MONDAY, 9 JUNE 2003 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY
                                ____

The House met at 14:02.

The 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.

                         APPROPRIATION BILL

Debate on Vote No 8 - National Treasury (including the South African Revenue Service) and Vote No 13 - Statistics South Africa:

The MINISTER OF FINANCE: Thank you, Madam Speaker. Madam Speaker, hon members, in many respects the Growth and Development Summit which we held this past Saturday was a watershed for all of South Africa, and certainly for the issues at hand in the debate on the two Votes and three departments before us today. The GDS was possible because of the economic achievements of our young democracy, but it was also a reminder of what remains to be achieved.

As a country, we continue to be brave enough to take decisions that may be unpopular in the short run, but ultimately beneficial in the long term. This is the spirit of the GDS that prevailed on Saturday. More fundamentally, we must also be able to dream and we must set ourselves realistic visions, behind which we should rally as a people: a dream of a better life; a dream of a time when all South Africans can share the fruits of our rich and diverse land. No better leader could have led us down this path than President Mbeki in his call for a GDS 18 months ago.

The GDS is a call to action to all South Africans. It urges us to act now to implement our plans to broaden the economy so that it does not benefit only the few; to strive to achieve a low and stable inflation, one that fundamentally protects the poor, and to ensure that our economy is even stronger than it is now so that we can reach high levels of growth and, importantly, job creation.

Government alone cannot address the development and growth challenges of our country. The GDS embodies the commitment and key elements of the partnership between Government, business, labour and community necessary to achieve a better life for all. Collectively, we must take responsibility for the success of this partnership.

The role of Government is to ensure that the macroeconomic fundamentals remain in place and that the environment is conducive for all economic players to engage effectively in the economy. This responsibility will continue to be preserved as a key foundation for delivering on our microeconomic inputs. Indeed, the purpose of the GDS is to build on this foundation and pay increasing attention to microeconomic prerequisites of the growth and employment challenge. Constituencies have agreed to work together in the realisation of our dream. Government is committed to ensuring that tight partnerships are built whilst promising a state growing in effectiveness and in relevance.

We would be foolhardy to either ignore the current perils of the global economy or to sell ourselves short in respect of the already formidable achievements of our own economy. While our international counterparts face the near future with trepidation, for good reason, we remain optimistic. The optimism is not grounded on luck, but on the hard decisions and work undertaken in reforming the South African economy over the past 8 to 10 years.

We are entering a new phase of economic growth and development, looking forward to expanded investment and employment opportunities. Despite the gradual weakening of the international economy, our economy grew strongly last year, averaging a growth of 3% on the back of encouragingly strong growth in investment. Only with a lag has it started showing some signs of weakening in response to the global performance and higher than expected domestic inflation. This lag confirms the health and resilience of the South African economy.

I was able to deliver a very positive Budget this year, which set out the rapid expansion in Government expenditure, together with significant tax cuts and declining borrowing costs. While it’s premature for us to be talking of radical changes to our economic outlook, we must remain vigilant of the economic environment in which we find ourselves. The poor economic situation in Europe and the United States is in marked contrast to the experience here in South Africa. This month marks the 56th month of economic growth in our country. All indications are that this growth will continue.

Our most recent data shows that external exposure is declining; official reserves will start rising on a net basis with the elimination of the net open forward position; prospects for higher investment are improving, with a strong indication of an effective correction in South Africa’s inflation; the costs of borrowing will continue to drop, with declining yields and growing confidence towards the emerging market world and South Africa in particular, and capital inflows will improve on the back of much improved sovereign ratings in South Africa. The outlook for our economy remains positive.

We can only attain the desired outcomes if the machinery of Government is well aligned, well informed and well equipped to deepen the partnership. The opportunity today is for an evaluation by Parliament of the extent to which the joint objectives of alignment, of information and of equipment will be met. In their own distinct ways the three departments - Stats SA, the National Treasury and the South African Revenue Service - contribute to these objectives, both within Government and beyond.

I will now turn to Vote 13, Stats SA. Stats SA has been in the news over the past few weeks for all of the wrong reasons. Let me put the error in the computation of CPIX in perspective. Though regrettable, this type of error is not unique to Stats SA. In fact, statistics agencies in some of the world’s largest economies have at times committed worse errors. But in South Africa, where we set such high standards for ourselves, where our hunger for information is so essential a part of measuring the changes that democracy brings to the lives of our people, we take it very, very seriously. It’s for this reason that we moved as speedily with the Statistics Council to obviate its reoccurrence.

Stats SA has its vision and a series of themes to support it: firstly, enhancing the quality of products and services; secondly, developing human capacity; thirdly, enhancing statistical integration through geography and registers; fourthly, advancing transformation; fifthly, refocusing statistical information in line with user requirements; and sixthly, developing the national statistics system within which the Statistics Council plays an important role.

Work on these themes is exceedingly difficult. South Africa has a shallow endowment of numeracy and statistical skills. As an ongoing project, the organisation must be built from the ground up; recruiting, training and retraining. This is a task which is exceedingly difficult when we have only one university that currently offers an official statistics course, which, incidentally, was only introduced at the start of the 2002 academic year.

Whilst this process continues, important outputs must be regularly and accurately produced. Furthermore, ongoing campaigns are necessary to convince the sources of information - people in their homes, businesses or public servants - that the supply of accurate information is not optional.

Stats SA produces a total of 118 data series, key among which is the population census conducted every five years. Other key statistical series include the national accounts data - such as GDP - price data, in particular the CPIX, the quarterly survey of employment and earnings, the labour force survey, the income and expenditure survey and poverty statistics and mapping.

The strengthening of the organisation and the veracity of its outputs receives ongoing attention in partnership with some of the leading statistical agencies in the world. In the recent period, we’ve invited evaluation missions from the IMF, Stats Sweden and Stats Canada. Each of their reports has commended the improvements already made, but pointed to what remains to be done.

One of the key focal areas resulting from these interactions is the strengthening of the business register. This is a process which also involves the Department of Trade and Industry, the Department of Labour and the revenue service, to ensure that all the databases are utilising the same core information. We will soon be able to announce a broadening of the register to provide a new sample frame for key data on the economy, such as outputs, earnings, employment, labour law exemptions and tax registration. Going forward we will have a stronger data source and a reference check for other outputs. Similarly, in close collaboration with the Stats Council, we will recast the essential series, with a strong emphasis on periodic surveys.

The huge undertaking of Census 2001 is now in its final stages. Stats SA will present the results to the President of the Republic and to the nation on 8 July this year. The value of the results needs to be understood in the context of the fact that South Africa has only had one previous full census and that was in 1996. The results of the two censuses will provide South Africa with two necessary anchors of important socioeconomic information to use for evaluation and extrapolation. In many respects, Census 1996 was undertaken very early in our democracy, presenting, if you wish, a dawn of democracy picture; and Census 2001 will reflect in the outcome of the policy changes. For this reason, there is no margin for error. We are deeply indebted to the sterling work being undertaken by the Stats Council, who are presently working under oath, to ensure that the quality of the results is entirely above reproach.

Stats SA will endeavour to remain true to its vision - a focus on quality and competence and the promotion of evidence-based planning and decision- making. Despite the recent difficulties, its commitment to be the standard- bearer of statistics of the highest quality remains very, very strong. Notwithstanding the fact that as responsible Minister my remit is limited by statute and practice, I wish to give this House the assurance that we will work hard to overcome the obstacles that we ourselves are so conscious of.

Turning to Vote 8, the National Treasury, to ensure efficient and sustainable management of public finances lies at the heart of Government’s efforts to promote economic development, good governance and rising living standards for all South Africans.

Core budget resources will allow the Treasury to focus on ongoing fiscal and budgetary reform aimed at promoting sustainable growth and development, strengthening initiatives to reduce poverty and increase job creation, enhancing budgetary transparency and improving financial management and the quality of public spending.

Further priorities include advancing procurement reform processes and introducing supply-chain management practices; reinforcing the quality of public sector financial accounting and reporting in line with Grap, or Generally Recognised Accounting Practices; ensuring efficient Government debt and financial asset management, and deepening relations with international multilateral institutions. Looking ahead, we are committed to developing macroeconomic policies that are relevant to the twin challenges of growth and development.

On the fiscal front, the Treasury is strengthening its fiscal analysis capacity in line with international trends. The sound but more expansionary fiscal stance first signalled in the 2001 Budget is maintained for the 2003 Medium-Term Expenditure Framework, supporting sustainable growth and development. This achievement, in the face of enormous fiscal difficulties in so many countries, should be applauded. In many respects our fiscal management is now seen as model. We can expand on a sustainable basis because we’ve been willing to take the correct, albeit tough decisions to stay the course.

Increased spending on infrastructure investment has a significant impact on economic growth and the expansion of service delivery. Over the next three years, as hon members know, capital spending will average 5% of GDP in real terms, with strong growth in public-private partnership expenditure supporting the step up in national, provincial and municipal infrastructure investment.

In addition, the deepening of South Africa’s financial markets, gradually liberalising exchange controls, improving the financial sector oversight and regulation and sound and efficient tax policy design play a critical role in stimulating the economy and raising a robust revenue base respectively.

Approximately 60% of expenditure on the main Budget comprises transfers to provincial and local governments, placing them at the forefront of social and basic service delivery. In the 2003 division of revenue we reinforce the shift in the division of nationally raised revenue towards provinces and local government. Over the next three years national transfers to provinces will increase by 6% in real terms and those to local government will rise by 12%.

The recent publication of the 2003 Intergovernmental Fiscal Review provides a consolidated review of spending and service delivery at the provincial and local government level. Strong relations with and the efforts of my provincial colleagues in team finance have contributed to the stabilisation of provincial finances and the focus of attention now is on improving the quality of spending on our schools, health care systems and social development sectors.

Better budgeting and planning contribute to improving service delivery. Recent reforms place us in a stronger position to deepen the link between Government’s policy choices, its spending plans and the delivery of services.

I can say, without fear of contradiction, that the roll-out of the PFMA now places this Parliament in a stronger position of oversight than any other. Parliament has an ENE chapter for each Vote, an annual strategic plan for each department and monthly gazetted reports of actual expenditures, published in terms of section 32 of the PFMA. There is no parliament better equipped to oversee executive functions, both in plan and actual implementation.

The Treasury’s asset and liability division is charged with the efficient management of public sector debt and managing the financing of the budget deficit. Mechanisms for financing the government deficit for the 2003 budget year are currently being put in place. Our debt management system is now one of the most highly regarded in governments across the world. Our weekly domestic auctions are continually oversubscribed. For a number of years our annual foreign placements have been awarded Deal of the Year by the Government Borrowers Forum. In this regard, our most recent placement, a global euro transaction, was heavily oversubscribed. We placed a 10-year euro bond worth 1,25 billion at 125 basis points above the mid swap rate.

I am sure that Parliament is also aware of the fact that two rating agencies, namely Fitch and Standard and Poors, upgraded South Africa’s sovereign credit ratings in the past few weeks.

Turning then to the exchange control amnesty, the amnesty unit was established with effect from 1 June, as required by the recently promulgated legislation. We appointed Advocate Buysile Madlanga to head the unit, and he’ll be assisted by eight panel members, four each from the revenue service and the Reserve Bank.

The week since it opened its doors has seen an overwhelming response. As of this morning, the website has had 5 272 hits from different individuals. We are expecting a flood of applications in the course of the amnesty period. In fact, the first application was faxed to us on the Monday morning that the unit opened its doors. Our decision to proclaim the amnesty has clearly been correct and we will inform Parliament of the successes of the unit from time to time.

Madam Speaker, I’m up against the clock. I thought that I had more than the 20 minutes.

The SPEAKER: You have another three minutes, Minister.

The MINISTER OF FINANCE: I see so. For three Budget Votes, it’s a bit steep, Madam Speaker. [Interjections.] Yes, I should talk to my Whips - loudly.

With regard to the SA Revenue Service, the performance of Sars is judged by evaluating the revenue collected, the administration of South Africa’s growing trade with the outside world and by our success in increasing tax compliance and in combating tax fraud. The three-year strategic plan of Sars that I mentioned in this House last year is paying handsome dividends to the South African Government and the South African public.

This past year has once again seen Sars deliver on its brief. Revenue came in at R281,1 billion in the 2002-03 financial year, with Sars collecting about R1,7 billion above the revised target.

Our customs officials are increasingly stamping their authority on all ports of entry, while our enforcement side continues to score major victories against fraudsters and other criminals. We are prosecuting more and more people for a range of offences.

In respect of enforcement, we continue to develop and implement different mechanisms of risk profiling that are systems-based and involve related third-party interfaces and suspicious activity reports. This has enabled us to identify and address noncompliance effectively at both the national and the regional level. Some examples of this approach were evidenced in the last year in the campaigns launched within the music, fishing, financial services, cash and carry and oil and petroleum sectors and among sex workers and practising professionals who, for the purposes of this discussion, are not the same people.

In implementing the economic sector approach, Sars has identified 10 different sectors where risk exists. Some of the stakeholders in one of these sectors, namely gaming and leisure, have already been approached by Sars with a special focus on the illegal aspects. Sars is examining international financial transactions, structured finance, transfer pricing and e-commerce and is looking at various other economic sectors within the economy.

The benefit of these efforts is evident in a number of ongoing high-profile cases. During the past year, 906 criminal investigations led to successful convictions. The sentences ranged from community service to 15 years’ imprisonment and fines of up to R2 million. We are increasing the number and level of investigators who will be involved in enforcement activities. Ten additional prosecutors will be deployed during this year to further enhance our current enforcement capacity. We’ve commenced the reorganisation of the Woodmead and Special Compliance Unit into a central enforcement unit as a national capacity focusing on special interest areas.

Let me conclude by saying that we place the achievements of a few short years before this august House for evaluation and critical appraisal. Our mission remains the fundamental transformation of South Africa to ensure that democracy effects tangible improvements in the lives of all of our people. A critical element of that mission is our accountability to Parliament. We offer an overview of work done, work in progress and work to be done.

I want to express my sincerest appreciation to the three heads of department, now Prof Maria Ramos - professor extraordinaire at Stellenbosch University - Dr Pravin Gordhan and Mr Pali Lehohla. [Applause.] Their dedication, input and energy remain exemplary. I’d be remiss if I did not also say a word of thanks to the outside officials who assist in bodies like the Stats Council and the various committees overseeing the work of the revenue service.

Finally, I also wish to convey my sincerest appreciation to all members of the Portfolio Committee on Finance, under the able stewardship of Ms Barbara Hogan. [Applause.]

The watchword, amplified at the Growth and Development Summit, is partnership across all of South Africa. We trust that by the discussions here today we will indeed strengthen the partnership between the executive and the legislature. I thank you.

Ms B A HOGAN: Madam Speaker, when I was in prison, about to embark on studying for my Masters in Economics, Ms Maria Ramos was my supervisor. I am very pleased to hear that I was in very good hands, and that others are of the same opinion. So, congratulations to Prof Ramos. [Applause.]

The Minister is correct when he says that he presents in the budget an opportunity for Parliament to exercise its oversight role. This year we attempted to do it more vigorously than we had done in the past. We commissioned researchers who went into that budget. They have produced a report for us. We met as a committee beforehand. We looked at what kind of issues we would like take up with National Treasury, Sars and Statistics SA. That was useful. It gave us an oversight into what the issues are that are confronting the department, often an oversight which is not there because we are caught up in the nitty-gritty.

Let me say that it is not sufficient. What became very apparent in our deliberations with National Treasury and the two other agencies was that in order for us to properly exercise our oversight role, you need continuity. We need researchers who are there daily, weekly, monitoring what is happening, keeping in touch, because the committee members, with their many varied roles that they play in the committee and the committee workload, are simply not able to exercise that oversight responsibility.

The challenges facing this Parliament, in rising to its legislative obligation of exercising oversight over the executive, are enormous, complex and are going to be demanding. It is unfortunate, I would say, that in these last couple of years, we have not been able to rise to that challenge sufficiently in tandem with reforms that National Treasury have brought in to the budget process.

Those reforms have been comprehensive. As the Minister has said, those reforms have provided Parliament with an inestimable value, a value based on concrete facts and information over which we can exercise our oversight role. It is our duty, our responsibility as representatives of the people, to exercise that role. I would hope that, in the future Parliament that is going to come into being in the next year, this will become the central focus of that Parliament.

Yes, we have spent the last ten years overhauling our legislative framework. That was necessary. We had to overhaul our legislative framework because of our apartheid inheritance. I hope that in our next Parliament we will then move to our next role, which is performing our oversight function with a great deal of rigour and objectivity.

When I look at the budget of National Treasury and its singular achievements, the question of budget reform and the achievements in terms of what this Treasury has managed in terms of budgetary reform is considerable. Each department has a strategic plan. That plan is reflected in the budget. Every programme in that budget has a measurable output. It tells you not only how much money is going into a budget, but what will actually be delivered with that money. So you are not just simply looking at the inputs - the money - you are looking at the outputs and what is to be delivered with those outputs. It is that key aspect of budgeting, what is to be delivered, that we need to exercise our minds on.

This was the first year that those measurable outputs were presented in the estimates of national expenditure. Going through that very thick volume, there are certain departments which have produced very interesting outputs, very interesting calculations, and very interesting instruments by which we can measure their achievements.

Bear in mind that a measurable objectives is a double-edged sword. If you put a function or activity up as a measurable objective, you can skew all your activities in the department towards the achievement of that measurable objective so that you will be recorded as having delivered. In the meantime, if you have not chosen the most appropriate measurable objective, whilst you might be lauded for achieving your objectives if, in fact, those objectives are not aligned to what you ultimately want to achieve in your outcomes, it could lead to severe deficiencies in the system of Government delivery.

That is why the choice of an objective is so critical to any government department or any programme. One can’t just simply put forward objectives that are easy to measure or thoughtlessly put these objectives together. This has to be done with a great deal of thought. These outputs must be linked to outcomes. In the old years, we used to talk about the difference between strategy and tactics. Strategy was the long-term objective. Tactics were the means by which we achieved the strategy. That is the relationship between an output and an outcome, the relationship between how you want to reach an objective, and through which means. Those means are recorded in your measurable objectives.

As I have said, you have to be very careful of how you pinpoint those measurable objectives and how you connect the two. If you are saying that you want to improve literacy in your country, and you put forward your measurable objective as a 10% improvement or 20% improvement every year, then you must be able to show that the outcome has been achieved, that literacy rates are improving, and that your training in literacy is keeping up with those who are falling by the wayside and who aren’t able to become literate in a sufficient amount of time. So, the linkage between your outputs and your outcomes are essential for choosing what your outputs should be.

There should be a contract between each legislature and each government department. Each legislature should reach agreement, and each portfolio committee should reach agreement with their particular department on what the actual measurables should be, so that there is agreement.

But it goes far beyond that. Who is going to collect the information on these measurable objectives? This is where we begin to see the problems that affected Statistics SA. In some cases, you see departments requesting Statistics SA to collect the information, because these measurable objectives are, in a sense, statistics. Yet, the management information systems have to be in place within each department to collect that information, otherwise that information is not readily available to the accounting officer, the Minister or the Deputy Minister. Those management information systems are critical for giving feedback on how well a department is delivering and how you need, as a department, to reshape your budget in the future to better fine-tune your budget to reach the objectives that you may or may not be achieving.

Management information systems become critical. We saw the experience with the police, in that they had statistics about crime and then suddenly realised that they had insufficient training on those statistics. That alone affected the whole image of crime in this country. If you have measurable objectives, you have to ensure that that information is properly collected, and that your people who put in the data are well-trained and know what they are doing.

But, over and above that, those people who are dealing with the budget in any government department, and particularly those in National Treasury, need to be in touch with the strategic objectives and the measurable objectives of each and every single department. Too often I have heard complaints from provincial governments and national Government departments that sometimes the budget analysts who are attached to National Treasury, who are the liaison between the National Treasury and their department when they are drawing up their budgets, are not sufficiently in contact with the strategic priorities and objectives of that particular department. We need to have that synergy. We can’t have budgets being controlled or influenced by people who sometimes might have an insufficient understanding of those strategic priorities. By the same token, we can’t have a government department using that as an excuse not to deliver on its deliverables.

On the question of the co-ordination of these statistics, who pulls them together? Some have said the President’s Office should do that. What is the role of GCIS? Where do these all come together in a report? Obviously, they should come in the annual report of each department. Is there a national and provincial Government statement envisaged at any time in the future? The annual reports of departments are tabled in this Parliament. Sometimes they bear very little relationship to the budgets that are presented to this Parliament. There needs to be a closer relationship between these two.

But oversight on the part of the legislature is not simply restricted to oversight on the budget. It must extend to oversight on the annual report. Those annual reports come out in the latter part of the year. No committee, as I understand it at this stage, ever holds hearings on those annual reports, and yet those annual reports are at the heart of oversight. What I am saying is that oversight is a continuing process. It is not simply a process that is restricted to the budget process or to the adjustments estimate. It is a process that involves the work that the Select Committee on Public Accounts does, because the committee scrutinises how the money was spent in the past. It is a scrutiny of how the money is being spent presently, and the figures being issued by the National Treasury. It is a scrutiny of how Government intends to spend in the future. Those are your forward estimates. Therefore it is an ongoing process.

We have to find time in the parliamentary programme to make sure that there is built into that programme adequate time and recognition, both in time and in our procedures, for us to perform our parliamentary oversight role.

I have spoken at length on this, because this was, when I first came to Parliament, at the heart of what I wished to achieved. We have come a long way. I think the executive has gone the furthest. We have now set up a budget committee in Parliament that will assume many of the responsibilities which I have outlined. I do sincerely hope that, in the future, this committee and the portfolio committees that feed into it will be given the requisite resources, time and a part in the programme for it to achieve what is my vision - and I think the vision of many of us in this Parliament - which is for us to achieve, as a legislature, our proper role as an oversight body.

Let me then conclude by saying that I am tired of being a praise-singer for National Treasury. There are many things that this Treasury has done superbly well, and continues to do superbly well. We have a very competent, very able and very efficient team of people who work with us. We always see the results of their work, and we are very pleased to be able to work with a department that has shown so much skill, so much resourcefulness and so much courage.

There are one or two issues that I would still like to address. The first is the question of the review of the formula for the intergovernmental fiscal relations for the division of revenue. That will be coming up shortly once the census results are available. We look forward to that review. It’ll be the first time that this Government will be able to look at how we are dividing our moneys between national, provincial and municipal levels. This will be important.

Second, there is the issue of municipal finance management. We have engaged in a laborious process for nearly one year now, interrogating the Local Government: Municipal Finance Management Bill. If anything is of singular importance for the next five years, it will be overhauling our system of municipal finance management. I am gratified to see that a large amount of money has been allocated for overhauling financial management. That, too, will be the job of a future Parliament.

Finally, I would have liked to cover other matters, but my time has once again run out. Minister, like you, we’ve been censored here. I would like to congratulate the SA Revenue Services for their sterling work and for their blistering pace of reform. It is gratifying to see an agency that was probably the worst-run agency in government transform itself in the last nine years into something exemplary and which is no doubt of great benefit to this country. Congratulations to the Commissioner, and may he survive long and hard in his position, despite all the groans and moans and whines and whinges that I inevitably and always come across about Sars at endless dinner parties. [Interjections.] We might change their name, yes. We need something different.

Finally, congratulations to the Treasury, Statistics SA and the Sars for work well done. We look forward, in the next five years, to even greater changes and reforms within these three agencies. [Applause.]

Ms R TALJAARD: Madam Speaker, may I add our congratulations to Ms Ramos for an honour well deserved and also my sincere agreement with Ms Hogan for the oversight challenges that confront us in this legislature.

There is little doubt that the three Budget Votes that we are debating in the House today are of enormous importance to the fortunes of our country and should be debated separately to reflect the immense scope and scale of the work of the National Treasury and the two agencies accountable to it, Stats SA and SARS.

There is little doubt that in the three agencies and all their respective divisions, much hard work has been done, and in some key areas, and a number of kudos are due.

