→ Parliamentary → National Assembly - 18 February 2004

National Assembly - 18 February 2004

WEDNESDAY, 18 FEBRUARY 2004 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY
                                ____

The House met at 14:01.

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

                           (Introduction)

The MINISTER OF FINANCE: Madam Speaker, Mr President, Deputy President, Cabinet colleagues, hon members, Governor of the Reserve Bank and Deputy Governors and MECs for Finance - I am pleased to see that there are a number of learners and students in the gallery this afternoon as well as a number of trade union and business leaders - and also the many South Africans at home and at work who join us this afternoon for the discussion of this Budget Speech, good afternoon to all of you.

The spirit of a people, its cultural level, its social structure, the deeds its policy may prepare - all this and more is written in its fiscal history, stripped of all phrases … The public finances are one of the best starting points for an investigation of society, especially though not exclusively of its political life.

Those words were written by a renowned commentator on economic policy, Joseph A Schumpeter.

We were rightly reminded by President Mbeki in his state of the nation address of the vision and values that were so clearly stated by former President Mandela a decade ago. Three issues stand out from that first speech: creating a people-centred society, expanding the frontiers of human fulfilment, and extending the frontiers of freedom.

The Budget and its progressive evolution, as Schumpeter, one of the great commentators, said, is a powerful index of a society’s values, not merely in its language and numbers, but in the lived experience of its impact on people, families, workers, businesses and organisations.

Development as freedom

We have made progress together, over the first 10 years of democracy - South Africans of all ages, colours, circumstances, lifestyles, aspirations, occupations, with our individual strengths and weaknesses, our likes and dislikes, and even our quirks and oddities.

We have walked together one step at a time, on our journey towards growth, towards learning, towards reconstruction, towards solidarity, towards reconciliation, towards prosperity, towards development, and yes, indeed, towards freedom. We have walked together on this journey, with hope, with confidence, with humility, with enthusiasm, with perseverance, and with industriousness.

We have stayed together on this journey because we share that vision, and we will continue day by day and year by year to translate the resources at our disposal and the opportunities before us into people-centred development, human fulfilment and freedom.

Last year, in tabling the 2003 Budget, we reflected on Amartya Sen’s brave formulation of the central intent of economic progress: freedom is the primary aim of development, and also the principal means of achieving it, he wrote. And we reflected on a formulation of that intent that goes back 49 years to 26 June 1955, the Freedom Charter, and also reminded ourselves that it reflects our aspirations for political freedom; freedom from poverty; freedom to transform our society, its culture and values; the freedom to explore our capabilities and the freedom that will grant our children choices that our parents did not enjoy. This is a freedom that opens up opportunities, but also imposes disciplines; it is a freedom that creates capabilities, but expects stewardship; it is a freedom that rewards enterprise, but clearly calls for accountability. It is a freedom we have used to build a new society, mould a new culture and create hope and opportunity for future generations. Tlhabologo ke tokologo, uphuhliso yinkululeko. [Development is freedom.]

Budget priorities - past, present and future

This is the vision that has inspired us for the past 10 years, and it remains our guiding light for the decade ahead. Yet from one year to the next we have to adapt our plans to the progress we have actually made and the changes in circumstance around us.

In 2002 we tabled a Budget in which R63 billion was added to our three-year spending plans; last year an additional R105 billion went to national departments, provinces and municipalities. This year we are able to add a further R44,5 billion to our highest priority Public Service delivery programmes. [Applause.]

Last year, we were able to provide R13 billion in personal income tax relief. This year we can accommodate more modest relief of R4 billion. [Applause.] Last year, we projected a budget deficit of 2,4% for the year ahead; this year it will widen to 3,1% of GDP. Economic growth in 2003 lagged somewhat behind our expectations, but we are nonetheless able to steer a course that builds on the spending and tax plans announced in previous years, and we can take several significant steps forward in progressively meeting the social and economic development challenges before us.

Before turning to the specific proposals for the 2004-05 Budget and beyond, let me share with this House some of the thinking, some of the key considerations that lie behind this Budget. Government’s preliminary review of progress over the past decade, published as Towards a Ten Year Review, provides both an instructive account of what we have achieved and a reminder of the journey ahead. Cabinet’s deliberations on budget policy and priorities have drawn on this work, and have also benefited from the work of the five cluster committees and their interdepartmental teams.

Reconstruction and development in review

It is important not just to look back at the journey we have walked, but to look back from the perspective of the aspirations and expectations, a decade ago, of our people; expectations that emerged from many thousands of meetings, consultations, iimbizo and people’s forums in the lead-up to the 1994 democratic elections.

First among the aims of the Reconstruction and Development Programme was to meet the basic needs of all South Africans. And so successive Budgets have progressively extended the resource envelope devoted to services in poor communities:

  • 1,6 million houses have been built;

  • 700 new primary health clinics have been constructed, in addition to 212 upgraded and 215 mobile clinics established; [Applause.]

  • potable water supplies have been extended to some 9 million South Africans … [Applause] … and 6,4 million more people now benefit from new sanitation facilities;

  • about 4,5 million children benefit from the Primary School Nutrition Programme; and

  • the number of social grant beneficiaries has increased from 2,9 million to over 7,4 million, including recipients of the new child support grant. [Applause.]

I think the numbers speak for themselves. But we recognise that vulnerability remains deep-rooted, exacerbated by rising unemployment and the long shadows cast by the social dislocation and exclusion of the past. The fight against poverty will continue, focused increasingly in the years ahead on creating work opportunities and building sustainable communities and safe residential neighbourhoods. [Applause.]

The second challenge of the RDP was building the economy. Following a decade in which average growth was just 1% a year and investment and productivity had steadily declined, the challenge of building a dynamic economy able to support rising living standards has been huge. For the past 10 years, growth has averaged 2,8% a year, productivity has increased strongly and many industries have successfully adapted to international competition.

  • Consumer inflation has averaged 7,3% since 1993, compared with 14,3% over the previous decade.

  • Interest on public debt has fallen from 6,4% of GDP in 1996 to 4,7% last year.

  • Manufactured goods now comprise 38% of exports, up from 25% in 1994.

  • Private sector investment growth has averaged 5,4% a year over the past decade. But we recognise that the pace of economic growth has to be accelerated. Investment in industry and infrastructure and an expansion of job opportunities are critical challenges for the decade ahead - both to underpin growth and to expand room for broad-based empowerment.

The third task we set ourselves was democratising the state and society. Construction of a vibrant democratic state, founded on the rule of law, has been an unparalleled success of the past decade. Key elements include our constitutional order, rationalisation of the local government sphere into 284 municipalities, and independent agencies with well-defined responsibilities - the Constitutional Court, the Public Protector, the Human Rights Commission, the Gender Commission, and the National Economic Development and Labour Council, amongst other things.

