the priesthood. Lawyers, for example, were priests in very ancient times, who knew the secret formulas by which one could transfer land and enter into contracts. One had to be initiated into those secret formulas. The knowledge was not given out very readily. It was insider knowledge in the best sense of the word.

True enough on the one hand, this type of attitude led to the process of the development of civilisation. We could not do without these professions, even when we entered the era of skilled trades, but on the other hand it created liabilities, and it was only in the late 18th century and 19th century that there was a process which was very important for the modern concept of professions of democratisation and humanisation. The basis for understanding why one needs professionals in certain fields and what the real nature of a profession is, rests on a few basic precepts.

Firstly, people belonging to a learned profession had specialised knowledge and skills which other people did not have. But, on the other hand, it was a basic requirement that those skills and knowledge be used not for oneself as a professional person, but in the interests of someone else, the client. And this altruistic or humanistic element, that one does not use the knowledge for oneself but for the client or the society at large, is the basic ethical basis of all professions. This was actually formulated by G W F Hegel in the middle of the 19th century when he said that there are these two requirements for professions. First, there is the altruistic or humanistic element. Second is the requirement that they exercise the functions of their profession according to a code, an objective code of knowledge, and not in the interests of the client subjectively, but in the interest of society as a whole.

I think that if we understand those aspects of professions, the reason why we are bringing this Planning Profession Amendment Bill should be clear, because it is basically a democratisation or transformation Bill that we are bringing.

Let me try and explain that. Spatial planning is a very powerful instrument in a state. In South Africa, sad to say, spatial planning was perhaps one of the most important building stones of the apartheid system. The whole way in which the physical landscape in South Africa has grown and has been planned and has been executed was in the hands of governmental planners and other planners who followed the idiom of those days.

It had an effect on the planning profession and the planners themselves. It is quite common knowledge, today, that access to the planning profession in South Africa was greatly denied to the vast majority of our people for many decades. I think, therefore, it is in the interests of South Africa that this profession be effectively transformed and effectively regulated.

What we are trying to do with this Bill and the objectives which we are striving for in repealing the original Town and Regional Planners Act of 1984 is to usher in a couple of fundamental changes. Firstly, it is to give greater access to the planning profession, especially for people from previously or historically disadvantaged communities. Secondly, we want a seamless system in which progression through various categories within the planning profession is possible, but under controlled conditions. Thirdly, we want greater protection for the public via enhanced technical and ethical standards. Ethics are the cornerstones of all professions. Fourthly, we want a more representative council which will, therefore, be a more legitimate and effective South African Council for Planners.

I must say that I do not think the members of the portfolio committee or I were satisfied with the Bill in the form that we brought it here. It was not very good, if I may say so, with respect. It is something which I must take responsibility for, but I must just make a plea for clemency in that I did not start this Bill, and it followed a long road before it eventually came to me here in Parliament.

There is one thing I want to say today. With the help of this portfolio committee, we got this Bill right after many amendments. Some difficult and very effective members of Parliament helped us to get this Bill right, and I think it is good now. It is perhaps not perfect, but it is good enough to be adopted here. Mr Gerber is smiling at me, because he knows that he was responsible for giving us a few sleepless nights!

It showed us some things. First, it showed that the executive must prepare its Bills very well when they come here. Second, proper consultation must be entered into. We did not consult enough on this matter. We did not have all the empirical knowledge available. I think it was right in the middle of the process that we had to ask the portfolio committee to have a proper workshop, which I asked the department to do. They had a proper workshop, and then it was evident which changes had to be made.

I beg the House’s pardon today, but in the end we did get it right. In the end I had to involve myself in the drafting as well. People who were not there in the department when this Bill was started, and are there now, did a very good job, and I think we can feel satisfied with what we ended up with.

How is it possible to get greater access to the planning profession? One must remember how the position was up to this stage. In the first instance, town and regional planners were the only acknowledged type of planners. Secondly, we had the position that at black tertiary institutions, town and regional planning programmes were not included in the possibilities for study. Thirdly, we had the position that the few blacks who were allowed to attend the town and regional planning programmes at the so-called white institutions, had to undergo a rather lengthy and sometimes unpleasant exemption process.

What we are doing now is now firstly, to shift from a narrow definition of the profession, from town and regional planners to a planning professions Act. Secondly - and this is the most important thing and I think this is the humanistic and democratic element in the profession on which we want to build: competence, and not so much which tertiary institution one went to, becomes the single most important measure for access and categorisation.

I am sure that some of the other members will go more into the details of the Bill, and explain how we get out of these captive categories. Let me just conclude by saying we are changing the way in which public protection can be enhanced. We included clear principles to guide the profession in the Bill, and the main thing is the original professional idea that planning must pursue and serve the interests of the general public, for the benefit of present and future generations, and that the council and registered persons must strive to achieve very high standards of quality and integrity in the profession. For that purpose the council is reconstituted in a way which will be far more representative.

The DEPUTY CHAIRPERSON OF COMMITTEES: I must thank you for the acknowledgement of the role of Parliament in law-making. [Applause.]

Mr N H MASITHELA: Chairperson, Deputy Minister, members of the House, as we sit here, still in a state of shock, not believing that one of our colleagues, a comrade, friend, a father, Comrade Peter Mokaba will never again be part of us in this Chamber, I am reminded of his slogan, or if one likes, motto, during the days of our struggle for this democratic dispensation, when he said: ``Rather die with a man, than let the enemy pass.’’

This slogan is very fitting to our debate today on the Planning Profession Amendment Bill. The worst enemy in the planning profession is the fact that the doors of learning are not open to all racial groups to participate and become members of this noble profession. This Bill therefore seeks to open these doors. The Bill was extensively considered and discussed during the meeting of the portfolio committee, where members fully understood its mandate, that of leaving no stone unturned in the transformation process.

We unanimously pass this Bill without any fear of judgment by any other political party. It is also pleasing to note the enthusiastic manner and the eagerness to meet the demands and expectations of members of the portfolio committee displayed by officials of the department when this Bill was debated in the committee.

In reality, this Bill seeks to underpin one of the major principles of our ANC-led Government, that of equal access and quality education to all. The South African society has a painful past. Thus we should not, at any stage, allow the enemy to pass. The enemy is this context is hunger, poverty and inequality.

The planning profession in our country has been widely perceived as having been an instrument for implementing the ideology of apartheid. With the transformation of our country to a just and nonracial democracy, the planning discipline also has to undergo a similar change for it to have relevancy and legitimacy, now and in the future.

As we often talk about change in this Chamber and put our vision on the table, such ideas need to be followed up and processed further through implementation. Therefore, it is our responsibility as members of Parliament, Government departments and the planning profession, to respond positively and imaginatively to the challenges posed by the diverse society of our country.

The cornerstone and main aim of the code of ethics of the planning profession should be to further the interests of the underprivileged and previously disadvantaged communities. Empowerment and capacity-building need planning processes that are open to all races and take gender imbalances into account. This should, therefore, facilitate the involvement of disadvantaged people as it directly impacts on their lives.

Gone are the days when Baas Koekemoer would dictate, direct and tell how, where and at what times the Dlaminis, Bakoenas, Barolongs and so forth should stay and plough and graze their cattle, without them being part of those processes with such finality and on decisions that directly affected their lives. This Bill seeks to restore and redress such anomalies.

This piece of legislation seeks to promote the participation of our communities largely through contributing to the planning profession, because the role of planning extends far beyond the simple seeking of answers for the community, but goes further and includes the creative use of knowledge and the application of synthetic and interpretive expertise in order to give form to the community’s expressed wishes.

We said, in 1999, that there were huge difficulties that we needed to address. The only structure and organisation which can address those issues is this Government which is led by the ANC, and this Parliament because they understand the needs and aspirations of our people. The introduction of this Bill is testimony to the sensitivity of this Parliament to those issues.

Through the enactment of this Bill, our people will now have access to a prestigious profession and meaningful education. This Bill seeks to remove the unbalanced mix in the town and regional planning profession. It should also be noted that no historically black education institution is recognised to offer approved planning courses. With the passage of this Bill, and with the restructuring or clustering of the institutions of higher learning by the Department of Education, our sons and daughters from previously disadvantaged communities will now, in their numbers, become members of this prestigious profession.

The Bill also aims to introduce a shift from a narrow definition of the profession to a broader concept of planning rather than ``town and regional planner’’. The standard of this profession, in my view, is going to be lifted because it is going to include many different people and stakeholders.

The ANC and members of the committee who are not ANC members, I am confident, support this Bill. I support this Bill. [Applause.]

Mr S B FARROW: Chair, Deputy Minister, colleagues, the Planning Profession Amendment Bill aims to establish mechanisms for quality control by means of mandatory registration of all persons in the planning profession and by work reservation. It also seeks to broaden access to the profession, and to tighten the ethical standards with which planners will have to comply. To achieve this, the Bill establishes the South African Council for Planners, whose function is to administer, as well as to transform the profession, whilst at the same time ensuring more representivity in its composition.

The Bill took an unusually long passage to finalise, as the Deputy Minister has already explained, considering that it was first introduced to the portfolio committee on 12 February 2002. This was despite consultation with 32 Government bodies, education institutions and organisations, and extensive consultations with stakeholders and interested persons. Yet, despite all this interaction, the Bill had to be subjected to numerous amendments.

Much of the deliberations at the portfolio committee level centred around clause 13, which related to the registration of planners. This categorisation had to ensure that the planners categorised in the previous Act were catered for, and at the same time ensure that new categories complied with the National Qualifications Framework, as defined in the National Qualifications Framework of the South African Qualifications Authority Act, Act 58 of 1995.

The committee was of the opinion that no one should be left out, whilst at the same time ensuring that the integrity of the planning profession was not compromised. These categories of registered planners were finalised as being a candidate planner, a technical planner and a professional planner. The DA is of the opinion that these amendments now cover both transitional and existing planners in terms of their qualifications. New and existing entrants are also now able to come into this profession at different levels of the registration process.

The Bill in general also provides for the establishment of the South African Council for Planners, their committees, and their modus operandi, together with a code of conduct and a code of practice for the planning profession, whilst at the same time providing for an appeal procedure.

As a society in transition, it is pleasing to see that the code of conduct is of a high ethical standard. In terms of the code no registered person may receive or seek gifts or favours which might in any way influence a participant’s objectivity in the planning process. The DA believes that it is imperative that the council keeps its members and its profession free from any form of corruption.

Planning is an integral part of the delivery cycle, and without proper planning, budgets and particularly cash-flow needs cannot be determined. Planners need to ensure that in terms of the IDP initiatives at local and provincial level, co-ordination takes place within the short-, medium- and long-term budgets in order that capital flow coincide with targeted deliveries. More important is the need to ensure that other Government departments are kept in the loop.