In respect of the National Treasury no one can deny that we are reaping the benefits of responsible fiscal policies as we home in our focus on questions of higher growth and social development. No one can deny that in international affairs and in the Bretton Woods Institutions and G20 that we punch well above our weight in the interest of the developing world.

In respect of Sars, which my colleague, Dr Rabie, will address in more detail, there can be little doubt that a once moribund organisation has revitalised itself and brought in countless revenue overruns to the benefit of our deficit targets.

However, as Stats SA and the Sars are agencies that are accountable to the Minister and he is, in turn, accountable to Parliament, it is clear that the recent disastrous errors at Stats SA cannot and must not be ignored in this debate before the House today.

As we convene here today, millions of South Africans have consistently overpaid for a number of things ranging from mortgage payments to services based on incorrect inflation data and subsequent monetary policy decisions.

Because of the Stats SA mess, South Africans have had to pay more for food, telephone services, postal services, transport costs and electricity. The data errors also had a devastating effect on bond repayments and the cost of capital for SMMEs and larger corporates.

Stats SA’s lapse and its impact on the CPI figures furthermore had a clear impact on wage settlements and tariffs which has caused further distortions. Due to the distortions that have occurred, the DA calls on all parastatals to institute an urgent review of their recent tariff increases, which were obviously based on the flawed Stats SA data.

In addition, all municipalities that have passed budgets and have utilised faulty inflation data in their budgetary projections and passed budgets that add further fuel to inflationary expectations should review these decisions. Consumers and ratepayers should not be made to pay for someone else’s mistakes.

Stats SA, though independent and protected against executive interference in its statute, remains accountable to the Minister of Finance and the Minister in turn accountable to this House for the actions, omissions and judgment errors of officials under his proverbial executive wing.

The Minister of Finance cannot merely state that there was an error at Stats SA; this is not good enough. He is obviously accountable for the actions and lapses on the part of Stats SA and must explain to this House in detail what went wrong. If it was a lack of funds, his duty to explain is even more pronounced given the pivotal importance of reliable statistics to both sound policy and creditable delivery. If it was a lack of judgment and a lapse in strategic leadership, and therefore a disastrous judgment error on the part of Stats SA and the Statistician-General, he must act and inform the House on what steps he has taken.

The fact is that the crucial household income data and rental figures from the October Household Survey could not be gleaned as the survey was discontinued in 1999; whilst other hobby-horses, including a request of the Presidency on the causes of death to perpetuate a politically inspired assertion that HIV/Aids was not the major cause of death in South Africa, are indeed pursued.

The significance of these errors cannot be overestimated and overemphasised. Every budgetary projection, which used inflation indicators, will have to be adjusted. Monetary policy, and monetary policy decisions that may have been based on the faulty data are equally questionable.

Minister Manuel, you yourself requested a full review of the CPIX-basket nearly a year ago due to concerns about the food inflation and its role and weighting in the basket of elements. Surely these errors should have been picked up as part of that process. Surely someone should have uncovered, over a year ago, that the Household Income Survey had been discontinued and taken corrective steps. We have to ask: Had an investment banker not stopped this circus, would it still be rolling through town?

According to the National Treasury’s Director-General, National Treasury officials did raise concerns with Stats SA - a claim denied subsequently by the Statistician-General. However, yesterday’s Business Report shows clearly that these errors should have been picked up at least a year ago and Mr Lehola’s comments in this regard are embarrassing.

The DA believes that the Minister must account for these errors to Parliament and should take all steps to ensure that action is taken against those responsible.

Errors of calculation which, yes Minister, indeed do occur the world over in statistics agencies, are a far cry from dramatic errors of judgment and lapses in management and leadership; lapses that appear to have occurred in this case. There is little doubt that the Statistician-General should have treated this matter far more seriously than he did. His conduct in this affair is unacceptable.

Confidence, confidence, confidence is key. Hard-won confidence in our macroeconomic policies and fiscal discipline cannot be undone by slip-ups such as the recent CPIX circus at Stats SA. Confidence is far too hard-won to be this easily lost.

There is little doubt that the errors of Statistics SA had an enormous impact on economic growth projections and realised economic growth following a monetary tightening as could be seen in the paltry 1,5% GDP growth figure in the first quarter.

Equally, there can be little doubt that monetary policy needs to be readjusted to take account of the new data. While the revised data can place us within reach of our inflation target, the Governor of the Reserve Bank is rightly concerned about administered prices and wage settlements in the context of weak productivity. There is obviously no long-term trade-off between inflation and economic growth, but it is clear that the South African economy is crying out for a cut in interest rates.

South Africa is gripped in a cycle of high interest rates which is worrying, a paltry first-quarter growth figure and an embarrassing botch-up at Stats SA, seemingly with no accountability. While all eyes will indeed be on the Reserve Bank Governor and the Monetary Policy Committee to cut rates dramatically, all eyes should be on all the role-players in our economy to reach agreement on the importance of the fight against inflation and inflationary expectations that are currently present.

This requires a commitment to review wage settlements and tariff hikes of parastatals on the back of the new data. A correction in terms of wage settlements and tariffs is a crucial important element of any discussion on further structural reforms or microeconomic reforms, and indeed on any discussion on rate cuts, crucial as these are to the economy at this stage. There is no doubt that our economy must not be allowed to contract any further based on faulty inflation data and its consequences in terms of monetary policy decisions.

The DA has requested the Chair of the Portfolio Committee on Finance to hold a public hearing with all role-players concerned as this matter has not been aired where it belongs, namely, in Parliament. We would like to thank the hon Hogan and our colleagues on the committee for agreeing that these matters are of such importance that the portfolio committee should probe them in more detail with those concerned and table a report in the House in this regard. It is in the interest of all of us that we do so and indeed do so on our study trip on which we depart today.

South Africa’s labour market has much to answer for in stifling job creation. While the employed labour aristocracy was present at the Growth and Development Summit over the weekend, the voices of the unemployed people of our country can be heard on the street corners of every suburb every day, pleading for a job.

A recent Economist Intelligence Unit study has slated South Africa’s labour market as among the most uncompetitive in the world. A Growth and Development Summit that fails to address this salient issue can never be seen as a success.

In addition, recent reviews of the South African economy by ratings agencies have highlighted the importance of social investments to start a virtuous cycle of stability, social cohesion, confidence and growth. It is clear that unless social development indicators are treated as part and parcel of an investment strategy, fixed investment will lag.

Investors want to see a comprehensive response to HIV and Aids. They want to see creative and focused policy responses to the skills crisis facing the country. They want to see affordable poverty alleviation that is clearly targeted and delivered to those who are most in need of a social security net and increased efficiency of spending. Investors want to see society trying to cater for the different needs of its dual economy in the interest of overall social cohesion.

In short, investors want to see a clear, untrammelled vision, coupled by a fundamental, political commitment to economic growth and development. We do not need a Growth and Development Summit to tell us that, important as it may be in charting dialogue in society. It is common sense. I thank you. [Applause.]

Mr K A MOLOTO: Madam Speaker, hon members, there are some people in this country who continually argue that the South African tax rates on companies and individuals are high and, therefore, internationally uncompetitive. After pursuing this argument relentlessly, they then come to the wrong conclusion - that the South African tax rates are an impediment to investment and economic growth.

Let us look at the tax rates of various countries in order to deal with this matter. Firstly, let us also note that the South African company tax rate is 30%. This excludes secondary company tax, which serves to encourage reinvestment of profits, thereby promoting economic development. Australia had a company tax rate of 36% in 2002; Belgium: 40,2%; Denmark: 32%; Canada: 43,4%; France: 41,7%; Germany: 54%; the United Kingdom: 30%; the United States: 39,5%. The list is endless.

Truly, the picture would be incomplete if one does not indicate the personal income tax rate of other countries in relation to high income earners. Let us also note that the tax rate on high income earners in South Africa is 40%.

Australia has a tax rate of 36% on high income earners; Belgium: 65%; Canada: 48,6%; Denmark: 63,3%, France: 62,9%, Germany: 53,8%; Spain: 48%. It is clear from an analysis of the tax rates of various countries that South Africa’s tax rate is competitive. Therefore the argument that the South African company tax rate and personal income tax rate are high is baseless. Obviously, there are a lot of factors that are determinants of investments and economic growth in any country. To single out the tax rate as the only determinant of investment is misleading.

We congratulate the National Treasury on developing a tax policy that is supportive of economic growth and development. The achievements of the SA Revenue Service continue to be a source of pride and inspiration for all South Africans. Sars has proven equal to the challenges brought by the movement of people, goods and services across borders. It is a well-managed institution that collects revenue efficiently and ensures that Government succeeds in meeting its developmental challenges.

During the past year there has been an even greater improvement in the processing cycle times of all assessments of tax return forms. Ninety per cent of income tax returns are being processed in less than 21 days, and 95% of help-line queries are dealt with. Sars should be commended for protecting our tax base and for putting in place measures to deal with tax evasion by high-net-worth individuals.

In the coming year Sars will be targeting enforcement action in high-risk areas and sectors, supported by intelligence activities. Risk-profiling techniques will be used to achieve these objectives and to deter tax avoidance. The introduction of a business intelligence centre will help to deal with this problem.

The system will provide better linkages to third party information, for example, if a person registers the purchase of a house for R3 million at the Deeds Office, but discloses an annual income of only R80 000 to Sars, then surely that taxpayer needs to do a lot of explaining regarding his or her true tax status. Therefore specific taxpayer information will be monitored through this project.

Sars will match the taxpayer’s data in relation to the purchase of high- value cars, properties and boats. Sars will also continue to strengthen its criminal investigation capacity in co-operation with the Department of Justice, the National Prosecuting Authority and the SA Police Service.

Tax evasion does not pay; it only brings tears and the grinding and gnashing of teeth. We need to reduce the tax gap because our development challenges are huge. It is part of each and every South African’s national duty to assist in addressing these challenges by paying tax. This Government has committed itself to the creation of a better life for all our people. It needs the support of all of us. The tax revenue base has to be protected.

In the coming year Sars will direct its efforts at improving tax literacy levels through targeted education and outreach programmes. Sars will also continue to interact with taxpayers with a view to improving the level of service and entrenching the new Sars Taxpayer Service Charter.

Taxpayers have rights too. They have the right to a better service and to appeal matters relating to their tax affairs. Improved service will also serve to “incentivise” the behaviour of compliant taxpayers. The simplification of tax forms should receive attention. Sars will also undertake targeted education and outreach programmes, which will go a long way towards raising compliance levels.

We need to congratulate the management of Sars on the success it has had in the implementation of its anticorruption strategy. In 2002, 49 employees were dismissed and 12 cases were referred for further criminal investigation. This year - 2003 - 75 cases have been reported. It is important to deal effectively with this internal threat. The realisation of our people’s hopes and dreams rests on the integrity of Sars.

Special customs enforcement action has been launched jointly with the European Union on VAT roundtripping in the fishing industry. Through the efforts of the customs divisions, major breakthroughs have been realised in drug-busting exercises.

The National Treasury has to be congratulated on the improved international credit rating. This improved international credit rating has reduced our borrowing costs. South African bonds are in demand because of the sound fiscal policy we continue to pursue. Our credibility and our ability to honour all our debts are unquestionable.

We also note with appreciation that the National Treasury has finally eliminated the net open forward position. This has always been a problematic area. It is also encouraging that over the next three years, the National Treasury will focus on assessing policies to manage capital account shocks and the transition from exchange control to prudential regulation of foreign investments by institutional investors. The National Treasury will also, over the next three years, be focusing on shaping the global development policy agenda to improve development policies for African economies and increase the level of aid flow.

The National Treasury continues to play a pivotal role in South Africa’s relationship with other African countries. Some of the initiatives to be undertaken in the next three years include efforts to develop and implement Nepad capital flow initiatives. This will also include debt and development assistance issues. Nepad must succeed. No effort should be spared to develop this continent.

The management of the economy of this country is in good hands. South Africa is destined to achieve greatness. Therefore the ANC supports this Budget Vote. [Applause.]

Dr G G WOODS: Madam Speaker, the IFP’s approach to this afternoon’s debate is not to dwell on any single specifics or to dwell on the economy as a central issue. We are just briefly going to go through the various programmes and responsibilities of Treasury and the Minister. We’ll pick up on issues that we feel have relevance to the Budget Vote before us.

With regard to the first programme, namely Administration, it is obvious that when one takes the transfers out of the Treasury budget, personnel expenditure is the big issue there, and so it should be. The department is one that requires particularly technical expertise as it sees its way to deliver environments and facilitate particular services, mainly in the financial sector and other areas, rather than delivering products or social services. There are no real problems with that programme.

The second programme of Treasury is the Economic Planning and Budget Management. As I have indicated, we are not going to dwell on economic policy. We have said, as have most of the others, that Treasury and the Minister are doing a fine job on macropolicy. However, on the fiscal policy side, where we know there is a fiscal unit, perhaps a couple of points could be raised. Sometimes there is inconsistency in tax policy, because we have never yet seen a broad fiscal or tax policy framework and so we get different tax policies coming up and being argued from different bases. Sometimes they are argued on the basis of promoting production and consumption, at other times it is on resolving inequalities. Then there are other tax issues such as the ability to pay, certainty, simplicity, and I think, cost of compliance. So we need to get a bigger picture some time from the tax unit and through the DG and Minister as to where tax reform is actually going and where the priorities actually exist. Otherwise, from an oversight point of view, when tax laws come, it is sometimes difficult to keep a finger on things.

Still under this programme, another issue worth raising is the Financial Regulation Unit. Something that we look forward to is the Bill on the accountancy professions, given that there were very big and very topical issues over the past period and we know there are many issues out there that this particular Bill will attempt to address. We understand that progress is being made by the Ministerial panel that was set up and hopefully its recommendations will be forthcoming in the near future to inform that particular Bill.

Another Bill which I would like to draw the Minister’s attention to is the Bill on the securities services. As I seem to remember, the Deputy Minister said in this House last year that we would still receive it last year. It is being anxiously awaited, but it has not made an appearance yet. It is also an important piece of legislation in the way that it will hopefully modernise the approach to markets and ultimately create a more efficient JSE.

A third issue under this unit would be the single regulator debate, and here one would urge Treasury to take a greater initiative and show a bit more leadership in research by producing a plan around which we can debate, negotiate and resolve this issue of whether we go the single or double regulator route. It is creating some uncertainty and the recent banking and insurance industry failures seem to hint at the urgency for a resolution of this issue.

Programme 3 deals with Assets and Liability Management and previous speakers have commented on the excellent work done by this department. I think it is the forté of the DG in particular, but also of Mr Brian Molefe, who I believe is going to the PRC. We wish him well there. The management in this department has been very astute on the debt management side, the borrowings and successful bonds issuing, the reduction in debt servicing costs and the cash flow. This all amounts to our ever increasing rise up the ratings of international credit agencies. In reference to that seminar I read about in this morning’s paper, which took place last Friday and was run by the Economist Intelligence Unit, we rated rather poorly on the risk side. There seemed to be something unfair about the criteria they used to judge us there. I think that is something we need to look at more closely and perhaps take up with them.

As regards the programme concerning financial management and systems, the Minister is quite right. Implementation of the PMFA has been very methodical and systematic. It seems that all departments and entities have responded well to taking on the PFMA. I have one reservation, which I often raise and will raise again, that even though we got into the area of measurable objectives, it was a special performance consideration, which is not being built into the way we are introducing this. It is all very well to produce measurable objectives, but unless we can say that those are good objectives, are value-for-money objectives, we don’t know whether the performance we are aiming for is really the ideal performance that we owe the public for the money that they give us to spend.

As regards the procurement programme, there is great progress there and the regulations are very modern and those departments, of which Treasury was one, which had trial runs with these have proved that this sort of responsibility for procurement can be devolved and can be taken up successfully at departmental level. With new efficiencies coming and the whole concept of supply chain management, the way that that’s creeping into the thinking in the public sector further endorses these reforms we have seen on the procurement side.

In the programme for financial accounting and reporting, the Accounting Standards Board which the Minister set up in February last year seems to have found its feet. I think the Minister has put the right people on that board. One recognises that accounting practices are evolving slowly and it is very interesting to see the 3-year plan for the introduction of accrual accounting, which is nice and ambitious. Having been able to learn from the experiences of the Australasian countries, I think three years is about the right term that we are aiming for here.

On the reporting side, yes, it was said earlier on that we are becoming something of a world leader in this regard, on the disclosure side. I have participated in international conferences in recent times and there is no doubt that we are ahead of even some of the leading developed countries when it comes to transparency and disclosure.

I am also having a time problem today. As regards Provincial and Local Government Transfers, the review from the FFC will be coming up shortly, but just listening to the reaction of provincial governments in particular, they seem to be very content with the participation and the logics of the current distribution system. There doesn’t seem to be any controversy there, so any future review might be a refinement, but it is one area where things seem to be operating very well.

I have no real comment on Civil and Military Pensions, as there seem to be no real problems. With Programme 8, Fiscal Transfers, those that go to bodies such as the FFC and FIC, there are no real problems there. I have said before about the FFC that even though some of the work they do is of a reasonable quality and it is useful and promotes debate, I still don’t know that they as a body justify their existence and the rather sizeable budget that we allocate to them.

Moving on from the programmes to public entities, for which the Minister has an oversight responsibility for or which report to him, we get the very impressive annual report from the DBSA which tells of all their remarkable achievements, but I am not sure that we really have an objective assessment of the social return on the state’s multibillion rand investment in the DBSA. Regarding the FSB, there are a number of complaints coming from the public about the slowness of investigations into issues such as insider trading and share price manipulations. They talk about the maze of contradictory regulations which some financial service companies take advantage of.

I don’t want to go into indulging in the dramatic economic consequences of recent incorrect statistics by Statistics SA. I think we have heard about the difficulties in our national stats agency. The Minister has cracked the whip and he has said that he will fix it. He has a track record of fixing things when he says he will. Let us give him six months and ask him to report back to us then.

On the PIC side, they have performed consistently well over the years, with good returns recently, given the conservative approach in the market that has existed. There is little controversy about whether they should use pensioners’ future funds for investing in black empowerment deals and the risks attached. However, there is a limitation to that and I’m sure there won’t be a problem there.

Sars remains one of the brightest jewels in the Treasury crown, but I’m still not sure that we optimise its budget correctly. With the commissioner saying there is much scope for further reduction in tax gaps, perhaps there is a need for a reassessment then on whether they are getting the right budget or not.

Let me just conclude by saying that it is all in all a very well-run organisation, Treasury and its appendages. We are very grateful for what they do and we thank the Minister, the DG and the heads of departments for their work, their past record and their competence. The IFP supports this Vote.

Dr G W KOORNHOF: Madam Speaker and hon members, it is a privilege for me to participate in this debate, and an honour to represent the ANC for the first time. [Applause.] My decision to join the ANC was preceded by deep thought over a period of time. I was especially impressed with the efficient manner in which the ANC Government has been implementing a package of sound policies. It is particularly the economic policy that is transforming our society successfully.

Our economy is on the right footing and successes achieved so far provide a solid basis for the future. I have realised together with many voters, that this Government is leading South Africa in the right direction. It will lead to a sound and secure future for all South Africans, because decisions are based on well thought through policies. Since I decided to join the ANC, I have been convinced, more than ever, that it was the right thing to do. I am therefore focused on putting all my energy into expanding the policy of access to a better life for all, and to push back the frontiers of poverty. [Applause.]

I am glad to say that I was welcomed warmly in the ANC. I feel at home and I look forward to serving this organisation and its leadership. This is a political party which states in its Constitution and in the Freedom Charter that South Africa must be a nonracial, nonsexist, and democratic country. [Applause.]

We will fight for social justice to eliminate the vast inequalities created by apartheid and the system of national oppression. If you want to live in South Africa, you must work for South Africa. Let us join hands and work together for our country. Our aim must be to unite all the people of South Africa for the complete liberation of our country from all forms of discrimination and inequalities.

I want to thank the Chairperson of the Portfolio Committee on Finance, Ms Barbara Hogan and the ANC study group for affording me the opportunity to speak in this debate.

Budget 2003 is the tenth budget presented to a democratic South African Parliament. Let me remind members what the new South Africa inherited a decade ago. Our economy was in deep recession with negative growth, high inflation expectations, an unsustainable high fiscal deficit, heavy government indebtedness, a heavy tax burden on individuals, isolation from technological advances, and low future prospects. In short, we were on the brink of an economic disaster. What has happened since then?

Whereas people generally refer to the political miracle of South Africa when discussing our first democratically elected Government, I think history will also identify that the foundation for our economic miracle was laid during the last ten years.

During the last decade, the boom-or-bust economic cycles that characterised the growth performance of South Africa in the past have been replaced by robust and broad-based sustainable growth. Inflation and the fiscal deficit has declined; Government debt has been lowered; billions of rands have been put back into taxpayers’ pockets; high levels of confidence, certainty and stability have been established; and increased empowerment opportunities for previously disadvantaged people, women and the poor have been created. With sound fiscal and monetary policies, our economy has successfully weathered recent global economic volatilities.

Due credit for this dramatic turnaround of our economy must be given to the leadership abilities, commitment and vision of one person, supported by highly professional teams in National Treasury, SA Revenue Service and Statistic South Africa; and a very effective Deputy Minister. That person is our Minister of Finance, the hon Trevor Manuel. [Applause.]

Many challenges remain, including creating employment, alleviating mass poverty and deep inequalities, and addressing low savings and investments. Some of these challenges are currently being addressed, for example, the agreements reached at this weekend’s Growth and Development Summit. What remains steadfast is that the Government is increasingly realising our social and economic goals of a better life for all. One of the major achievements in the National Treasury during the last three years has been the establishment of public - private partnerships, or so-called PPPs. Since 2001 the PPP unit in the Treasury has concluded six projects valued at R6 billion. Projects include Cape Town’s scenic Chapman’s Peak Drive toll road, the Albert Luthuli Hospital in KwaZulu- Natal and some ecotourism reserves. Euro Money’s International Project Finance Journal has hailed the R4,5 billion Inkosi Albert Luthuli Hospital as the Africa Health PPP Deal of the Year 2002.

This evolution of a philosophy of risk sharing and far-sighted project management between the public sector and the private sector has paid dividends. Currently Treasury’s PPP unit involves national departments, provincial departments, public entities and the private sector; with no less than fifty contracts, which are under negotiation. With the approval of the municipal finance management Bill by Parliament in the near future, many municipalities will also form part of the public-private partnership process. I trust that the PPP unit will assist many municipalities with such projects, from feasibility studies to completion.

I appeal to the Minister that PPP projects should not only entrench the interests of previously advantaged groups in the private sector, but also include local black empowerment groups to participate in these projects, for example in providing essential support services. Direct involvement by Treasury brings credibility to projects and promotes investor confidence.

Government spends large amounts of money on big projects - R12 billion has been earmarked in the current budget and we therefore must ensure that it is being spent well. Through the PPP programme we are making sure that a project is affordable, provides value for money, and that it transfers financial risks. All requirements combined improve service delivery.

Madam Speaker, the recent mistake by Statistics South Africa regarding CPIX calculations is regrettable. This is not the first time that mistakes have been acknowledged by Statistics South Africa. I am referring to uncertainties about the calculation of economic growth in 2001 and the calculation of growth in primary sectors within the provinces. As an autonomous institution, Statistics SA must be held accountable for their actions and products.

The CPIX calculation mistake has a knock-on effect for the public sector, the private sector and every citizen as well as for the current budget and the Medium-Term Expenditure Framework. Statistics SA should now ensure that these kinds of mistakes are not repeated. We need to know that the statistics they produce are credible and reliable, because major policy decisions are based on official statistics. And I would ask the Minister not to pay too much attention to the overreaction from the DA, because the DA is like a person riding backwards in a carriage. It never sees a thing until it has gone by. [Laughter.]

We urge Statistics SA to consider the proposals of the Financial and Fiscal Commission with regard to existing data gaps. This includes regular audits, the refinement of a national statistics system which is coherent and consistent, with regular reporting to the Minister of Finance. They should also consider, I think, reintroducing the October Household Survey.