Building on the work of the Growth and Development Summit held in June last year, Towards a Ten Year Review proposes an ``encompassing framework’’, a partnership that better integrates the activities of Government and harnesses the efforts of communities, labour, civil society and business to focus on the long-term development goals of our country.

Fourthly, we gave priority to developing our human resources. Education, training and skills development are key foundations of social and economic progress, and preconditions for addressing inequality and division in society. Over the past decade:

  • School education numbers have grown by 1,5 million to some 12 million learners, with broadly equal enrolment of girls and boys, and marked reductions in out-of-age enrolment;

  • 56 000 classrooms have been constructed;

  • a skills development strategy has been launched, 25 Setas established, 478 learnership programmes registered, 70 000 learners enrolled and an estimated 29% of workers underwent training in the fiscal year 2002-03;

  • the renewal of further education has begun with the consolidation of technical colleges into 50 new institutions;

  • the restructuring of higher education is under way, with a view to creating 21 consolidated institutions out of the former 36 universities and technikons.

Over the decade ahead, investment in the quality of education and the promotion of work-related training opportunities will remain amongst the foremost priorities of Government.

The fifth RDP theme was implementation - building the capacity of the institutions to deliver. Progress on that front underpins everything else we have achieved. And again, we have to say there is more to be done. As President Mbeki reminded us, our work is not complete until the spirit of Batho Pele permeates every administrative office, every magistrate’s court, every clinic, every classroom and every licensing counter. [Applause.]

I think we must commit to this, because our understanding is that tlhabologo ke tokologo, uphuhliso yinkululeko [development is freedom]. [Applause.]

Policy priorities for 2004 and beyond

Our achievements are not mere statistics; they tell a story of fundamental transformation, on which all of us as South Africans can look back with pride. We have rolled back the stumbling block. Our path is clear. [Applause.] We can celebrate the many ways in which we have pushed back the tide of poverty, and pushed forward the frontiers of our freedom and humanity.

But as we look forward to the second decade of democracy we know that we still have far to walk. Too many South Africans are trapped in the ``second economy’’, characterised by poverty, inadequate shelter, uncertain incomes and the despair of joblessness. And many of those whose circumstances are most vulnerable are young and marginalised.

A recent study of household dynamics in KwaZulu-Natal illustrates very starkly how vulnerability is experienced in impoverished villages. Income security can be overturned in many unpredictable ways through the loss of a breadwinner’s job, loss of livestock or crops through disease or theft, drought or flood, the impact of disease on family members, and the reality of conflict and crime. Circumstances can change rapidly over time and vary greatly between one community or neighbourhood and another. These kinds of vulnerabilities hurt families and especially children, not just once but in recurring ways; not just through distress or hunger, but in wounded minds and fractured communities.

And so when we talk of development, building capabilities and empowering our people, these are the lives, these are the experiences, that we seek to change. These are the reasons why the Growth and Development Summit last year set a target of halving the unemployment rate by 2014. These are the reasons why President Mbeki has challenged us to increase the number of people in society who depend for their livelihood, not on social grants, but on normal participation in the economy. But these are also the reasons why we are progressively extending the social security system, with a focus particularly on the needs of children who cannot be expected to provide for themselves.

In reflecting on the challenges that lie ahead, Cabinet has had to confront difficult choices. Our task is, simply put, to accelerate the pace of growth and job creation and extend the scope of development and empowerment. Our approach has four key priorities for the decade ahead:

  • we aim to increase the share of investment and saving out of national income, to provide the infrastructure and industrial capital formation required for sustained output growth. Our policies must aim to raise the level of investment in the economy from its present 16% to 25%, and to halve the unemployment rate by 2014;

  • we will improve the quality of education and access to training opportunities to ensure that skills development and productivity enhancement contribute to expanding participation in social and economic development;

  • we will diminish the inequalities and economic divisions that characterise our society through broad-based empowerment. We will reduce poverty by creating work opportunities and building sustainable communities, alongside consolidation of the social security system; and

  • we must, as a fourth objective, continue to build sound institutions competitive markets, support for emerging entrepreneurs, better governance and regulation, and rigorous monitoring and measurement of Public Service delivery.

Ten years from now, when we look back on what we have achieved in our second decade of freedom, what will we celebrate? What are the values that future investigations of our society will see etched in our social and economic history, and documented in the records of our programmes and policy implementation? We will want to say that we have built a caring society. We will want to say that we have reduced pain and extended joy. We will want to say that we have rewarded creativity and invested in capabilities. Indeed, we will want to say that compassion and industry have overcome greed and despair. We will want to say that those among us who enjoy the privilege of power or riches have ploughed and not plundered our lands. The shape and trajectory of the public finances will impact in important ways on this journey.

The 2004 Budget signals a clear direction. In the years ahead:

  • We will continue to expand housing, water and community services - the fastest growing categories of expenditure over the past decade - because these are the investments that contribute most to the health, safety and comfort of our children and our children’s children.

  • We will continue to extend and improve spending on health services, which has grown in real terms by 4,3% a year since 1992-93.

  • We will continue to broaden the tax base in the interests of both fairness and efficiency, and because a broad, well-administered tax structure is an important bulwark against unproductive or opportunistic forms of self-enrichment.

  • We will continue to manage the public finances in a responsible manner that ensures that debt service costs decline as a share of expenditure and of GDP, releasing resources for productive service delivery.

But there are other areas in which we will need to seek a changed trajectory, a more agile state and more vigilant institutions. One of our central achievements over the past years has been the reinforcement of the social security net. In the period ahead we will complete the phasing in of the child support grant and will see continued growth in the provision for those who qualify for old age and disability payments.

We propose to consolidate the grants delivery system in a new national Social Security Agency. Improved food security and partnerships with nongovernmental organisations are also ongoing priorities. Including adjustments for inflation, welfare and social security spending is projected to grow by 13,6% a year over the MTEF period. Given the challenges we face, we have made these choices. But in the longer term, it seems clear that we will need to seek a better balance between growth in welfare spending and our investments in education and infrastructure development.

In this Budget, we take several steps in this direction: an expanded public works programme through increased allocations for provincial and municipal infrastructure; a renewed focus on learner support materials and facilities at disadvantaged schools; and further allocations for the restructuring of higher education institutions. These are orderly and well-considered shifts, over time, in the structure of our public finances. But they rest on the same fundamental vision and values that underpinned the first presidential lead projects announced just under 10 years ago.

In all of this we must seek not just improvements in the quality of Public Service delivery, but also firmer partnerships with the business sector and civil society, drawing on the energy and capacity of all our people. Itye silisusile. [We have rolled back the stumbling block.]

Economic outlook

Let me turn to the outlook for the economy.

Global economy

The 2004 Budget is tabled against the background of a global economy characterised by extraordinarily uneven growth. An expansion in world output is strongly driven by the recovery of the US economy - underpinned by historically low interest rates, tax cuts and unchecked defence spending. China continues to grow rapidly and Japan is showing greater confidence after a long slowdown. However, most of Europe, which remains South Africa’s main trading partner, is still reporting growth below 1%.

