TUESDAY, 9 NOVEMBER 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.

          PRECEDENCE GIVEN TO ORDER NO 2 ON THE ORDER PAPER


                         (Draft Resolution)

The DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move the motion as printed in the name of the Chief Whip on the Order Paper, as follows:

That, notwithstanding the provisions of Rule 29(8), Questions shall not
have precedence tomorrow, 10 November 2004.

Agreed to.

                 MEDIUM TERM BUDGET POLICY STATEMENT


                       (Second Reading debate)

Mr N M NENE: Madam Speaker, hon members, the tabling of the Medium Term Budget Policy Statement presents Parliament and all stakeholders – labour, civil society and business – with an opportunity to engage with the budget process at a very critical stage. This statement sets the stage for what lies ahead of us in the upcoming Medium Term Expenditure Framework. Public participation remains critical in the ANC’s commitment to the Freedom Charter’s first clause, in which the people’s movement declared for all our country and the world to know that, ``the people shall govern’’.

Lo mhlahlandlela wesabelo sezimali zaleli zwe unika izakhamuzi ithuba lokuhlaziya imigomo nezinhlelo zikahulumeni zeminyaka emithathu ezayo. Lolu hlelo luyingqayizivele, ngisho nasemazweni asemnkantshubomvu kwintando yeningi alukho. Impela badlela ogageni uma sekuziwa ngakwezomnotho nakuyo intando yeningi imbala. (Translation of Zulu paragraph follows.)

[This medium-term budget policy framework gives the people an opportunity to analyse policies and programmes of the government for the three years ahead. This arrangement is very rare; even the countries that have long been democracies do not have this kind of arrangement. In actual fact, they cannot compete with us in terms of both economy and democracy.]

This year’s Medium Term Budget Policy Statement is a direct response to the challenges of poverty and underdevelopment alluded to by the President in the state of the nation address in May this year. The Minister of Finance reminded us of our commitment to the people’s contract to fight poverty and create work when he tabled this statement on 26 October 2004. In his own words he said:

The Medium Term Budget Policy Statement provides a concise overview of the Government’s economic, social and development policy priorities, in the context of projections for the economy over the next three years and a coherent framework for fiscal policy and the national Budget.

He further said:

Its point of departure is a medium-term strategic framework that recognises the limits of the state’s resources and the importance of promoting a vibrant and competitive market-based economy.

It is against this background that the Joint Budget Committee held its public hearings immediately after the tabling of this statement. The committee’s terms of reference require us to consider the Medium Term Budget Policy Statement when tabled and report to Parliament, as we hereby do today.

This mandate was interpreted by the committee to mean that we should consider, firstly, the likely impact of the expenditure allocations in the Medium Term Budget Policy Statement on the effectiveness and efficiency with which departments can respond to Government’s stated policy priorities; and secondly, whether the departments are making the tough choices required, tailoring their planned expenditures according to priorities, choosing effective strategies and seeking efficiency in implementation.

The hearings were conducted under the following themes: Justice and Protection Services, Employment and Economic Growth, Rural Development and Urban Renewal, Social Services and International Relations.

Under the Justice and Protection Services theme, the committee had a submission by the Minister of Safety and Security and the Assistant Commissioner. The department confirmed that the Medium Term Budget Policy Statement is in line with its key strategic priorities and that the committee was satisfied that the department is well on track to deliver.

The Department of Correctional Services, led by the Deputy Commissioner and its chief financial officer expressed concern that the Medium Term Budget Policy Statement does not support the requirements of their White Paper, which changes the department’s strategic direction to focus on the rehabilitation and correction of offenders. The Joint Budget Committee trusts that this matter will be dealt with by the Portfolio Committee on Correctional Services.

The Department of Defence, led by its chief financial officer, also expressed similar concerns to the Department of Correctional Services, and the committee also felt that its revised strategic plan would reflect this concern. In its written submission the Department of Justice and Constitutional Development was satisfied that the Medium Term Budget Policy Statement is in line with its strategic priorities.

At this point I would like to apologise to the Minister of Justice and Constitutional Development for what seems to have been an oversight of the committee to count the department as one of those departments that did not apologise. Of course, indeed, his apology was tabled in the meeting.

The overall view of the committee is that the departments are relatively ready to respond to the challenges with the limited resources allocated to them. As my colleagues will demonstrate in the debate, there are challenges that might limit the capacity of some of the departments to deliver optimally, but the level of commitment is insurmountable. Our recommendations at the end of the report speak to some of these challenges in detail and call upon all of us and stakeholders, more particularly Parliament, to exercise meaningful oversight to ensure the implementation of the policies and realisation of the required outcomes.