More than often - and I am sure we have all experienced this - one sees a township road being built with a beautiful tar top, only to see the same road being dug up a few months later to provide a service that was not planned for. This should never happen. If effective co-ordination takes place between the developers, the communities, the engineers and the planners, this will surely be a thing of the past.

A typical case of poor planning which I can relate must be the Kokstad C- Max prison which was built on an unsuitable site without adequate water supplies and sanitation. This type of ad hoc planning is totally unacceptable and has, as a result, cost taxpayers vast sums of money. I think something like R60 million is now required just to get additional water to this particular infrastructure which is standing empty.

The Bill, as already mentioned, took an unusually long time to finalise and the DA believes that much of this delay could have been avoided if the Bill had been better prepared. I think the Deputy Minister has alluded to that. The DA cannot emphasise enough the need for the department’s legal team to present well- prepared Bills to the portfolio committee in order to avoid a recurrence of this nature, and I am glad that the Deputy Minister has recognised that. The DA supports the Bill.

Mr G B BHENGU: Chairperson, Mr Chairman, Deputy Minister, hon members, before us is the Planning Profession Amendment Bill, whose aim is to establish a juristic person to be known as the SA Council of Planners. This council will be composed of professionals dealing with, among other things, land use and management, housing settlements, planning policy and the maintenance of professional standards in the field of planning.

The Bill will therefore serve to subject all planners to one ethical code of conduct, with appropriate reprimand and censure of those who flout the code and bring the profession into disrepute. The Bill requires the registration of all professionals who wish to practise as planners. The registration of persons under particular professions requires thorough scrutiny of such a person’s credentials in terms of what the profession demands, what the person claims to know and where she or he claims to have studied to achieve his or her qualifications.

The IFP believes that the juristic person to be established, the registration of planners, the formulation of the planning code, the investigation of improper conduct by members of the profession and the imposition of penalties will all count in favour of progress, integrity and correct practices in the profession. It is a common thing to see a human settlement or structure being removed or demolished in favour of a new structure that has to come in the place of the demolished one. This could be in the form of a dam, a road or a building with a completely different purpose to the one that preceded it. This indicates that proper planning was not given attention in the first instance, and it is emotionally and financially costly to rectify the damage as humans and built structures are involved. The IFP, as the protagonist of governance that is much closer to the people, wishes to register its appreciation for the fact that the SA Council of Planners will represent the department, provincial government, the municipal sphere, including districts and towns, and the planning, education and training sectors, as well as private practice.

We also wish to express our support for the fact that the voluntary associations of planners will be recognised as such. We are happy that although there will be such recognition, the requirements and procedures for them will still have to be set out by the council that this Bill directs to be established. Voluntary associations cannot be allowed to be loose cannons, denying proper recourse to those they might unfairly treat in executing their duty. The IFP supports this Bill.

Mrs B M NTULI: Chairperson and hon members, the Town and Regional Planners Act, Act 19 of 1984, currently regulates admission to the practice of the town and regional planning profession in the country.

Since the enactment of this Act in 1984, it has been amended six times by Parliament. The last amendment was in 1996, but the amendments to the Act did not effect any major policy shifts from the original position. There were no significant changes. The 1984 Act mainly regulates the town and regional planning profession.

The Bill establishes a South African council for town and regional planners as a juristic person. The composition of the council is as follows. The Minister has to select eight town and regional planners from a list of 10 town and regional planners who are nominated by professional institutions. Two planning lecturers are nominated by the Committee of University Principals and one full-time state employee to be selected by the Minister. One planning technician also serves on the council.

The current institutional avenues for the education and training of persons as planners remain firmly located in the traditional historic white institutions which, to a large extent, represent value systems which are not detached from those that served apartheid ideologies.

The legitimacy of the current structure has been and still is subject to serious questioning. The persons I mentioned above are only from the following institutions: UCT, UOFS, University of Natal, Potchefstroom University, the University of Pretoria, Stellenbosch University and Wits. Technicians are from Cape Tech, Durban Technikon and Witwatersrand Technikon. This must be corrected.

The new Bill seeks to integrate the previously divided societies, and this is the ANC’s objective. In South Africa, planning has been an instrument for implementing the ideologies of apartheid. We cannot allow this to continue. With this Bill it is envisaged that training and education opportunities will widen to proactively allow the broadening of the mix of persons in the profession, to have a more inclusive and representative council of planners. There must be a shift from a narrow definition of the profession, for example from town and regional planning to a broader concept of planning, hence the title of the Bill is the Planning Profession Amendment Bill.

It covers all the sectors of the profession, unlike in the past when individuals from technikons fell in the technical planning category, while university graduates ended up as town and regional planners. This created a captive category.

In the RDP we talked about the redressing of unacceptable conditions imposed upon the country’s disadvantaged communities during the apartheid era. It is now the responsibility of the planning professions to respond positively and imaginatively to the challenges posed by the RDP and society at large. In order to address the needs of the South African society in general, it is submitted that the cornerstone of the code of ethics of planners should be to further the interests of the underprivileged and disadvantaged communities. Planning actions should be geared towards empowering those communities, so that they can contribute to the advancement of the nation. A new Act is needed to effect delivery.

The introduction of this Bill will address the following: access to the profession; recognition of the historical black institution, which are not recognised as being able to offer approved planning courses; progress within the profession; ethical standards; representivity and legitimacy.

We hope that this will facilitate progress within the ranks of registered persons by ensuring that captive categorisation is not perpetuated. I support the Bill. [Applause.]

Mnr A S VAN DER MERWE: Mnr die Voorsitter, agb Adjunkminister, kollegas, die Planning Profession Bill, 76B van 2001, is daargestel om verder aan die transformasieproses gestalte te gee. Daar word gepoog om meer mense toegang tot die omskrewe professie te gee. Ek glo dit is nodig.

Die nuwe wet moet egter sorg dat die standaarde nie verlaag word, en sodoende skade aan ons ontwikkeling in Suid-Afrika teweeg bring nie. Die nuwe wet bring dus sekere verantwoordelikhede na vore. ‘n Professie mag nie net beskerm word nie. Indien dít is waaroor dit gaan, het so ‘n professie nie bestaansreg nie.

Ek wil graag verwys na artikel 18 wat handel oor die gedragskode wat deur lede van die professie gehandhaaf moet word. Wanneer werk gereserveer word, is dit die verantwoordelikheid van die professie om sorg te dra dat sy standaarde hoog is. Die wetsontwerp probeer hierdie verantwoordelikheid onderskryf. Dit sal die raad se verantwoordelikheid wees om toe te sien dat hierdie standaard gehandhaaf word.

Daar is nog groeperinge van beplanners wat graag hul eie professionele raad wil vorm, met ‘n eie professie. By sekere groeperinge is daar meriete, maar die staat sal ook moet waak dat dit nie oordryf word nie. Dit is egter belangrik om die publiek te beskerm. Die wetsontwerp is goed uitgetrap in die portefeuljekomitee. Die lede het dit goed verduidelik in die debat. Dit is Maandagmiddag en ek wil nie verder herhaal wat reeds gesê is nie. [Applous.]

Die Nuwe NP steun hierdie wetgewing. (Translation of Afrikaans speech follows.)

[Mr A S VAN DER MERWE: Chairperson, hon Deputy Minister, colleagues, the Planning Profession Bill, No 76B of 2001, is aimed at furthering the transformation process. It is an attempt to give more people access to a defined profession. I feel that it is necessary.

The new Act should see to it, however, that standards are not lowered, thereby hindering our development in South Africa. The new Act will thus result in certain responsibilities. A profession should not just be protected. If that is what it is about, then such a profession has no right to exist.

I wish to refer to section 18 which deals with the code of conduct which members of the profession should maintain. When work is reserved, it is the responsibility of the profession to ensure that its standards are high. The Bill is an attempt to endorse this responsibility. It will be the responsibility of the council to see to it that this standard is maintained.

There are still some groupings of planners who wish to form their own professional council with an own profession. Some groupings have their merits, but the state will also have to guard against this being taken to excess. It is important, however, to protect the public. This Bill was discussed thoroughly in the portfolio committee. Members have explained it well during this debate. It is Monday afternoon and I do not want to repeat what has already been said. [Applause.]

The New NP supports this legislation.] Mr S ABRAM: Chairperson, the Bill before us aims to provide for the establishment of the SA Council for Planners as a juristic person; to provide for the establishment of an appeal board; to provide for the registration of different categories of planners; to regulate access to the planning profession; to protect the public from unethical registered persons; to maintain a high standard of integrity; to identify areas of work reserved for different categories of planners; and to provide for incidental matters.

Naturally, every profession needs to be regulated in some way or another. We see this Bill as a measure which intends doing exactly that. However, I have a major gripe with many statutory professional bodies. The problem is that many of these bodies also have the authority to lay down certain tariffs for work to be done, and the planner and other professional people will hide behind the fact that the tariff charged has been laid down by the professional body concerned.

In a country like ours, where we have massive levels of poverty, we need to see to it that we are truly of service to the people and this country, and we should not always hide behind the fact that there is a tariff which is laid down by the professional body. That also goes not only for this particular profession, but also, for example, for attorneys transferring properties. They will tell us that the tariff is laid down, but the guy can make do with much less than that to help people who do not have enough and who are merely scraping together some funds in order to achieve something.

The same principle applies here. I trust that when this body is constituted, it will bear in mind that we are not dealing with First World planning matters alone. One finds that the measure contains a categorisation of planners into candidate, technical and professional planners. The whole aim is to try to allow as many categories as possible of people who did not previously have access to this profession to execute this type of work.

I believe that some of the arguments that were advanced with regard to clause 13 do not make issues any worse for anybody. The clause is a regulatory one and it provides for the categories that I have mentioned. A person may not practise in any of these categories unless he or she is registered.

I see that the red light flickers. [Time expired.] [Applause.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon members, you are very rowdy. Could I please prevail on you to come to order.

Miss S RAJBALLY: Mr Chairperson, it is proper and professional to maintain thorough consideration of issues at all levels. The Planning Profession Amendment Bill establishes the SA Council for Planners to oversee the clause that repeals the Town and Regional Planners Act, Act 19 of 1984.

The MF sees the need to identify the various categories of the planning profession, as these will demarcate areas of the profession and areas related to the profession. Further, being controlled and motivated by the council by demanding the registration of persons within the planning profession, will allow the long arm of the law to weed out unethical persons in the profession, thereby protecting the public and maintaining a high standard of integrity.

The MF supports the regulation of access to the planning profession. However, the criteria for registering are questionable. The MF believes that these standards should take into consideration the harsh divisions of the past, so as to give those disadvantaged a chance to be part of this big project.

The MF is glad to note that an appeal board shall be established so as to maintain fairness and broader discrepancy before ruling out or closing the doors to a party’s profession or ambition. This will certainly also ensure that we do not lose the service of a credible contributor to the profession over a minor issue that may be solved in a different fashion.

The MF, however, expresses its concern as to the powers of the SA Council for Planners and hopes that a mechanism may be put in place to regulate, guide and monitor the powers.