Madam Speaker, regarding tax matters, in conclusion, we have to compliment the Revenue Services and Treasury for an outstanding performance. The SA Revenue Services has achieved revenue collections consistently above target for the last six years, bringing in additional collections of R49,2 billion. This is an excellent track record.

While revenue as a percentage of the GDP has stabilised between 24,5% and 25%, the following trends have emerged during the last six years: The lowest personal bracket has increased from R31 000 to R70 000; the highest marginal rate has declined from 45% to 40%; the tax threshold has increased from R18 000 to R30 000; tax cuts have accumulated to R55,1 billion; company tax rates have declined from 35% to 30% and secondary tax on companies has declined from 25% to 12,5%. Indeed these are achievements we should be proud of.

The ANC supports the two Budget Votes. I thank you. [Applause.]

The DEPUTY MINISTER OF FINANCE: Deputy Speaker, hon members, each year is defined by a number of significant events that directly influence our financial wellbeing and determine our collective future as players in the global marketplace. In last year’s speech we talked about the effects of the events of September 11, the string of corporate failures around the world, and the demise of Argentina as key events that shaped our financial world.

Whilst these events still influence our markets today, the war in Iraq and the spread of SARS - not the revenue service - are the two key events that pose new challenges and are in the process of redefining outcomes in terms of the global economy.

The volatility in global markets that was the consequence of the build-up to the war in Iraq affected our markets, both positively and negatively. The gold price shot up along with oil prices, but the net effect was reflected in significantly weaker global equity prices across the board. This has had a severe effect on pension funds and other market related savings instruments.

The period under review, that is the period after September 11, the build- up to and the onset of the war in Iraq, as well as the outbreak of Severe Acute Respiratory Syndrome, has also seen a considerable growth in tourism to South Africa, as well as a considerable strengthening of the South African currency.

The point we are making is that in South Africa we remain optimistic. And how can we not be with an economy that has shown resilience and strength in the face of adversity. We are proud of this fact and will continue to ensure that Government’s economic and financial market policies are capable of delivering stability and growth within continuously changing global circumstances.

This environment gives us a chance to reflect on the progress made since last year’s budget vote debate on a number of key areas. Briefly, these are developments in our financial markets; progress made with regards to consumer protection and education; the regulation of auditors and accountants; combating of money laundering; implementation of an effective and efficient system of government procurement; progress made in the disbursement of special pensions and the performance of the Government Employees’ Pension Fund, whose assets are managed on its behalf by the Public Investment Commission (PIC).

Reflecting on the year since the last budget, a number of developments have occurred within our financial markets that are worth mentioning. Firstly, there is the relationship that developed between FTSE and the JSE in 2002 which we are watching as it matures and which seems to be proving fruitful and exciting, particularly to the participants. Members might be aware that FTSE now calculates all the JSE’s indices and works with the exchange to develop new indices. This work is also complemented by the JSE’s efforts to develop new markets, including a development capital market that is anticipated to be launched within the coming months. These developments are mirrored in the derivatives market with the development of new types of contracts being offered by the Futures Exchange in the agricultural futures market.

The JSE has also recently issued updated listings requirements that focus on a number of key issues, including improved corporate governance amongst listed companies. Certain aspects of the King Code on Corporate Governance have been expanded on to provide companies with clearer guidelines in terms of reporting and board functions and responsibilities.

Looking at the debt market, the Bond Exchange of South Africa listed R41 million of an initial R150 million issue of Swaziland’s Post and telecommunications debt on 15 April this year. This is a significant development for us, given the regional role South Africa’s financial markets intend to play as a source of regional capital for development.

In terms of the regulatory framework governing the markets, the Collective Investments Schemes Bill was passed towards the end of last year and enacted in the beginning of this year. The FSB has already begun to implement all the necessary changes to the regulation of the collective investment industry in line with this new legislation.

Madam Deputy Speaker, you may recall that in the last budget vote we indicated that the security services Bill was going to be tabled in Parliament last year. This is arguably the most important piece of legislation awaiting the portfolio committee’s input, because it will not only consolidate five pieces of existing legislation into one Act, but it will also represent a whole new approach to the institutional structure of South Africa’s financial markets. The Minister of Finance withdrew the Bill from the process of being tabled in Parliament early last July and requested the Treasury to address concerns that had been identified about the practicalities of implementing some of the new provisions contained in the Bill.

As a result of this the legislation has been delayed for almost a year, but the hon Gavin Woods will be happy to hear that it is now back on track and on its way to Cabinet for the second time after key amendments have been agreed to. It is now anticipated that this key legislation will be tabled before this House in the coming quarter.

On consumer protection and education, in the past year legislation and regulations have been put in place to ensure that pensioners, policy holders and investors alike are protected and educated. The Financial Advisory and Intermediary Services Act, better known as the FAIS Act, was promulgated in mid-November last year.

In March this year the Minister approved the regulations of the FAIS Act for the establishment of the FAIS Ombud. The appointment of an ombud is expected to be finalised by the beginning of July this year. The ombud will be empowered to impose penalties on advisors or intermediaries who contravene the Act in the form of a fine or imprisonment for up to one year.

In addition to this, the FSB is currently completing the process of consultation with its FAIS Advisory Committee to begin registering all advisors and intermediaries. This is a crucial step towards the enforcement of the Act given that registration implies that the FSB will have jurisdiction over those seeking to regulate. The FSB intends to begin the registration process in July this year.

As part of a comprehensive consumer education strategy, the FSB is also planning to launch an education campaign involving the distribution of booklets that will assist low-income and middle-income South Africans in their purchase of financial services. The booklets will be issued in basic dialogue format and will accentuate the message that: To live in financial soundness depends more on discipline and an awareness of one’s needs than on intelligence, thus making it possible for each consumer, rich or poor, intelligent or not so intelligent to enhance his or her personal financial soundness and by so doing create a wealthier, more prosperous South African society.

It is envisaged by the FSB that the distribution of these booklets will begin in early July 2003. And currently there is fundraising going on for the printing and distribution of these booklets, including raising money for training school teachers and others to teach people about the contents of the booklets.

Finally, the FSB’s Consumer Education Department has also been involved in an awareness campaign around surplus pensions. Because there is a lot of misconceptions as to who will have access to the surpluses of pensions funds, the idea is to make sure that everyone concerned is informed of his or her rights.

I would like to now take a moment to focus on the auditing and accounting profession, as it is one of the most fundamental issues affecting the integrity of our markets and our economy today. We are pleased to address this issue today, given the substantial progress that is being made towards bolstering the regulation of these two professions.

As members may be aware, the Minister launched a panel for the review of the Accounting Professions Bill in December last year. It has nine terms of reference which can essentially be grouped into three key areas. The first one is the independence of auditors from their clients. The second one is an appropriate system of accountability and liabilities for auditors. The third one is the need for an appropriate institutional and legislative framework to be implemented to support the goal of protecting the integrity of our financial markets through honest, accurate and fair financial reporting.

The panel is due to provide the Minister with recommendations on the terms of reference by the end of July this year. The panel has already solicited public comment, which we believe has resulted in lengthy debates about the correct approach to take. It should be noted that the terms of reference, all public comments received and other relevant information about the panel can be found on the Treasury’s website by clicking on the icon ``Accounting Professions Bill’’.

The process that will unfold subsequent to the panel providing the Minister with recommendations is anticipated to be as follows. Firstly, the recommendations will be reviewed by the Minister and the National Treasury and depending on the practicalities of the recommendations, they will either be fully or partially accepted. Secondly, the accepted recommendations will then be written into legislation through amending the existing Accounting Professions Bill, the Financial Reporting Bill and, with the co-operation of the Minister of Trade and Industry, the Companies Act. Thirdly, once the redrafted legislation is complete, it will then be circulated for public comment and inputs will be incorporated where appropriate.

When the legislation is complete, Cabinet, and finally, Parliament will be requested to endorse a new way forward in terms of the regulation of auditors and accountants. It is anticipated that this process should be complete by the middle of next year given our commitment to ensuring that the integrity of our financial markets is protected. The approach that we are taking is to try and ensure that the solutions we implement are as holistic and practical as possible. At this point we are very pleased with the progress that is being made and look forward to providing members with an update next year.

As far as money laundering is concerned, South Africa has embarked on an ambitious programme which started when the Financial Intelligence Centre was established in 2001. The Act that creates the FIC, namely the Financial Intelligence Centre Act, is regarded as one of the most comprehensive and leading pieces of legislation in this field. Since the beginning of this year, implementation of this Act has gathered momentum, starting with the reporting of suspicious transactions to the FIC from 3 February this year and continuing as from 30 June this year. The requirement to establish and verify the identity of clients will come into force for reporting institutions.

As no country can implement antimoney-laundering measures in isolation, in June 2002 South Africa was accepted as an observer of the Financial Action Task Force, which is the de facto international co-ordinating body for policy development and assessment in the area of money laundering control and the combating of terrorist financing. It presently consists of 29 member countries and several observer institutions. Our membership of the FATF will ultimately provide South Africa with the opportunity to influence the policy process that has been underway within the FATF over the past 18 months.

Deputy Speaker, with regard to the issue of special pensions, the total number of applications received since the promulgation of the Act and full implementation in 1997 was 29 766. The board has almost completed adjudication of these applications. However, about 2 500 late applications have been received, which cannot be processed pending the amendment to the Act to permit late applications to be processed. It is our understanding that the portfolio committee has effected the amendments that would allow this process to go ahead.

It is also worth mentioning that a Special Pensions Office established a research unit in September 2002 to enhance the process of collecting information on applicants to facilitate the speedy processing of applications and appeals and to reach out to those who may be eligible for benefits but have not applied.

Since the implementation of the this Act in 1996-97 until 31 March 2003, the board has made payments of R1 billion in comparison to a budget of R2,3 billion. The under expenditure is as a result of administrative delays in processing claims. However, we are pleased to report that the benefit payment process has improved tremendously during the 2001-02 financial year. This is attributable to board members appointed on a full-time basis by the Minister. We have utilised the experience of these board members over a period of a solid two years to conduct a comprehensive review of the special pensions dispensation, which has been completed and is due to go to Cabinet as policy and legislative changes may result from the review that we have just done.

Finally, Deputy Speaker, let me make reference to the performance of the Public Investment Commission, given the general perception that pension funds around the world have shed a substantial amount of value over the past six months.

We are happy to say that the PIC has managed yet again to deliver very strong positive returns, and this should give comfort to members of the pension fund and to pensioners that their funds are managed in a prudent fashion. The PIC is an organisation faced like all others with the challenge of change. It must be expected therefore that change is to be a constant in the PIC, but we shall not compromise the savings of members of the GEPF. Therefore strong returns must also be a constant in the PIC.

Madam Deputy Speaker, thank you very much for giving me some leeway to complete my speech. Thank you. [Applause.]

Dr W A ODENDAAL: Agb Adjunkspeaker, ek wil graag my gelukwense aan die Minister en sy Adjunk rig vir die besondere prestasies van die departemente onder hulle beheer. Die NNP sal beide dié begrotingsposte steun. Niks op hierdie aarde is perfek nie en daarom is daar ‘n paar aspekte wat ek dink ons behoort aan te spreek.

Daar het in die jongste tyd ongelukkig ‘n fout ingesluip met die werksaamhede van Statistiek SA, maar ek dink nie dis nodig om in die oortreffende trap daarop te reageer soos sommige vorige sprekers gedoen het nie. Maar ek dink daar is veral drie aspekte waaraan ek dink die Minister sal moet aandag gee en ons sal dit waardeer as hy daarop wil reageer.

Gerugte doen die rondte - en dit is weer vanmiddag hier versterk - dat die Tesourie klaarblyklik al 18 maande gelede geweet het dat daar ‘n fout aan die kom is. Die vraag is nou: Het die Minister daarvan geweet, is dit korrek, waarom is daar nie op gereageer nie, as dit so is?

Daar is ook ander gerugte wat die rondte doen dat daar byna ‘n chaotiese toestand in die departement heers. Die fout was een van wetenskaplike onbevoegdheid en is gemaak deur een van die top personeel in die departement. Ons wil graag van die Minister weet waar ons staan ten opsigte van die bevoegdheid van sy amptenare.

Daar word ook gesê dat die Regering sekere prioriteite aan Statistiek SA deurgee wat sy bestaande werksaamhede ontwrig, soos wat wel gebeur het met die Oktober Huishoudingsopnames en ons wil graag weet wat die Minister te sê het oor dié herrangskikking van prioriteite.

Dan is dit, wat die Suid-Afrikaanse Inkomstediens betref, vir my aangenaam om die kommissaris, dr Pravin Gordhan, baie geluk te wens met die prestasies van sy departement, wat hoofsaaklik daarvoor verantwoordelik is dat die tekort op die betalingsbalans vir 2003 net ‘n merkwaardige lae 0,5% van die bruto binnelandse produk sal wees.

Hierdie soort prestasies het dit moontlik gemaak om welkome belastingverligting aan individue, sowel as aan maatskappye toe te staan. Dit het ook ‘n groot bydrae gelewer tot die merkwaardige gesonde finansiële en fiskale toestand waarin Suid-Afrika vandag verkeer. (Translation of Afrikaans paragraphs follows.)

[Hon Deputy Speaker, I should like to extend my congratulations to the Minister and his Deputy for the outstanding achievements of the departments under their control. The NNP will support both these Budget Votes. Nothing on this earth is perfect and therefore there are a few aspects which, I think, we should address.

Unfortunately in recent times an error occurred in the operations of Statistics SA, but I do not think it is necessary to overreact as some of the previous speakers did. But I think there are three aspects in particular, to my mind, to which the Minister will have to pay attention and we shall appreciate it if he can respond to these.

Rumours are doing the rounds - it was reinforced again here this afternoon

• that the Treasury apparently already knew 18 months ago that an error was looming. The question now is: Did the Minister know about this, is this correct, why was there no reaction to this, if it was the case?

There are also other rumours doing the rounds that there is almost a chaotic situation in the department. The error was one of scientific incompetence and was made by one of the top members of staff in the department. We should like to know from the Minister where we stand in regard to the competence of his officials.

It is also said that the Government relays certain priorities to Statistics South Africa which disrupts its existing activities, as in fact happened with the October Household Survey and we would like to know what the Minister has to say about the rearrangement of priorities.

Regarding the South African Revenue Service, it is a pleasure for me to congratulate the Commissioner, Dr Pravin Gordhan on the achievements of his department, which is mainly responsible for the fact that the deficit on the balance of payments for 2003 will only be a remarkable 0,5% of the gross domestic product. This kind of achievements made it possible to grant tax relief to individuals as well as companies. It also contributed largely to the remarkably healthy financial and fiscal situation in which South Africa finds itself today.]

As far as the National Treasury is concerned, Madam Deputy Speaker, we would like to congratulate Prof Maria Ramos and her staff on the system of financial discipline operating in this country. Listen to the accolades bestowed on South Africa lately. The Government has made major strides in reducing macroeconomic imbalances since 1994. The external current account improved remarkably. The international reserve position has improved considerably. Medium-term and long-term external debt exposure is low by any emerging market standards. The financial institutions are adequately capitalised and well regulated. These elements provide the necessary foundation for achieving the sound and stable economic environment that is essential for higher growth.

Dit is ‘n besondere prestasie. Feit is egter dat Suid-Afrika nie vinnig genoeg gegroei het nie en die werkloosheidsyfer in ons land bly styg. Ons het ‘n ekonomiese groeikoers van meer as 5% per jaar nodig om die werkloosheidsyfer van meer as 40% teen 2014 te halveer. Die groeikoers bly egter onder 3%, wat eintlik merkwaardig vir enige ontwikkelende land is, maar nie genoeg is om die armoede in Suid-Afrika te bekamp nie.

Beleggers sit na bewering op miljarde rande wat net nie in die werkskeppingsondernemings belê word nie. Hulle het nie die vertroue in die SA ekonomie dat hulle beleggings veilig gaan wees nie. Anders as in die res van Afrika en die wêreld, dra klein sake-ondernemings in SA baie min by tot groei in die ekonomie en werkskepping. Suid-Afrika se KMMO’s ``deliver nie.’’

Die vraag is nou: Wat is die rede hiervoor? Natuurlik kan die antwoord hierop nooit simplisties van aard wees nie, want baie faktore speel ‘n rol. Kenners stem egter saam dat die belangrikste redes die volgende is: Die rigiede SA arbeidsbedeling dra by tot verhoogde werkloosheid; bedinging tussen werkgewers en werknemers vind slegs sentraal plaas - tussen groot besigheid en groot arbeid; die kleiner werkgewer word nie toegelaat om met sy eie werkgewers te onderhandel oor lone en werksomstandighede nie. Hy ontvang slegs ‘n instruksie van die groot menere af en as hy hom nie daarby neerlê nie, gaan hy tronk toe of word hy geweldige boetes opgelê.

‘n Mens kan met veiligheid sê dat die Minister van Arbeid ondergrawe met sy rigiede arbeidswette die goeie werk wat die Minister van Finansies doen. Arbeidswetgewing moet deels verantwoordelikheid neem vir die geweldige werkloosheidsyfer in ons land. Werkloses moet weet dat onbuigsame arbeidswetgewing wat deur die Minister van Arbeid afgeforseer word, slegs die werkers in die formele sektor beskerm en verhoed dat klein werkgewers vir hulle werkgeleenthede skep.

Daar is ‘n geweldige aanbod van arbeid, maar chroniese vaardigheidstekorte, veral onder werkloses, vertraag ook ekonomiese groei. Wat die Groei- en Ontwikkelingsberaad betref wat die afgelope naweek plaasgevind het, is daar geprobeer om sekere van hierdie probleme aan te spreek. Kom ons kyk wat het gebeur het: Cosatu het sy sin gekry en die besprekingspunt oor die verslapping van rigiede arbeidswetgewing is eenvoudig van die tafel af gevee. Net hierdie enkele gebeurtenis, so word voorspel, sal veroorsaak dat werkloosheid in Suid-Afrika nie noemenswaardig gaan daal nie en dat armoede vir nog baie lank in SA hoogty gaan vier.

Die R105 miljard wat die Minister in sy begroting opsy gesit het vir kapitaalwerke wat veral gemik is op die instandhouding en opgradering van Suid-Afrika se infrastruktuur, is met ‘n verdere R145 miljard aangevul deur beloftes van kapitaalbesteding deur die mynbou- en ander besigheidsektore. Dit behoort welkome werkgeleenthede te skep en ook die ekonomie te stimuleer omdat verbeterde infrastruktuur soos paaie, spoorweë en hawens ook ‘n ekonomiese bemagtiger is.

Wat egter teleurstellend is, is dat die aanmoediging van private inisiatief en ondernemerskap nie spesifiek by hierdie beraad aandag geniet het nie. Die inisiatief vir die werkskeppingsprogramme bly, byvoorbeeld, onder beheer van die staat. Die ooreenkoms met die sakesektor om reeds teen 2004 meer as 72 000 werkloses in leerlingskappe te plaas, moet applous kry. Dit spreek die probleem van werkloosheid direk aan en sal dit vir baie duisende werkloses moontlik maak om werk te kry.

Hierdie beraad is reeds ‘n mate van vordering. Suid-Afrika moet egter nog leer om nie die simptome van die werkloosheidsiekte te behandel nie, maar die oorsaak daarvan. As dit werklik ons erns is om armoede uit te wis, sal die goeie werk wat die Minister van Finansies en sy departement doen, opgevolg moet word met ‘n bevrydingsaksie vir die kleinsakesektor, sowel as die arbeidsmark in die breë. Aanmoedigingskemas sal aangepak moet word om private inisiatief aan te moedig en die huidige opleidingsprogramme sal aangevul moet word met werklike grootskaalse, verbeeldingryke skemas wat daarop gemik is om groot getalle werkloses met die nodige vaardighede toe te rus om die arbeidsmark suksesvol te betree.

Daar is hoop vir Suid-Afrika. Die NNP is trots daarop om saam te werk en van ons land ‘n sukses te maak. (Translation of Afrikaans paragraphs follows.) This is an exceptional achievement. The fact, is however, that South Africa has not grown quickly enough and that the unemployment rate keeps on rising. We need an economic growth rate of more than 5% per annum to cut the unemployment rate of more than 40%, by half by 2014. The growth rate remains, however, under 3%, which is really remarkable for any developing country, but not enough to fight the poverty in South Africa.

Investors are allegedly sitting on billions of rands which are just not being invested in job creation enterprises. They do not have the confidence in the South African economy that their investments will be safe. Contrary to the rest of Africa and the world, small business enterprises in South Africa contribute very little towards growth in the economy and job creation. South Africa’s SMMEs are not delivering.

The question now is: What is the reason for this? The answer to this can of course, never be of a simplistic nature, because many factors play a role. Experts do, however, agree that the following reasons are the most important: The rigid South African labour dispensation contributes towards increased unemployment; negotiations between employers and employees only take place centrally - between big business and big labour; the smaller employer is not allowed to negotiate with his own employees about wages and working conditions. He merely receives instruction from the big guns and if he does not comply, he goes to jail or is fined enormous penalties.

One can safely say that the Minister of Labour is undermining the good work done by the Minister of Finance with his rigid labour laws. Labour legislation should take part of the responsibility for the tremendous unemployment rate in our country. The unemployed should know that inflexible labour legislation, enforced by the Minister of Labour, only protects the workers in the formal sector and prevents the small employer from creating job opportunities.

There is an enormous supply of labour, but a chronic lack of skills, especially among the unemployed, also slows down delays economic growth. In regard to the Growth and Development Summit which took place over the past weekend, an effort was made to address some of these problems. Let us look at what happened: Cosatu got its way and the discussion point on the relaxation of rigid labour legislation was simply wiped off the table. Just this single event, according to predictions, will see to it that unemployment in South Africa will not drop significantly and that poverty will reign supreme in South Africa for a long time to come.

The R105 billion that the Minister put aside in his budget for capital works which is primarily aimed at the maintenance and upgrading of South Africa’s infrastructure, is supplemented with a further R145 billion by promises of capital expenditure from the mining and other business sectors. This should create welcome job opportunities and should stimulate the economy because improved infrastructure, like roads, railways and harbours, is also an economic empowerer.

What is disappointing, however, is that the encouragement of private initiative and entrepreneurship did not receive attention specifically at this summit. The initiative for the job creation programmes remains, for example, under the control of the state. The agreement with the business sector to put more than 72 000 unemployed people in apprenticeships by 2004 already, must be applauded. It addresses the problem of unemployment directly and will make it possible for the many thousands of unemployed to find work.

This summit in a way is already a measure of improvement. South Africa, however, must still learn not to treat the symptoms of the unemployment disease, but the cause. If we are really serious about eradicating poverty, the good work done by the Minister of Finance must be followed up by taking action to free the small business sector as well as the labour market in general. Incentive schemes will have to be started to encourage private initiatives and the current training programmes must be supplemented with real large-scale, imaginative schemes aimed at supplying the necessary skills to the large number of unemployed to successfully enter the labour market.

There is hope for South Africa. The NNP is proud to co-operate and make a success of our country.]

Mr A BLAAS: Deputy Speaker, the ACDP can align itself quite comfortably with all the positive things that have been said here this afternoon, with reference to the National Treasury and Sars. We will, however, not be supporting Vote No 13, Statistics SA, because the recent release of wrong information manifests a lack of competent management. Until such time that we are confident that the necessary competency is restored, this will be our view.

As a reasonable measure one would expect a parallel system of measurement using independent models and unrelated sources to formulate the statistics. This should indicate deviations and initiate investigations. Implementing such control measures is the responsibility of management. One can assume that such control measures do not exist in Statistics SA. We sincerely hope that the experience gained will help to resolve this problem.

If it were at all possible to calculate the cost of this mistake it would be appreciated if the Minister could give an indication when such results can be expected. One would also expect that if prices were administered incorrectly, based on a wrong inflation figure, the necessary benefits would be passed on to the consumer. Thank you.