While the recovery has gained momentum, there are imbalances that threaten its sustainability. The United States’ current account and fiscal deficits and the weakness of the US dollar have led to immense shifts in international capital flows, including attempts by Asian and other countries to prevent their currencies from appreciating by amassing dollars. This, in turn, impacts in unpredictable ways on the currencies and markets of emerging economies. South Africa has benefited from rising commodity prices and declining interest rates worldwide, but the relative strength of the rand and weakness of the dollar - the currency in which most of our trade is denominated - have impacted negatively on many exporters and import-competing industries.

Prospects for the domestic economy Although exchange rate volatility remains a concern, the South African economy is in a much better position to take advantage of the emerging global economic recovery today than it was a decade ago. Sicenceshela umthi esautyala ngo-1994. [We are watering the tree we planted in 1994.] [Applause.]

We are now integrated into the global economy and we have diversified our trade by product and region. A healthier balance of payments position means that faster growth can be sustained without the boom-bust cycles of the past. We now have access to international capital markets, allowing us to source long-term foreign capital to supplement domestic savings. An inflation-targeting framework has assisted in anchoring price expectations, while making monetary policy more transparent.

Wide-ranging reforms have reduced the vulnerability of the fiscus and we have a well-regulated financial system that has enabled the economy to withstand several shocks to the international financial system over the past decade. Within this context of a strong macroeconomic and fiscal framework, we have to streamline the operation of the economy, encourage investment, address barriers to business development and invigorate job creation and labour market processes.

Key microeconomic reforms include:

  • Improving the efficiency of communication and transport flows, including investment in ports, road and rail networks;

  • Easing the regulatory burden for small businesses;

  • Extending access to financial services;

  • Consolidating further education colleges and expanding training and skills development opportunities;

  • Capacity-building in trade administration, regulation of public utilities and competition policy. Our economy has expanded for 20 consecutive quarters - the longest period of continuous growth for over fifty years. However, the preliminary estimate of output growth of 1,9% last year is rather lower than the 3,3% projected this time last year.

Factors contributing to slower growth included a sharp decline in agricultural production as a result of adverse weather conditions, weak demand in several trading partner countries and the impact of the strength of the rand on industry and tourism-related sectors. Gross domestic product is expected to increase by 2,9% during 2004 and accelerate further to 3,6% and 4% in the next two years.

Expenditure, inflation and monetary policy

Gross domestic expenditure increased by an estimated 4,4% during 2003, supported by monetary policy easing last year and the significant tax relief of the past two fiscal years. Despite the slowdown in manufacturing, capital formation remained robust and expanded by about 8% in 2003, laying a firm foundation for future output growth.

With expenditure rising somewhat faster than domestic production, we recorded a rise in the deficit on the current account of the balance of payments. This is expected to increase moderately in the years ahead, but without unduly straining the overall balance of payments, which benefited from healthy capital inflows last year.

Inflation, as measured by CPIX, has slowed down significantly from its peak of 11,3% in October 2002. The tightening of monetary policy during 2002, the stronger rand and a slowdown in the food price trend in 2003 contributed to the moderation in inflation. The CPIX is now firmly within the target range of 3% to 6%. Are you okay, Governor? [Laughter.]

With the producer price index indicating a decline in factory-gate prices year-on-year to December 2003 and inflation expectations steadily declining, our projection is that CPIX inflation will average 4,8% this year and remain within the target band over the medium term.

Employment creation

Our shared vision clearly calls for more vigorous employment creation to accompany improved output growth. We have to confront this challenge forthrightly. In today’s world fewer people till the lands, more women are workseekers, technology advances rapidly and there is fierce competition between poor, low-wage economies. Thinking people across the globe are working to give meaning to the nature of work and sustainability of livelihoods in this changing environment.

Government cannot tackle this problem single-handedly. Our Growth and Development Summit last year, and the success of the Proudly South African campaign, are evidence of the creative power of joint responsibility between Government, employers, trade unions and communities.

Financial Sector Charter This spirit of working together also characterised the process of developing the Financial Sector Charter, finally signed on 17 October last year. This important milestone in the evolving framework for empowerment and broadening participation in the economy was initiated and led by stakeholders in the sector, many of whom are in the gallery with us this afternoon.

It sets out several specific transformation commitments for human resource development, empowerment financing, procurement and enterprise development, broadening ownership and control and corporate social investment. It aims to extend financial services to 80% of lower-income people by 2008. A draft Code of Practice has already been published for empowerment in public- private partnership projects, and other commitments of the Financial Sector Charter will lead to a balanced scorecard and a further Code of Practice, in terms of the Broad-based Black Empowerment Act.

When we look back in 10 years time, we will measure our progress against these commitments. We will look for evidence not of a few who have made the leap to greater riches, but of a progressive broadening of opportunity for all. Every step of the way we will remind ourselves: Sicenceshela umthi esautyala ngo-1994. [We are watering the tree we planted in 1994.] [Applause.]

We have to water this tree because it is ours. We cherish it, we love it and it must provide for us in the future.

The Budget framework

For the fiscus and the Budget framework, we will seek assurance that a progressive realisation of economic development and social rights has been achieved without compromising sustainability and the legacy we pass on to our children’s children.

Our fiscal policy is not engineered for short-term gain, but is directed at strengthening economic capacity and the resources of the state over the long haul. So, for example, we can point to the fact that whereas state debt costs have increased by less than 3% a year since 1999, education spending has grown by 10% a year - and that has nothing to do with where I squat.

The framework for the 2004 Budget is, again, able to provide additional resources to spend on our priorities. In the November Medium-Term Budget Policy Statement we revised downwards our revenue projections for 2003-04 by about R4,5 billion. The revised estimate for revenue this year is R300,3 billion, marginally higher than the November number.

Taking into account a further appropriation of R250 million for drought relief - a special Appropriation Bill for drought relief is being tabled - and a reduction of R3,7 billion in debt service costs, the projected Budget deficit for 2003-04 is 2,6% of GDP. In keeping with the expansionary fiscal policy stance introduced in 2001, the period ahead will see strong increases in social spending and infrastructure investment, a stable tax burden and declining debt service costs relative to GDP. The Budget framework makes provision for an additional R44,5 billion over the next three years relative to the 2003 Budget forward estimates. The main Budget provides for total expenditure of R370 billion in the first year, rising to R439 billion by the fiscal year that ends on 31 March 2007.

Revenue increases from R327 billion to R394 billion over the same period, resulting in a deficit of 3,1% of GDP next year, declining to 2,8% by 2006-

  1. After setting aside provisions for interest payments, Government will be spending over R1 trillion on services over the next three years. [Applause.] In the light of so many economic sages ahead of the elections, we should advise that R1 trillion has 12 zeros! [Applause.]