The MF supports the Planning Profession Amendment Bill. [Time expired.] [Applause.]

Mr P A GERBER: Mr Chairperson, I should like to thank you for the opportunity to speak on this Bill. I want to thank the department for the extra mile they have walked with this committee, and especially for accommodating certain specific concerns of certain planners.

Whenever a Bill is referred to a portfolio committee of which I am a member, I usually send copies of that Bill to a voter or two who are directly affected by such a Bill. That is how we discovered the problems in this Bill regarding the transitional arrangements for technical planners, and I am glad to say that I think all planners, whether they studied at technikon or university, are on board with this new Bill. If we did not change the Bill, we would have taken away some vested rights held by certain planners.

Of all the technical planners in South Africa, 25% are black - in other words, those planners who studied at technikons. However, of the approximately 950 planners who studied at universities, only 3,5% are black. This situation is not healthy, and I hope the soon-to-be-formed SA Council for Planners will tackle this problem of representivity and demographics in this profession head on. The luxury of discrimination between technikons and universities is prehistoric in our new democracy and is unacceptable.

As this Bill is not cast in concrete, I foresee that there will be future amendments, which is quite natural, and we should be open to a debate around these issues, as the Deputy Minister has quite rightly mentioned.

Property owners in South Africa have certain rights in terms of what they can do with their properties. If one wants to build on a granny flat for one’s mother-in-law, one will go to the local authority and complete the necessary application forms. One does not need to be a chopper-pilot to be able to do it.

As ‘n mens die boulyn op jou erf effens wil verslap, gaan doen jy aansoek by die munisipaliteit en vul die nodige vorms in vir goedkeuring. Met ander woorde, iemand kan sy of haar eiendom verbeter deur bestaande meganismes te gebruik. [When one wants to relax the building line on one’s property, one applies at the municipality and complete the necessary forms for approval. In other words, one can improve his or her property by using existing mechanisms.] If a farmer wants to put up a farm stall on his farm, or wants to pickle the olives he produces on his farm, adding value in the process and creating extra jobs, he can do it by applying for a consent use for his farm from the local authority. It is a simple exercise.

Just as one has the right to mow one’s own lawn, paint one’s house and service one’s car, one does not have to be a professionally registered lawn- mower, painter or mechanic. If one wants to build one’s own house, one can do it. One does not need to be a professional builder. If that was a requirement, then two thirds of the homes in South Africa would not have been built. If one wants to design one’s own house because one cannot afford an architect, one is free to do so. One does not have to use an architect at an astronomical cost; one can use someone who draws up building plans or do it oneself. There are many such vested rights that a landowner has.

If one wants to build one’s own French drain, one is free to do so. One does not need a Frenchman to do that either. One does not need an estate agent to buy or sell one’s property; one can do it oneself.

A Mercedes Benz is definitely one of the best cars on the market, but it has a terrible ashtray. This Bill has gone a long way and is quite a good one, but there is a small problem that I still have with it, which, I think, can be addressed in future, as the Deputy Minister indicated. I know that the Deputy Minister is a man of many talents and a good listener, and I am sure that he will investigate the problem that I would like to sketch for him.

The current Town and Regional Planners Act of 1984, section 23(1) (a) states that a landowner or anyone else has the right to do their own town planning activities regarding their own property, or one can assist a landowner with these activities. Only if someone who is not registered as a town planner performs such activities for reward, then such a person would be guilty of an offence.

The current Bill we are debating is making a 180 degree u-turn on this issue, and specifically clause 13(2), which reads as follows:

A person may practise in or perform any work, whether for reward or otherwise, which is reserved for [planners] …

A person with a R20 million property in the Waterfront will be idiotic not to use a professional planner, but someone with an erf in Steynsburg which is worth R500, who wants to subdivide it into two portions for his two best workers, must now use a planner. They ask money, which puts up the cost and in the end the landowner decides not to subdivide the property.

I phoned a planner on Friday evening to get a quote to do an application for the subdivision of an erf in Steynsburg. He quoted about R2 000, excluding his transport, as there is no planner in Steynsburg. Now, if he gets the subdivision approval from the local authority, he still needs to get a surveyor out to do a survey, which will cost about R5 000. When that is done, one still has to transfer the plot into one’s workers’ names at about R1 500 transfer fees.

So, a single subdivision of a R500 plot in Steynsburg will end up eventually costing the landowner R8 500. The landowner will now shelve the idea of subdividing his R500 plot, and thus someone who could have been the proud owner of a big plot in the central area of Steynsburg must now continue to live in the township of Steynsburg. This is my main concern about this job reservation of all planning work, and I hope it can be addressed, as is proposed by this Bill. It is going to push up the administrative costs of property developments, however small they might be. We need to expand land reform in South Africa by not only relying on the state to hand over land. We need to create and further expand the mechanisms of land reform to stimulate spontaneous land reform by private landowners. This we can only do by getting rid of red tape when it comes to planning, amongst other things. This is a potential untapped gold mine. We do not have a shortage of land in this country, but we have an overdose of bureaucracy and red tape when it comes to land.

The whole property administration environment is not consumer friendly and we need to change it. Three quarters of South Africans know how to purchase a car or a TV on instalments, but they do not know how to go about acquiring a piece of land. It is a closed shop and that is unacceptable. We should educate people about these things. If we can educate people on how to use a condom, then surely we can educate people on how to acquire a piece of land.

People who now, for the first time, become landowners will never learn the skills of how to improve their property in terms of planning, because all planning work, in terms of this Bill, unless very much specified, will be reserved for planners. Job reservation was an invention of the previous regime, and if we allow it in this Bill to become draconic, it will undoubtedly push up the cost of town planning for landowners.

In my eight years as a member of Parliament, I have assisted many voters with planning problems. I have physically completed many of their forms for them and made telephone calls to the local authorities to help them. With this clause, as it stands, I can no longer do that. I would be breaking the law and in the process, I would let down my constituency.

I would like to conclude by thanking the Deputy Minister and the department, once again, for their open-mindedness on this Bill. The Deputy Minister himself sat with this committee through every meeting of the portfolio committee. I have not seen that before. He always had a sharp mind and tried to address the problems, which I think he is going to address in this Bill as well. Let us use this opportunity to streamline planning in South Africa and continue exploring ways to make sure that South Africa belongs to all of us, not only on paper or in terms of votes, but in terms of landownership. The ANC supports this Bill. [Applause.]

The DEPUTY MINISTER FOR AGRICULTURE AND LAND AFFAIRS: Mr Chairperson, perhaps we could have a bit of a debate, as we should in this House.

Let me quickly get back to Mr Gerber about clause 16(2) which he is so concerned about. I do not think that he is reading it correctly, because clause 13(2) must be read together with clause 16(3). The point is that he will not be doing anything illegal if he divides that matter and does nothing more. It will depend on whether that type of small planning work will be preserved in terms of clause 16(2).

However, I just want to say that we will continue with this debate. We must just get more empirical evidence so that we can make a proper scientific decision on this matter; otherwise we will still be here next year with this thing. I promise that if he can prove it to me, I will be convinced and then we can work on that matter.

In general, I must thank everyone who participated in this debate, as they also did in the portfolio committee. There is a very interesting concept that is being used with the restructuring of education at the moment, the distinction between hardware and software.

Now, what we are doing here is restructuring the hardware of planning. It is not the full transformation because the software is not here. At the moment we are experiencing a lot of problems. For instance, Mr Farrow complained about bad planning. That will only be addressed when we introduce the software. We want to introduce a proper Bill. We will introduce the Bill on land use management very soon.

We are just working with The Presidency on including the concept of a national spatial perspective, which will include economic and spatial economy questions as well. We must sort out a few other details and then we will bring it here, hopefully, very soon. That will be the software which will go with the hardware, the restructuring that we are doing. So, the full transformation includes the normative side, the functionality, apart from the structures that we will be coming with. I think that is what Mr Bhengu also referred to.

Mr Farrow was also concerned with Kokstad Prison becoming the school example. Indeed, what is extremely difficult and more problematic is the integration, which is the technical job of co-ordinating all Government departments, not only horizontally, but also vertically among national, provincial and local government.

We need very sophisticated Government apparatus to really do these things properly. But we hope the software … [Interjections.] No, we are doing far better than anyone has ever done in this bloody place. [Interjections.]

An HON MEMBER: You cannot even build a prison!

The DEPUTY MINISTER: We have built a very nice prison. We must just get the water. Do not distract me. [Interjections.]

Mr Ntuli has also given a lot of attention to the transformation aspects. I want to tell him that we will still introduce the software which will complete the picture.

Let me respond to the hon Mr Van der Merwe.

Dit lyk my hy is nie hier nie. Wat betref die kwessie van standaarde, dit is ook ‘n operasionele kwessie. Dit gaan afhang van hoe goed die raad ons dinge implementeer. Ons as departement sal net eenvoudig baie goeie toesig moet hou, veral deur die wyse waarop die Minister met die regulasies kan werk. Ons sal moet sorg dat die standaarde nie verslap nie, maar dat die publiek beskerm word.

Ek wil met mnr Gerber saamstem dat ‘n mens hierdie saak ekonomies moet benader. Met die beginsel het ek geen probleem nie. ‘n Mens moet ‘n stelsel hê wat nie ekonomiese groei gaan beknop nie. Ons moet dit ten alle koste beskerm. (Translation of Afrikaans paragraphs follows.)

[Apparently he is not here. As regards the question of standards, that, too, is an operational issue. It will depend on how well the council implements our affairs. We, as a department, will simply have to supervise very well, especially according to the way the Minister is able to work with the regulations. We shall have to ensure that the standards are not lowered, but that the public is protected.

I want to agree with Mr Gerber that one has to approach this matter in an economic manner. I have no problem with this principle. One must have a system that will not hamper economic growth. We have to protect it at all costs.]

That is why I am very much in favour of spontaneous land reform and our systems must promote it. I think the same goes for the tariff problem which the hon Abram mentioned. We must monitor how it is operationalised. It is Parliament’s function to keep us accountable, and, through us, also the council. We must look after the council as well. Members need to be in touch with their constituencies and bring the problems around tariffs to our attention. However, we must afford people a proper opportunity to make a life as a planner, otherwise we will not have planners. It is a question of balance. I have become aware of the question of balance …

… die kwessie van oorwoë oordeel, as ek dit so kan uitdruk. [… the question of considered judgement, if I may express it like that.]

Miss Rajbally - I think she has left already - has concerns about the powers of the council. It is again a question of how those powers are going to be exercised. We will keep a close eye on the matter.

I want to thank all members for the debate and for agreeing to this Bill. It was a pleasurable experience for me.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Deputy Minister, before you go: Could you clarify something? You used the words ``bloody place’’. In the way it was used, I think everyone understood the context, but in Hansard, when it is printed, it might appear to be problematic.