Mr N M NENE: Madam Deputy Speaker and hon members, in supporting this Budget Vote today the ANC further demonstrates its commitment to one of its founding principles; that of the equitable sharing of the resources with which this country has been blessed. When the Freedom Charter was written in 1955, the delegates were driven by a common purpose of bringing about a just and democratic society. That is what has sustained this movement to this day. The National Treasury is one department that is at the forefront of the fight against poverty, dispossession, inequality and deprivation. My task here today is to speak on intergovernmental fiscal relations and the equitable distribution of resources amongst the three spheres of government. This is a subprogramme in Programme 2 - Economic Planning and Budget Management, and its main responsibility is to co-ordinate fiscal relations between these spheres of government and to promote sound fiscal management in provincial and local government.

The ANC NEC in our January 8 statement for this year said the following:

To advance in the struggle against poverty, while we transform our country into a truly nonracial, nonsexist, egalitarian and prosperous democracy, requires that we address a number of challenges.

These challenges are outlined in this statement in detail, and key among them is poverty alleviation. The statement further calls on us to use the state Budget to improve the quality of life, especially of the poor, whilst contributing to the expansion of our economy. Among other things, we are also called upon to ensure the proper functioning of our social welfare system and effective use of poverty alleviation funds. It is therefore encouraging that the report on the use of these funds was tabled and debated in this Chamber last week, and we look forward to the implementation of the recommendations of the Portfolio Committee on Trade and Industry. We also commend the portfolio committee for having done that.

The National Treasury is therefore seized with the task of ensuring that these challenges are addressed at all levels of government. This department is mandated by our Constitution, among other things, to co-ordinate intergovernmental fiscal relations and to manage the budget process. It also exercises control over the implementation of the annual Division of Revenue Act, and it monitors the implementation of provincial budgets, ensuring oversight of these provincial and local government budgets, and the implementation of financial management reforms at provincial and local levels. Approximately 60% of expenditure on the annual Budget - in fact, to be precise, 56% - takes the form of transfers to provincial and local governments, placing them at the forefront of social and basic service delivery. The 2003 Budget reflected the continuing evolution of our intergovernmental system.

Over the past few years the national and provincial treasuries have co- operated to introduce and implement financial management and budgeting reforms underpinned by the Public Finance Management Act, and these are now bearing fruit. Provincial finances have shown marked improvement in terms of transparency and accountability and this will translate into improved service delivery. The latest actual expenditure reports gazetted recently, bear testimony to this.

While we know that this department is the driver of the Public Finance Management Act, it also has to comply with this Act. One of the requirements of this Act is that of measurable objectives, and for this programme the measurable objectives are to promote growth, social development and poverty reduction through sound economic, fiscal and financial policies, efficient revenue managers and effective, efficient and appropriate allocation of public funds.

The question that arises is: How do you measure these objectives and what is the role of committees of Parliament in holding this department and other departments to account? Our role is to study the strategic plans tabled by the departments, consider the outputs, indicators and timeframes, and then our oversight should ascertain whether these objectives are realised.

At the end of each financial year, when the departments table their annual reports, very few of us take the trouble of engaging with departments on whether their objectives have been achieved. The Minister of Finance has raised this a number of times that our failure to hold departments to account allows the departments to get away with murder, to put it in his words. An added tool is that of reporting by provinces as required by the Public Finance Management Act, which is now done quarterly, and by departments it is done monthly. A report is tabled by the Joint Budget Committee in this House, as we will be doing in the course of this month.

I want to take this opportunity to urge members to take these reports seriously, as they provide us with an opportunity to fulfil our commitment of bringing about a better life for all through service delivery. To avoid boring you with figures, hon members, let me say that for the past few years since the 1999-2000 financial year, the allocation to this programme has been growing at an average of 21% per year. Much of this growth is accounted for by the exceptional spending on the work of the commission of inquiry into the depreciation of the rand in December 2001. Over the MTEF period we only envisage growth of a little over 3% per annum.

Allow me to commend the National Treasury for their good work in making such an invaluable contribution to the struggle of pushing back the frontiers of poverty. Indeed, the tide is turning and when it does, only those who want things to stay the same will be hurt and will cry: ``Fight back!’’

Let me also take this opportunity to commend the participants in the Growth and Development Summit that took place over the weekend for their constructive engagement in tackling the challenges that face our country and on their commitment to sustainable growth and development. The ANC supports both Budget Votes. I thank you. [Applause.]

Dr P J RABIE: Madam Deputy Speaker, hon Minister and hon members, the DA is a responsible, constructive opposition party - our role is to hold Government accountable for how taxpayers’ money should be spent and evaluate how departments and officials determine priorities and allocate billions of rands of public money. [Interjections.]

Democracy is not about being the praise-singers of the ANC Government in order to be co-opted into Government structures. A transparent democracy entails the critical input of the opposition in the media regarding all Government expenditure.

The present fiscal policy is prudent. Our monetary policy in relation to inflation targeting, however, will have to be reviewed in future, because interest rates and growth are also important for sustained economic growth. Allow me to congratulate the SA Revenue Service, and in particular Commissioner Pravin Gordhan - the effective manner in which taxes were collected created the opportunity for substantial personal tax relief of R13,3 billion.

Another aspect which again must be noted is that retirement fund tax was reduced from 25% to 18% in February. The retirement industry was adversely affected by the present international bear equity market that began in

1. It is estimated that some funds have lost 29% in value, because South African funds have a 70% to 80% exposure to equities. If equity markets do not recover significantly over the next fiscal year, the present financial situation of some funds could get substantially worse, which is reason for grave concern.

The following factors, namely crime, unemployment and HIV pose a very serious threat to the wellbeing of the South African economy. The hon President stressed the importance of the medium and small business sector to alleviate unemployment and reduce poverty. Ask any aspiring small entrepreneur how crime adversely affects him. The small business sector experiences the real effects of our high crime rate, because many of them cannot afford the present comparatively high costs of security.

Die strafregprestasie is verdoemend. Van meer as ‘n halfmiljoen - 610 000 - van die totaal van 2,6 miljoen aangetekende sake in 2001 is 24% teruggetrek voor hulle die hof bereik het. Net 8% van die aangemelde sake loop op skuldigbevindings uit en in net 2% van gevalle gaan die skuldige tronk toe. Die Tesourie en die SAID doen goeie werk. Dit moet egter duidelik gestel word dat die vlak van dienslewering van ander departemente soos Justisie, Veiligheid en Sekuriteit, en Gesondheid kommer wek. (Translation of Afrikaans paragraph follows.)

[The criminal law performance is damning. Out of more than half a million - 610 000 - of the total of 2,6 million reported cases in 2001 24% were withdrawn before they reached the courts. Only 8% of the reported cases led to convictions and in only 2% of these cases did the guilty party go to prison. The Treasury and Sars do a lot of good work. It must, however, be stated clearly that the level of service delivery of other departments, such as Justice, Safety and Security, and Health, causes concern.]

The hon President referred to Zimbabwe in Parliament last Thursday. He mentioned the possibility of a dialogue between Pres Mugabe and Mr Tsvangirai, the leader of the MDC. Zimbabwe is on the brink of an economic implosion. The cost of the present crisis in Zimbabwe to the South African economy is of grave concern. It will affect the export of goods and services, tourism, nonpayments and foreign direct investment. The Zimbabwe Research Initiative estimates that the cost of the present crisis is a R15 billion loss to the South African economy, which can be translated into a total GDP loss of 1,3%. To elaborate upon this statement, the South African economy would have been 1,3% larger by the end of 2002 if it were not for the crisis in Zimbabwe. This amounts to over 0,4% extra growth per year in GDP for the South African economy.

The volatility of the South African rand the past 24 months can be ascribed to the high incidence of mainly negative reporting on events in Zimbabwe. This has resulted in a negative reaction to the South African currency and Africa as an investment destination. At present the IMF reports that 60% of the 11,5 million Zimbabwean citizens are facing a dire food and energy crisis.

Tony Hawkins, an economist from Harare, stated in a recent research paper for Absa Bank that there is a considerable volume of unrecorded cross- border trade, including the smuggling of price-controlled items such as sugar and gold, into neighbouring territories to be sold for hard currency. There is also a substantial volume of unrecorded exports by day shoppers buying consumer goods.

Two million Zimbabwean migrants live in South Africa and buy emergency food for their relatives in Zimbabwe. The danger is that the perceived extra buying of consumer goods may indicate local growth in South Africa while the real situation may have been an actual state of decline. The present situation in Zimbabwe is untenable. Imports total approximately one third of South Africa’s GDP. It is estimated that our present inflation and CPIX rate would have been 1% lower, had it not been for the situation in Zimbabwe.

The economic costs of Zimbabwe to South Africa and the SADC region are still growing. It is of vital importance that the present policy of silent diplomacy be reviewed and basic human economic rights be respected and reinstated. It is in South Africa’s interest to review the policy of silent diplomacy. I thank you. [Applause.]

Ms S B NQODI: Madam Deputy Speaker and hon Members, in his presentation of his Department’s Strategic Plan of 2003-2006 to the portfolio committee, the Statistician-General told us that there is a critical relationship between good governance and statistical information. As a member of this committee I was persuaded by my curiosity and eagerness to verify this assertion by linking it to the factual realities of the responsiveness of our policies. My input this afternoon will focus on the functioning and the Budget Vote of Stats South Africa which, as a national department, is accountable to the Minister of Finance. It is regulated by the Statistics Act, Act 6 of 1999. Its core business at present is the production of a range of economic, social and population statistics.

Honourable Members, after my having mentioned the focus of my debate, some of you might be concluding that, given the current media coverage on and around the controversy of the incorrect figures released by this Department, allegedly leading to the wrongful calculation of our CPIX and other aspects of the economy, I will possibly be addressing the problem. Let me state upfront, that it is not my intention. Fortunately, my colleague from the DA has already done that by presenting her party’s perceptions and maybe the understanding of the matter. My brief is to look at the Budget Vote as part of my oversight function on the financial management of Government funds by Stats South Africa, and I intend doing exactly that.

Allow me, however, to proceed with my deliberation in this debate and risk the possibility of being perceived or interpreted as defensive or protective of the publicly acknowledged and surely deeply regretted erratic calculation committed by Stats South Africa. Should that be the case, let me hasten to say, as the ANC in this House, we share the concerns raised in the media and by other statistical stakeholders. We believe that what needs to be done to correct this mistake will definitely be done. We will never allow any negative repercussion caused by this mistake to affect or destabilise our flourishing economy and superb policies. At this point in time I think it is also worth mentioning or informing the House that having learnt about this mistake, the portfolio committee intends undertaking and doing an in-depth investigation to try and find out what exactly caused such a mistake. In the very near future, the committee intends visiting the offices of Stats South Africa in Pretoria to perform that exercise, with the view of tabling before Parliament the report of our findings early in the next session.

Without belabouring the matter, let me remind you again, that as we celebrate progress across all fronts of our newly won democratic dispensation, we should be under no illusion that even eight years after our hard-won political liberation, in particular the economic challenges that we face, are indeed massive. For a very long time this will remain the case, because their origin is embedded in the racially divisive system of the apartheid legacy that we have inherited.

I therefore put it to you that the probability and possibility of this miscalculation by Stats South Africa might be as a result of the volumes of the fragmented, inconsistent, racially and geographically biased statistical data that this department and Government inherited from the past. Given this hard fact, I hope that we can all imagine the magnitude of the work done by the staff of Stats South Africa on a daily basis as they peruse, correct and try to balance these falsely collected and compiled files and documents.

Honourable Members, we sojourn together with our Government the steep, rocky and thorny road en route to attaining the desired, measurable transformation of the economy of this country. Having embarked on the cumbersome programme of promoting growth and development amongst all our people in South Africa, we are critical of the mistake made by this department, and we should never forget that even the mere collection of national statistics in the past, including the functioning and organisational structure of the then Central Services, now replaced by Stats South Africa, was based on specific, statistical data-collection policies. These policies marginalised, excluded and least considered the majority of the people of this country, namely, we, the black people in the mainstreaming of their social and economic developmental plans and priorities.

Their biased and segregationist nature favoured and advantaged the very few whites who live in this country. The result of that was a unique history of the statutory inequalities that we are confronted with today. As an emerging economy, over and above these biased inequalities, the international comparison of the Gini coefficient income measurement instrument, ranks South Africa high amongst societies with the most unequal distribution of income. Because of these observations, the ANC members of this House believe that it stands to reason that, as a country, we urgently need statistical information that is accurate, qualitative, reliable, comparable and user-friendly to Government, the public and the international community.

It will only be through the aid of such good statistics that we will be able to plan, formulate, implement, monitor and evaluate our Government’s policy initiatives, projects and programmes effectively and efficiently. This mammoth task is definitely the biggest challenge for Stats South Africa. Good statistics will provide Government with indicators to benchmark our progress in poverty alleviation and job creation - the twin problems posing as the biggest threats to Government’s poverty eradication strategies. Equally so, good statistics will help us reflect on the realities of the gaps and challenges facing this Government when it comes to accelerated service delivery and change. We therefore, call upon Stats South Africa to heed the call by joining hands with Government in its efforts to push back the frontiers of poverty and improve the quality of life for our people.

We are pleased to report that, despite all its shortcomings, the picture painted about the work done by this Department is not all that gloomy. Within a very short space of time after its establishment this year, the Department presented its first ever strategic plan to the Committee. The plan is in line with our Medium Term Expenditure Framework and it clearly sets out the Department’s goals for the next three to five years. The plan is definitely a watershed in the development of, amongst other things, official statistics in South Africa. It provides criteria for refocusing and prioritising this Department’s core business, which is critical for transformation. It is envisaged that the strategic plan will form the basis for the development of the National Statistics System.

Furthermore, the approach and methodology of data collection used is comprehensive and integrated. This is highly commendable because it allows for policy co-ordination and targeted resource allocation by Government departments. In this way we shall be able to formulate policy and pass budgets that are output-based and responsive to our electoral mandate. It is worth mentioning also that as a standard-bearer of quality statistics and a first point of call for official statistics, this Department also did well in producing volumes of research and service documents and reports which are user-friendly and quite informative to all statistical stakeholders such as Government, business, academic institutions, NGOs and the public.

Although we as ANC members of this Committee welcome and support the budget, we feel that it will be a serious oversight on our side if we fail to draw the attention of this House to the practical problems and limitations which negatively impact on the timeous production of the much- needed statistical information, especially by Government. It is regrettable, however, to notice that in their ever negative criticism, the opposition seem not to consider these problems seriously. Given the mammoth task and responsibilities of this Department, the overall total budget allocation of approximately R294 million falls far too short from addressing its problems which include small survey sample sizes for provincial and local breakdowns; the continuation of the important October Household Survey; the avoidance of the repetition of wrong CPIX calculations due to limited human and financial resources; the shortage of skilled professional statisticians; the delays such as we have seen of our five-yearly households census results; the underfunding of important surveys such as HIV/Aids death incidents and child mortality rates; and lastly, the absence of a national address register.

The ANC supports the Budget Vote. [Applause.]

The MINISTER OF FINANCE: Thank you, Deputy Speaker. Let me express appreciation for the general support offered by all speakers and all parties in this House, save the exclusions as I will deal with in a moment.

Let me deal with the concerns raised by hon members in the debate under three broad headings. The first of these headings is the issue of parliamentary oversight. I think it is worth restating that, in respect of what the Treasury provides for Parliament, we are far advanced in this Parliament and it is in a league of its own. The concern is how this information is used. And part of what I need to do from time to time is to try and hold the horses in the Treasury who want to move even faster, because I think we are all painfully aware of the capacity constraints that Parliament in general, Parliament’s committees in particular, and even in greater particular, members have in trying to deal with this information.

So when the hon Woods raises matters such as performance indicators beyond the measurable objectives, it is in this context that we have to see it. Sure, we will get to that point, but I think we need to be quite organic about arriving at that point. Nothing could be worse than asking people to give even more of themselves when that information is inadequately used by this House. In this context, Madam Deputy Speaker, I therefore want to express a strong note of welcome to what the hon Nene said, namely that there will be the first report by the Budget Committee on an analysis of the Section 32 gazetting. So thank you very much. I think that will mark a big break forward.

The second set of issues I’d like to respond to relates to issues of growth, employment creation and so on. I think it is important to remind colleagues in this House that the golden era has passed. The first was a golden era from the sixties on, and the second was the irrational exuberance of the dot.com bubble. And unless we understand our own growth performance within this context, I am afraid that we are going to make major mistakes. But it is also important to locate the event of this past Saturday - and the processes that have gone before, and that will follow from the Growth and Development Summit - within the context of a world that is substantially different, particularly substantially different at this point, and which is going forward in a substantially different way.

Clearly, as we talk of this golden era having passed, I think it is also important to recognise that this era that was introduced with Thatcherism and Reaganism, the era of individuals without social solidarity, is, for all times, behind us. One can only look at the extent of the ravages of this period on the developed economy. [Interjections.]

Mr G B D McINTOSH: The speaker is so bossy. The MINISTER OF FINANCE: Shut up! Shut up! … on the developed economies of the world, on the developed economies of the world, on the developed economies of the world! Look at the levels of unemployment, look at the absence of solidarity to understand that the world requires different interventions, perhaps not unlike the interventions of Keynes at the conclusion of the Second World War. We need a world that is substantially different, and there are no answers at the moment. [Applause.]

So instead of beating up on Government, we should, in fact, be taking initiatives like the GDS, seizing the opportunities, and examine what the world will do in the future. We’re seeing substantial shifts in employment, not just out of developed economies but also out of developing economies, like Mexico, and much of this employment is going into China. At the same time, the rate of change and technology is of such a magnitude that what people used to do, machines are doing now. And this I think presents us with the challenge that, in many respects, is larger than the changes in the world economy that happened at the time of the industrial revolution. So unless we are sanguine about what we are doing, we are going to make major mistakes.

So before we apportion blame it’s important that we examine it in this way. I want to advise the hon Taljaard in this context. [Interjections.] I know, that’s her problem. Before you laud everything that the Economist Intelligence Unit does, just a few weeks ago The Economist main newspaper, made a very significant shift. In fact, they suggested that this evangelist approach to capital market liberalisation that they have held in place for so long, should actually not find a place in developing economies. So before we laud this, let’s just be a bit more analytic about what we’re doing.

If we talk about what smart investors are looking for, smart investors will also look for an environment in which political risk is modulated. I hasten to add that the Growth and Development Summit, which was held this past Saturday, creates the basis for a much wider political buy-in to the process of change, deals with the issues of social solidarity, and therefore smart investors will read this as a major positive for South Africa.

Let me conclude on the issue of economic growth in general by asking the hon member for Salisbury West, the hon Pierre Rabie.

Wanneer het jy ‘n Rhodesiër geword? Dis ver van Napier na Salisbury toe, Boetie. [When did you become a Rhodesian? Napier is far from Salisbury, my friend.]

The last set of issues I should like to deal with relates to Stats SA. I said in my introduction, Madam Deputy Speaker, that errors in statistical services are not unique. That is certainly not unique for the British statistical office, and certainly not unique for the US statistical office that overcalculated inflation in a much lower inflationary environment by just under one percent not too long ago. So let’s not beat our breasts about this issue. Let’s examine what the issues are at stake, and let’s examine what we must do going forward. But in dealing with that let’s remind ourselves that a few years ago this Parliament passed a very important piece of legislation in the Statistics Act. That Act gives the Statistician-General an independence, and the courage to act without fear or favour. In the same way, it would be as if I stood up in this House and tried to direct what the Monetary Policy Committee of the Reserve Bank would do in trying to apply its mind to monetary policy in the context of its independence. Similarly, this House should be concerned if we try to intervene by ``smokkeling’’ the figures, in order to produce the outcomes that we seek.

Between the Statistician-General, who has that vested independence, and the Ministry, the Act creates the agency of a council as a custodian of national statistics. And it is in this context that our actions of three weeks ago need to be seen. When we realised the issues at hand, we called in the Statistics Council. These individuals gave voluntarily of their time to engage with us in the process, and to ensure that we will be able to correct going forward. But this deals with the issues exposed. It doesn’t ever suggest that we get into the nest, and try and move things around to suit the Government. It’s very important. With the Monetary Policy Committee meeting just around the corner, and also with an election next year, it is very important that the independence of the statistics service be seen to be there. And so we have to deal with these issues. I cannot tell the hon Odendaal whether anybody knew about it some 18 months ago.

But the hon Taljaard is correct. I’ve been concerned about some aspects, certainly of the basket in general and of administered prices in particular. And amongst the issues in the administered prices basket has been the rentals issue. It’s been there. She’s been barking about this issue without ever making a positive contribution to anything. But such is the DA. We need an output without interference. [Interjections.] We need an output without interference, and we need to ensure that we can place the statistical service in a position where they can deliver what they are meant to deliver.

Let me turn to the issue of the Budget, because this has been raised by members as well. Every department would always say we didn’t have the correct budget. Now the Statistician-General knows, and I am prepared to go on the record again and say, that the October Household Survey was not terminated because of any budgetary cuts. The Statistician-General, acting in the framework of the legislation, opted to replace the October Household Survey with a labour force survey. Such is his power. The Act gives him that power, and I am not allowed to interfere with that power. The OHS and the LFS both are done in October, both involve 30 000 households and both cost exactly the same. He opted to do that because he needed, as part of his national statistical system, a better basis of information about unemployment. Now that was a choice made. It is not about a budgetary cut, and I’d like to believe that this Parliament will accept this.

Going forward the council will redefine the elements of that national statistical system, the key data, the key series within there will focus, as I said earlier, on surveys as a key element within that. But the key difficulty that confronts us is that we are not able to find sufficient statisticians to staff the department. It’s a major tragedy that, until last year when Wits introduced a course on official statistics, not a single university trained people in official statistics. So all of our training has to be undertaken either in-house or off-shore. It’s an exceedingly, but exceedingly difficult task … [Interjections.]

Yes, yes, and you lived under apartheid, hon McIntosh, because you had a Du Toit Treurnicht, or Treurnicht Du Toit, who made up figures and you were happy with it because you were happy with apartheid then, as you long for it now. [Applause.] We need to understand this issue. We need to understand this issue, and work at it to ensure that we have the necessary people skills, failing which, we won’t be able to have a statistical system that advises and informs the correct political choices.

Let me just finally turn to the hon colonel Blaas where he now sits. You see the issue of statistical overstatement is not new to the world. From where you now sit, colonel Blaas, you will know that Methuselah’s age was an overstatement; you know that what went into Noah’s ark was an overstatement; you know that the multiplication of talents when the ``baas’’ left the farm was an overstatement. These things have happened at various times in history. They’ll happen again. What we need to do is to ensure that the Statistical Council can help us to ensure that they don’t happen too frequently in South Africa. Thank you very much. [Applause.]

Debate concluded.

                         APPROPRIATION BILL

Debate on Vote No 33 - Transport:

The ACTING MINISTER OF TRANSPORT: Madam Deputy Speaker, the national Department of Transport covers a wide and complex spectrum of activity. It oversees the work of seven agencies and bodies and is responsible for the implementation of some 135 Acts of Parliament and their amendments. It currently has 13 Bills in process and it administers myriad regulations which cover transport issues on land, at sea and in the air.

It is rather a daunting task to present the Budget Vote of the department for debate this afternoon in my capacity as Acting Minister of Transport. My task is made more pleasant, however, because of the presence of Minister Dullah Omar, the captain of the Transport ship, whom I am delighted to welcome to this House this afternoon. [Applause.] I am sure that members from all sides join me, Minister Omar, in wishing you continued strong recovery and good health. We extend, also, our consideration to your family during this time. [Applause.]

We are all familiar with TV advertisements that emanate from companies involved in the South African transport sector. These clearly provide a snapshot of the importance of this sector to our economy as a whole and the manner in which these entities impact on the daily lives of our people everywhere. They all reflect the rather apt assessment provided some years back by the European Commission that described transport as a human right, a human pleasure, an economic resource and a servant of economic activity. Transport is many things to all people. I wish to hang my comments this afternoon around this concept and highlight only some elements from the wide range of the department’s activity.

At the outset, allow me to acknowledge the presence, today, of those other critical links in the transport chain: the provincial MECs for transport and representatives of their departments, as well as the executives and management of the agencies and entities that reside within the ambit of the department itself. The department continues to provide energetic and committed work for which all of us are grateful. Without their co- operation, participation and hard work, I suspect that our country would quite literally be at a standstill.