Our Budget framework makes provision for a contingency reserve. This allows for unforeseeable and unavoidable expenditure in-year and for policy priorities in future years. If further resources are required for relief in drought-stricken areas - they will be expended from this reserve. Similarly, the taxi-recapitalisation programme and further critical infrastructure projects in support of industrial investment will be funded from the reserve if planning and project development proceed more rapidly than anticipated. Insha’Allah. [As God wills it.]

When looking at the spending of all three spheres of Government, several trends are evident:

  • A larger proportion of the Budget is now spent at provincial and local government level and in Government agencies and entities, signalling significant progress in decentralising budgeting and accountability.

  • The share of the Budget that is now directly transferred to households increases by 7,3% a year in real terms, strengthening the redistributive stance of the Budget.

  • Government expenditure on capital and infrastructure is rising as a share of spending, contributing towards increased access to services and facilitating economic development. The evolution of a stable and well-functioning intergovernmental fiscal system has been a notable success of South Africa’s first decade of democracy. In 1994 South Africa had fragmented administrations designed to spend public resources and deliver services along racial lines. Budget decisions were highly centralised and provinces, homelands and black local authorities only existed as mere administrations of the central minority Parliament.

That was ten years ago - some people forget that that was the starting point of democracy. [Applause.]

Ten years later, we have a unitary state with nine sound provincial governments and a complete set of municipalities responsible for the delivery of basic services to our people. Each of these governments determines its own budget, taking into account nationally-agreed priorities determined after consultations through forums like sector Minmecs, the Budget Council and the Budget Forum, and culminating in an extended meeting of the Cabinet where Premiers and the chairperson of the SA Local Government Association are invited to participate.

Medium-term Expenditure Framework

Let me turn to our spending plans. In spite of our successes over the past 10 years, there is further room for improvement. We need to seek an improved balance between the expansion of social services and the reinforcement of investment in infrastructure and economic development. More work needs to be done to improve the quality of spending, especially in the areas of housing, health services and school education. Although improvements have been achieved in financial management, capacity needs to be strengthened to realise better value for money.

Local government challenges include improving service delivery capacity, maintaining and extending infrastructure, collecting revenue, reducing the share of personnel expenditure, and improving accountability through the timely submission of financial statements for audit.

Over the past decade, Government has made concerted efforts to redress poverty and inequality through a substantial redirection of public spending towards key social and economic programmes. Spending on social services has grown from 44,4% of general Government expenditure in 1982-83 to 56,7% in 2002-03. Spending on social security, health and housing and water services has consistently increased over the period. Education, at 23% of noninterest expenditure, continues to make up the largest component of the Budget. Most of our spending, particularly in social services, is targeted towards poor and vulnerable groups as a basis for broadening economic prosperity through building human capabilities.

Next year, R195,4 billion of nationally raised revenue will be transferred to provincial and local governments for the delivery of improved public services to all South Africans. This is about 62% of the national revenue after debt-servicing, and represents about 97% of all provincial revenue and 14% of local government revenue.

Provinces and local government are the primary delivery channels for basic services and will receive R30,2 billion of the total additional R44,5 billion over and above that which we announced last year. This will see national transfers to provinces growing by 4,8% in real terms over the MTEF while local government allocations will grow by 5,8% in real terms. Hon members may recall that we had a big debate because some of the MECs last year said that we were just playing umrabaraba. This is a real change, and a significant one at that.

Provinces

In the provincial sphere the equitable share grows by an additional R19,7 billion over the next three years. This increase will reinforce pro- poor social services spending on school education, health and social security grants. Existing commitments in the social services and other provincial functions including housing, roads, transport and other infrastructure will also be funded from this source.

Over the medium term, provinces and municipalities will prioritise labour- based infrastructure projects as part of Government’s Expanded Public Works Programme. Over the next five years, R15 billion will be channelled to this intervention in part through the provincial infrastructure and municipal infrastructure grants. Together, these grants receive additional allocations of R3,2 billion over the MTEF which will be partially earmarked for labour-based public works. Work opportunities will also be created in environmental programmes and in social development initiatives.

Provinces are expected to spend R65 billion on education, R41 billion on health and R48 billion on social grants and welfare services in the new fiscal year. Much of the additional R26,3 billion allocated over the 2003 forward estimates will go to the comprehensive response to HIV and Aids, further extension of social assistance to the poor and procurement of complementary inputs such as textbooks and other materials in school education. [Applause.]

Provincial social development spending will rise by R6 billion in 2004-05; reaching a total of R47,8 billion in 2004-05 and R62,4 billion two years later. These amounts include R19,8 billion to fund the extension of the child support grant. In addition, provincial budgets provide for increases in April of R40 in the pension and disability grant values to a maximum of R740, and the child support grant increases to R170 a month. [Applause.]

Dear colleagues, we can only say wagwetywa ndlala! [Applause.] We’re saying that a sentence has been imposed on hunger. Wagwetywa ndlala!

A further priority is to provide comprehensive agricultural support to developing farmers, including those benefiting from the Land Redistribution for Agricultural Development programme. Through a new grant, R750 million will be transferred over the MTEF to provincial agricultural departments for this purpose. [Applause.]

Local government

Minister Mufamadi, over the next three years municipalities will receive an additional R3,9 billion, taking total transfers to local government to R47,3 billion. Through the local government equitable share, which receives an additional R2,2 billion, Government reaffirms its commitment to the extension of basic household services. Increased local government allocations are intended to accelerate the delivery of municipal services, especially water and electricity, to poor households. The local government equitable share rises by 12,1% a year with a total budget of R28,5 billion over the next three years.

Approximately R1,7 billion of the additional allocation of R3,9 billion for local government goes directly into the Municipal Infrastructure Grant. [Applause.] Thank you, Mr Carrim. This enables municipalities to address backlogs in basic municipal infrastructure in a sustainable manner, and to promote the creation of jobs through the Expanded Public Works Programme. Total grants for infrastructure increase to R5 billion in the first year, rising to R5,6 billion and then R6 billion. On average, infrastructure transfers to municipalities increase by 13% a year over the Medium-Term Expenditure Framework. [Applause.]

Key financial reforms for the local sphere over the next three years will be driven by the implementation of the Municipal Finance Management Act, which will take effect on 1 July this year. A programme for the phased implementation of the Act will be issued shortly. It will take due regard of the uneven capacities of municipalities to implement financial reforms. The legislation also allows for a municipality to borrow, and it is expected that these provisions will usher in new players in the bond market.

Some large municipalities will be issuing municipal bonds very shortly. We wish them every success, and we note that such borrowing will be undertaken without national or provincial government guarantees. [Laughter.]

National spending priorities

As part of the broad strategy to deepen the skills base, the higher education restructuring process receives a further R1 billion. Increased support for curriculum development and implementation is proposed, particularly in the Further Education and Training sector. Together, these initiatives will enhance the quality of education.