It is regrettable that some of the departments were not led by their political heads or senior management. The delegations of some departments were led by their respective Ministers. These were: Safety and Security, Finance, Minerals and Energy, and Home Affairs. The committee commends these Ministers for taking their accountability to Parliament seriously and trusts that there will be an improvement in the future. The presence of Ministers and or senior officials made the engagement very fruitful and assisted the process tremendously. The opposite is, however, true for the departments that didn’t do that.

The ANC’s commitment to fighting poverty is further demonstrated by an expansionary fiscal policy despite the global economic slowdown. The Medium Term Budget Policy Statement projects growth of 4,3% in overall noninterest expenditure, representing additional expenditure of R50 billion over the MTEF, with most of this allocated to the social services sector. Allocations to provincial and local government spheres are also expected to increase significantly over the MTEF. Provinces will receive a bigger slice of the additional resources - 67% - while national government receives 27% and local government will receive 5,6% over the MTEF.

The most important policy change in provincial spending will be the shift of social security to the National Social Security Agency and also the inclusion of the primary health care function, which was previously provided by local government. The management of the transitional phase will be very critical, as an interim conditional grant will be augmented for this purpose.

Isabelo sohulumeni basekhaya sona sikhuphuka ngesamba sika R2,3 billion - ngehlulekile ukuthola igama le “billion” ngesiZulu ngoba abantu bakithi ngendlela abahlupheka ngayo abakaze babe nemali efika kwi “billion”. [Uhleko.] Ngakho-ke ngizophinda ngithi isabelo sohulumeni basekhaya sikhuphuka ngo-R2,3 billion kule minyaka emithathu ezayo ukuze labo hulumeni bakwazi ukunikezela ngezidingongqangi kubantu bakithi, ikakhulu labo abadla imbuya ngothi. Ngaphezulu kwalokho, isamba esiyizigidi ezingama-R500 siyengezwa emalini ebhekene nokuthuthukisa izingqalasizinda kulesi sigaba sohulumeni basekhaya.

Konke lokhu uhulumeni ka-ANC ukwenza ukuze kuncishiswe igebe phakathi kwabadla izambane likapondo nalabo abadla imbuya ngothi. Okubaluleki-ke ukuthi imiphakathi yakithi isukume ibambe iqhaza kulezi zinhlelo zentuthuko nalapho kucutshungulwa ukwabiwa kwezimali emikhandlwini yayo, nalapho kudwetshwa izinhlelo ezididiyelwe, ama-IDPs. (Translation of Zulu paragraphs follows.)

[The budget for the local governments has been increased by R2,3 billion - I failed to find an equivalent for ``billion’’ in isiZulu. Our people are so poor that they have never had money in the sum of a billion. [Laughter.] Therefore, I want to repeat that the budget for local governments has been increased to R2,3 billion for the three-year period that lies ahead in order to capacitate the municipalities to provide services, particularly for the poor. In addition to that, a sum of R500 million has been added to the local sphere of government for the development of infrastructure.

The ANC-led government is doing this in order to bridge the gap between the rich and the poor. It is therefore very important for our people to participate in these development programmes, and also to participate in budget debates as well as IDPs.]

What also becomes critical is our oversight as members of this House, which cannot be overemphasised. Our oversight stretches across the political spectrum to ensure that our Government honours its side of the people’s contract to fight poverty and create wealth. My colleagues will speak more on the subject of bridging the gap between the first and the second economy, but let me say that this is one of our major challenges and it demands that we all work together to overcome it.

Let me take this opportunity to thank the Minister of Finance and his department for leading the process that has produced the statement. We would also like to thank all those who participated in the hearings – Government departments, business, labour and civil society. May I also thank the committee members for the hard work they put into the entire process under enormous pressure and time constraints; last, but not least, our researchers for their support.

Ngiyabonga, Sihlalo. [Ihlombe.] [Thank you, Chairperson.[Applause.]]

Ms R TALJAARD: Madam Speaker, hon colleagues, the South African economy is poised for higher rates of economic growth in the context of a fairly benign global environment, and with moderate inflation projections going forward.

We acknowledge that factors largely beyond our control like the price of crude oil, any slowdown in the global economy and lacklustre conclusion and implementation of the Doha development round remain a threat and that uncertainty and may threaten this growth.

We remain convinced, however, that government policy has the most impact on our country’s ability not only to capitalise on its potential, but also to realise its promise. Whilst South Africa is poised for higher growth – and projections of GDP growth at 4% appear reasonable – this dimension of the challenge ahead lies squarely in the realm of government control. This is where governments the world over, irrespective of their ideological persuasions, often fail.

South Africa needs a strategy for growth and entrepreneurship, as well as clear policies to support this vision. This is the only solution to effect a turnaround in our levels of unemployment and the consequent unsustainable, existing structure of social security support.