The DEPUTY MINISTER: I gladly withdraw that. I am sorry. [Applause.]

Debate concluded.

Bill read a second time. SUSPENSION OF RULES 240 AND 253(1)(b)

                         (Draft Resolution)

The DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I move without notice:

That -

(1) Rules 240 and 253(1)(b) be suspended for the purposes of respectively the introduction of, and the Second Reading debate on, the Loss or Retention of Membership of National and Provincial Legislatures Bill; and

(2) subject to the concurrence of the National Council of Provinces, Joint Rule 154 also be suspended in respect of the Bill.

Agreed to.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon members, earlier this afternoon, when the motion of condolence for the late Mr P R Mokaba was addressed, the hon Ms De Lille of the PAC and the hon Mr Mfundisi of the UCDP were unable to be present. They wish to send their apologies, as they were unable to be in the House, and ask that their condolences be recognised. They fully associate themselves with the motion.

The House adjourned at 17:54. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The Joint Tagging Mechanism (JTM) on 10 June 2002 in terms of
     Joint Rule 160(6), classified the following Bill as a section 76
     Bill:


     (i)     Loss or Retention of Membership of National and Provincial
          Legislatures Bill [B 25 - 2002] (National Assembly - sec 76). TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Education:

 (a)    Revised National Curriculum Statement Grades R-9 (Schools)
     Policy 2002 (Overview Document).


 (b)    Revised National Curriculum Statement Grades R-9 (Schools)
     Policy 2002 (Learning Area Statements).


 (c)    Annual Report and Financial Statements of the South African
     Council for Educators for 2001.

COMMITTEE REPORTS:

National Assembly:

1. Report of the Portfolio Committee on Provincial and Local Government on Budget Vote 5: Provincial and Local Government, dated 10 June 2002: The Portfolio Committee on Provincial and Local Government, having considered Budget Vote 5: Provincial and Local Government, reports as follows:

 A.     Introduction


     1. The budget review of the Ministry and the Department of
          Provincial and Local Government was undertaken from 23 to 26
          April 2002.


     2. Those who appeared before the Committee included Minister F S
          Mufamadi, Deputy Minister N Botha, Acting Director-General Mr
          C Clerihew, Deputy Directors-General Mr E Africa and Ms J
          Manche, Chief Directors Mr L Buys, Ms G Gumbi-Masilela, Ms T
          Mketi, Ms B Mogane-Ramahotswa, Ms L Mosia, Mr D Powell, Mr T
          Seboka and Mr S Selesho, Directors Mr A P Botha, Ms S Dzengwa,
          Ms K Harrison, Mr T S Malaka, Mr B Marrian, Mr R Mosiane, Mr M
          Nkasawe, Mr Y Patel and Ms Y Silimela.


     3. The National House of Traditional Leaders was represented by
          its Chairperson Inkosi M B Mzimela, Deputy Chairperson Morena
          M Mopeli, and members Kgoshi M Malekane, Kgoshi C Mathebe,
          Nkosi M Matanzima and Chief Executive Officer Mr L Molubi. The
          delegation from the Municipal Infrastructure Investment Unit
          (MIIU) consisted of the Chairperson of the Board, Ms M
          Hesketh, Acting Chief Executive Officer, Mr J Leigland, and
          Project Manager, Ms D Magugumela. The Municipal Demarcation
          Board was represented by its Chairperson, Dr M Sutcliffe and
          Manager, Mr H Monare. Local Government Water and Related
          Services SETA was represented by its Chairperson, Mr S Mqaka,
          Deputy Chairperson Mr J Mohlala and Chief Executive Officer,
          Mr A Machin. The South African Local Government Association
          (SALGA) was represented by Councillor J Mohlala, CEO Mr T
          Mokwena and Managers Mr M Mabusela and Mr J Mettler.


     4. A full-day workshop was held with the Department on 26 February
          2002, at which the programmes, plans and strategies of the
          Department were discussed. This served as a precursor to the
          budget review.
 B.     Minister's Overview


     1. The Minister explained that the President's "State of the
          Nation Address" informs the Ministry's and the Department's
          programmes for the year. The Department's work would
          contribute to advancing government's work which is centred
          around the interrelated themes of (i) pushing back the
          frontiers of poverty; (ii) overcoming underdevelopment; and
          (iii) achieving higher rates of investment and growth.


     2. The Minister explained that the President's Coordinating
          Council (PCC), which met in December 2001, enabled the three
          spheres of government to review progress on the establishment
          of the new system of local government. The PCC noted
          appreciable progress in this regard, but also identified
          challenges which require immediate attention. Consequently,
          the Department is drafting a revised programme of support for
          local government for adoption by Cabinet. The key elements of
          the programme include:


          (a) Facilitating greater national and provincial government
              assistance to municipalities to cope with the
              transformation.


          (b) Ensuring greater coordination between the programmes and
              projects of national and provincial departments and IDPs.




          (c) Ensuring that programmes such as LED (Local Economic
              Development) and CMIP (Consolidated Municipal
              Infrastructure Programme) contribute more to stimulating
              local economies.


     3. The Minister emphasised the importance of the ISRDP (Integrated
          Sustainable Rural Development Programme) and the URP (Urban
          Renewal Programme) and the need for effective cooperation
          between all three spheres of government and traditional
          leaders to ensure their successful implementation.


     4. The Minister explained that discussions were underway to
          explore the possibilities of including municipal staff as part
          of the country's public service. This would encourage mobility
          between the three spheres of government.


     5. The Minister stressed the importance of "volunteerism" in this
          "The Year of the Volunteer" and the need for ordinary people
          to take greater control over their own lives. For its part,
          the Department would be taking a much more "hands-on" approach
          to delivery in future.


 C.     Strategic Planning Process and Restructuring of Department
     1. Consistent with the requirements of the PFMA (Public Finance
          Management Act), the Department has finalised a Strategic Plan
          for 2002-2005. This will be followed by a Business Plan.


     2. The further restructuring of the Department will take place in
          terms of the Strategic Plan. There has been a significant
          increase in staff. However, the Department has "underspent" on
          its personnel budget for 2001/02 by 23,7%. The main reason for
          this was the delay in filling vacant posts caused mainly by
          the need to conduct job evaluation for every management post.


     3. The Department has a current staff complement of 208. 56% of
          the Department's staff is female. However, at senior
          management level, women make up only 20%. White and African
          women make up almost 50% each of this 20%. The 80% men in
          senior management comprise 35% African, 35 % White and 10%
          Coloured. The Department has three staff members with
          disabilities. This falls short of the 5% target government has
          set for departments. The Department is finalising its internal
          employment equity plan as part of its strategic planning
          process.


     4. The Department's internal skills audit has just been finalised
          and the Department is now developing an internal capacity-
          building programme.


     5. The Committee welcomes the Strategic Plan as it provides a
          clearer form and structure for the Department's programmes and
          activities and for the Committee's oversight role. The
          Committee feels, however, that the Strategic Plan needs to be
          more specific, especially in terms of measurable objectives
          and outcomes. The Plan should also be more explicit about how
          the Department's work contributes to the key goals of
          government as a whole, including economic growth, job-
          creation, development and redistribution.


     6. The Committee welcomes improvements in the social composition
          of the Department. It notes with concern, however, the
          inadequate representation of women in the senior management
          echelons.


     7. The Committee notes that the post of Director-General of the
          Department has not yet been filled, and urges that this be
          done expeditiously.


     8. The Committee welcomes the Department's commitment to
          strengthening its capacity-building programme. The majority in
          the Committee feels that it is not just technical capacity
          that must be developed, but also a better understanding of the
          goals, political values, perspectives, strategies and
          programmes of the government as a whole that is urgently
          necessary. The Committee welcomes the Minister's statement
          that the Department needs to have a more "hands-on" approach
          to its responsibilities.


 D.     Overview of Budget and Programmes


     1. The Programmes of the Department are: (i) Administration; (ii)
          Governance and Development; (iii) Institutional Reform and
          Support; and (iv) Auxiliary and Associated Services.


     2. The Ministry and the Department of Provincial and Local
          Government have been allocated R6385 million for the 2002/03
          financial year, which is an increase of 34,8% in nominal terms
          (30% in real terms). The increases are 34,8%, 22,4% and 8,1%
          over the MTEF (Medium-Term Expenditure Framework) period.


     3. Most significant is the increase to local government. Transfers
          to local government go up by 18,3% over the three-year MTEF
          period. The allocation for the current financial year rises to
          R8,5 billion from last year's R6,4 billion. Included in this
          is the "equitable share" of R3,8 billion and conditional
          grants of R2,4 billion.  The 2002-03 budget shifts resources
          towards the provision of basic infrastructure and services at
          local level. The Department therefore has to facilitate
          significantly more service delivery.


     4. The Committee welcomes the increases in the budget,
          particularly for local government. The Committee is pleased
          too that, unlike last year, district municipalities will be
          receiving funds from the "equitable share". Of course, the
          allocation to local government is still not adequate. The
          Committee does not believe, however, that the answer lies in
          flinging more money at local government. Municipalities have
          to make more effort to raise the revenue due to them from
          their own sources, spend money more strategically and
          productively, and manage their finances better. Over time,
          however, national government will have to allocate more money
          to local government if local government is to fulfil its
          increasing responsibilities. The Department too now has more
          responsibilities to fulfil with its bigger budget, and needs
          to further develop its capacity to spend and allocate its
          budget more effectively.


     5. In future budget oversight hearings, the Committee would like
          the Department to more clearly set out the relationship
          between its Strategic Plan and its budget.


     6. The Committee welcomes the "clean bill of health" for the 2000-
          01 financial year the Department received from the Auditor-
          General's Office.


 E.     Legislative Programme


     1. The Department hopes to introduce the following legislation
          this year:


          (a) Disaster Management Bill


          (b) Property Rates Bill


          (c) Municipal Structures Amendment Bill


          (d) Legislation on traditional leadership and institutions


          (e) Local Government Laws Amendment Bill


          (f) Amendment to Sections 100 and 139 of the Constitution


          (g) Legislation emanating from Section 41 of the Constitution


          (h) Repeal of outdated Local Government legislation


     F. Integrated Governance: Intergovernmental Relations (IGR), Co-
          Operative Governance, Provincial Systems


     1. The Department emphasised the importance of integrated
          governance to ensuring improvements in planning, service
          delivery and development.


     2. The Department is preparing legislation on IGR
          (Intergovernmental Relations) and cooperative governance, as
          required by section 41 of the Constitution. Among other
          things, the legislation will deal with enhancing the role of
          local government in executive intergovernmental process.  The
          Department is also working with National Treasury to prepare
          constitutional amendments relating to interventions in
          municipalities experiencing major financial difficulties
          within a framework for monitoring, support and interventions.


     3. The Department is to review the Schedule 4 and 5 powers and
          functions of the spheres of government set out in the
          Constitution.