In health, a further R2,1 billion is allocated for the comprehensive response to HIV and Aids, including the provision of antiretroviral treatment programmes by provinces through a conditional grant. [Applause.] Health spending will also include implementation of the new rural and scarce skills allowances, which are aimed at improving services in remote areas and retaining highly skilled professional groups within the health service. Twenty seven hospitals will also be completely upgraded or replaced as part of the hospital revitalisation programme, over the MTEF. [Applause.]

Fighting crime and streamlining the justice process continue to be central priorities. The Budget allocates an additional R1,9 billion over the next three years for enhanced safety and security. [Applause.] In policing, this allows for the recruiting of additional personnel, modernising and expanding the vehicle fleet and upgrading support systems.

To improve the efficiency of courts and reduce the backlog in cases, key interventions are supported to streamline the justice process. A further R475 million is provided for strengthening court administration and prioritising services to vulnerable groups, particularly women and children. [Applause.] The allocations to Correctional Services include provisions for establishing new remission and parole boards to bring community involvement into decisions to reintegrate offenders. In pursuit of more equitable land ownership patterns, the Land Reform and Restitution programmes receive an additional R700 million. [Applause.]

Government is improving the coverage and efficiency of core services in Home Affairs by deploying 67 mobile offices to underserved rural communities. [Applause.] Provision has also been made to computerise regional offices and to upgrade systems in general. These initiatives will be funded through additional allocations amounting to R850 million. [Applause.]

As part of our contribution to the African Union and Nepad, Minister Lekota, an additional R1,1 billion is allocated to support peacekeeping operations in Africa and R427 million to enhance diplomatic representation abroad, Minister Dlamini-Zuma. [Applause.]

Revenue issues

We now turn to our revenue proposals. As our economy weakened last year, similarly, our revenue collection has slowed. The revised revenue estimate for the current fiscal year - that one which ends on 31 March - is R300,3 billion, or R4,2 billion lower than the original Budget estimate. The shortfall is mainly in company tax receipts. In recent years, our tax reforms have raised revenue from companies significantly, contributing to there being scope for personal income tax relief. This has unavoidably increased the volatility of overall revenue trends somewhat.

Tax policy over the past decade has been completely reshaped. We have changed from a source-based tax system to taxing the global earnings of South African residents. We have begun taxing capital gains, we have reduced corporate tax rates, we have made substantial reductions in personal income tax rates, especially for low and middle-income workers. We have zero-rated paraffin, reduced ad valorem excise taxes and introduced a lower tax rate for small businesses. In total, we have announced over R72 billion in tax cuts since 1994. [Applause.]

Equally impressive is the change in tax administration. In a short period of time, the SA Revenue Service has overhauled many of its procedures and systems. We have created an environment that promotes tax compliance. This is almost unique in developing countries.

The outcome of these policy changes and administrative reforms is that we have been able to reduce the deficit, increase resources available for spending and give considerable relief to individuals. These factors, including improved tax morality, have had an immeasurably positive impact on the economy.

Our revenue projection for the next fiscal year is R327 billion. Although economic performance is expected to rebound this year, the weak revenue performance obliges us to be more prudent with tax relief. The tax proposals contain a moderate easing of the tax burden on individuals and a somewhat higher tax incidence on tobacco products, alcoholic beverages and fuels. [Interjections.] [Applause.]

I was going to ask for Hansard for those who are opposing this. [Laughter.]

Personal income tax relief

This year we propose to reduce personal income taxes by R4 billion, providing an adjustment that compensates taxpayers for inflation. At the lower end of the income spectrum, there is some real relief. Sixty percent of this relief will go to workers earning less than R150 000 a year. The primary rebate is raised to R5 800, increasing the threshold below which people do not pay any income tax to R32 222. [Applause.] For people aged 65 and over, the threshold is raised to R50 000. [Applause.] Yes, we should give the over-65s the opportunity to applaud. [Applause.] Don’t pretend, Kader. You may applaud when we say that. [Laughter.]

Interest and dividend income To complement personal income tax relief, we raise the domestic interest and dividend exemption threshold by 10% for those under 65 from R10 000 to R11 000, and for people aged 65 and older, from R15 000 to R16 000. These proposals will take effect on 1 March this year and will cost Government R62 million.

Transfer duty

The South African housing market has seen a notable recovery since 2000. To facilitate the acquisition of houses in the lower end of the housing market, we are raising the exemption threshold for transfer duty to R150 000 from the beginning of next month. [Applause.]

Stamp duties on mortgage bonds and NCDs

To assist homebuyers further, stamp duties on mortgage bonds will be removed from 1 March 2004 … [Applause.] … as this constitutes a second levy in addition to the transfer duty. This measure will cost R250 million. Stamp duty on negotiable certificates of deposit will also be repealed with effect from 1 April, thereby completing the removal of stamp duty on all debt instruments. Simultaneously, measures to prevent the avoidance of duties on leases will be introduced.

Broad-based employee equity participation

We propose to encourage the broadening of equity ownership by employees. An issuance of shares to low-income employees at reduced or no cost, subject to a cap that will be announced, will not be deemed as income for purposes of income tax if the shares are held for a prescribed period of time. [Applause.] These changes will facilitate long-term ownership by workers, facilitating improvements in productivity and broad-based economic empowerment.

Excise duties

For the past seven years, excise duties on cigarettes and other tobacco products carried a total tax incidence of 50%. Evidence indicates that this policy has contributed to reducing consumption of tobacco products almost everywhere. The tax incidence will be revised upwards to 52% for the next three years, taking the tax on a packet of cigarettes up by 64 cents a packet. [Applause.] Increases in tax on tobacco products will raise R800 million more.

The following adjustments to taxes on alcoholic beverages are proposed:

  • Tax on beer is raised by 4,3 cents per 340 ml can.

  • To calm the waters in the debate on issues relating to traditional leaders, there is no change in the tax on traditional beer. [Laughter.] [Applause.]

  • Tax on fortified wine rises to R2,33 per litre and on natural wine to R1,17 a litre.

  • Ciders and alcoholic fruit beverages go up by 3,4 cents a 340 ml can.

  • Duties on spirits are raised by R1,76 for a 750 ml bottle to R14,78 cents. There is no distinction, Kader, between Irish and Scotch whiskey. [Laughter.]

Tax increases on alcohol will raise a further R660 million. These excises take effect immediately at 3 o’clock today. [Laughter.] [Applause.]

Fuel taxes

The general fuel levy on petrol and diesel is raised by 10 cents a litre to R1,11 and 95 cents respectively, raising an additional R909 million over the next year. It’s proposed that the Road Accident Fund levy be raised by 5 cents this year. Reform of the Road Accident Fund policy framework and administration is clearly a pressing matter for the year ahead. The increases in fuel taxes take effect on 7 April this year. To offset these fuel levy increases, the diesel fuel rebate is increased by 15 cents a litre, providing relief for the agricultural, forestry and mining sectors.