The DA strategy for growth and entrepreneurship includes but is not limited to, a clear industrial policy backed by fiscal and regulatory reforms that fosters comparative advantage; an unwavering focus on small business that not only seeks to free it from compliance and regulatory burdens, but also seeks to support entrepreneurs through financing government services and targeted fiscal incentives; a review of labour law in the context of basic ILO standards; a review of tax policy and taxation burdens at all levels of government with a view to savings incentives, investment and employment…

The SPEAKER: Order! Hon members, could you please lower your voices?

Ms R TALJAARD: Thank you, Madam Speaker …continued support for monetary policy anchored by inflation targeting, especially regarding the impact of administered prices; modernising of the Public Service, with emphasis on the word “service”; reforming existing BEE provisions that merely serve to counteract any notion of broad-based empowerment, as evidenced in the recent Telkom announcement; a dedicated fund for infrastructural development and maintenance beyond the R165 billion announcement, as maintenance would be crucial; and a review of tax provisions in the residence basis of taxation, combined with the skills recruitment drive under the new immigration policy, to fill vital skills gaps.

While broadbased development is a critical challenge, it is but only one side of a far more complex coin. Job creation remains our country’s most pressing priority, irrespective of the recent labour force survey numbers, which show that unemployment is stable at around 42%. With due respect to the much-admired – and I reiterate, much-admired – DG of Finance, we need to think creatively beyond Setas and Expanded Public Works Programmes to tackle decisively our skills deficit, unemployment and its ravaging effects in terms of poverty.

This is where the challenge has always been for government and will continue to be over the MTEF period and beyond. It is also where Cabinet’s, the opposition’s and all MPs’ focus has to remain in terms of oversight and accountability. Despite our macroeconomic stability, our economy has failed to create sufficient jobs over the past 10 years of democracy to lessen the pressure on social support.

There can be no doubt that the burgeoning social security net in the MTBPF’s projections is a clear consequence of this failure of jobless economic growth. This is not a conclusion we must bicker about. It is one we will all have to confront together, because the social security structure as such, at this stage, is unsustainable beyond the MTEF period.

While economic growth of 6% and higher is desirable in itself, all emerging markets and developed countries alike need creative and clear job creation strategies to maximise their competitive and comparative advantage in a rapidly-changing and fast-evolving global, complex economy. In our country this is imperative and even more compelling if we are to ensure that the gains of a constitutional democracy are realised and deliver the fruits of socioeconomic change. As an emerging market we need to think creatively to unlock the potential in all sectors of our economy.

On a recent state visit the Prime Minister of India captured the imagination of this House with the emphasis of his country on harnessing biotechnology and nanotechnology as engines for growth in their five-year national foreign trade policy. While we are not harnessing nanotechnology or biotechnology, the challenge is in creative thinking in putting a job creation strategy on the table. Despite our skills constraints, we need a clear strategy on the table to maximise our country’s participation not only in new markets, but also in order to create our own opportunities in the global marketplace far more creatively and aggressively than we have done.

Whether this creative policy-making is unleashed through call centres, the economic potential in cultural diversity beyond tourism, or investment incentives – anathema as they may be to National Treasury – a clear jobs strategy is not on the table and it needs to be. We need a strategy that not only takes the pursuit of higher growth as its point of departure and foundation, but also seeks to go beyond it.

It is in this context that many of the proposals in the MTBPS must be weighed and concerns raised. The Adjustment Appropriation Bill that accompanies the MTBPS will, pending the rebasing of GDP figures by Stats SA, increase the projected Budget deficit marginally.

These figures are not profligate or irresponsible public expenditure, as the muted market reaction showed. They are also more than acceptable in a global economy where many EU member states are failing to meet the deficit target laid down in the EU Growth and Stability Pact.

Minister, we are concerned about the composition of the deficit between capital and consumption expenditure. We have raised this with you, and I am not going to belabour the point. Suffice it to say that, based on the public sector wage negotiation agreement and the increased uptake in social grants, there is concern that we are falling on the wrong side of the balance between consumption and capital expenditure.

Equally as laudable as the infrastructural drive of R165 billion is, and as necessary as it is to create an accelerated growth path, we have to be sure that most of this would be off-Budget, because if not, we do see the consequences on the public sector borrowing requirement. And because a lot of this would be import-heavy and import content, we also see the impact on the current account going forward, and these remain areas of focus and concern.

Higher deficits that fail to strike the right balance become more difficult to defend over time; so do higher public sector borrowing requirements and current account deficits. The cautionary tales of many countries that have learnt this lesson the hard way should be salient.

The DA welcomed the relaxation of exchange control, but we are worried about the retention of the administrative requirements. We also believe that we need to finalise prudential regulation provisions, place a clear timetable on the table and address some of the bias against individuals in recent liberalisation. It is no small achievement to receive a Fitch and Moody’s upgrade, but we believe that a lot more needs to be done.