Transport is a cornerstone of any society. The ability to move around, move goods and people rapidly and efficiently and above all, safely; the ability to overcome the natural barriers to human movement that physical and spatial impediments present; and the ability to traverse the oceans and course through the air are activities that we sometimes take for granted. South Africa’s history shows very clearly that transport systems are not neutral in their social impact. They have frequently served to perpetuate unequal access to opportunity, secured the unjust delivery of services to a few beneficiaries and have often disregarded the equality of people from whatever background, class or race.

The spatial legacy of apartheid town and regional planning produced a political geography of discrimination in all spheres of the transport sector from the provision of roads, rail and air facilities, infrastructure investment and planning, to the identification of public bus routes, timetables, equipment and even led, in a major part, to the development of the minibus taxi industry as we know it today.

If we are to successfully eradicate the negative social and economic effects of that past from the present, whilst at the same time introducing systems that cater for future development, we must, as Government, play an active and purposeful role that does not leave transformation up to chance. At the same time, an effective transport system will encourage the success of the New Partnership for Africa’s Development. For these reasons, amongst others, the transport sector stands at the centre of efforts to transform our society and reorientate our economy.

All elements of transport policy, whether they relate to safety and security, public access or the alignment of transport subsidies or the recapitalisation of the taxi industry, and the concession and reorganisation of ports, must therefore be conscious efforts to change our society, but in a manner that does not allow the unintended consequence to be king at the end of the day. Transport policy must, of necessity, be proactive, dynamic and able to adapt to changing circumstances as well as to forge new power relationships and assist social processes for change and therefore bring the formerly excluded into the forefront of development initiatives. Thus, a national department of transport must take ownership of policy formulation and implementation, and assert its authority over the various bodies that fall under it, to ensure that individual contributions are aligned with national objectives, and that the human and financial resources of such bodies are expended responsibly.

I wish to focus attention on four priority areas. These are: the transport sector as the catalyst in the logistics chain that powers our economy; the requirements of the commuter and public transport systems; the role of infrastructure provision, both as instruments of growth and as employment driver; and the issue of safety and security within the transport sector itself. I am sure that I do not need to convince anyone in this House about the importance of a seamless logistics chain in any developing economy. Such a chain should critically reduce the cost of doing business in our country, make for the more efficient movement of goods and people, assist in the promotion of economic activity and development across a wide geographic area and ensure productive participation of ever large numbers of people in our economy.

Our participation in the global economy has grown by leaps and bounds since 1994 and this has presented particular challenges to our transport system in terms of its infrastructure needs and its management systems. To put it simply, we have to ensure that our export and import routes operate smoothly from ocean to coast, from port to wharf, railhead or road or to air freight depot; that they are assisted by realistic tariffs and charges; and activated by an appropriately skilled workforce that can reach places of work easily, comfortably and safely through urban and rural areas that operate efficient public transport systems that ease movement and cut down delays. The nature of production today has changed dramatically where manufacturing is concentrated on the production and efficient transport of components from one place to many others and increasingly relies on the just-in-time principle. One effect of this is that any disruption along the way, whether it be a train derailment, congestion in ports, an IT breakdown, a wildcat strike or even electricity outages, to list a few, can have a major negative impact on economic activity.

One answer to the problems is to focus attention on the co-ordination of multiple and diverse efforts, the coherence of policy conception and the co- operation of all stakeholders. All of us can do a lot more to ensure greater co-ordination, coherence and co-operation throughout our transport sector, as these elements play as large a role as infrastructure development in the development of an efficient logistics system.

Critically, our transport system is integrated into the SADC region and here, the work of the cross-border road transport agency needs to be commended for its efforts to ensure standardisation and coherence. Nepad, too, stands to benefit from an integrated and well-developed transport system. A second area of importance relates to the rationalisation and streamlining of commuter and public transport. The department is currently conducting a strategic review of public transport policy and strategy which includes the development of a policy on the targeting of public transport subsidies for bus and commuter rail. Currently, nearly R4 billion per annum is allocated to public transport subsidies for bus and commuter rail transportation but, as public transport is a basic need, subsidies should be allocated in line with income distribution.

The very issue of the taxi recapitalisation process continues to provide challenges. I need to remind this House that the recapitalisation programme is but one of three initiatives related to the overhaul of the taxi industry as a whole. The others are the democratisation and formalisation or registration of the taxi industry, and the process of electing the leadership of the industry countrywide. The taxi recapitalisation programme involves safety and empowerment issues. We must take into account the diversity within the taxi industry whilst not compromising the need for proper regulation and safety. We are proceeding with the taxi recapitalisation programme and we will do so with all stakeholders on board. The Minmec of Transport meets tomorrow to discuss the latest developments in the taxi recapitalisation process, the programme of the roll-out and specifically the issues raised by Santaco.

Rail commuters account for a large percentage of people on the move, most of whom are catered for by the SA Rail Commuter Corporation. Increased allocations for the rolling stock upgrade programme with an additional R100 million per annum over the next three years will certainly play an important role in beginning to address the current backlog. This is in addition to the R884 million already invested in the upgrading, remodelling and refurbishment of rail commuter stations countrywide. A further R1,6 billion of private sector investments, covering more than 120 developments, has also been facilitated on land and property surrounding rail commuter stations. The cumulative total economic impact of job creation and economic activity through the station investment programme has so far exceeded R3,7 billion.

Renewed attention has been focused on infrastructure development and upgrading across the transport sector. Roads in developing urban and rural areas are generally inadequate, both for reasons of historic neglect and for reasons of regional population shift and growth. It is estimated that funding levels required to address the rural roads backlog is R56 billion for all provincial roads and R8 billion for roads under the SA National Roads Agency. To meet this challenge, Cabinet has approved a five-year road infrastructure strategy to prevent further deterioration of our roads network.

The department, also, is working with its provincial counterparts and major stakeholders on a major overload control maintenance programme which deals with reckless overloading. It is based on the construction of a strategic network of traffic control centres and fixed weigh stations on major roads which will be supported by mobile weigh stations on alternative roads in the main freight corridors. Related to this initiative, as part of the department’s freight transport strategic intervention of promoting a modal shift from roads to rail, the department has embarked on a programme which includes joint venture projects with the Eastern Cape and KwaZulu-Natal departments of transport to revive railway lines that have been classified as low and light density lines.

The department, in partnership with the KwaZulu-Natal department of transport has just completed a study of freight flows in the major freight corridors within the province. This information is critical in us knowing the type of commodities being moved, their tonnages, their origin and destination, and thereby assisting in addressing problem areas in our transport infrastructure.

The SA National Roads Agency is involved in efforts to improve the primary road network. Although the issue of tolling has become a contentious public debate in our country, it is very important to note that the existing concession roads have embedded within them a combined private sector investment value of R5,2 billion, of which R1,37 billion is in the form of direct foreign investment. Approximately 1 350 kilometres of national roads are being upgraded and maintained without making any demands on tax-based revenue.

Some key projects are undertaken by various provinces, including the provision of infrastructure in previously underdeveloped areas, access road development, labour-based employment creation projects, as well as maintenance and rehabilitation. Provincial budgets will increase by 7,5% from R4,7 billion in 2002-2003 to R5,1 billion in 2003-2004. It is also projected that there will be further increases of the order of 9,5% over the MTEF period, reaching R6,2 billion in 2005.

I must stress that we expect full compliance with the Growth and Development Summit call for transport infrastructure, particularly but not exclusively, rural roads to make use of labour-intensive methods of construction. Of course, these will need to be integrated with engineering requirements associated with sustainability and safety.

I can report that the revision of the National Ports Authority Bill is nearly complete and will be submitted shortly. In the interest of time, I will reserve that comment on ports policy to the debate on the Bill in due course.

Investment in airport infrastructure is basically necessary for four reasons: to comply with aviation safety requirements; to facilitate trade; to promote general economic growth; to promote tourism and to improve handling capacity in view of increasing passenger numbers. This investment is most necessary at South Africa’s major international airports operated by the Airports Company of South Africa, ACSA. ACSA has a major capital expenditure programme for improvements in terminal capacity, runways and taxiways, roads and parking, safety, security and bulk infrastructure, with the greater portion of this expenditure going into the Cape Town and Johannesburg International Airports. A budget of R2,7 billion has been projected for infrastructure improvement and expansion for the period 2002-2007. This morning I formally opened the new domestic terminal at Johannesburg International Airport, a project that involved a R850 million investment. In the current financial year, ACSA will continue with the provision of infrastructure and equipment required for meeting increased traffic demand and safe and secure airport operations.

Madam Deputy Speaker, I am pleased to announce that South Africa has recently been elected onto the council of the International Civil Aviation Organization, ICAO. This is indeed a historical moment, marking South Africa’s return to the governing body of ICAO, 36 years after its expulsion from the council [Applause.] We are honoured by our election and are mindful, both of the importance of our new position, and of the challenges that come with it.

This brings me to the final issue, that of safety and security in the new global environment. Once again, our agencies are in the forefront of activity to ensure safety and security. The Air Traffic and Navigation Services, ATNS, is currently working on upgrading aging radar display and processing systems at Johannesburg International Airport that will expand the control centres nationwide and incorporate automatic sequencing of traffic into Johannesburg and Cape Town, ensuring correct separation and a consistent flow of arrivals, which will enhance efficiency and reduce costs for airlines. The total cost of this project, which is due for completion in 2004, is R228 million.

During the year ahead, we will continue our efforts to ensure a network of air transport services that efficiently connects South Africa with the rest of the world. This includes the introduction of new air services and the expansion of the level of activity of current air services to and from South Africa, in support of Government’s macroeconomic priorities.

Safety in aviation is critical, as this weekend’s tragic aeroplane-crash losses indicate. It is one of the critical areas where the Civil Aviation Authority is hard at work to ensure safety in aviation. As we know only too well, there have been three mid-air collisions in African airspace in the recent past. Collision avoidance has become a critical element across the continent. I can report that SAA, SA Airlink and British Airways/Comair all operate the Airborne Collision Avoidance systems and are fully compliant with all requirements. Other SA registered airlines are taking steps to be compliant by the implementation date of 30 June 2003. We shall also shortly be addressing ICAO’s new requirements for a new global standard for readable travel documents to prevent identity fraud and to speed up passenger processing at airports. The department is also active in the preparations to introduce the new security and safety requirements agreed to by the International Maritime Organisation which will be applicable from June 2004.

I do not have to remind anyone in this House, or in this country, about the critical issue of safety on our roads. We all continue to be confronted by the reality of death on our roads on a daily basis. The Bethlehem bus disaster, where over 50 workers lost their lives, is only one of the more recent instances in this grim toll of death.

The department is making every possible effort within its power to lay the foundation for a sustainable long-term reduction in these fatalities and injuries. Our short-term actions must be compatible with the long-term programme based on effective enforcement, institutional reform, anticorruption measures, education and community participation. Therefore, within the framework of the road to safety strategy, the following key interventions have been identified for urgent implementation in the short to medium term. These include integrated law-enforcement and communication to ensure co-ordinated planning for traffic law-enforcement and support services. Hazardous locations were identified in provinces and there is currently ongoing work to improve safety in those locations.

Plans are afoot to establish community-based structures to co-ordinate, educate, create awareness and encourage community participation in road safety programmes. Relevant road traffic legislation is also undergoing amendment where necessary.

Let me briefly mention a few further key developments in the implementation of the road to safety strategy. With respect to fraudulent licences, we were able to cancel approximately 10 000 drivers’ licences as a result of joint investigations with the SA Police Services by 2002. We have upgraded 30 drivers’ licence testing centres to meet the minimum statutory requirements at a cost of R17,1 million. We have reviewed and improved the K53 manuals which are used for both training and testing of drivers, and we have introduced a best practice model for vehicle registration and licensing. We have also introduced new legislation to regulate the transportation of dangerous goods. We have, to date, trained 4 000 traffic officers to enable them to carry out dangerous goods law enforcement, whilst at the same time we are setting up a dangerous goods inspectorate within the department.

The safety of passengers in the rail commuter system remains one of the biggest challenges for the rail industry. The newly established Railway Safety Regulator, which will regulate safety by setting standards in the railway transport system, has a lot of work to do, and we look forward to its contribution.

Our marine heritage remains an important ecological asset that is under constant threat of extinction from repeated incidents of oil and chemical spillage in our territorial waters. The department, in partnership with the South Africa Maritime Safety Authority, SAMSA, and the Department of Environmental Affairs and Tourism is currently developing a national contingency plan to respond quickly and effectively to these spills wherever they occur. The establishment of a dedicated maritime rescue co- ordination centre is firmly on track and the new centre will officially become functional before the end of this year.

In conclusion, Madam Deputy Speaker, the function of transport is to move people and goods from one point to another safely, predictably, efficiently and at a reasonable cost. For millions who travel to and from work daily, transport is a basic need. Transport also plays a crucial role in the economic growth and development of our country. But because of our inherited legacies of huge spatial distortions and large areas of under- development, even the economic function serves a social function. That social function has to do with our Constitutional imperatives of dignity and equality. In its role of addressing one of our people’s most fundamental basic needs, and as an input sector supporting the growth and development of South Africa’s economy, transport will continue to deal with the many complex challenges it faces.

Madam Deputy Speaker, I have outlined only some interventions of the department in meeting this challenge. There is a need for greater oversight by the national department within the context of co-operative governance to ensure alignment with our national development goals. The department will host a transport sector summit later this year to discuss the way forward for how best to translate this Government’s social and economic vision into reality.

Thank you, and remember, “Arrive Alive”! [Applause.]

Mr J P CRONIN: As you said, transport is about moving people predictably and safely from one point to the next, and I failed to make it.

Thank you, Chairperson. Acting Minister of Transport, Jeff Radebe, comrade Dullah Omar, in joining my voice to that of Minister Jeff Radebe I am sure that I am speaking on behalf of the portfolio committee in expressing our pleasure at your presence in the House this afternoon. [Applause.] We trust that it is a sign that you are indeed making a steady recovery.

Colleagues, this budget debate occurs in the immediate aftermath of the Growth and Development Summit. I believe that the resolutions and vision that emanate from the summit speak to many key strategic tasks for the transport sector. This debate also comes towards the end of the second five- year term of our new democratic dispensation. It is, therefore, appropriate to begin to do a broad stock-taking. What are the lessons that we have learned over these past nine years? What are the key challenges going forward?

The transport sector, I think, graphically illustrates President Mbeki’s state of the nation perspective that we have in South Africa a dual economy and a dual society; not two economies or two societies, but one economy, one society, but with sharply divided polarities, interacting and perhaps sometimes mutually reinforcing each other.

On the one hand we have a modern transport system that is central to our formal economy, a logistics system that includes our commercial airports, our rail and road freight systems, our ports and the many support institutions and agencies, some of which fall under this transport budget - and I see in the House many representatives from the Air Traffic Navigation Services Company, the Civil Aviation Authority, the South African Maritime Safety Authority and the Cross-Border Transport Agency.

This logistics system, it is important to note, is not just South African; it reaches actively into our region, our continent and links us obviously with a global economy.

There are many complex challenges that face us on this front. Many of the challenges relate very directly to the exponential growth of the global economy over the last two decades and also the remarkable successes in expanding our own trade in the last nine years, not least in key sectors like auto manufacturing and tourism. It is well known that these very successes have created pressure points in parts of the logistics chain. Currently most in the news are our sea port container terminals and especially the largest and busiest, the Durban Container Terminal.

Working closely with our colleagues in the trade and industry portfolio committee and public enterprises portfolio committee, we have had in transport a series of hearings and other engagements with port users and operators to better understand the challenges. At the moment we are busy with the National Ports Authority Bill and we hope to shape this legislation so that it provides an effective legal and regulatory framework and greater certainty for all the stakeholders as we proceed with the modernisation, upgrading and general development of our ports.

But more broadly on the general national logistics front, the ANC transport study group believes that what is needed, more than ever, is greater strategic coherence, more effective national and indeed regional harmonisation. ACSA, for instance, has led a major airport terminal construction and refurbishing programme. As MPs we are well aware of what you have been doing and it is with a sense of pride that we congratulate ACSA for this impressive programme.

But stepping back a little, and without for a moment blaming ACSA at all, is it out of order to wonder whether a massive new domestic terminal in Johannesburg is a more pressing priority than, say, capital investment in our container terminals - presumably these things are not opposites. How does the proposed King Shaka/Dube international logistic hub square with the recent upgrade of the Durban International Airport?

I do not pretend to have easy answers to these and many similar strategic questions, but I would like to see the the national Department of Transport lead a proactive process of stimulating in Government - across all spheres of Government and in the public in general - an open, frank discussion about the key logistic challenges and how we can marshal our national resources most effectively so that we address the key priorities.

The success of Saturday’s Growth and Development Summit rested in part on a number of sector summits that preceded it. Other sector summits are soon to follow and I am really pleased to hear the Acting Minister of Transport announce that later this year the national Department of Transport will host a transport sector summit. I think this will be absolutely critical and logistics becomes a key topic for such a summit.

The other pole of transport, the other duality in our dual society and in our dual economy, is mass public transport, most of which is characterised by what President Mbeki described as a crisis, or a challenge, of underdevelopment. We should not, of course, underestimate the real successes achieved in the past few years. Perhaps the most notable has been the regulation, legalisation and democratisation of a very complex industry, the taxi industry. Minister Omar, you played the leading role in this key achievement and we would like to acknowledge this. [Applause.] The key priority is now to proceed rapidly but sensitively with the implementation of the recapitalisation programme.

There are other major commuter transport challenges including the elimination of crime on our commuter rail system and ensuring that our subsidies really benefit the most impoverished communities. But here too it is important to step back just a little. Without wishing to side-step immediate problems and responsibilities, it is important to understand that many of the challenges in our mass public transport relate not to incidental matters but to systemic problems.

Our commuter trains, our taxis and our buses are mostly operating the same long, one-way-in-the-morning, one-way-back-in-the-evening service. They commute between what remain distant dormitory townships on the one hand, and work and shopping on the other. We have to do what we can obviously to make these commutes safer, more reliable, pleasant and affordable. But often it is, basically, like trying to climb up an escalator that is coming downwards, trying to make socially dysfunctional corridors created by apartheid geography, somehow, work as best as we can.

Paradoxically many of the achievements of the last nine years have actually to some extent compounded the challenges on the public transport front. The obvious one would be the 1,4 million new low-cost houses - which is an amazing achievement and a huge resource transfer to the poor - but these houses are mostly still in those dormitory townships. Perhaps, therefore, the beginning of wisdom is to appreciate that many of our mass public transport challenges cannot be solved simply within a transport silo. We need to campaign actively for a paradigm shift in regard to human settlement patterns. We need to support the Minister of Housing’s call for a greater densification of our towns and cities. We need to construct more sustainable communities, that have a greater multi-income character. We need to move low-cost housing closer to work and shopping, and work and shopping closer to townships. I would like also to acknowledge the pioneering role that the MEC in the Western Cape is playing with the plan to develop a Klipfontein corridor which begins to shift the paradigm in terms of approaching the challenges of public transport. [Applause.]

Ninety-four percent of the national Department of Transport’s budget - as we have often complained this year and previously - flows into the department and straight out of the department again as transfer payments. Perhaps we should not lament this reality. We should see opportunity in this transfer. We should not transfer just cash, but a paradigm shift in the provincial and local government spheres. We urge the national Department of Transport to gear up to play a proactive role in helping municipalities, for instance, to link their integrated development plans much more dynamically into transport planning and transport subsidies, and conversely. We need to use transport subsidies in a much more integrated way that relates to integrated planning.

The two poles of which we have been speaking, are poles within the same economy, I stress, and the same society. The straddle crane operator at the Durban Container Terminal is a worker who has to commute in from a dormitory township often on unsafe, unreliable public transport, with all of the obvious implications for productivity.

The two poles come together in the sharing of infrastructure, not least on our roads. Other ANC speakers will emphasise the important challenges relating to road safety and enforcement on the roads in particular. As the ANC, we are calling for the road traffic management corporation to be up and running as soon as possible. We would also like to see the Government respond, very quickly to the Satchwell commission report and findings on the Road Accident Fund. Then we can begin to move to restructure this important asset, which I think needs significant restructuring.

Other ANC speakers will also highlight the many positive resolutions coming out of the Growth and Development Summit that relate very directly to road and related infrastructure construction and maintenance. We urge the national Department of Transport and the South African National Road Agency to play a proselytising role in the establishment of extended public works programmes and greater labour absorption.

Finally, I would like to acknowledge the helpful and diligent support that we have received from the Acting Director-General and his staff, confronting, I think a difficult and testing situation. I would also like to thank and commend Minister Jeff Radebe for stepping in to assist with this department, in addition to other very extensive responsibilities. [Applause.]

The ANC supports Budget Vote 33. [Applause.]

Mr S B FARROW: Deputy Chair, the past year has not been a good one for the department, not only has our Minister been ill - and I take this opportunity of wishing you well, Minister, on your road to recovery, but the country has faced continued loss of life on our roads and railways. The Arrive Alive Campaign has failed to reach its target of reducing road fatalities by 5% per annum. It is clear that this programme needs to go back to the drawing board. Its funding and focus is obviously missing the mark.

One of its sponsors, the Road Accident Fund, is withdrawing its annual budgetary support of R50 million this year due to the financial crisis in which it finds itself. To add fuel to the fire, the recently released study by the MRC has shown that the South African road death toll is more than double what the Department of Transport says. According to the report gathered from provincial mortuaries, 18 443 road accidents fatalities were recorded during 2000, compared to the 7 635 given out in the statistics of the department.

If these figures are anything to go by, then this has to make South Africa the number-one road death country in the world, and could be costing the South African economy a massive R33,3 billion a year. The MRC puts the reason for the substantial differences in the road death figures down to the fact that the Arrive Alive accident reports are based only on deaths that occur at the scene of the accident, and do not necessarily include deaths that occur on the way to hospital or at some later point. If this the case, the department needs to seriously review its methods of accurately determining systems of statistics gathering.

Our railways, on the other hand, continue to be plagued with incidents of violent crime, robberies, cable theft, vandalism and arson, which has resulted in the decrease in the number of commuters and freighters using the service. Metrorail was taken to court forcing it to comply with basic provisions of safety and security, and coupled to this was a number of fatal same-line collisions at Kraaifontein and Lawley.

These two accidents combined, caused the death of 10 commuters and the injury of a further 197 people. The report of the board of inquiry took over four months to be made public. We still await the cause of the Lawley accident. More than 15 months ago, a similar accident at Charlottedale resulted in the death of 24 commuters, and injured 156 people. This prompted the Minister to institute a board of inquiry into it and a number of other accidents. That inquiry still has not been released publicly. Many families of those commuters still do not know the reason for the accident. Unless these inquiries can bring to the fore the causes of collision of this nature, the public will have little faith in using Metrorail services, and nothing can be done to avoid similar accidents from reoccurring.

It is a well-known fact that our railways, like our roads, are deteriorating due to lack of maintenance and upgrading. A massive capital injection of over R120 billion is needed to improve our ageing rolling stock, signal systems, and perways. Although it is commendable that the budget does provide for some funding for this purpose, it is not adequate. To put money into extending the much-needed line to Khayelitsha is possibly foolhardy when we should be fixing and putting right what we have now.

The department’s policy of moving road to rail has not been a great success. Last year in the budget debate, the DA called on the Minister to hold a workshop of all transport stakeholders - I am pleased to hear that the Acting Minister is finally going to do this, particularly with regard to the private sector - yet to date, this has still not taken place. Our railways continue to be inefficient and unable to compete with road transportation. This is having a devastating effect on our road transportation, as well as on our country’s import and export competitiveness and economy as a whole.

The absence of an integrated and seamless transport policy, and the lack of co-ordination between different transport authorities has brought about a crisis in the South African transport sector. The DA has taken it upon itself to talk to as many stakeholders as possible, and soon will be releasing its transport policy document, “Moving Forward”. This document spells out a national transport strategy based on principles of integration, responsiveness, safety and sustainability, and measurable targets and timetables will be set to do this.