Ad valorem taxes

In the 2003 Budget, ad valorem duties on computers and some printers were removed. This year we propose the scrapping of these duties on all computer printers, recorded and prepared unrecorded media including magnetic tapes, print film, photocopiers, certain cosmetic products, watches and clocks. Why these things are there I don’t know, but they are there.

Compliance, administration and further base-broadening initiatives

The filing campaign that the Revenue Service launched last year and its simpler returns have received very positive feedback from taxpayers. This year, additional work has been done to simplify returns and will be backed by education around the filing process. Taxpayers are once again urged to assist in changing our compliance culture. The commissioner has assured me that they, indeed, will.

Sars will continue to promote improved relations with taxpayers. A taxpayer charter spelling out the rights of taxpayers is now being discussed and finalised. New service offices will be opened during the next three months in Pretoria East and Central Johannesburg.

In the past five years, a number of measures have been introduced to support small businesses. Reducing the regulatory burden on these businesses is a key element of Government’s strategy for encouraging employment creation. A working group will be established this year to review the compliance of small businesses.

In analysing corporate taxes, it’s clear that the low effective tax rates in certain sectors remain a cause for concern. Sars and sector representatives are meeting to discuss collaborative ways of dealing with this. Further analysis is also under way to look specifically at structured finance arrangements and possible reforms in the mining and financial service sectors. I am confident that South African shareholders, company executives and boards will join us in seeking both improved tax laws and full compliance, in keeping with good corporate citizenship. [Applause.]

I am also concerned about the tax loss associated with travel allowances. In the coming year, we plan to review the taxation of the motor vehicle allowance and the ad valorem duty structure on motor vehicles. In conducting this review there will be proper consultation with all the relevant stakeholders so that all aspects can be taken into account.

In the area of mining Government will continue its work on the Mineral and Petroleum Royalty Bill, which was initiated by reforms undertaken by the Department of Minerals and Energy relating to the control and development of the country’s valuable natural resources. As was announced in September last year, Government plans to introduce a sales-based revenue royalty charge. However, this charge will only take effect in 2009, ensuring that the change in the tax regime does not interfere with conversion to new- order mineral rights in terms of the Mineral and Petroleum Resources Development Act. These changes to the mining and petroleum tax structure provide an opportunity to review the industry’s tax dispensation as a whole.

Further steps in exchange control reform

Since 1995, South Africa has steadily eased exchange controls in line with progress in achieving macroeconomic stability, strengthening of the balance of payments and financial sector development.

Companies’ allowed use of South African funds to finance approved foreign direct investment currently stands at R2 billion per project for investment in Africa and R1 billion for projects elsewhere. These limits remain in place, but the percentage of the excess cost that can be funded from South Africa is increased from 10% to 20%.

To improve their access to domestic credit in financing investment in South Africa or domestic working capital requirements, foreign companies or foreign-owned South African companies may now borrow locally up to 300% of the total shareholders’ investment.

Measures will also be implemented during the course of this year to enable foreign firms to list on South African capital markets, thus allowing them to raise debt and equity finance on the JSE and the Bond Exchange. South African individuals and institutional investors will be able to participate in such listings through their foreign investment allowances.

Lastly, in a further contribution to the aims of Nepad, we propose to develop a policy framework during 2004 to promote South Africa as a regional financial centre to cater more fully for the needs of the African continent. It’s envisaged that inward listings by African companies, institutions and governments should be encouraged through a special allowance for institutional investors, allowing them to invest up to an additional 5% of their total retail assets in African securities listed on the JSE or Bond Exchange. Exchange control amnesty

Last year, we announced an exchange control amnesty and accompanying tax measures to deal with the contravention of past exchange control transgressions. The exchange control and tax amnesty process commenced in June 2003 with the appointment of an independent amnesty unit. There have been several refinements to the regulations, and the deadline for submission of applications was extended to 29 February this year. By the end of January, 14 250 applications had been received. The House will in due course be advised of the results of this effort to increase tax and exchange control compliance and the revenue receipts from the process.

Tips for Trevor

As in previous years, we invited input into the Budget from all South Africans. This year, we received over 2 200 Tips for Trevor. I thank the contributors, who have helped me understand many taxpayers’ concerns and have added to the diversity of advice I have had to consider. There are many wonderful ideas and, not unexpectedly, a few which make very entertaining reading. I want to respond to some of the matters, which I have grouped together because of their similarity.

Firstly, many contributors have raised what appears to be a contradiction in the system - workers are encouraged to save for retirement and then live off the interest earned. However, as the economy improves, interest rates decline and the incomes of pensioners shrink. The tax aspects of retirement provision are of great importance, and I have already asked a team from the National Treasury and Sars to look at the matter and report back.

Secondly, there was a surprisingly large number of ``tippers’’, not tipplers, who asked that we consider scrapping the Personal Income Tax system and hiking VAT to, say, 28%. The first part of this proposal is clearly appealing, but sadly it doesn’t stand up to scrutiny. Such a change would not accord with the progressive nature of our tax system, which we need to protect because of the huge inequalities in society. These proposals will tend to discriminate heavily against the poor, and so cannot find a place in our system. [Applause.]

Thirdly, there have been representations for the abolition of VAT on books. Some time ago I requested a report on this matter, which I have considered. There are several problems. The definition of a book for tax purposes raises certain challenges - the case for reducing tax on, say, magazines or coffee-table publications, or Minister Kasrils’s golf magazines, is not compelling. As it happens, the tax loss would be large, and would very largely go to higher income households. With some personal regret, I cannot see how we could justify this change. I hope it will be appreciated that recent revisions to the tax status of public benefit organisations involved in promoting literacy and reading provide a more efficient and equitable fiscal contribution for this purpose.

Fourthly, there were many submissions on the idea of a basic income grant. I have sympathy with the underlying intent. Government’s approach, however, is to extend social security and income support through targeted measures, and to contribute also to creating work opportunities and investing further in education, training and health services. [Applause.] This is the more balanced strategy for social progress and sustainable development.

Madam Speaker, I have to table here this afternoon nine different documents. The Budget Speech, the Estimates of National Revenue, the Taxation Proposals in respect of Income Tax, the Division of Revenue Bill, the Budget Review, the Appropriation Bill, the Estimate of National Expenditure, the Drought Relief Adjustments Appropriation Bill, and the Explanatory Memorandum to the Drought Relief Adjustments Appropriation Bill. I do so now so that Parliament has a record that I didn’t pretend that I did.

Over the past five years, President Mbeki has been a pillar of strength, constantly providing leadership and vision. But more importantly, he has challenged us to do better and more to deepen democracy. We are all profoundly indebted. [Applause.]