     4. The Committee feels that integrated governance is key to
          achieving the major goals of government. While it notes the
          progress in this regard, it feels that more needs to be done.
          The Committee feels that the success of the ISRDP and URP
          depend crucially on integrated governance, and the success of
          these programmes will also serve to enhance integrated
          governance. An important barometer of integrated governance
          therefore will be progress on the ISRDP and URP. The Committee
          believes that a review of the Schedule 4 and 5 powers and
          functions of the spheres of government is important, and is to
          seek a briefing from the Department on the matter later in the
          year.


 G.     ISRDP (Integrated Sustainable Rural Development Programme) and
     URP (Urban Renewal Programme)


     1. To oversee the implementation of the ISRDP and URP, provincial
          political structures made up of premiers and MECs, and nodal
          political structures consisting of Executive Mayors have been
          established.


     2. Over 120 ISRDP projects worth R3,7 billion were identified in
          November 2001 using the Interim IDP (IIDPs) processes and
          through consultative workshops. A further 122 priority
          projects worth R584 million were identified for this financial
          year. Of these, 48% are currently being implemented while 52%
          are in the planning stages. The Department of Labour has made
          available R18 million for skills development. UNDP provides
          assistance with monitoring and evaluation to the tune of
          US$350 000. Various parastatals and donor agencies have shown
          interest in supporting the programme.


     3. Of the 110 anchor URP projects compiled by the Department,
          63,6% are still in the preparatory stage, 29% are completed
          and 7,4% are still to commence. Examples of planned URP
          projects include Galeshewe Cultural Village in Kimberly,
          Mitchell's Plain Town Centre and Alexandra Jukskei Greening.


     4. Part of the funding for the ISRDP and URP comes from the
          Consolidated Municipal Infrastructure Programme (CMIP) and the
          "equitable share". Each project is separately administered and
          has to have a business plan. For instance the Alexandra URP
          nodal project is audited with World Bank assistance. The
          Department has also embarked on mobilising private sector and
          other stakeholders to assist with the programmes.


     5. The Committee feels that it is vital that the ISRDP and URP are
          a success. Their effective implementation requires not just
          the involvement of government, but public representatives in
          all three spheres, the private sector, trade unions, community
          organisations, non-governmental organisations and a range of
          civil society organisations, as well as ordinary people. The
          Committee believes that MPs living in or servicing the nodal
          areas should actively monitor and contribute to the
          implementation of the ISRDP and URP. The Minister should also
          consider writing to the relevant MPs to seek their appropriate
          contribution. The Committee also feels that there should be
          more communication through the media about the ISRDP and URP.


     6. The Committee feels that it is difficult to evaluate progress
          on the ISRDP and URP at this stage. It accepts that these are
          complex and challenging programmes that cannot be implemented
          overnight. The Committee is keen to consider a more
          comprehensive progress report on the ISRDP and URP later in
          the year. It is also keen to get a better sense of the funding
          arrangements for these programmes. The Committee will also
          consider visiting the nodal areas next year.


 H.     CMIP (Consolidated Municipal Infrastructure Programme), LED
     (Local Economic Development) and Social Plan Fund


     1. The CMIP was established in 1998 as an infrastructure programme
          to address backlogs in service delivery. The LED was
          established in 1999 as a poverty alleviation programme to
          facilitate local economic growth. The Department has decided
          to merge the two programmes to have a coordinated approach.
          The allocation to CMIP has increased from R1034m last year to
          R1769,5m this year, an increase of 71%.


     2. The LED Fund has funded 186 projects to the value of R186
          million. It has created 3 215 permanent jobs. Through the
          fund, 99 738 person days of temporary employment have been
          created and 8 293 people trained on various projects. The
          Department has identified over 80 new projects for the 2002-03
          financial year.


     3. The Social Plan Fund is an outcome of the 1998 Presidential
          Jobs Summit. It was established in 1999 to provide
          municipalities with financial assistance to undertake local
          economic regeneration studies. During the past financial year,
          the plan provided funding to six municipalities. Following a
          review of the fund, eight rural nodes have been allocated
          money for this financial year.


     4. The combined CMIP and LED funds will be utilised to develop a
          National Infrastructure Investment Framework; strengthen the
          role of the Municipal Infrastructure Task Team; provide
          national strategy for addressing infrastructure backlogs; and
          facilitate a single infrastructure funding mechanism. Both
          programmes will undergo extensive external evaluation to
          consider their impact.


     5. The Committee welcomes the merging of the two programmes. The
          committee is pleased that the CMIP budget has been increased
          by 71%. It is concerned, however, about whether the Department
          will be able to allocate its full CMIP funds to
          municipalities, especially in view of its inability to
          allocate its full CMIP budget in the past two financial years.
          The Department explained that there were many sound reasons
          for this "underspending", including the slow process of
          project approval and implementation by both provincial
          government and municipalities. However, the Department is
          determined to overcome the obstacles and allocate the full
          CMIP budget during this financial year. The Committee is keen
          to see this happen and will be monitoring the progress.


 I.     Local Government Transformation


     1. The Department reported that it is constantly monitoring and
          actively contributing to the local government transformation
          process. Among the many areas in which it is working are the
          consolidation of IDPs (Integrated Development Plans),
          establishment of performance management systems, finalisation
          of the division of powers and functions between local and
          district municipalities, determination of the fiscal powers of
          local and district municipalities, and review of the local
          government financial system (including the "equitable share",
          the property rates system, the RSC levy, and the implications
          of the restructuring of electricity industry).


     2. The Department accepts that the transitional arrangements in
          regard to the division of powers and functions between
          district and local municipalities, while necessary, make for
          uncertainty. The finalisation of the division is necessary to
          ensure proper planning, budgeting, setting up institutional
          structures and attending to other key aspects of the
          transformation. The Department has set up an Inter-
          Departmental Task Team (IDTT), including SALGA, the Finance
          and Fiscal Commission, and Municipal Demarcation Board to
          undertake a detailed assessment of the capacities of
          municipalities and their service delivery arrangements. The
          IDTT report has taken into account the views of all
          stakeholders. The Department is presently undertaking a series
          of bilateral consultations with the Departments of Health,
          Water Affairs and Forestry, Minerals and Energy, and National
          Treasury. Through this process consensus is emerging. It is
          envisaged that the division of powers and functions will be
          finalised by May 2003.


     3. The City Support and Learning Network has been established to
          bring together the 9 major municipalities, including the 6
          metropolitan municipalities, so that they can learn from each
          others' experiences and support each other.


     4. The Department is developing guidelines on the establishment of
          ward committees. It recognises, of course, that a number of
          ward committees have already been established. The Department
          is looking into the possibility of the Imbizo concept used by
          provincial and national government being extended to local
          government.
     5. In co-operation with the MDB, the Department is investigating
          the specific problems of cross-boundary municipalities and
          exploring various options to deal with the problems.


     6. About 55% of the country's population is receiving free basic
          water services. There are 10 pilot projects on the provision
          of free basic electricity. The Department explained that there
          are problems of logistics, infrastructure, capacity and
          funding that are determining the pace of progress, especially
          in respect of electricity.


     7. The Department is to develop policy frameworks to regulate the
          remuneration of councillors and senior managers of
          municipalities. This will be an interactive process with the
          relevant role players.
     8. The Committee recognises the magnitude of the local government
          transformation underway and the many challenges that have to
          be contended with. It is acutely aware that the Department
          alone cannot meet these challenges, SALGA, provincial
          governments, public representatives, municipalities, trade
          unions, the private sector, NGOs, CBOs, local government
          professionals and other sections of civil society, as well as
          ordinary residents, have important roles to play. The
          Committee itself should be doing more to contribute to the
          transformation.


     9. While recognising the challenges and the important role of
          other stakeholders, the Committee feels that the Department
          should be contributing more effectively to the local
          government transformation. There is a need for greater clarity
          on issues around the strategy, programmes, targets and time-
          frames of the Department's local government transformation
          work. The Department could also be playing a more effective
          coordinating role of the key stakeholders in the local
          government transformation process. The Committee is pleased to
          learn that there has been significant progress in finalising
          policy on the distribution of powers and functions between
          local and district municipalities and that the Department has
          the support of all the key stakeholders. As this is a matter
          of such importance, this progress should be communicated
          publicly.


     10.     While it is understandable, given the infrastructure
          disparities, the Committee is concerned that the free basic
          water service is being provided largely to urban residents,
          and hopes that more rural residents will receive the service
          soon as well. The Committee is also concerned at the cutting
          off of water services to residents who cannot afford to pay,
          and urges the Department to contribute to exploring practical
          ways of resolving the issues of arrears in payments and free
          services. The Committee will seek to arrange a joint meeting
          with the Water  Affairs and Minerals and Energy Portfolio
          Committees.


     11.     While recognising the sensitivities of the issues, the
          Committee feels appropriate consideration should be given to
          reviewing the boundaries of the provinces as a way of
          resolving the difficulties posed by cross-boundary
          municipalities.


     12.     While recognising the restraints of funds, resources and
          capacity, the Committee feels that provincial governments
          could do more to assist municipalities to effect
          transformation.


     13.     The Committee believes that the Department should do more
          to assist SALGA to play a more effective role, and that this
          can be done in a way that does not intrude on SALGA's
          autonomy.


     14.     The Committee believes that it is absolutely crucial for
          the success of the local government transformation that an
          effective capacity-building strategy is implemented and that
          an appropriate system of local government finances is
          developed. These are urgent needs, and the Committee believes
          they should be expeditiously attended to. The Committee, once
          again, expresses its concern about the financial implications
          of the restructuring of the electricity industry and requests
          the Department to intervene appropriately.


     15.     The Committee feels that there is not a sufficiently
          concrete sense of progress with regard to the local government
          transformation process, and is keen to pursue this further
          with the Department later in the year. The Committee is also
          to undertake a study tour of municipalities in the second half
          of the year.


     16.     The majority in the Committee feels that there is a need
          for further careful consideration of councillor remuneration.
          One of the issues that needs to be addressed is the
          significant gap in remuneration between full-time and part-
          time councillors. There are also difficulties that flow from
          ward councillors being part-time while PR councillors are full-
          time. Obviously the national budget is under considerable
          strain, but over time consideration has to be given to whether
          it might be appropriate for councillors, remuneration to be
          paid for either in full or part from the national budget. Over
          the longer term, with increasing responsibilities being
          imposed on local government to ensure delivery and
          development, there also needs to be an open debate about
          whether the gap between public representatives in the local,
          provincial and national spheres should not be significantly
          reduced, so as to allow for easier mobility of representatives
          between the three spheres (although this will serve to
          increase the gap between full-time and part-time councillors).
          Of course, in suggesting that these debates occur over time,
          the Committee is acutely aware of the stringent constraints on
          the budget and other difficulties, and that it will take quite
          some time before these issues can be fully addressed.