Let me now refer to a number of other important issues which still need to be resolved. The first of these is the implementation of the Road Traffic Management Corporation. The Act was passed in 1999 and amended to accommodate the appointment of the CEO in December 2001. To date, we have a CEO and a secretary, but its mandate to promote safety, security, order and smooth mobility on the roads has been curtailed by the lack of funding and the delay in getting the shareholders’ committee, the board and all the necessary staffing in place. Only R6 million has been allocated by the department for this functionary when in fact R57 million is needed to start up the corporation.

One of their key areas of focus is vehicle roadworthy testing and vehicle registration and licensing centres. The Minister identified that these two areas has been dogged with corruption and mismanagement, and is part of the reason for the increase in road accidents. The DA believes that unless these two aspects are resolved timeously, fraudulent drivers and unroadworthy vehicles will continue to plague our roads.

The long awaited Satchwell Commission of Inquiry into the Road Accident Fund and the more recently released fraudulent reports by the executive officer of the Financial Services Board, has re-emphasised the need to restructure the RAF. The fund is technically insolvent, and merely increasing the levy on petrol every year to offset its losses will not solve these problems. Although I do not agree with all the commission’s recommendations, I do agree that poor management is the prime reason for the RAF’s failure.

The commission has proposed the setting up of a new body, the road accident benefit scheme, using a no-fault system, paying periodically as opposed to the lump sum, with a capped level of compensation to claimants. This proposal will undoubtedly cause an increase in the number of claims administered by the RAF. By capping the level of compensation, claimants will no longer receive the standard common law compensation. The commission argues that this is not a gross infringement of a victim’s right to compensation, but that the victim will still have the right to proceed against the wrongdoer for the portion of claim not compensated in terms of its proposal. This is a ridiculous assertion. A negligent driver will almost never have the means to compensate his victim unless adequately insured, and the ability for the average motorist to provide such insurance will simply be unaffordable.

The DA believes that it is questionable whether these proposals have the capacity or infrastructure to be realistically implemented in RSA, given the current demand on social services and health care. The question is: What needs to be done now to put the RAF on a strong footing, in order to meet its commitment to its clients and prevent a further decline in its financial status?

Their staff costs are extravagant, to say the least, and continue to rise. Serious consideration must be given to placing a moratorium on any further employment, as the DA called for in last year’s debate, until an in-depth study can be done on the restructuring of RAF personnel. At the same time, an investigation must be initiated into how to reduce costs and the time period of administering claims. The arbitration pilot project which has been applied so successfully in the Western Cape must be looked at again as a possible way to sort out this problem.

Now let me talk about our ports. The present crisis which resulted in vessels having to be diverted from Cape Town and Durban harbours, and the resultant imposition by shipping lines of a US$100 surcharge on a 20-foot container has long been in the making. The DA has consistently called for sufficient funding to be made available to maintain and replace old equipment, together with adequately motivated and trained staff.

A recent visit to Durban and PE harbours confirmed this when only four out of five cranes were working. The floating dock was in an unsafe condition and only eleven containers were being off-loaded per hour, despite two drivers been allocated per crane. We again call on the Minister to speed up the concessionary process, improve the state of affairs at our harbours, especially as far as planning and infrastructure maintenance is concerned, and ensure that the operators at our ports are given proper training. If this doesn’t happen, serious job losses could be incurred as shipping lines look for more efficient ports to service their needs in the region.

Our airports are also not excluded from the problems. The new Johannesburg International Airport disability facilities are far from adequate. Umtata and Bulemba Airports facilities are deteriorating, and possibly the Minister could elaborate on their future use. All these problems, coupled with a continued uncertainity as to how the R64 billion road maintenance programme is going to be financed, the further delays in the roll-out of the taxi recapitalisation scheme, and the fact that over one million drivers failed to convert their licences to the new credit card licences - in every likelihood due to affordability - has left the Minister with much to think about. I trust the Minister will review his department in a serious light, in terms of the budget and its capacity to manage and deliver. If this doesn’t happen, he will be in for another annus horribilis. Thank you. [Applause.]

Mrs T L P NWAMITWA-SHILUBANE: Chairperson, hon Acting Minister of Transport and Minister Dullah Omar, in supporting this Budget Vote, I want to start by quoting Minister Omar’s statement of April 2002, when he said:

For transport to be a driving force for economic growth and social development, the requisite road infrastructure must be in place for it to be efficient and effective

And I cannot agree more. Road infrastructure is an important component of a country’s economy. Roads serve as the backbone of a country’s land transport system, and have economic as well as social functions. They facilitate the efficient movement of people and goods. Economic activity zones can be linked and tourism can be promoted. The road infrastructure can also serve as a catalyst for economic integration development, for example, between urban and rural areas.

Since 1994 Government has given attention to road infrastructure in various policy initiatives. Road policy was spelt out in the 1996 White Paper on National Transport Policy, and also to a limited extent in the 1999 Moving South Africa Action Agenda. In 1998 the SA National Road Agency Limited was established as a dedicated agency to deal with the country’s national road network. Yes, the challenges for the department is to break the imbalances of the past, and to consider only immediate short-term solutions to the major structural problems. The problems made our goals of the RDP difficult to achieve.

The country’s total road network consists of approximately 752 000 km, comprising approximately 532 000 km of classified roads and approximately 220 000 km of unclassified roads. Historically, many of the unclassified community access roads have been neglected. The condition of the country’s road network varies from good to fair to very poor.

In addition, the maintenance of existing roads is also necessary to expand the country’s road infrastructure, in order to meet the changing socioeconomic demands of society. The SMMEs, especially those from the historically disadvantaged categories, should be allocated a better share of all the contracts for national roads.

If a road is allowed to deteriorate for longer than three years, visible signs of distress might become apparent to the road users. The typical cost of maintenance at this stage will be R0,6 million or more per kilometre. In other words, to repair this road will be six times more expensive compared to three years ago, when the maintenance was actually required.

Road performance depends on what, when and how maintenance is performed. For this reason, roads have to be maintained throughout their design life to ensure that they deliver the performance envisaged. This can only be realised if the department is given enough money in its budget.

Allow me to say something about toll roads, as the Minister has already indicated, and in particular about the user-pays principle. We are aware that in order to improve our road infrastructure, public-private partnerships had to be introduced. However, the user-pays principle, that is, toll roads are only used where the traffic flow is high.

During the concession period the roads are both built and maintained at no cost to the state. At the end of the concession period the state is therefore left with an improved asset that is not only of great value but also entirely debt free. Examples of these are the N4 Witbank-Maputo corridor and the N4 Platinum road. We commend the department for such initiatives.

Let me deal with road infrastructure development through labour-based construction methods. The maintenance and expansion of South Africa’s road infrastructure will create various employment opportunities. It is therefore important to consider the extent to which the use of labour in road infrastructure projects can be optimised as a means to promote employment creation and poverty alleviation. Through labour-based construction, preference is given to the use of labour in relation to equipment. The implications therefore are that people will be employed under fair working conditions as the predominant resource, together with suitable light construction equipment.

Internationally, the concept of labour-based technologies has received attention in developing countries since the 1960s. The use of labour- intensive technologies has been motivated by two criteria: to improve the standard of living of rural communities through infrastructure provision and to generate employment for rural, unskilled people, thereby alleviating poverty.

Therefore, the use of labour-based methods in different countries across the world has indicated its technical feasibility and economic justifiability in civil construction projects, especially road projects. Labour-based projects and programmes are suitable if there are large numbers of poor and unemployed people and if there is a large number of infrastructure construction, rehabilitation and maintenance work.

The Growth and Development Summit held over the weekend is commended. The agreements reached with the private sector, unions, parastatals and Government to beat unemployment and spur on the economy of this country is something we have been waiting for. We want to believe that this giant step will surely be a driving force for economic growth and social development, and transport will have an important contribution to make.

Mutshami wa Xitulu, ntirho wa ku antswisa kumbe ku lunghisa mapatu wu laveka ni le matiko-xikaya. Hi navela leswaku hinkwaswo swifundzhankulu leswi nga na vusweti swo fana na Kwazulu-Natal, Limpopo na Eastern Cape swi ya emahlweni ku nyika leswi vuriwaka Poverty Relief and Infrastructure Investment Allocation, na leswaku nkavelo lowu wu ya emahlweni wu engeteleriwa.

Hi lembe ra 2000 ku vile na timpfula ta ndhambi eka swifundhankulu swo hlaya. Xa Limpopo xi vile xin’wana lexi nga onhakeriwa ngopfu hi mapatu na mabiloho. Ndzi pfumeleleni ku hoyozela ntirho lowu nga endliwa eLimpopo na swin’wana swifundhankulu laha Ripubiliki ra Afrika Dzonga. Xikombiso, mapatu ya va Magoebaskloof pass, Thathe Vondo pass na man’wana inge ya nga pfukangi loko va Road Agency ya Limpopo a va nga nyikiwangi mpimanyeto wo ringana R348 million ku lunghisa. Mabiloho na wona a ya wile. Biloho ro fana na ra nambu wa Olifants na wa Letaba na man’wana ma pfuxiwile. Leswi hinkwaswo hi wona matshalatshala yo herisa ku tikeriwa ka vaaka-tiko.

Makungu ya va ndzawulo ya Mfumo wa le xikarhi eka nsunsumeto wa leswi vuriwaka National strategy for the road sector ya amukeleka hi mavoko mambirhi. Mintirho yo aka no lulamisa mapatu swa aviwa ku vona leswaku hi wahi mapatu lama welaka eka Mfumo wa le xikarhi, eka swifundhankulu, swifundhantsongo na le ka masipala. Leswi swi pfuneta swinene-nene ku tiva leswaku hi vahi va faneleke ku lunghisa yini, kwihi naswona rini leswaku vaaka-tiko va ta hluvuka eka ikhonomi na vutshila.

Ndzi navela naswona ku hoyozela swifundha leswi nga tinyiketa ku sungula tiphurogireme to nyika vanhu mintirho yo lunghisa mapatu ku nga tirhisiwi michini kambe va tirhisa mavoko ya vona, le Limpopo wa sungurile leswi vuriwaka Gundo Lashu Labour Intensive Roads Programme leyi simekiweke hi lembe ra 2000 [Nkarhi wu herile.] [Swandla.] (Translation of Xitsonga paragraphs follows.)

[Chairperson, the job of improving roads is also needed in the rural areas. We wish that all provinces that are poor, like KwaZulu-Natal, Limpopo and Eastern Cape should continue to receive the so-called Poverty Relief and Infrastructure Investment Allocation, and that this share must continually be increased.

In the year 2000 we had floods in a few provinces. Limpopo was one of the provinces where the roads and bridges were destroyed. Allow me to convey our congratulations on the job that was done in Limpopo and other provinces here in the Republic of South Africa. For example, roads at the Magoebaskloof pass, the Thathe Vondo pass and others would not have been improved if it were not for the Limpopo Road Agency that was given a budget of about R348 million to improve the roads. Bridges also fell. The bridge at the Olifants River and the Letaba River were rebuilt. All these efforts are to improve life in the communities.

The department involved with the national Government’s plans to encourage what is called the national strategy for the road sector is well accepted. The job of building and reconstructing roads is divided to see which roads are under the national Government, provinces, local governments and municipalities. It helps to know who is responsible for what, where and when so that the communities will develop economically and creatively.

I would like to congratulate the provinces that have started the programmes involving people in the road construction. Instead of machines they use their hands. Limpopo started what is called the Gundo Lashu labour- intensive road programme which was established in the year 2000. [Time expired.] [Applause.]]

Prince N E ZULU: Chairperson, may I also take this opportunity to express my party’s pleasure at seeing hon Minister Omar’s presence in the House in order to enjoy his portfolio’s Budget Debate despite his ill health. We always observe the levels of improvement in his health on a daily basis and we wish this to happen very speedily.

The transport sector is one of the most important reponsibilities of Government and plays a pivotal role in ensuring the freedom of the individual in a country of such diversities and long distances. The IFP policy attests to this fact. All of us do know this. Transport is the artery of the economy and the life-blood of the country. It links South Africa to the outside world and brings wealth, ideas, technology and visitors into the country. It achieves this in a transversal process of 546 000 km by road alone. What a distance!

It is unfortunate that regulations governing road transport are known and honoured more in breach of their codes than for their observance by a substantial number of road users in South Africa. This can be seen in the rate of accidents during weekends, festive seasons and beyond. Minibus taxis are generally believed to be the worst culprits and labelled as coffins on the road by reckless analysts, when in fact, they rate number four after motor cars, bakkies and other types of transport. However, Government, particularly the Department of Transport, is taking every conceivable measure to ensure that transport fulfils its mandate safely and satisfactorily.

A new plan with stricter regulations to deal with dangerous driving may be introduced in due course. This 12-point plan will be a crackdown on offenders in a more concerted way and obviously will make the Department of Transport less popular in the eyes of many road users. Nonetheless it is going to enhance awareness of the fact that one is not alone on the road and we must drive carefully for our own safety and for the safety of other road users.

The increased transport allocation for the current financial year and beyond aims at maximising responsiveness to the needs of the transport users be they rail, road, aviation or maritime transport users. It purports to achieve this by providing and facilitating a safe, sustainable and affordable system, which will improve efficiency, access and equity in the development of all industrial and commercial sectors in South Africa and beyond. This can be only realised if stakeholders co-operate with one another for the common good of the country’s transport system.

Incidentally, budgeting time this year comes at a time when the road accident commission delivers its report. The work of the commission was broad, done quite extensively, leaving no stone unturned in the search for acceptable recommendations as to how best compensation for injury or death of persons in road accidents can be paid. However, this view needs to be further workshopped.

Programme 2 measures the development and the co-ordination of all land transport infrastructure and promotes the operational environment to ensure safety, quality, efficiency and economic sustainability of the business. It takes care of all land transport regulations and guidelines and Treasury is commended for the Budget allocation for this programme, for the term under review. It is hoped that the Budget will address the question of the number of the people killed on our roads and thrown out of running trains annually.

It is heartening to note that a selected number of provincial roads may be transferred to the National Road Agency in order to create a more coherent road network. We note also that local and rural roads do not get equal budgetary considerations from their respective authorities, or their allocations are too lean to meet the demand. There are densely populated rural areas still without roads and means of travel, and the movement of the people still depends on carts, walking on foot, going on horseback or by donkey rides. Although the situation is not as bad as it was prior to 1994, a lot more can still be done to alleviate the plight of rural communities in terms of roads and transport delivery.

May I refer to that notorious node of our transport system, namely, the minibus taxis. The taxi industry in South Africa was a black initiative founded without research or capital. It started as a one-man business and expanded over the years. It never enjoyed support from the previous government despite the fact that it was creating jobs for the jobless and enhancing mobility to economic development points. Instead, it suffered untold hardships in the hands of cruel transport authorities. The industry has since undergone several levels of transformation in the 60s, 70s and 80s up to the late 90s, when it was seized with a plan to recapitalise and bring modest and new-look taxis on the roads. This was an innovative development by the new Government.

However, this type of industry is charged with high-emotion voltage and remains a sensitive issue. It sparks flames of violent reaction, even where such reaction is not warranted. When such flames rage, they undermine anyone’s sense of jurisprudence and unintended consequences are realised at an alarming magnitude.

For the Government to subsidise the industry is a welcome and long-awaited development. The intention to maximise economic and social gains to those with the greatest need, namely the disabled, the aged and the unemployed is indeed welcomed as a positive and sympathetic consideration by the Department of Transport. I am inclined to believe that consensus was reached among national taxi organisations as a matter of transparency in the transformation of their business. Such consensus will ensure that the high voltage syndrome is minimised or avoided. The IFP in fact supports this Budget Vote.

The Government’s draft roll-out plan, as shown in the estimates of national expenditure, aims at spelling out mechanisms for financial implications. This plan needs to be released in sufficient time to be interrogated by taxi associations and commuters across the board. May I, at this point, thank the Minister of Trade and Industry for his answer in this House in this regard. According to him the roll-out plan is still a confidential document within the department. Well, it is true that all documents start as confidential and embargoed until released, and the request is to release and give stakeholders sufficient time to interrogate it before implementation.

Mr G D SCHNEEMANN: Chairperson, Acting Minister of Transport, Minister Radebe, Minister Omar, comrades and hon members; Chairperson, with your permission, I would like to start by acknowledging the presence of a number of officials from the Alexandra Taxi Association who are here this afternoon and welcome them to Parliament. [Applause.] Further, I would like to say to them that the Minister, the MEC for Transport and Public Works in Gauteng, MEC Mosunkutu, has been facilitating unity talks between the Alexandra Taxi Association and AMSTA, the two taxi associations operating in Alexandra. Although this process is still continuing, I would like to urge the leadership of the Alexandra Taxi Association to do all in their power and to take all steps that they can, to help speed up this process of unity. It is almost universally accepted that transport has played a predominant role in the economic development of all modern civilisations. The levels of production and consumption we experience today would be inconceivable without a well-developed and well-operated transport system forming a vital link in supply chain management logistics.

Every day across the globe, in our own country, in the SADC region, and across the continent of Africa, millions of people move within and between countries, cities, towns and villages. Fruit produced here in South Africa is packed today and sold in London tomorrow. Motor vehicles are assembled in East London and shipped to various parts of the world. All of this takes place through the use of various modes of transport.

We often relegate transport and transport issues to lower levels of importance. We need to raise the importance of transport to higher levels and constantly strive to find ways of improving the levels of efficiency, reliability, and competitiveness in our local transport industry, and that of the SADC region and the continent. An efficient transport infrastructure assists in promoting economic growth and competitiveness and the creation of employment opportunities.

During this year, we celebrate the 100th anniversary of the first flight undertaken by the Wright brothers, a truly remarkable achievement in its day that would, over the next century, see air travel become an important means of travel for millions of people and for the transport of cargo. In our own country here in South Africa, air travel links our cities together and is a gateway linking our country to the rest of the continent and the world. The Airports Company of South Africa (ACSA), is playing a commendable role in ensuring that the travel experience of both domestic and international passengers is of a first-class standard.

Many of our airports have been upgraded, with Johannesburg International being the flagship. This airport often provides first-time international visitors to our country with their very first impression of our country. We must congratulate ACSA on the recent opening of the new and very impressive domestic terminal in Johannesburg. As the chairperson of the committee, Jeremy Cronin, indicated many of us experience that terminal on almost a weekly basis.

Forming an integral part of our air services is the role played by the Air Traffic and Navigational Services. They ensure that we have effective air traffic services and that our skies are safe. Recently there have been reports of shortages of air traffic controllers with reported delays in the departure and landing of aircraft. The portfolio committee was recently assured that despite staff shortages, the ATNS is providing its services and that the safety of passengers is in no way compromised.

One of the problems facing the ATNS is that controllers are attracted to other countries, in particular those in the Middle East, due in part to the high standard of training that is being provided by the ATNS to its students. They have taken steps to alleviate staff shortages by employing air traffic controllers from foreign countries on a contract basis. In addition, local training is being streamlined to ensure higher training standards and the faster graduation of air traffic controllers. The ATNS trains air traffic controllers for, and is working with, countries on the continent to improve air traffic services and safety in our African skies.

The harbour and rail infrastructure that we have play an important role in helping to ensure that our economy grows through international and regional trade. Since 1994 we have seen increased volumes moving through our ports. Over the past five years, containerised traffic through our ports has increased by 25%. Total harbour tonnages are 20%-25% higher than in 1998. We often hear reports of congestion in our ports, and we need to look at this in its proper context.

Congestion at our ports is not new. As far back as the late eighties and early nineties, congestion was a regular occurrence. Some of the main reasons were due to the lack of investment, both in the maintenance and upgrading of infrastructure, as well as the failure to expand our ports. Post-1994 South Africa entered the global market and the increase in trade has placed enormous pressures on our ports. Investment in the infrastructure of our ports is being undertaken, but this will take time. Years of underinvestment cannot be corrected overnight.

The concessioning of the Durban container terminal is a further step being taken to address the improvement of efficiencies within the port system. Despite the challenges our ports face, we must urge management and staff to ensure that they take all necessary steps within their power, to ensure that our ports are operated in an efficient and competitive manner that will help to ensure our continued growth and global and regional trade.

The upgrading of the Maputo port is good news, not only for Mozambique, but also for the entire region. The more efficient the ports of our region become, the more attractive the subcontinent will become for investment and global trade. The rail network in our country has an important role to play in the efficient and reliable and cost-effective transport of goods within our borders, as well as within the SADC region. This is a further area, together with our ports, where there was significant underinvestment in the mid-eighties.

An area of concern, though, is that delays are often found in rail transportation. These delays are caused by cable thefts and a shortage of rail trucks and locomotives in the main. Together with these delays and congestion at our ports, importers, exporters and domestic traders often choose the road option to ensure that their cargo reaches its destination on time. As with ports, Spoornet has announced significant investment programmes for the upgrading and replacement of infrastructure. And again, it will take time to reverse the years of underinvestment.

It is hoped that this will assist in attracting rail cargo back onto rail, where it belongs. Both Spoornet and the port authorities play an important role in ensuring that there is a seamless link between both rail and ports. Equally, they need to work closely to ensure that our rail and ports services operate efficiently and reliably, so that we are able to compete successfully in the global world. The movement of freight by road through our border posts has in the past seen long queues of trucks, particularly over holiday periods.

In a reply to a question to the Minister of Transport on the delays at border posts, the Minister indicated that efforts were underway to address these delays between the South African Government, and those of Mozambique and Zimbabwe, together with the Cross Border Road Transport Agency. We trust that solutions will be found to allow for the efficient and free flow of traffic through our border posts in the future.

The strategic plan for 2003-2004 of the national Department of Transport, indicates that the National Freight Logistic Strategic Framework is to be finalised. We urge the department to ensure a speedy finalisation of this process, as we believe this will help drive a logistic vision for our country.

Forming part of the transport resolutions at the ANC’s 51st national conference, was the call for integrated and coherent logistical networks and the maintenance and upgrading of rail infrastructure. Certainly by the indications that we have had of investment that is taking place, these things are taking place in line with our national conference resolutions.

The economic importance of our transportation system extends beyond our borders. Through initiatives of the Department of Transport, and other transport related public entities, significant work is being done to help improve transport infrastructure and operations, both within the SADC region and the continent as a whole. This is in line with the objectives of Nepad for the development of the African continent.

Under Nepad a number of priority sectors are identified, which include ports, roads, rail services and air services. Efficient, reliable and competitive transport networks will play a significant role in making the African continent a force in the global world. The transport sector has the potential to contribute significantly to growth, not only in South Africa, but in the entire Southern African region, and also to playing a major role in helping to push back the frontiers of poverty.

As the ANC we support this Budget Vote.[Applause.]

Mnr J J NIEMANN: Mnr die Voorsitter, of soos die mense in die Noord-Kaap sê, ``Die Stoelsitter’’, bedoelende die voorsitter; ek wil in die eerste plek ook my opregte waardering uitspreek teenoor Minister Dullah Omar, wat onder baie moeilike omstandighede sy posbespreking bywoon. Die NNP loof u daarvoor; dit wys vir die wêreld die man wat u werklik is.

Vir die waarnemende Minister van Vervoer wil ek net sê: “Sterkte, ou vriend

• die Departement van Vervoer is nie ‘n maklike departement nie.”

Albei die Ministers besef teen dié tyd dat die vervoerbegroting totaal onderbegroot is. Dit is hoog tyd dat die Minister van Finansies ná tien jaar in die Kabinet besef dat die prioriteite in die land herrangskik moet word. In enige land in die wêreld is sy vervoerstelsel die allerbelangrikste aar in sy liggaam.

Die padstruktuur is net so belangrik soos die are in ‘n mens se liggaam. Dit moet goed in stand gehou word, sodat daar nie klonte vorm en die verkeer tot stilstand kom, wat noodwendig tot sterftes lei nie. Net so ook is die spoorvervoer vir die vervoer van produkte, materiaal en mense, veral na die hawens toe en na en van die nywerheidsmetropole in ‘n land. Dit bly die ekonomiese slagaar van enige land. Dit sluit onder andere in die hawens vir die in- en uitvoer, asook lughawens vir die in- en uitvoer van bederfbare produkte en talle ander invoer- en uitvoerprodukte waarsonder ‘n land soos Suid-Afrika nie kan bestaan nie.