My gratitude also goes to Deputy President Zuma and my Cabinet colleagues, in particular the members of the Ministers’ Committee on the Budget, for support and inspiration. Clearly, I have to thank Deputy Minister Mandisi Mpahlwa for sharing our duties in the way that he does and for his close friendship. [Applause.]

I want to thank that impressive gallery up there - the nine MECs for finance who have become known as “Team Finance”. I think this team has operated as a kind of dream team. I think we need to ask them to rise and take a bow for doing a sterling job under the circumstances. [Applause.]

I want to thank Governor Tito Mboweni and his team at the Reserve Bank and I am glad to see that he is accompanied by the Deputy Governors sitting alongside him. They make our life mainly easier. [Laughter.] They must also rise. [Applause.] The President says he wants to see you Governor, and Jill and Ian. [Applause.] I also want to thank the members of the Financial and Fiscal Commission led by Mr Murphy Morobe - where is Murphy - Mr Herbert Mkhize, the executive director of Nedlac; Barbara Hogan and Qedani Mahlangu, as Chairpersons of the Portfolio and Select Committees of Finance; and, Tutu Ralane and Nhlanhla Nene, as Chairpersons of the Joint Budget Committee. [Applause.] I also want to thank Pali Lehohla and everybody at Stats SA.

Let me take this opportunity to introduce to this House the brand-new Director-General of the National Treasury, Mr Lesetja Kganyago. [Applause.] He has had a baptism of fire in the past two weeks, and friend, it’s not going to get any easier. Thanks also go to Maria Ramos who has been kicked upstairs somewhere nd who served as director-general up to November last year and oversaw much of the period when this Budget was put together. [Applause.] Thanks also to Ismail Momoniat who served as acting Director- General for the National Treasury between November and January. Momoniat did a sterling job in maintaining the high performance standards in the Treasury. [Applause.] Special thanks go to Commissioner Pravin Gordhan for his wisdom, advice and support. [Applause.] We are deeply indebted to the thousands of people who collect our revenue at the SA Revenue Service. [Applause.] Thanks are also due to the staff of the National Treasury and the Ministry of Finance, as well as their families who share the burden.

Last but not least, I would like to thank my family for their support and for tolerating me during this crazy period. [Applause.]

One of South Africa’s living treasures, the poet, Dr Don Materra, writes:

This land, the whole land Will be healed, must be healed These feeding cornfields and faces of sunflower Sprawling farms scrawling grass and tree The jabbering jacaranda The pointing pine the partisan protea The vineyards the orchards Bursting fruit and grazing grain Defiant cactus in desert dunes Flashing swords against pretorian knaves These gifts of earth must be shared With all the caring it takes To heal a million hearts

This land, the whole land Must be healed, will be healed

[Applause.]

This Budget seeks to express, in Schumpeter’s phrase, the collective spirit of our people, and in Don Materra’s words, the healing spirits. It charts a way forward in extending the frontiers of freedom, of human fulfilment, of creating a people-centred society. But, the legacy we leave must not be told just in the numbers, it must be borne out in the values that characterise our time.

We will create a caring society. We will reduce pain and extend joy. We will reward creativity and invest in human capabilities. Compassion and industry will overcome greed and despair. [Applause.] And, finally, so that our children can enjoy shade in the summer, let us plant and nurture these indigenous trees. That is a statement of what we want to do about a different South Africa. Where trees grow has largely been a statement of a dividing line between wealth and poverty. Let us plant the trees for our children. Thank you very much. [Applause.]

The Minister placed upon the Table:

(1) Budget Speech - 18 February 2004 [RP 19-2004].

(2) Estimates of National Revenue, 2004 [RP 17-2004].

(3) Taxation proposals: Income Tax.

(4) Division of Revenue Bill [B4-2004], tabled in terms of section 10 of the Intergovernmental Fiscal Relations Act, 1997 (Act No 97 of 1997).

(5) Budget Review 2004 [RP 18-2004], including:

 (a)    Taxation proposals in  respect  of  customs  and  excise  duties
     [tabled at 14:59]; and


 (b)    ``Annexure E: Memorandum to accompany the  Division  of  Revenue
     Bill'' tabled in terms of section 10(5)  of  the  Intergovernmental
     Fiscal Relations Act, 1997 (Act No 97 of 1997).

(6) Appropriation Bill [B3-2004].

(7) Drought Relief Adjustments Appropriation Bill [B5-2004].

(8) Explanatory Memorandum on the Drought Relief Adjustments Appropriation Bill.

(9) Estimates of National Expenditure, 2004 [RP 16-2004].

Bills, together with the introductory speech and papers tabled, referred to the Portfolio Committee on Finance for consideration and report.

The SPEAKER: Order! Before I adjourn the House, I wish to acknowledge the presence amongst us today of His Excellency Mr Yousuf Boutrous Ghali, the Egyptian Minister of Foreign Trade, and Her Excellency Mrs Kristin Clemet, the Norwegian Minister of Education and Research. You are most welcome. [Applause.]

The House adjourned at 15:18. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

ANNOUNCEMENTS

National Assembly and National Council of Provinces

  1. Fast-tracking of Bills
 (1)    The Joint Subcommittee of the Joint Programme  Committee  on  18
     February 2004 took  a  decision,  in  accordance  with  Joint  Rule
     216(2), that the Division of Revenue Bill [B 4  -  2004]  (National
     Assembly - sec 76) be fast-tracked by, where necessary,  dispensing
     with any relevant House Rule  or  Joint  Rule  and  shortening  any
     period within which any step in the  legislative  process  relating
     to the Bill must be completed, in order to  make  it  possible  for
     the Bill to be passed by both Houses during  the  current  term  of
     Parliament.


     In terms of Joint Rule 216(4) this decision must be tabled in  both
     Houses for ratification.
  1. Classification of Bills by Joint Tagging Mechanism
 (1)    The Joint Tagging Mechanism (JTM) on 13 February 2004  in  terms
     of Joint Rule 160(3), classified the following Bill  as  a  section
     75 Bill:


     (i)     Public Audit Bill [B 1 - 2004]  (National  Assembly  -  sec
          75)
  1. Introduction of Bills
 (1)    The Minister of Finance


     (i)     Appropriation Bill [B 3 - 2004] (National  Assembly  -  sec
            77)


     (ii)    Division of Revenue Bill [B 4 - 2004] (National Assembly  -
            sec 76)


     (iii)   Drought Relief Adjustments Appropriation Bill [B 5 -  2004]
            (National Assembly - sec 77)


     Introduction and referral to the Portfolio Committee on Finance  of
     the National Assembly, as well as referral  to  the  Joint  Tagging
     Mechanism (JTM) for classification in terms of Joint Rule  160,  on
     18 February 2004.


     In terms of Joint Rule 154 written views on the  classification  of
     the Bills may be submitted to the JTM  within  three  parliamentary
     working days.