 J.     Local Government Capacity-Building


     1. The Department explained that it recognises the importance of
          having an intensive local government capacity-building
          programme to ensure that the new local government model is
          effectively implemented and is working with other relevant
          stakeholders in this regard. The December 2001 meeting of the
          PCC resolved that municipalities should receive "hands-on
          support from national and provincial governments within a
          framework of clear transformation targets and deadlines".
          (Deleted reference to joint World Bank project as it could not
          be verified). The Department is also finalising special
          support programmes for the two new metropolitan municipalities
          - Ekuthuleni and Nelson Mandela - with the assistance of the
          Cities Network programme.


     2. The Committee believes that it is extremely vital that the
          capacity-building programmes for local government be
          intensified and more effectively implemented. The success of
          the local government transformation depends crucially on a
          significant improvement in levels of capacity. It is not only
          technical capacity that has to be improved, but there also has
          to be a focus on political capacity and the need for a
          particular work orientation. The Committee repeats its concern
          over the lack of co-ordination among all the stakeholders
          responsible for local government capacity-building, and urges
          that this be attended to expeditiously. The Committee feels
          that it might be appropriate for the Department to see its
          role as primarily that of co-ordinating. SALGA should take
          primary responsibility for building the capacity of
          councillors and the LGWSETA (Local Government and Water Sector
          Education Training Authority) should focus primarily on
          personnel training. The Committee is keen to organise a full
          briefing on local government capacity-building with the key
          stakeholders in the second half of this year.


 K.     Traditional Leadership and Institutions


     1. The Department explained that it recognises the importance of
          finalising policy and legislation on traditional leadership
          and institutions. The President, in his "State of the Nation"
          address, made it very clear that there will be significant
          progress in this regard this year.
     2. The Department intends to finalise the White Paper on
          Traditional Leadership and Institutions by July 2002 and to
          introduce legislation later this year. The interim Bill on the
          powers and functions of traditional leaders in local
          government will not be reintroduced. National framework
          legislation will be introduced, which will allow provinces to
          formulate their own legislation.


     3. The Department continues to offer support to the National House
          of Traditional Leaders and recently established a task team to
          address the specific concerns of the House. The term of the
          House is to expire soon and the Department is assisting with
          preparations for the inauguration of the new House.
     4. The Department is at present considering a report dealing with
          the Khoisan communities.


     5. Of course, the majority in the Committee appreciates the
          complexities and difficulties in attending to issues of
          traditional leaders and institutions, but would like to see
          significant progress this year, and urges the Department to
          fulfil the deadlines it has set in this regard. The Committee
          would also like to see greater progress in addressing the
          concerns of the Khoisan communities as well.


 L.     Disaster Management


     1. The Department expects that Parliament will pass the Disaster
          Management Bill by June this year. The Bill seeks to provide a
          uniform and co-ordinated approach to disaster management in
          the country. It shifts the focus from managing disasters to
          prevention and mitigation. It is envisaged that the Disaster
          Management Framework, as required by the Bill, will be
          developed by February 2003. By March 2003 a process of
          assessing capacities of municipalities and provinces will be
          launched with a view to implementing sections of the Bill.
          SALGA has commissioned a study to determine which sections of
          the Bill can be immediately implemented.


     2. The Department is negotiating for some sections of the
          Fundraising Act to be transferred to it for easy access during
          disasters. NGOs have been approached to provide relief
          operations on agency bases when the need arises. The
          Department will also be in consultation with the LGWSETA on
          disaster management capacity-building and training.


     3. The Department is part of developing a SADC cross-border
          assistance framework, a standing operational procedures manual
          for relief operations, and an initiative to relax protocols
          that pose logistical cross border constraints.


     4. The Committee welcomes the progress on disaster management.


 M.     South African Local Government Association (SALGA)


     1. SALGA's allocation has increased from R16 million last year to
          R22 million this financial year. SALGA explained that the R22
          million will serve merely to meet the expenses of personnel,
          travelling and meetings. According to a tentative budget it
          had drawn up to meet the costs of its proposed programmes,
          SALGA needs R120 million. It intended to draw these extra
          funds from its provincial affiliates. At present the provinces
          raise R30 million.


     2. SALGA is undertaking an audit of municipalities to establish
          progress on the local government transformation process, and
          the report on this will be presented to Parliament. SALGA is
          embarking on a plan to play a more active role in the
          implementation of the ISRDP and URP. SALGA is actively engaged
          with the Department of Minerals and Energy on the financial
          implications of electricity restructuring. SALGA is concerned
          about the possible adverse effects of the restructuring of
          electricity on the finances of municipalities, and is working
          with the Department on ways in which to respond to this.


     3. SALGA undertook a major organisational analysis and identified,
          among other things, that its work is being hampered by its
          lack of both administrative and technical support. In response
          to this, SALGA is undergoing a major restructuring process,
          central to which is the alignment of the organisational
          structures with overall strategy. The objective of the
          restructuring process is to create cohesion within the
          organisation. The core elements of the restructuring process
          include determining strategy, performance goals and budget
          allocations nationally. SALGA believes that both the envisaged
          cohesion and the injecting of more human and financial
          resource capacity into the organisation will assist SALGA to
          execute its constitutional mandate and accelerate service
          delivery.


     4. SALGA recognises that it lacks the necessary profile it needs,
          especially during these challenging times of local government
          transformation. SALGA will also take initiatives to raise
          funds and not be dependent only on national allocations.


     5. The Committee appreciates the difficulties SALGA has to contend
          with, but believes that it can and must be more effective. The
          Committee finds it difficult to appreciate how SALGA will be
          able to raise a budget of R120 million. Notwithstanding
          resource and other limitations, the Committee feels that SALGA
          needs to be monitoring, and contributing to, the local
          government transformation more effectively. SALGA's
          participation in Parliament is far from adequate, and the
          Committee appeals to it to appoint a permanent parliamentary
          liaison officer. The Committee also feels that the public
          profile of SALGA needs to be enhanced. The Committee feels
          that it needs to pursue many more issues with SALGA and will
          seek to meet with SALGA's representatives to take this further
          in the second half of the year.


 N.     National House of Traditional Leaders:


     1. In executing its constitutional mandate, the National House has
          established six standing committees: Management; Internal
          Arrangements; Rules; Constitutional Development; Social
          Development; and Traditions, Customs and Culture.


     2. The House has established an HIV/Aids task team in co-operation
          with the Department of Health. The House also participates in
          a rural safety project in co-operation with the Department of
          Safety and Security.


     3. As part of its plans for the next financial year, the House has
          drawn up a strategy to ensure more effective service delivery.
          Other identified activities for the 2002-03 financial year
          include participation in the White Paper process, building
          structures and partnerships with potential investors and
          donors, and capacity-building workshops for the members of the
          House.


     4. Inkosi Mzimela expressed the deep disappointment of the House
          in the government's failure to address the concerns of
          traditional leaders. The House objected to the control the
          Department has over its budget. It wanted to "de-link from the
          administration of the Department". The House would like to be
          part of the Presidency, as it considers that its work cuts
          across all Departments. The House feels that the Department is
          not responsive to its capacity-building needs. The House wants
          to be involved in the drafting of the White Paper on
          Traditional Leadership and Institutions.


     5. The Committee feels that the report submitted by the House is
          not satisfactory, and requests the Department to assist the
          House in preparing an adequate report for the next financial
          year. In particular, the Committee has to have a better sense
          of how the House is spending the budget allocated to it, what
          the programmes and activities of the House are, what outcomes
          it is seeking to achieve each year, and how it measures its
          progress. The Committee suggests the Department meets the
          House and resolves outstanding issues regarding a capacity-
          building programme within three months. As for the other
          issues raised by the House, the Committee Chairperson will
          meet with the Department and Ministry and provide a response
          to the House within three months. The majority in the
          Committee feels that the House should continue to negotiate
          with the Department and Ministry about its concerns. There is
          steady, if slow, progress on the concerns of traditional
          leaders, and the House is encouraged to constantly negotiate
          to further its interests.


 O.     Local Government, Water And Related Services Sector (LGWSETA)


     1. The LGWSETA draws its funds from the skills levy paid by the
          employer. In the past financial year it received R121 million.
          For this financial year it expects to receive R120 million. In
          terms of the relevant funding regulations, only 60% of this is
          available to be disbursed as grants to employers to fund
          learning activity in local authorities and water companies.
          According to the LGWSETA, this falls far short of its needs.
          Proper training is not possible with these funds. The learning
          costs are estimated to be between R15,000 and R20,000 per
          learner per learnership. On this estimate, if the total
          available grants are claimed by employers, the maximum number
          of learners that can participate in full-time learnerships is
          estimated to be between 3 600 and 4 800 learners per year,
          which is between 1,3% and 1,7% of the total employees in the
          local government and water sector. The learnership course
          development costs are estimated to be between R1,1 and R1,4
          million each. The LGWSETA needs to develop a minimum of 40
          learnerships with a total estimated development budget of
          between R44 and R56 million over the next three years, an
          amount greater than the total estimated discretionary grant
          funds available to it over the first five-year period (2000-
          2005).


     2. The LGWSETA feels there are at least four options to increase
          the funds it gets:


          (a) To increase the levy from 1% to 4% of payroll. This would
              have to be a voluntary undertaking by employers in the
              sector because an amendment to the Skills Development Act
              is unlikely to find political support from employers
              generally;


          (b) To broaden the scope of coverage of the sector to become a
              local government and utilities sector including, for
              example, electricity generation. This would involve an
              amalgamation of some existing SETAs that would require
              amendments to regulations and the approval of the
              Minister of Labour;


          (c) To allocate a much larger percentage of the further and
              higher education budget to vocational training, as
              happens in the Netherlands and other European countries


          (d) To access donor funds to meet learning development costs
              as a short-term intervention.


     3. The LGWSETA explained that as a relatively newly created
          structure it was experiencing certain teething problems that
          it would, over time, overcome. Its CEO was only appointed in
          November 2001 and the new skills manager will start only in
          August 2002. The CEO conceded that the LGWSETA report to
          Parliament may not be satisfactory, but next year the report
          will reflect an increased level of development and delivery
          activity.


     4. The CEO explained that there were no intakes for learnerships
          during the past financial year. The LGWSETA hopes that there
          will be eight learnerships by the end of this financial year.
          The LGWSETA has decided to focus its development activity on
          shorter skills programmes to address urgent needs for service
          delivery.


     5. The Committee finds it very difficult to get a clear sense of
          the value of the LGWSETA's work. While appreciating the
          difficulties the LGWSETA confronts, the Committee feels that
          it can be more effective than it is. The Committee felt that
          the previous Local Government Training Board was very
          ineffective, and hoped the LGWSETA would be a significant
          improvement. At this stage, regrettably, there is no sign of
          this. The Committee, as explained above, is very concerned
          about the inadequacy of capacity-building and training
          programmes in the local government sphere, and feels that
          LGWSETA should be working with other stakeholders and doing
          more to contribute to the local government transformation. The
          Committee is especially concerned about the lack of co-
          ordination between the relevant capacity-building and training
          stakeholders, and would like to see LGWSETA playing a more
          active role in contributing to the necessary co-ordination
          being effected. The Committee will seek to convene a meeting
          of all the relevant stakeholders later in the year.
     6. The Committee is not clear about how effectively and
          productively the LGWSETA has used the funds allocated to it
          thus far. The Committee does not feel competent to evaluate
          the LGWSETA's proposals on options to increase its funds, but
          will refer this to the Labour Portfolio Committee and the
          Department of Labour.