Toerisme is die enkele grootste nywerheid in die wêreld. Suid-Afrika is in dié opsig nog ‘n baie klein rolspeler. Faktore wat toerisme geweldige stukrag gee, is lugvervoer en lughawens, skeepsvervoer en hawens, padvervoer, busse wat voldoen aan alle veiligheidswette, en ten slotte, treinvervoer, of dit die Blou Trein is of enige ander prestigetrein, of selfs ‘n stoomtrein wat ten duurste gehuur word deur stoomtreingeesdriftiges, alles en almal moet ervaar word as toerismevriendelik.

Dan is dit des te meer tragies dat ons verlede week in die koerante moes lees dat Spoornet se erfenisstigting ‘n stoomtrein met 62 buitelandse gaste, wat elk derduisende rande bestee het, eenvoudig beveel het om op Ashtonstasie af te klim en verder self te sorg hoe hulle oor die weg kom. Absolute skande! Die Minister behoort aan elkeen van daardie toeriste ‘n persoonlike verskoning per brief aan te bied.

Dié gebeure is so ‘n skandevlek op Spoornet. Dit onderskryf die dringendheid van die opgradering van ons totale vervoerfamilie se probleem. Om net by Metrorail vir ‘n oomblik van rou stil te staan, kyk ons na die debakel van die Muldersvleitreinramp.

Ek het in Junie 2002 die Minister die volgende vraag gevra: (Translation of Afrikaans paragraphs follows.)

[Mr J J NIEMANN: Mr Chairman, or as the people in the Northern Cape say: ``Die Stoelsitter’’, [The Chair Sitter], meaning the chairperson, firstly I also want to express my sincere appreciation to Minister Dullah Omar, who is attending the discussion of his Vote under very difficult circumstances. The NNP lauds you for this; it shows the world the man you really are.

To the Acting Minister of Transport I just want to say: “Courage, my friend, the Department of Transport is not an easy department.”

Both the Ministers realise by now that the transport budget is totally underbudgeted. It is high time that the Minister of Finance and the Cabinet realise that after ten years the priorities in the country must be rearranged. In any country in the world its transport system is the most vital vein in its body.

The road structure is just as important as the veins in one’s body. They must be well maintained so that no clots form and bring the traffic to a standstill, which inevitably results in deaths. Equally important is the rail transport for the transport of products, materials and people, especially to the harbours and to and from the industrial metropolises in a country. It remains the economic artery of any country. It includes, inter alia, the harbours for imports and exports, as well as airports for the import and export of perishable products and numerous other import and export products without which a country such as South Africa cannot exist.

Tourism is the single largest industry in the world. In this respect South Africa is still a very minor role-player. Factors that give tourism a tremendous boost are air transport and airports, shipping transport and harbours, road transport, buses which comply with all safety laws, and lastly, train transport, whether it is the Blue Train or any other prestigious train, or even a steam train which is hired at an exorbitant cost by steam train enthusiasts, all of them must be seen as being tourism- friendly.

So it is even more tragic that we had to read in the newspapers last week that Spoornet’s heritage foundation simply ordered the passengers of a steam train with 62 overseas passengers, who had each spent thousands of rands, to get off at Ashton station and make their own way from there. An absolute disgrace! The Minister should address a letter of personal apology to each one of those tourists. These events are such a disgrace for Spoornet. They underline the urgency of the upgrading of our total transport family’s problem. To stand still at Metrorail for a mournful moment, let us look at the debacle of the Muldersvlei train disaster.

In June 2001 I asked the Minister the following question:]

What is the current position with regard to the implementation of the railway safety regulator?

Sy antwoord was [His reply was]:

The National Railway Safety Regulator Bill was duly passed by Parliament and will shortly be promulgated into law. In the meantime, practical steps to set up the Office of the National Railway Safety Regulator are being taken. An implementation plan is being prepared so that the law can be implemented without unnecessary delay.

Dit is nou meer as ‘n jaar later en dié wet is nog nie geïmplementeer nie. Die Adjunk-Direkteur van Vervoer, Jerry Makokoane, sê op die Africa Rail 2002-konferensie in Midrand: [It is now more than a year later and this Act has not yet been implemented. The Deputy Director of Transport, Jerry Makokoane, said at the Africa Rail 2002 conference in Midrand]:

The Bill comes in the wake of a spate of rail accidents in recent years in which scores of people have been killed and thousands have been injured.

Hy gaan verder en sê [He went on to say]:

Railway operators in South Africa had acted as both players and referees, which was an untenable situation.

Maar meer as ‘n jaar later vind die tragedie te Muldersvlei plaas. Ek het nog nie self die verslag van die ondersoek onder oë gehad nie, maar van wat ek in die koerante lees, wil dit blyk dat dit die masjinis is wat nou die sondebok, die nalatige, die skuldige is en wat die ongeluk veroorsaak het. Ek wil saamstem met Die Burger wat Metrorail se plig bevraagteken. Ek haal aan:

Ernstige vrae heers weer eens oor Metrorail se verbintenis tot sy regsplig om die veiligheid van pendelaars te verseker.

Die gesindheid van Metrorail teenoor pendelaars word blootgelê deur mev Smith. Haar seun, Ashley, was een van diegene wat gesterf het in die treinramp. Hy was die broodwinner in die familie en Metrorail het aanvanklik vir mev Smith R4 000 aangebied as kompensasie vir haar oorlede seun. Om die minste te sê, dié aanbod is niks anders as ‘n growwe belediging nie. Die persepsie bestaan dat die volle waarheid oor die oorsaak van die ongeluk nie duidelik na vore kom in die kommissie van ondersoek se verslag nie.

Die totale en ernstige tekort aan masjiniste wat lei tot onaanvaarbare lang- uurskofte word glad nie uitgelig nie. Die betrokke masjinis moes glad nie in beheer van die trein gewees het nie. Sy lynhoof het aanbeveel dat hy afgehaal word van treindiens. Desnieteenstaande is hy aan diens geplaas. Ek wil namens die NNP en al die derduisende pendelaars wat elke dag hul lewe in die hande van Metrorail plaas, vra vir ‘n nuwe ondersoek en dat die ware oorsaak van die Muldersvleiramp oopgevlek word tot op die been.

Gewelddadige aanrandings, geweld, roof en selfs moord is ‘n alledaagse verskynsel op Metrorail-treine. Net verlede maand is ‘n 15-jarige meisietjie, Robyn Jansen van Mitchells Plein, van haar hangertjie en haar polshorlosie beroof en toe van die bewegende trein afgegooi. Sy was dae lank in ‘n koma in die Groote Schuur-Hospitaal. Haar regterskouer is gekraak en sy het talle ander lyfbeserings opgedoen. Sy kan nie haar regteroog oopmaak nie, omdat van die senuwees beskadig is. Om af te sluit met Metrorail se onsimpatieke traak-my-nie-agtige houding teenoor pendelaars, verwys ek na die saak wat hulle in die hof verloor het oor ‘n jong man wat vermoor is op ‘n Metrorail-trein en jou wragtig, hulle en die Departement van Vervoer appelleer. Die departement en Metrorail probeer weghardloop deur hul verpligting teenoor die veiligheid van die pendelaars op so ‘n laakbare manier te ontduik.

In Desember 2002 en Januarie 2003 het altesaam 1 882 mense in padongelukke op ons paaie gesterf, en minibus-taxis, was by sowat 10% van hierdie ongelukke betrokke. Die Mediese Navorsingsraad het bevind dat die sterftesyfer in 2000 nader aan 18 443 was, terwyl die Departement van Vervoer die syfer van 7 635 per jaar aangegee het.

Die Departement van Binnelandse Sake sê aan die ander kant dat 17 045 in dieselfde jaar mense dood is. [Tyd verstreke.] (Translation of Afrikaans paragraphs follows.)

[But more than a year later the tragedy at Muldersvlei took place. I myself have not yet scrutinised the report of the inquiry, but from what I have read in the newspapers it would appear that it is now the engine-driver who is the scapegoat, who is being blamed for having been negligent and causing the accident. I want to agree with Die Burger which questioned Metrorail’s duty. I quote:

Ernstige vrae jeers weer eens oor Metrorail se verbintenis tot sy regsplig om die veiligheid van pendelaars te verseker.

Metrorail’s attitude to commuters is exposed by Mrs Smith. Her son, Ashley, was one of those who died in the train disaster. He was the breadwinner in the family and Metrorail initially offered Mrs Smith R4 000 in compensation for the loss of her son. To say the least, this offer is nothing but a gross insult. There is the perception that the whole truth about the cause of the accident does not emerge from the the commission of inquiry’s report.

The total and serious shortage of engine drivers which leads to unacceptably long shifts is not highlighted at all. The engine driver concerned should not at all have been in control of the train. His line head recommended that he be taken off train duty. Nevertheless, he was put on duty. I want to ask, on behalf of the NNP and all the thousands of commuters who place their lives in the hands of Metrorail every day, for a new inquiry and that the true cause of the Muldersvlei disaster should be exposed in the finest detail.

Violent assault, violence, robbery and even murder are an every day phenomenon on Metrorail trains. Only last month a 15-year-old girl, Robyn Jansen from Mitchells Plain, was robbed of her necklace and her watch and then thrown off the moving train. She was in a coma in the Groote Schuur Hospital for days. He right shoulder was cracked and she sustained many other bodily injuries. She cannot open her right eye because some of the nerves have been damaged. To conclude with Metrorail’s unsympathetic, careless attitude toward commuters, I mention the case which they lost in court concerning a young man who was murdered on a Metrorail train and, believe it or not, they and the Department of Transport are appealing. The department and Metrorail are trying to run away by shirking their obligation toward the safety of the commuters in such a reprehensible manner.

In December 2002 and January 2003 altogether 1 882 people died in road accidents on our roads, and minibus taxis were involved in approximately 10% of these accidents. The Medical Research Council has found that the death toll in 2000 was closer to 18 443, while the Department of Transport indicated a figure of 7 635 per annum.

The Department of Home Affairs on the other hand, says that 17 045 people died in the same year. [Time expired.]]

Ms H F MATLANYANE: Deputy Chair, I rise in this House today, firstly, to wish our Minister Dullah Omar good health in these difficult times. The ANC will not fail you in the task of increasing access for our people to a better life for all. Secondly, I would like to make a contribution to the Budget Vote No 33 per Transport.

The challenges of improving the lives of individuals, particularly the historically disadvantaged communities, lie in the provision of reliable and effective transport. Transport is a basic necessity for sustainable social and economic development, and it is an enabler in addressing poverty and development needs, particularly in rural areas.

The apartheid policy moved people away from centres of economic activities. To access emergency services, education, employment and other amenities, people had to travel expensively with excessive costs.

The RDP stresses meeting the basic needs of the people. We need to ensure that the poor, the aged, the unemployed, scholars and people with disabilities are able to have access to affordable public transport.

Transport subsidies can be used as an important tool to address the inefficiencies in the public transport system, and to promote access and equity.

These inefficiencies are, to a large extent, related to the country’s history of apartheid and segregated planning. Subsidies in the past were not clearly targeted and were implemented selectively. Much as the department is faced with the challenges of redressing these imbalances, it is in the process of targeting those with the greatest needs and subsidising them.

An investigation into transport subsidies, which focused on passenger profiles and the targeting of public transport subsidies, was completed towards the end of 2002. The investigation identified targeting as a mechanism to ensure that the most deserving users of public transport were identified. Through the allocation of subsidies according to income distribution and the targeting of low-income households, transport subsidies can contribute towards Government’s objective of poverty alleviation and pushing back the frontiers of poverty.

Rail and bus subsidies account for 60% of public transport expenditure. Subsidisation of parallel routes must be avoided as we need intermodal facilities in an effort to encourage the use of public transport. Taxis must act as feeders to buses, where buses are the prime movers. Taxis and buses must act as feeders to rail, where rail is a prime mover. This will go a long way in addressing congestion of traffic on our roads which in turn leads to delays and sometimes accidents. Emphasis must be on the provision of convenient, effective, affordable and safe public transport.

As part of the process to improve the efficiency of bus subsidies, the department has already converted 30% of bus subsidy contracts to move efficient and competitive tenders.

Through the process of tendered contracts, small operators can also benefit economically. The process includes a programme to train emerging operators to access these opportunities. Currently, 10% of subsidised bus services and 23% of the total bus subsidy allocations goes to SMME companies.

The national Department of Transport has adopted the concessioning of the SA Rail Commuter Corporation as a tool to improve efficiency in the rail business and bring in private sector capital and expertise. Commuter rail is responsible for over two million passengers’ journeys daily. The mandate of SARCC is to ensure that rail commuter services are provided in the public interest. These services are currently under contract by Metrorail services in terms of an operating agreement. As a SARCC government agency, it is responsible for commuter rail services countrywide, and has been charged with the implementation of concessioning in South Africa.

Ka baka la maemo a ikonomi ao a bego a kopane le kgethollo le kgatelelo ya bontši bja batho, batho ba ile ba felelwa ke mešomo ka bontši. Ba bangwe ba ile ba gapeletšega go dula gae, ba bangwe go ile gwa re boelang dinagamagaeng. Ka baka la tlala, ba bangwe ba ile ba tšeya mašaledi a megolwana yeo ba e hweditšego ba reka dikhompi gore ba kgone go ka iphidiša ka go hwetša setseka.

Ka ge mmušo wa pele o be o sa kgathalele le gona o hloka kgahlego go tšwelopele ya bathobaso, go ile gwa hlokomologwa gore go swanetše go ba le taolo. Maemo a ile a befa ge ditekesi di thoma go ata. Ka ge tlala e be e iphile maatla, go ile gwa tsoga megabaru, lehufa le go dira boithatelo. Boganka, phedišo ya maphelo le go hloka kgotlelelano di ile tša aparela naga.

Ka go lemoga karolo yeo e bapalwago ke ditekesi mo ikonoming, Mmuso wa ANC o ile wa hlohleletša gore bohle bao ba nago le kgahlego le bohle bao ba tšeyago karolo mo intasering ye, ba kopane le go boledišana ka tharollo le phedišo ya pharela ye. (Translation of Sepedi paragraphs follows.)

[Because of the economic situation that was coupled with apartheid and the oppression of the majority of our people, people lost jobs in numbers. Some were forced to stay home, while others were told to go back home to the Bantustans. Because of hunger some people used their retrenchment packages to buy minibuses to use them for taxi businesses.

As the previous Government did not care and did not have any interest in the development of blacks, the fact that there was to be proper management was overlooked. The situation worsened when the number of taxis increased. Because people are poor, greed, jealousy and total disorder began to prevail. Intimidation, killings and a lack of a spirit of togetherness became the order of the day.

As we understand the role played by the taxis in our economy, the ANC-led Government persuaded all those interested, and all the stakeholders in the industry, to meet and talk about the solution to this problem.]

At present, there are about 126 000 minibus taxis countrywide, of which many are in excess of nine-years old. It is estimated that 65% of all commuter trips nationally are undertaken by means of minibus taxis.

Transformation of the industry is the only viable option for integration into the South African public transport system. This process will strengthen a sustainable and passenger-friendly transport network. The industry has to be formalised. In consultation with all stakeholders, the SA National Taxi Association Council, SANTACO, was formed as an umbrella body of all taxi organisations. It plays a role of mediating in disputes and in the elimination of causes of taxi violence.

The process is divided into three sequential phases, namely formalisation, regulation and recapitalisation. The formalisation phase requires taxi associations and their members to register with their provincial transport registrars. This is done in terms of a uniform code of conduct and constitution. This resulted in the ``Be Legal Campaign’’, which aims to produce an opportunity for illegal operators to apply for an operating licence in terms of the National Land Transport Transitional Act, NLTTA.

At the regulation phase, operators get their licences which determine the operational route and are valid for five years. The operators must have been in operation at least before 30 June 1997, be a member of a registered association and be registered as a taxpayer. The recapitalisation phase is only for operators who are formal and regulated. The main steps are the arrangement for the scrapping of the taxi and the arrangement for purchasing and registration of the new vehicles and the handover of new vehicles with new registration and operating licences.

Ge e le tema re e lemile le ge re sešo ra e wetša ka ge go sa na le dikgakgano. [We have played our part, even though there are still some disagreements.]

There is a disagreement between Government and SANTACO on the vehicle tender process and over the ownership and control of the electronic management system.

Fela ka ge gona go hlabana tša ‘šaka le tee, le gona mo di tlo be tša bowa tša lala mmogo. [But, as disagreements are part of the deal, we will end up agreeing.]

The process is a complicated one for an industry that was not transformed at all. The various delays of the past three years should therefore be seen as part of a challenge to the ANC Government to transform the industry from a war-torn, accident-prone, nonperforming, dysfunctional and autocratic management structure into an efficient and effective business sector.

Walking long distances is the only means of getting to work and school for most rural people, even for 20% of urban people. This is not done by choice, but because people cannot afford any other means of transport.

Shoba Kalula is a programme aimed at targeting primary and secondary school students and workers in rural and urban areas who walk long distances. This is in partnership with the national Department of Transport, local and provincial government and an NGO, Afribike. They have been able to procure low-cost new and used bicycles and have developed a chain that includes a container-based shop, a cycle repair training course and a light engineering modification to produce carrying work cycles.

We need adequate infrastructure and facilities for cyclists. This will reduce the number of cyclists that are involved in accidents on our roads. This project has also attracted the World Bank through its Rural Travel and Transport programme in Sub-Saharan Africa.

Another form of nonmotorist transport commonly used in rural areas is donkey carts. It is used mainly as a form of passenger and goods transport. In rural areas, it is used for collecting wood, fetching water and even vegetables. Visibility plays an important part for donkey carts. So every cart needs to be roadworthy and have reflectors. Thank you. [Time expired.] [Applause.]

Miss S RAJBALLY: Chairperson, the department’s functions stretch beyond the daily commuting of our public. It plays an important role in our national economy and the economies of several African states who utilise our transport infrastructure to transport their imports and exports.

However, what shines out foremost is the department’s efforts to provide a sustainable public transport system. Affordable access to transport and mobility that is safe, reliable, and internationally competitive is amongst these.

The recent licensing adjustment appears to be quite successful. Safe transport relies a lot on the driver. Irresponsible drivers have cost many lives. The MF is pleased to note the department’s campaign, both nationally and provincially, to promote safe driving. Drivers need not only to be kind and considerate to other vehicle occupants but to pedestrians too.

At North Coast Road in Durban children often have difficulty crossing the road, and this is very dangerous. It is felt that the necessary provincial authorities need to take time and allocate assistance to areas of need such as this. Safety on our trains has also become a recent issue for communities, after a 15-year old schoolgirl was robbed and thrown off a train in Cape Town recently. The MF feels that certain safety procedures need to be utilised such as at our airports to ensure the safety of passengers, including perhaps patrolling officers.

The rise and decline of the petrol price seems to affect those using public transport greatly. As petrol prices rise so do the public transport fares. The MF hopes that there is some mechanism in place to ensure that, with the drop of petrol prices, there will be a drop in public transport fares too.

The MF hopes that the budget allocated to the department for this financial year is adequate for the management of effective and sustainable transport measures.

To the hon the Minister, may I take this opportunity to wish you a very speedy and complete recovery.

The MF supports Budget Vote 33.

Mr P M SIBANDE: Chairperson, Deputy Minister, hon members and comrades. The tide has finally turned. The ANC has fought for the liberation of all South Africans, black and white, to create a nonracial society. We have also fought to eradicate the oppression, suppression and subordination of women to create a nonsexist society. Although apartheid was defeated a few years ago, we are still fighting vigorously against the evil legacies left by the apartheid regime. The effects of apartheid are still clearly visible in the lives of the poorest of the poor in our society.

Through racist town planning practices the poor were condemned to life on the outer boundaries of our cities. This forced them to travel long distances to and from work and to access all sorts of amenities. The long travelling distances have also brought about an extra financial burden on the poor, which basically meant that they had to spend more on travelling than on basic necessities such as food.

Inkulumo yami izogxila kakhulu kumgodla wemali ekhokhelwa abantu abalimmala, nakulabo abashonelwa yimindeni yabo ezingozini ezidalwa yizimoto. Lesi sikhwama senganyelwe uHulumeni. Siyazi-ke ukuthi kunezinkinga ngokusetshenziswa kwalesi sikhwama.

Mgcinisihlalo, ngivumele ukuba ngikhumbuze amaqembu aphikisayo ukuthi bangakhohlwa ukuthi lesi sikhwama sokunxephezela abantu sasungulwa mandulo kusabusa uhulumeni wobandlululo ngaphambi kuka-1994. Ngakho-ke, uHulumeni wentando yesizwe oholwa nguKhongolose ngonyaka ka-1999 wakhetha ikhomishana ebizwa ngokuthi i-Satchwell Commission ukuba iphenye ngakho konke okumayelana nokusetshenziswa kwalesi sikhwama se-Road Accident Fund. Okwamanje ikhomishana lika-Satchwell alikaphothuli ngophenyo lwalo kodwa- ke sekuyantwela ezansi kubantu bakithi abaningi ukuthi kulezi zinhlelo zokuphathwa kwalesi sikhwama kukhona okushaya amanzi.

Ngalezi zizathu, inqubo okusetshenziswa ngayo lesi sikhwama ayihambisani nendlela efanele. Okwesibili, inqubo ngalesi sikhwama ayilinganiseki, okuchaza ukuthi noma uHulumeni angafaka isabiwomali akucaci ukuthi kwenzekani ngoba njalo ayeneli. Elinye iphuzu elilandelayo ukuthi ngale nqubo ekhona abantu bakithi badlela ogageni Okunye okulandelayo ukuthi inqubo ekhona ayikwazi ukusiza abantu abahlukumezeke ngenxa yezingozi zezimoto kanye nemindeni yabo. (Translation of isiZulu paragraphs follows.)

[My debate is going to focus on the Road Accident Fund that is being paid to people who get injured, and those whose relatives die due to car accidents. This fund is managed by the Government. We know that there are problems with the utilisation of this fund.

Chairperson, allow me to remind the opposition parties that they must not forget that this compensation fund was started long ago during the apartheid regime prior to 1994, therefore the ANC-led democratic Government in 1999 appointed the Satchwell Commission so that it could investigate the utilisation of this fund. The commission has not yet finished its investigation, but it is becoming clear to many of our people that something is not right about the management of this fund.

For these reasons, the system of using this fund is not adhered to. Secondly, it is difficult to estimate in so far as the fund is concerned, which means that even if the Government puts some money into the fund, it is never enough. Another thing is that the present system does not benefit those who have been traumatised, together with their families, by car accidents.

Because of the system that was created by the apartheid government, many people, mostly blacks, travel long distances when they go to work or to the cities in order to put bread on the table for their children.]

The system is not sustainable and it is not equitable.

Ngenxa yohlelo olwenziwa umbuso wobandlululo, abantu abaningi ikakhuloukazi abampisholo bahamba ibanga elide uma beya emsebenzini noma emadolobheni ukuyohlwayela izingane zabo ukudla.

Izwe laseNingizimu Afrika, ngokwesilinganiso esicashunwe ku- Human Development Index kumazwe ayi-173 ilandela emuva nge-107 uma kuqhathaniswa abantu abasengcupheni yokuvelelwa yizingozi zezimoto. Esibalweni sabantu esilinganiselwa ku-130 000 bakule ngabade abasebenzisa imigwaqo abalimalayo minyaka yonke, phakathi kwabo cishe ngabantu ababalelwa ku-20 000 abashonayo ngonyaka.