TABLINGS

National Assembly and National Council of Provinces

  1. The Minister of Finance
 (1)    The Budget Speech of the Minister of Finance - 18 February  2004
     [RP 19-2004].


 (2)    Estimate of National Revenue for 2004 [RP 17-2004].


 (3)    Taxation Proposals in respect of Income Tax.


 (4)    Division of Revenue Bill [B  4  -  2004],  tabled  in  terms  of
     section 10(1) of the Intergovernmental Fiscal Relations  Act,  1997
     (Act No 97 of 1997).


 (5)    Budget Review 2004 [RP 18-2004], including:
     (a)     Taxation proposals in respect of customs and excise  duties
          [tabled at 14:59]; and


     (b)     "Annexure  E:  Memorandum  to  accompany  the  Division  of
          Revenue Bill",  tabled  in  terms  of  section  10(5)  of  the
          Intergovernmental Fiscal Relations Act, 1997  (Act  No  97  of
          1997).


 (6)    Appropriation Bill [B 3 - 2004].


 (7)    Drought Relief Adjustments Appropriation Bill [B 5 - 2004].


 (8)     Explanatory  Memorandum  to  the  Drought  Relief   Adjustments
     Appropriation Bill.


 (9)    Estimate  of  National  Expenditure  2004  [RP  16-2004],  which
     includes:


     1. Memorandum on Vote No 1  -  "The  Presidency",  Main  Estimates,
          2004-2005;


     2. Memorandum on Vote No 2 - "Parliament",  Main  Estimates,  2004-
          2005;


     3. Memorandum on Vote No 3 -  "Foreign  Affairs",  Main  Estimates,
          2004-2005;


     4. Memorandum on Vote No 4 - "Home Affairs", Main Estimates,  2004-
          2005;


     5. Memorandum on Vote No 5 -  "Provincial  and  Local  Government",
          Main Estimates, 2004-2005;


     6. Memorandum on Vote No 6 - "Public Works", Main Estimates,  2004-
          2005;


     7. Memorandum  on  Vote  No  7  -  "Government  Communications  and
          Information System", Main Estimates, 2004-2005;


     8. Memorandum on Vote No 8 - "National Treasury",  Main  Estimates,
          2004-2005;


     9. Memorandum on Vote No 9 - "Public Enterprises", Main  Estimates,
          2004-2005;


     10.      Memorandum  on  Vote  No  10   -   "Public   Service   and
          Administration", Main Estimates, 2004-2005;


     11.     Memorandum on Vote No 11  -  "Public  Service  Commission",
          Main Estimates, 2004-2005;


     12.     Memorandum on  Vote  No  12  -  "South  African  Management
          Development Institute", Main Estimates, 2004-2005;


     13.     Memorandum on Vote No 13 - "Statistics South Africa",  Main
          Estimates, 2004-2005;


     14.     Memorandum on  Vote  No  14  -  "Arts  and  Culture",  Main
          Estimates, 2004-2005;


     15.     Memorandum on Vote No 15  -  "Education",  Main  Estimates,
          2004-2005;


     16.     Memorandum on Vote No 16 - "Health", Main Estimates,  2004-
          2005;


     17.     Memorandum on Vote No 17 - "Labour", Main Estimates,  2004-
          2005;


     18.     Memorandum on Vote No 18 - "Science and  Technology",  Main
          Estimates, 2004-2005;


     19.     Memorandum on Vote  No  19  -  "Social  Development",  Main
          Estimates, 2004-2005;


     20.     Memorandum on Vote No 20  -  "Sport  and  Recreation  South
          Africa", Main Estimates, 2004-2005;


     21.     Memorandum on Vote No 21 -  "Correctional  Services",  Main
          Estimates, 2004-2005;


     22.     Memorandum on Vote No 22 - "Defence", Main Estimates, 2004-
          2005;


     23.      Memorandum  on  Vote  No  23  -  "Independent   Complaints
          Directorate", Main Estimates, 2004-2005;


     24.     Memorandum on Vote No  24  -  "Justice  and  Constitutional
          Development", Main Estimates, 2004-2005;


     25.     Memorandum on Vote No 25  -  "Safety  and  Security",  Main
          Estimates, 2004-2005;


     26.     Memorandum on Vote No 26 - "Agriculture",  Main  Estimates,
          2004-2005;


     27.      Memorandum  on  Vote  No  27  -   "Communications",   Main
          Estimates, 2004-2005;


     28.     Memorandum on Vote  No  28  -  "Environmental  Affairs  and
          Tourism", Main Estimates, 2004-2005;


     29.     Memorandum on Vote No 29 - "Housing", Main Estimates, 2004-
          2005;


     30.     Memorandum on Vote No 30 - "Land Affairs", Main  Estimates,
          2004-2005;


     31.     Memorandum on Vote No 31  -  "Minerals  and  Energy",  Main
          Estimates, 2004-2005;


     32.     Memorandum on Vote No  32  -  "Trade  and  Industry",  Main
          Estimates, 2004-2005;


     33.     Memorandum on Vote No 33  -  "Transport",  Main  Estimates,
          2004-2005;.


     34.     Memorandum on Vote No 34 - "Water  Affairs  and  Forestry",
          Main Estimates, 2004-2005.
  1. The Minister for Justice and Constitutional Development
 (a)    Report and Financial Statements  of  the  Commission  on  Gender
     Equality for  2002-2003,  including  the  Report  of  the  Auditor-
     General on the Financial Statements for 2002-2003 [RP 71-2003].


 (b)    Government Notice No R1755 published in  Government  Gazette  No
     25795 dated 5 December 2003: Amendment of the rules regulating  the
     conduct of the proceedings of  the  various  Provincial  and  Local
     Divisions of the High Court of South Africa, in terms of the  Rules
     Board for Courts of Law Act, 1985 (Act No 107 of 1985).

COMMITTEE REPORTS

National Assembly

  1. Report of the Portfolio Committee on Environmental Affairs and Tourism on the National Environmental Management Second Amendment Bill [B 56B - 2003] (National Council of Provinces - sec 76), dated 11 February 2004:

    The Portfolio Committee on Environmental Affairs and Tourism, having considered the subject of the National Environmental Management Second Amendment Bill [B 56B - 2003] (National Council of Provinces - sec 76), referred to it and classified by the Joint Tagging Mechanism as a section 76 Bill, reports the Bill without amendment.

  2. Report of the Portfolio Committee on Environmental Affairs and Tourism on Exclusion of Land from Augrabies Waterfall National Park, dated 11 February 2004:

    The Portfolio Committee on Environmental Affairs and Tourism, having considered the request for approval by Parliament, in terms of section 2(3) of the National Parks Act, 1976 (Act No. 57 of 1976), of the remainder of Farm 498 (Melkbosrand), in extent 4137 ha, from the Augrabies Waterfall National Park, situated in the Administrative District of Gordonia, Province of the Northern Cape, referred to it, recommends that the request be approved.

 Request to be considered.