 P.     Municipal Demarcation Board (MDB)


     1. The budget of the MDB has been reduced from 15,8 million last
          year to R11,6 million this financial year. The Board had a
          shortfall of R3,5 million last year, which was funded by the
          Department. The Board consistently relies on the Department
          for supplementary funding. The Board expressed concern at the
          reduction of its budget. Although the boundary determinations
          have been essentially completed, the Board still has a lot of
          outstanding work to attend to, and the budget allocated is not
          adequate.


     2. The main activities of the Board have centred around: (i)
          boundary categorisation, (ii) powers and functions of
          municipalities, (iii) alignment of service-delivery boundaries
          and (iv) improvement on the functioning of its administration.
          During this financial year, the Board will consolidate its
          work around the areas outlined above and will also play a
          part in finalising the outstanding issues of local government
          transformation.


     3. The majority in the Committee feels that the Board still has
          important responsibilities to fulfil and should be funded
          adequately. The Board has been extremely frugal and productive
          in its use of its budget and other resources. In view of its
          exemplary use of funds, its case for more funds carries a
          certain credibility with the Committee.


 Q.     Municipal Infrastructure Investment Unit (MIIU)


     1. The MIIU was established in 1998 for a five-year term, mainly
          to assist municipalities to secure private sector investment
          in municipal services. Its term comes to an end in April 2003,
          but Cabinet is likely to renew it.


     2. The MIIU's allocation has increased from R6 million last year
          to R7 million this year. The MIIU's overall budget is R17,5
          million. This budget is also being financed with surplus funds
          carried forward from the previous financial year, plus
          anticipated interest on investment and success fees. The
          financial year of the MIIU ends in February of each year but
          will change, as required by the PFMA, to align with the
          financial year of government. The consolidation of newly-
          demarcated municipalities slowed down requests for assistance
          from MIIU last year, but the demands on MIIU are expected to
          increase in this financial year.


     3. In the past financial year, MIIU completed MSPs valued at R6,7
          million. 433 445 households benefited from this. In the past
          financial year the Unit managed to sign five major MSPs,
          including the Kelvin Power Plant Sale in Johannesburg and
          Uthukela Water Partnerships Multi-Jurisdictional Municipal
          Service Districts. The latter, which is the first of its kind
          in the country, is a very innovative water distribution
          service involving three district municipalities.


     4. The MIIU has conducted a series of diagnostic studies of
          municipalities to investigate potential successes, constraints
          and challenges for the MSPs.


     5. The Committee welcomes the clear and precise report from the
          MIIU and feels that the MIIU has been effective. The Committee
          supports a renewal of the MIIU's mandate. Of course the
          Committee recognises the obvious challenges in securing
          private sector investment for more rural municipalities, but
          feels the MIIU should be seeking more creative ways of
          achieving this, especially with the increasing importance of
          the ISRDP and the long-term benefits for the private sector if
          it became appropriately involved in this programme.


 R.     Conclusion


     1. The reports of the Department to the Committee were better this
          year than last year. Of course, they could be better.


     2. The Department has major responsibilities. It has to contend
          with budgetary, resource, personnel and other limitations. In
          the circumstances, it is coping reasonably. Notwithstanding
          the constraints, the Department has to be far more effective
          in fulfilling its responsibilities.


     3. The Committee has identified its concerns in different sections
          of this report. Fundamentally, these revolve around two
          interrelated themes:
          (a) the need for greater coordination and integration in the
              many senses identified in this report; and
          (b) the need for major capacity-building initiatives in the
              many senses suggested in this report.


     4. Given limitations on time and capacity, the Committee will
          follow up on the issues raised in this report before the end
          of the financial year. The Committee expects the Department
          and the above statutory bodies to respond to the issues raised
          in this report in their presentations to next year's budget
          hearings.


     5. Within the context of the separation of powers between the
          executive and legislature, the Committee would like to co-
          operate more effectively with the Department and contribute
          more to addressing the challenges identified in this report.


     6. The Committee recognises that it too needs to improve its
          capacity to fulfil it oversight role.


     7. The reports provided by SALGA, LGWSETA and the National House
          of Traditional Leaders were not satisfactory and have to be
          better next year. Where possible, the Department should offer
          appropriate assistance to these organisations.


     8. The Committee expresses its appreciation to researchers, Ms D
          Hene and Mr C Sibanyoni and Committee Secretary, Mr L Brown,
          for their assistance in the preparation of this report.


     9. The Committee expresses its appreciation to the Minister,
          Deputy Minister, Acting Director General, other
          representatives of the Department and representatives of the
          statutory bodies for their co-operation with the Committee in
          respect of the budget hearings.

1. Report of the Portfolio Committee on Provincial and Local Government on the Local Government: Municipal Structures Amendment Bill [B 22 - 2002] (National Assembly - sec 75), dated 7 June 2002:

 The Portfolio Committee on Provincial and Local Government, having
 considered the subject of the Local Government: Municipal Structures
 Amendment Bill [B 22 - 2002] (National Assembly - sec 75), referred to
 it and classified by the Joint Tagging Mechanism as a section 75 Bill,
 reports the Bill with amendments [B 22A - 2002].


 The Committee further reports, as follows:


 1.     The Bill basically addresses the consequences of constitutional
     amendments providing for "crossing the floor" in the local
     government sphere.


 2.     The current electoral system in the Local Government: Municipal
     Structures Act, 1998 (Act No. 117 of 1998), is very closely linked
     to the model of local government.  The model was significantly
     based on a prohibition of "floor crossing". In respect of both the
     constitutional amendments, as well as the amendment of the
     principal Act by this Bill, there has been a concern to provide
     for "floor crossing" in a way that does not erode the foundations
     of the new model of local government, especially the concepts of
     democracy underpinning it.


 3.     The Committee believes that the provisions of this Bill respond
     appropriately to the above concerns, and that they could serve to
     strengthen aspects of the new model of local government.


 4.     The provisions to allow for "crossing the floor" have
     consequences for the composition of district councils,
     metropolitan subcouncils and other municipal structures and
     committees. Among other matters, the Bill provides for the
     reconstitution of metropolitan subcouncils in terms of a new
     formula that makes provision for "floor crossing". It is difficult
     at this stage to fully anticipate all the consequences that
     "crossing the floor" will have for district councils, metropolitan
     subcouncils and other municipal structures and committees. The
     Committee will closely monitor the process. The Committee urges
     the Department of Provincial and Local Government to play a full
     and effective role in ensuring that all the practical consequences
     of "floor crossing" are catered for through legislation, including
     regulations, as well as guidelines and other appropriate means.


 5.     The provisions on "crossing the floor" also confer additional
     responsibilities on the Electoral Commission. The Commission is
     urged to put the necessary infrastructure and procedures in place
     to attend to these responsibilities expeditiously.

1. Report of the Portfolio Committee on Justice and Constitutional Development on the Constitution of the Republic of South Africa Amendment Bill [B 16 - 2002] (National Assembly - sec 74), dated 7 June 2002:

   The Portfolio Committee on Justice and Constitutional Development, having considered the subject of the Constitution of the Republic of South Africa Amendment Bill [B 16 - 2002] (National Assembly - sec 74), referred to it and classified by the Joint Tagging Mechanism as a section 74 Bill, reports the Bill with amendments [B 16A - 2002].

2. Report of the Portfolio Committee on Justice and Constitutional Development on the Constitution of the Republic of South Africa Second Amendment Bill [B 17 - 2002] (National Assembly - sec 74), dated 7 June 2002:

   The Portfolio Committee on Justice and Constitutional Development, having considered the subject of the Constitution of the Republic of South Africa Second Amendment Bill [B 17 - 2002] (National Assembly - sec 74), referred to it and classified by the Joint Tagging Mechanism as a section 74 Bill, reports the Bill with amendments [B 17A - 2002].

3. Report of the Portfolio Committee on Justice and Constitutional Development, dated 7 June 2002:

   The Portfolio Committee on Justice and Constitutional Development resolved to initiate a Loss or Retention of Membership of National and Provincial Legislatures Bill dealing with procedures on loss or retention of membership of a legislature by a member who ceases to be a member of the party which nominated him or her, and on the merging of one party with another party.

   The Committee complied with Rule 238(1) by tabling a memorandum in the National Assembly on 12 November 2001, setting out particulars and explaining the objects of the proposed legislation, as well as stating whether it would have financial implications for the State.

   The House, in accordance with Rule 238(3), on 13 November 2001 gave permission that the proposal be proceeded with.

   The Committee therefore reports that it has introduced the Loss or Retention of Membership of National and Provincial Legislatures Bill [B 25 - 2002] (National Assembly - sec 76) by submitting a copy thereof to the Speaker in accordance with Rule 243.

4. Further Report of the Portfolio Committee on Justice and Constitutional Development on Crossing-the-Floor Legislation, dated 10 June 2002: The Portfolio Committee on Justice and Constitutional Development wishes to report further on the Crossing-the-Floor Legislation, as follows:

 1.     The four Bills dealing with changes of party membership and
     merger/subdivision of parties, namely the -


     *  Loss or Retention of Membership of National and Provincial
       Legislatures Bill [B 25 - 2002];


     *  Constitution of the Republic of South Africa Amendment Bill [B
       16B - 2002];


    *  Constitution of the Republic of South Africa Second Amendment
       Bill [B 17B - 2002]; and


     *  Local Government: Municipal Structures Amendment Bill [B 22 B -
       2002],


     will commence on the date of publication in the Gazette.


     In terms of transitional provisions contained in the legislation
     (the new item 23A(4) in [B 25 - 2002], and the new Schedule 6A
     item 7 in [B 16B - 2002]), the first opportunity for those changes
     will occur immediately after such commencement and will last for a
     period of 15 days.


 2.     It is imperative that the administrative structures and
     mechanisms, in particular the designation of officers by the
     Independent Electoral Commission, to deal with those procedures
     must be in place at the time of such commencement.


     *  The Committee recommends that the Independent Electoral
       Commission be urged to ensure that steps are taken timeously in
       order to ensure that the provisions of item 7 of the new
       Schedule 6A, as provided for in the Constitution of the Republic
       of South Africa Amendment Bill [B 16B - 2002], could be
       implemented smoothly in the local government sphere.
     *  The Committee also recommends that the Secretaries of
       Parliament and of the various provincial legislatures be urged
       to ensure that steps are taken timeously in order to ensure that
       the provisions of the new item 23A(4), as provided for in the
       Loss or Retention of Membership of National and Provincial
       Legislatures Bill [B 25 - 2002], could likewise be implemented
       smoothly in the national and provincial government spheres.