Ikhomishana lika-Satchwell ngophenyo lwalo elulwenizile ngokusetshenziswa kwesikhwama sokunxephezela abantu abalimalayo nabashonelwe ezingozini zezimoto, uphenyo lwembule amanye amahlazo ngokulandelayo: Inqubo esetshenziswa ukunxephezela abantu abahlukunyezwe yizingozi ezidalwa yizimoto abasawutholi umvuzo wabo ngendlela efanele. Okulandelayo, amanye amafayela asetshenziswe ukunxephezela abantu anyamalele ukuze noma ubani ofuna ulwazi lokuthi izinxephezelo zikhokhelwa kanjani, angalutholi. Okunye okulandela lokhu ukuthi ilinganiselwa ku-30% kuya ku- 55% inzuzo ekhokhelwa abatheli bentela yezithuthi , amafutha ezimoto okumele ngabe ikhokhela izinxephezelo kodwa igcina iphelele ezandleni zabantu abanolwazi kanye nasekukhokheleni izizinda kanye namaholo amakhulu ezisebenzi ze-Road Accident Fund.

Iziphakamaiso ngesikhwama se-Road Accident Fund ngukuthi kufanele kupheliswe ukukhokhela izinxephezelo ngesizumbulu esisodwa, kodwa abantu kufanele bakhokhelwe kancane kancane, okuyindlela esetshenziswa emazweni afana nase-North America, e-United Kingdom, e-Europe, e-Australia nase- Canada ukuze sikwazi ukuqinisekisa nokulekelela ukuthi lezi zinxephezelo ziyafika kubaninizo. Kufanele kuqedwe ukukhokhela izinxephezelo ngesilinganiso semali yangaphesheya kolwandle. Kufanele bangakhokhelwa abantu okuthiwa bethuke kakhulu ngenxa yengozi yemoto uma befuna ukunxephezelwa. Kukhona ozakwethu abavamile ukuthi kancane kancane ngoba bebonile ukuthi uHulumeni waseNingizimu Afrika sengathi unemali eningi, bese bezenzela noma yini abayithandayo. Sithi phansi-ke ngalokho.

Isigaba 3 se- Road Accident Fund Act ka-1996 uyasivumela ukuthi kwenziwe isikhwama esizokwazi ukunxephezela abantu ngendlela ephucuzekile. Imali yokunxephezela kufanele ikhokhelwe abantu abalimele ngokusabisayo noma abalimele kakhulu. Ngenxa yokungazi ngamalungelo okufaka isicelo sokunxephezelwa kulesi sikhwama esikhokhela izingozi zezimoto, kunesigejana sabameli nodokotela abangogimbela kwesabo abathola amathuba okuzinjingisa njengoba kwakwenza uMnumzane uNdebenkulu wasemdlalweni owawukumabonakude.

Ngizothanda ukwexwayisa le misheshelengwana engondlavithi exhaphaza amalungelo abantu bakithi ngokuzitika bazitamuzele ngemivuzo okufanele ikhokhelwe abantu ezingozini zemigwaqo ukuthi selidumela emansumpeni, uphiko lofezela luzobantinyela khona maduze nje. (Translation of isiZulu paragraphs follows.)

[According to figures from the Human Development Index, South Africa ranks 107th among 173 countries when comparing people who are likely to get involved in car accidents. Out of 130 000 people in this country who use the road and get involved in car accidents every year, about 20 a year die.

The Satchwell commission, on the investigation it has conducted into the use of the compensation fund by people who are involved in car accidents and those who lose their relatives, has uncovered the following scandals: The system being used to compensate people who have been traumatised by road accidents is not ensuring that people get their money as they should; secondly, some files that were used for compensating people have disappeared, so that whoever wants information as to how compensation is paid, does not get that information; thirdly, about 30% - 55% of the money that is generated from the road users and fuel ends up in the hands of professionals and goes towards payment for offices and huge salaries for Road Accident Fund employees instead of paying compensation.

The recommendations on the Road Accident Fund are as follows: Lump-sum payments should be done away with; instead, people should be paid in instalments, which is a standard practice in other countries such as North America, the United Kingdom, Europe, Australia and Canada, so that we ensure that this compensation reaches its rightful owners. The payment of compensation according to overseas currency should be stopped, and people who are said to have been shocked because of a car accident should not be paid if they want to be compensated. There are comrades who think that the Government has a lot of money, and so they take advantage. We say down with that.

Section 3 of the Road Accident Fund Act of 1996 allows us to set up the fund, which will be able to compensate people in a civilised manner. The compensation money should be paid to people who are badly injured. Because of the fact that people are not aware of their rights to apply to this compensation fund, there is a group of selfish lawyers and doctors who enrich themselves, like Mr Ndebenkulu in the television drama.

I would like to issue a warning to those unscrupuluous crooks who are exploiting our people by denying them their rights with regard to the compensation fund. It is almost over, the Scorpions unit is going to sting them sooner or later.]

Reports show that 17 people from Gauteng were arrested for defrauding the Road Accident Fund. One has been granted bail of R3 000 and is to appear in court tomorrow, 10 June. Another one had to remain in custody until his next court appearance which was on Monday, 27 May.

Along with this investigation, we also need to take note that it is within this sector that some staff members are the very ones who are assisting with corrupting the system further. Documents get lost, payouts disappear in the post and the process drags on forever, which ultimately destroys the credibility of this parastatal. To give an example:

Ngasekupheleni konyaka odlule, kwaba nenhlekelele yebhasi eThekwini, abagibeli kulelo bhasi babe bahlanu kuphela. Akukho noyedwa owalimala, kodwa isinxephezelo semali esafunwa lapho kwaba ngeyabantu abangama-32. [Towards the end of last year there was a bus accident in Durban. There were only five passengers on that bus. No one was injured but there were 32 applicants for compensation from the fund.]

In the year 2000, the Department of Transport reported that of 143 cases investigated, 56% of the amount due to accident victims had been kept by lawyers. It has been reported in the annual report of the Road Accident Fund that the bulk of its budget is allocated to personnel and operational costs. The challenge for the Road Accident Fund and our Government is to address these imbalances in terms of budget allocation and to review the salary scales of staff in terms of performance.

The ANC supports the Budget Vote. [Time expired.] [Applause.]

Mr M F CASSIM: Hon Chair, thank you very much. I want to begin, first of all, by saying how gratified I am to see the hon Minister Dullah Omar in his customary seat. I wish to join my prayers with those of others in wishing him a speedy and a total recovery.

This afternoon, we heard the hon Acting Minister and the chairman of the portfolio committee mention the progress that has been made in respect of the Department of Transport. I endorse those sentiments that we have indeed come very far since 1994. I think some of the points that were made by the hon Jeremy Cronin are points that I also wish to canvas, once again. Indeed, we have to, very speedily, look for the harmonisation and the coherence of all of the different transport strategies, so that we have one single, highly workable strategy that actually covers the whole of South Africa.

I wish, also, to submit that the transport summit is going to be a very important summit in finally determining what is going to be happening over the next decade in transport. I trust that all of us will be afforded the opportunity to make our submissions there.

I now come to the issue that I think is of most importance to all of us who are public representatives and who will have to go to elections next year, namely the situation with Metrorail.

A lack of adequate security on the trains themselves affects service levels and costs in many ways. From Metrorail’s own information booklet, we picked up the following very important information. Firstly, vandalism on trains imposes a direct cost on Metrorail because of repairs and refurbishing of damaged trains. Damaged trains are removed from service to be repaired and this imposes indirect costs of overcrowding, train cancellations and train delays. Vandalism creates an unsafe environment for commuters and this may lead to lost revenue for Metrorail.

Up to 30% of commuters ride the trains illegally. This means that 150 000 people board trains daily without tickets. Ticket verification and checks on trains cost the trains to be stopped sometimes, which imposes other costs on the system. Metrorail has security officials in place. However, their presence is inadequate. Many of the routes which are affected by the higher levels of crime have no officials whatsoever, and there are complaints that more effective policing of the trains themselves is needed, and not just at the stations.

We, therefore, wish to recommend the increase in the numbers of security personnel on the trains, especially on the routes which are the most crime ridden. We also wish to recommend a policy of zero tolerance. It is a reasonable assumption that vandals and violent criminals will be in the 30% of commuters who are dodging their fares.

The other points that I would like to recommend are from the Free State department, where the budget speech and all of their details are on CD. They are keeping in step with the digital revolution and I would like to suggest that all departments do this. [Applause.]

We also would like to suggest a fuel levy, especially in respect of the leaded fuel. While the Finance Treasury is moving towards a convergence, we must try and eliminate, for the sake of our environment, fuel that is leaded, and maybe we should impose a higher surcharge on that.

Finally, we would like to support the use of toll roads. This is the only way in which South Africa can continue to expand its road infrastructure. Without the user-pays principle, it’s not going to be possible. So, if we want the quality of roads that we think we need, the user-pays principle has to be implemented.

We wish to support the Budget Vote of the Minister of Transport. Thank you. [Applause.]

Mr A R AINSLIE: Chairperson, thank you very much. Mr Omar and Mr Radebe, it’s a pleasant surprise, actually, to follow Mr Cassim, who does not normally take part in transport debates. In fact, I think this may be his maiden transport speech today. We look forward to seeing him at transport portfolio committee meetings, where he’ll find that many of the issues that he dealt with in his speech are, in fact, dealt with at the portfolio committee level.

One of the major challenges facing our country is stopping the carnage on our roads. The Road to Safety strategy is at the forefront of this challenge. Recently, the focus on the Road to Safety strategy has shifted to the reliability of the statistics kept by the department.

Mr Farrow has attempted to take the matter out of perspective and, to a certain extent, Mr Niemann has also joined him in doing that. I want to make some kind of attempt to bring it back into context.

The National Accident Register for the year 2000 records 7 635 road accident fatalities. Based on data collected at 37 mortuaries country-wide, the Medical Research Council estimates the number of fatalities for 2000 to be approximately 18 000. It is important to note that the MRC figure is an estimate. It’s not an exact figure, Mr Farrow. The data was collected from 37 sites and then expanded to make an estimate for the whole country. It is not clear on what basis this was done.

One of the problems in collecting data has been with the definition of a road accident fatality. The definition consists of two elements. One is death on the spot and the other is death within six days of the accident, if directly related to the accident. A major problem has been in the correct recording of fatalities during this six-day period. Another problem has been the fragmented responsibility of collecting the data across several authorities.

The department has been aware, for some time, that the collection and recording of data has been problematic. The Portfolio Committee on Transport has dealt with this matter and Minister Omar has discussed these issues in the House. So, long before the MRC report, the department had already put into place several measures to arrive at a more reliable set of figures, and these measures included a forensic audit into road traffic data. The DA has been very critical regarding the collection of the data and the role played by the department. However, perhaps Mr Farrow should have told us that, before 1994, this country had no reliable data on road accident crashes, injuries or fatalities. [Interjections.] What there was, was racially skewed. Data on road accidents was not collected from the Transkei, not collected from the Ciskei, not collected from other TVB states, and KwaZulu-Natal was also largely left out of the equation. We had data being collected from Durban North, Mr Ellis, and King Williams Town, Mr Farrow, but not from Inanda, kwaMashu and Soweto. So, these were racially skewed, and it was only with the advent of democracy in 1994 and the determination of the ANC, that normality prevails on our roads for everybody; not only if you live in Durban North or Umhlanga Rocks, but also for those people living in Inanda and kwaMashu. A serious effort has been made to collect proper road accident data. [Applause.]

However, the work done by the MRC is very important. It will be of great value in assisting the department in arriving at a more effective methodology for collecting road accident data. However, we must be very careful not to reduce the road safety campaign to a mere collection of numbers. The production of accurate figures is important, but is only one element of a far more comprehensive approach to bringing sanity back to our roads.

We must be very careful of DA attempts to discredit the entire road safety campaign, as they have, again, tried to do here today, simply because we are still wrestling with a very complex matter of the collection of data. [Interjections.] Yes, there may have been problems with the collection of data, but then to reject, as they have done here today, the department’s entire approach to road safety, amounts to throwing the baby out with the bath water.

Our approach to road safety is based on fundamentally sound principles and a programme of action that meet international best practice. Communication, public education and participation are arguably the most important elements of the campaign. We come from a very violent past, a past that devalued lives and respect for others, to the extent that these attitudes still remain in our society. They will, inevitably, be reflected also in the way we drive. The Road to Safety campaign is meeting the challenge of public education.

Changing people’s attitude, Mr Farrow, is taking time, but there is a change. People are more aware of road safety. The campaign is beginning to make a difference and it has to work. It is the only approach that is sustainable in the long term. The DA’s quick fixes to road safety centres on deploying huge numbers of traffic officers. Of course, the law enforcement element is important, but the DA and others who emphasise the law enforcement element to the virtual exclusion of the other aspects of the strategy, are misdirecting themselves.

Flooding the country’s roads with thousands of traffic officers is impractical and, in the long run, unsustainable. The correct approach is the current one, which includes public education, public partnerships, effective communication campaigns, changing attitudes and effective levels of law enforcement.

The provincial departments of transport are also taking the question of raising people’s awareness in road safety seriously. Earlier on, someone from the Free State punted their province, and I think I can punt KwaZulu- Natal a little bit here. My own province of KwaZulu-Natal, which has pioneered much of our road safety strategy, is doing outstanding work with regard to public education. For example, they organised a transport imbizo last week in the Durban City Hall, with religious leaders, to look at ways of stopping the carnage on our roads. Over 1 000 people attended this event.

Another core element of the strategy is vehicle and driver fitness. It has been given a boost recently, by the introduction of the new credit card format driver’s licence. The conversion process included eye tests, with those failing the test being refused a licence, without the necessary corrective measures being taken.

That the system works, Mr Farrow, is borne out by today’s lead story in the early edition of the Cape Argus. Several people who attempted to convert fake licences to the new format have been arrested and a licence scam uncovered in the process. The system, the staff and the traffic officers are to be congratulated on cracking the scam. The system is working, Mr Farrow. [Interjections.]

The enforcement and law compliance element of the Road to Safety programme has been reinforced by two important events. The first is the appointment of a CEO to head the Road Traffic Management Corporation. I would have thought that Mr Farrow would have welcomed this positive development, but he simply adds it to his long list of moans and groans which he has given us here today.

One of the objectives of the Road to Safety strategy is institutional reform of road traffic management, to allow for a more co-ordinated approach. As part of this institutional reform, the Road Traffic Management Corporation was established.

At the moment, there is fragmentation of traffic management functions across hundreds of provincial and local jurisdictions. The main intention behind the establishment of the RTMC is to promote a strong partnership between the national, provincial and local spheres of Government with regard to road traffic management. The RTMC is required to pool the road traffic powers and resources of these different spheres of Government. Now that the CEO has been appointed, we look forward to the activation of the RTMC’s different functions.

The emphasis needs to be on partnership and co-operation between the RTMC and the local and provincial authorities. Mr Farrow would have us rush in where angels fear to tread. The last thing that we want to see is the RTMC rushing in and grabbing functions it is not ready to exercise. The process, therefore, Mr Farrow, needs to be a gradual but steady one, towards bringing all traffic management functions into a single, legal and institutional framework.

The second event, reinforcing the law compliance element in the strategy, is the announcement that the administrative adjudication of road traffic offences is to be rolled out from September.

Mr Farrow’s long lamentation today, shows no vision. I’m not surprised that the DA has no transport policy. A long list of moans and groans with no constructive suggestions on how to meet the challenges we face in transport, is not transport policy. We do not look forward to their policy when it finally arrives.

The ANC supports this Budget Vote. [Applause.]

The ACTING MINISTER OF TRANSPORT: Chairperson, I would like to take this opportunity to thank all the hon members who participated in this debate and assure them that many of their constructive suggestions will be incorporated as we go forward.

I just want to spend a little bit of time on responding to some of the issues that have been raised. Regarding the issue of safety and security in our rail system, there is a process in the department to enhance safety and security in our rail system by increasing the supervisory functions of all those involved in order to ensure the effectiveness of the security measures.

The successful reduction of crime in our rail, especially in the Western Cape, to about a 60% decrease is a reflection of the effectiveness of the current measures that are in place. The joint SRCC Metrorail campaign to educate our public is a further indication of the seriousness with which all stakeholders in the transport sector take this matter. There is an evaluation and review of the rail service provision chain to identify flaws to ensure that we comply. There are also considerations to introduce a CCTV system in line with the efforts that are being taken by unicities in our country. There is also an increase in steps that are taken to ensure that we conduct security audits nationally to comply with the measures. On the issue of the Kraaifontein report, that report was released to the public and the CEOs of SSRC; and Metrorail, together with many councillors in the Western Cape, are acting in concert to ensure that those recommendations are implemented. There is a series of measures that are taking place right now which include counselling of those affected and to effect the settlement of the claims that have been launched. On the issue that has been raised regarding insurance compensation, we need to indicate that, amongst other things, the burial costs were paid for by Metrorail and SSRC and the settlement of other claims are dealt with on the merits of each claim, depending on the extent of the damage that has been caused.

On the question of the Road Accident Fund Commission Report, the report was received by the department towards the end of last year. The department has evaluated the recommendations and it is currently reflecting on them and will submit its recommendation for Cabinet decision. However, it must be pointed out that there are a number of measures that have been taken by the Road Accident Fund to address some of the problems that the Satchwell report indicated. Amongst other things, the issue of improving the processing of claims is going ahead. Disciplinary measures are currently under way to root out the corrupt officials concerned. There is also a process of beefing up the managerial capacity to cope with additional claims that are coming forth. There is a number of legislative measures that are being reviewed to deal with the issues of payments to victims and capping the payment of foreign victims in road accidents.

Regarding the issue of integration of transport in the integrated development plans, the National Land Transport Transition Act sets out a platform for Government to have integrated transport plans, the ITPs, as a key for spatial planning and development in our country. These ITPs are a sectoral part of these integrated development plans which look into the overall development of a region. The current public transport records, the CPTR process, are being completed throughout the country. In most areas, the information is ready to form part of this sector’s input to the IDP process. There is a team that involves the Department of Transport, provincial and local government that interacts to ensure that there is a legislative framework to be aligned with these processes.

On the taxi recapitalisation process, as I indicated earlier on, that is still very much on course and the best and final offer instruction letter, as we indicated, was issued to short-listed bidders on 21 May. As Government, we are very much committed to ensuring that as we proceed with this programme, all stakeholders, especially Santaco, are brought on board. That’s why I mentioned the meeting that will take place tomorrow to look at the issues that have been raised by them.

Regarding the issue of the rail safety regulator, contrary to what Mr Farrow said, this is very much on board. Cabinet has approved the appointment of the board for this safety regulator. On Friday I met with the task team to map a way forward in ensuring that a CEO and all staff are in fact in place by the time the board takes office. On the issue of the Growth and Development Summit, Parliament, last Thursday, debated on the relevance and importance of this GDS. All political parties, I believe, supported this principle of social dialogue and recognised the critical importance of building an enduring partnership between Government and all its social partners in putting our country on a sustainable path of growth and development. I must indicate that on Saturday, regarding the decisions that have been taken in implementing this GDS, an urgent need was also expressed to accelerate the implementation of key public infrastructure investment projects.

I must indicate as well to this House that the transport infrastructure is one of the key areas where massive public investment is on the increase. If one takes the issue of port infrastructure right now, for this current financial year almost R1,9 billion is going to be expended to ensure that we increase our capacity in ports. This is going to increase to more than R7 billion over the next three years. Also, the investment on national and provincial roads is running into billions of rands, as we have indicated.

The issue of the expanded public works programme also provides, in particular, for rural road construction and maintenance. Some of these projects have already been initiated by transport MECs in various provinces such as Limpopo, KwaZulu-Natal and the Eastern Cape. The critical challenge for us is to ensure that public investment in transport infrastructure is properly aligned at national, provincial and local government levels. Together with the provinces we believe that we are committing ourselves to implementing these transport infrastructure projects to ensure, where appropriate, that labour-intensive methods are applied so that we can maximise job creation.

The assistance to provinces and at local government level is critical in accelerating the infrastructure projects in construction of rural, provincial and local roads which are going to be taken into account in all the commitments that have been made at GDS. To this end, one of the Mincom meetings is going to dedicate time to ensure how, from a transport perspective, we are going to take forward all these concrete agreements that have been reached at GDS.

With those few words, once more, thank you very much for participating in this debate. You are all invited to join Minister Omar and me at the cocktail party immediately after the end of this Budget Vote at the Old Assembly dining hall. Thank you. [Applause.]

Debate concluded.

CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON LABOUR - PROVINCIAL
                               VISITS

There was no debate.

The DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, with leave I move:

That the Report be noted.

Agreed to.

                      HOURS OF SITTING OF HOUSE

                         (Draft Resolution)

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

That, notwithstanding Rule 23(2), the House meets tomorrow at 09:30.

Agreed to.

The House adjourned at 18:34. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

ANNOUNCEMENTS:

National Assembly:

1. Membership of Assembly: (a) The following member vacated her seat with effect from 30 May 2003:

   Hlangwana, N L.

 (b)    The vacancy which occurred owing to the death of Mr R J Heine on
     29 May 2003, has been filled with effect from 9 June 2003 by the
     appointment of Mr M H Steele.

1. Membership of Committees:

 (1)    The following changes have been made to the membership of
     Portfolio Committees, viz:


     Communications:


     Appointed: Mtsweni, N S.


     Defence:


     Appointed: Makanda, W G (Alt).
     Discharged: Mathebe, P M.


     Education:


     Appointed: Abrahams, T.


     Foreign Affairs:


     Appointed: Makanda, W G (Alt).


     Health:


     Discharged: Abrahams, T.


     Public Service and Administration:


     Appointed: Baloyi, M R; Mbulawa-Hans, B G (Alt).


     Sport and Recreation:


     Appointed: Frolick, C T; Chauke, H P (Alt).

1. Referrals to committees of tabled papers: (1) The following papers are referred to the Portfolio Committee on Environmental Affairs and Tourism:

   (a) Treaty between the Government of the Republic of Mozambique, the Government of the Republic of South Africa and the Government of the Republic of Zimbabwe on the establishment of the Great Limpopo Transfrontier Park, tabled in terms of section 231(3) of the Constitution, 1996.

   (b) Explanatory Memorandum to the Treaty between the Government of the Republic of Mozambique, the Government of the Republic of South Africa and the Government of the Republic of Zimbabwe on the establishment of the Great Limpopo Transfrontier Park.

   (c) Annual Report of the Committee for Environmental Co- ordination for 2002.

 (2)    The Fourth Economic and Social Rights Report of the South
     African Human Rights Commission for 2000-2002 is referred to the
     following Portfolio Committees:


     (a)     Chapter 2 - "The Right of Access to Adequate Housing" of
          the Report to be referred to the Portfolio Committee on
          Housing for consideration and report.


     (b)     Chapter 3 - "The Right to Land" of the Report to be
          referred to the Portfolio Committee on Agriculture and Land
          Affairs for consideration and report.


     (c)     Chapter 4 - "The Right to Health Care" of the Report to be
          referred to the Portfolio Committee on Health for
          consideration and report.


     (d)     Chapter 5 - "The Right to Have Access to Sufficient Food"
          and Chapter 6 - "The Right to Social Security" of the Report
          to be referred to the Portfolio Committee on Social
          Development for consideration and report.


     (e)     Chapter 7 - "The Right to Education" of the Report to be
          referred to the Portfolio Committee on Education for
          consideration and report.


     (f)     Chapter 8 - "Environmental Rights" of the Report to be
          referred to the Portfolio Committee on Environmental Affairs
          and Tourism for consideration and report.


     (g)     Chapter 9 - "The Right to Sufficient Water" of the Report
          to be referred to the Portfolio Committee on Water Affairs and
          Forestry for consideration and report.


     (h)     Chapter 10 - "Metropolitan Councils" of the Report to be
          referred to the Portfolio Committee on Provincial and Local
          Government for consideration and report.


     (i)     Chapter 11 - "Parastatals" of the Report to be referred to
          the Portfolio Committee on Public Enterprises for
          consideration and report.


     (j)     Chapter 12 - "The Right of Prisoners" of the Report to be
          referred to the Portfolio Committee on Correctional Services
          for consideration and report.


        k) Chapter 13 - "Public Finance" of the Report to be referred to
           the Portfolio Committee on Finance for consideration and
           report.