     The Committee is of the view that the relevant functionaries may
     wish to ensure that uniform practices and procedures are developed
     for this purpose. The Committee offers the drafts contained in the
     Annexure to this Report as a contribution to promote such
     uniformity. It is further suggested that the Independent Electoral
     Commission should, as soon as possible, publicise a list of all
     officers designated by the Commission to facilitate the necessary
     procedures in the local government sphere and submit the list to
     political parties.


 3.     The Committee further recommends that the Department of Justice
     and Constitutional Development be requested, in conjunction with
     the relevant role-players:
     *  To research the laws pertaining to the registration of
       political parties in order to ascertain whether or not any such
       laws should be amended in order to expedite the registration of
       new parties emerging as a result of the new provisions, in
       particular the subdivision of parties. It should be noted that
       the Independent Electoral Commission expressed the view that, at
       present, the Independent Electoral Commission Act, 1996, does
       not make provision for the subdivision of parties.


     *  To review the laws pertaining to the funding of political
       parties, in particular parties represented in a legislature, and
       to take such steps as may be necessary to ensure that those
       provisions are aligned with the changes effected in terms of the
       above legislation.


     *  To consider all legislation which may need to be amended in
       order to be brought into line with the new laws referred to in
       paragraph 1, and to make recommendations regarding such changes
       as may need to be effected.
     *  To revert to the Committee within two months of the
       commencement of the said legislation regarding all steps it has
       taken or will be taking as a result of the above matters.


 4.     In addition to the Report of the Portfolio Committee on
     Provincial and Local Government on the Local Government:
     Municipal Structures Amendment Bill [B 22B - 2002] (Announcements,
     Tablings and Committee Reports, 10 June 2002), it should be noted
     that an important principle is established by the amendments to
     the Local Government: Municipal Structures Act, 1998, in so far as
     the reconstitution of metropolitan subcouncils is concerned after
     changes of party membership, mergers or subdivision of parties
     have taken place. In terms of the relevant amendment, metro
     councils may determine their own mechanism for the appointment of
     councillors in the proportional representative component of
     metropolitan subcouncils. Although such a mechanism must comply
     with the principles of fair representation and democracy, as set
     out in Part 2 of Schedule 4 to the Municipal Structures Act (as
     amended), it is desirable for some degree of uniformity to be
     maintained by the respective metro councils. To this end, the
     Minister for Provincial and Local Government is requested to issue
     guidelines to metro councils on a possible model for such a
     mechanism.


 5.     The Committee further recommends that a copy of this resolution,
     together with the abovementioned Bills, be forwarded as a matter
     of the utmost urgency to the -


    *  Speaker of the National Assembly and the,;


     *  Speakers of the provincial legislatures;


     *  Independent Electoral Commission;


     *  Department of Home Affairs;


     *  Department of Provincial and Local Government; and


     *  South African Local Government Association.
 Report to be considerd.


 ANNEXURE


 NOTICE TO ELECTORAL COMMISSION


 (Item 4(2)(a) of Schedule 6A to Constitution)


  CHANGE OF MEMBERSHIP OF A PARTY
  BECOMING MEMBER OF A PARTY
  CEASING TO BE MEMBER OF A PARTY

In terms of item 4(2)(a) of Schedule 6A to the Constitution, I, ………………………………………………………………. (full names), hereby inform the Electoral Commission that, being a councillor who was elected from the party list of the …………………………………. (name of original party) represented in the Municipal Council of …………………………………., I have become a member of the …………………………………. (name of new party). to represent …………………………………. (name of ward) in the Municipal Council of …………………………………., who was nominated by the …………………………………. (name of party) as a candidate in the ward election, I have ceased to be a member of the …………………………………. (name of original party) and have become a member of the …………………………………. (name of new party). _ to represent …………………………………. (name of ward) in the Municipal Council of …………………………………., who was nominated by the …………………………………. (name of party) as a candidate in the ward election, I have ceased to be a member of the …………………………………. (name of original party) and have not become a member of another party. _ to represent …………………………………. (name of ward) in the Municipal Council of …………………………………., who was not nominated by a party as a candidate in the ward election, I have become a member of the …………………………………. (name of party).

………………………………………………….. SIGNATURE OF COUNCILLOR DATE

CONFIRMATION

In terms of item 4(2)(a) of Schedule 6A to the Constitution, I, ………………………………………………………………. (full names), acting on behalf of and in my capacity as …………………………………. of the …………………………………. (name of party), hereby confirm that …………………………………. (full names of new member) has been accepted as a member of the …………………………………. (name of party).

………………………………………………….. SIGNATURE OF REPRESENTATIVE DATE

CERTIFICATION

I, …………………………………. (full names of officer designated by the Electoral Commission), hereby certify that this notice has been duly submitted to me by …………………………………. (full names of councillor) and confirmed by *…………………………………. (name of party) on …………………………………. (date) at ………………………………… (place).

………………………………………………….. SIGNATURE OF DESIGNATED OFFICER DATE *Complete, if applicable

NOTICE TO ELECTORAL COMMISSION (Item 4(2)(b) of Schedule 6A to Constitution)

_ PARTY MERGING WITH ANOTHER PARTY _ PARTY SUBDIVIDING INTO MORE THAN ONE PARTY _ PARTY SUBDIVIDING AND SUBDIVISION MERGING WITH ANOTHER PARTY

In terms of item 4(2)(b) of Schedule 6A to the Constitution, I, ………………………………………………………………. (full names), acting on behalf of and in my capacity as …………………………………. of the …………………………………. (name of party), hereby inform the Electoral Commission thatÿ _ the …………………………………. (name of original party) as represented in the Municipal Council of …………………………………. has merged with the …………………………………. (name of party). A list of the names and signatures of all the councillors involved in the merger is attached. _ the …………………………………. (name of subdivision) has subdivided from the …………………………………. (name of original party), being a party represented in the Municipal Council of ………………………………….. A list of the names and signatures of all the councillors involved in the subdivision is attached. _ the councillors mentioned in the attached list have subdivided from the …………………………………. (name of original party), being a party represented in the Municipal Council of …………………………………. and merged with the …………………………………. (name of party). A list of the names and signatures of all the councillors involved in the subdivision and merger is attached.

………………………………………………… SIGNATURE OF REPRESENTATIVE DATE

CONFIRMATION (Complete in event of merger or subdivision and merger)

In terms of item 4(2)(b) of Schedule 6A to the Constitution, I, ………………………………………………………………. (full names), acting on behalf of and in my capacity as …………………………………. of the …………………………………. (name of party), hereby confirm the names of all the councillors involved in theÿ _ merger; or _ subdivision and merger; and that the …………………………………. (name of party) has accepted the merger.

…………………………………………….. SIGNATURE OF REPRESENTATIVE DATE

CERTIFICATION

I, …………………………………. (full names of officer designated by the Electoral Commission), hereby certify that this notice has been duly submitted to me by …………………………………. (full names of representative) and confirmed by *…………………………………. (name of party) on …………………………………. (date) at ………………………………… (place).

………………………………………………. SIGNATURE OF DESIGNATED OFFICER DATE *Complete, if applicable

NOTICE TO SPEAKER OF LEGISLATURE CHANGE OF MEMBERSHIP OF A PARTY (Item 23A(5)(c)(i) of Schedule 2 to Act 200 of 1993)

In terms of item 23A(5)(c)(i) of Schedule 2 to the Constitution of the Republic of South Africa, 1993, I, ………………………………………………………………. (full names) hereby inform the Speaker of the …………………………………. (name of legislature) that I have

n ceased to be a member of the …………………………………. (name of original party); and

n have become a member of the …………………………………. (name of new party).

………………………………………………….. SIGNATURE OF MEMBER DATE

CONFIRMATION

In terms of item 23A(5)(c)(i) of Schedule 2 to the Constitution of the Republic of South Africa, 1993, I, ………………………………………………………………. (full names), acting on behalf of and in my capacity as …………………………………. of the …………………………………. (name of party), hereby confirm that …………………………………. (full names of new member) has been accepted as a member of the …………………………………. (name of party).

………………………………………………….. SIGNATURE OF REPRESENTATIVE DATE

CERTIFICATION

I, …………………………………. Speaker of the ……………………………. (name of legislature), hereby certify that this notice has been duly submitted to me by …………………………………. (full names of member) and confirmed by …………………………………. (name of party) on …………………………………. (date) at ………………………………… (place).

………………………………………………….. SIGNATURE OF SPEAKER DATE

NOTICE TO SPEAKER OF LEGISLATURE (Item 23A(5)(c)(ii) of Schedule 2 to Act 200 of 1993)

_ PARTY MERGING WITH ANOTHER PARTY _ PARTY SUBDIVIDING INTO MORE THAN ONE PARTY _ PARTY SUBDIVIDING AND SUBDIVISION MERGING WITH ANOTHER PARTY

In terms of item 23A(5)(c)(ii) of Schedule 2 to the Constitution of the Republic of South Africa, 1993, I, ………………………………………………………………. (full names), acting on behalf of and in my capacity as …………………………………. of the …………………………………. (name of party), hereby inform the Speaker of the …………………………………. (name of legislature) thatÿ _ the …………………………………. (name of original party), as represented in the …………………………………. (name of legislature) has merged with the …………………………………. (name of party). A list of the names and signatures of all the members involved in the merger is attached. _ the …………………………………. (name of subdivision) has subdivided from the …………………………………. (name of original party), being a party represented in the ………………………………….. (name of legislature). A list of the names and signatures of all the members involved in the subdivision is attached. _ the members mentioned in the attached list have subdivided from the …………………………………. (name of original party), being a party represented in the …………………………………. (name of legislature) and merged with the …………………………………. (name of party). A list of the names and signatures of all the members involved in the subdivision and merger is attached.

………………………………………………. SIGNATURE OF REPRESENTATIVE DATE

CONFIRMATION (Complete in event of merger or subdivision and merger)

In terms of item 23A(5)(c)(ii) of Schedule 2 to the Constitution of the Republic of South Africa, 1993, I, ………………………………………………………………. (full names), acting on behalf of and in my capacity as …………………………………. of the …………………………………. (name of party), hereby confirm the names of all the members involved in theÿ _ merger; or _ subdivision and merger; and that the …………………………………. (name of party) has accepted the merger.

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CERTIFICATION

I, …………………………………. Speaker of the …………………………………. (name of legislature), hereby certify that this notice has been duly submitted to me by …………………………………. (full names of representative) and confirmed by *…………………………………. (name of party) on …………………………………. (date) at ……………………………….. (place).

………………………………………………….. SIGNATURE OF SPEAKER DATE *Complete, if applicable