Colleagues, this is my last speech in this House. [Interjections.] When I walked into Parliament as a researcher in 1996, I never realised how interwoven my own life would become with the democratic destiny of the country that I love above all others. I would like to thank each and every one of you for your camaraderie as fellow MPs, though it often expressed itself not only in howls of approval, but very often in howls of disapproval of what I had to say, as it happened again today.

I would like to thank many of you, across party lines, for the friendships I have been able to form and the challenges I have lived through with many of you - albeit often on opposite sides of this House. These are bonds that I will cherish long after the political ink of this speech is dry.

We live in a complex country with a complex history and an uncertain future. If I have one concern that I would like to place as a challenge before all of you, it is this: Politics, not only in our own country, is overpopulated with staunch beliefs and dogmas on all sides, and underrepresented by commitment and curiosity. We live in a world that is filled with statements of tolerance, when what we see is an alarming increase in mutual hostilities and intolerance.

  I would like to leave you with the words of my favourite Nobel
  Laureate, Bertrand Russell, whom I believe had the answer to certainly
  many of my own challenges, but also the one I have cited, and I quote:
  What is wanted is not the will to believe, but the will to find out, which is the exact opposite.

Perhaps what we all need more of across the globe and locally is the will to find out, the will to respect and the will to debate. We have taken steps in this House in this regard, in building it in 10 years of our democracy. My fervent wish for this House is that we will take leaps forward in that regarding the years ahead. I thank you. [Applause.]

The SPEAKER: I am sure I will be representing the views and the sentiments of the House when I say that the House wishes you well in your future endeavours. [Applause.]

Mr T E VEZI: Madam Speaker, the Medium Term Budget Policy Statement is tabled against the background of a significant improvement in the performance of the South African economy. The gross domestic product has grown and the consumer price index remains subdued. The IFP remains very concerned that in spite of every effort by the Minister the problems of poverty, unemployment, HIV and Aids and inequality still remain unabated.

We applaud every effort by the Minister, but we wish to see sustainable interventions to reduce poverty and unemployment. The IFP is concerned about what seems to be a bottomless pit created by the Road Accident Fund. The IFP would like to see the reduction of retirement tax.

Social services continue to absorb nearly 60% of government expenditure with social security spending increasing by 11,4% per year. We have a sound policy framework that balances the demands of an emerging and growing the economy with the budget constraints it faces.

It is vitally important that delivery and efficiency is enhanced through improving management capacity. The IFP hopes that the steps to reduce the number of grants going to people who do not warrant them will not result in unintended consequences of adversely affecting deserving cases.

We agree with the hon Minister that some of the challenges are to improve the performance of the state, to consolidate the institutional reforms of democratic transition, to build capacity where service delivery falls short and to promote greater participation and interaction of people with organs of government.

Our financial institutions have been very slow in accepting the invitation to the party. How many, if any, have assisted black small businesses through facilities offered by the Ntsika and Khula Trusts? Another sad fact is that very few previously disadvantaged people know about Ntsika and Khula. The reality is that we are dealing with communities who were deliberately dispossessed and disempowered. In 1911 the President of the Chamber of Mines stated: He, the black, cares nothing if industries pine for want of labour when his crops and home-brewed drinks are plentiful. He called for a policy to force blacks into the cheap labour market by splitting their land into native reserves under tribal tenure. In order to intensify the war against poverty, inequality, ignorance and disease, schemes like the Agricultural Credit Schemes, the Apex Fund and others should be assisted to deliver as a matter of urgency. The IFP urges the state to promote and provide funding for self-help projects in order drastically to reduce the numbers of those who depend on social grants.

In conclusion, let me repeat that the growth projections underlying the MTEF are realistic and attainable. They do not depend on unrealistic assumptions about the performance of the world economy. I thank you. [Applause.]

Ms J L FUBBS: Hon Speaker, colleagues and comrades, it gives me great pleasure to speak on the Medium Term Budget Policy Statement, because today we stand in this country knowing that there is increased business confidence, not only outside the country but also inside the country. There is buoyant consumer, regional and international acknowledgement of South Africa’s resilient and robust economy.

This Medium Term Budget Policy Statement gives evidence of a series of sequential measures designed to bridge the divide between the first and second economies, and to overcome the legacy of years of this special brand of colonialism, called apartheid, which was designed to destroy human capital, but which, ironically, led to its own demise.

The impact of a sustained low inflation target, unprecedented in 30 years, with low interest rates and a visible turnaround in employment prospects, is underpinned by the projections in the MTBPS and the 4% economic growth. Also, what is reflected there is the three-pillar strategy to fight poverty and unemployment. The latest monetary policy review from the SA Reserve Bank confirms that the inflation-targeting framework is standing firm.

Now, I must say, hon colleagues that the economic situation in our country is unique and cannot be compared to either Canada or Chile, as some would advocate. Instead a customised set of measures must be implemented, and these have been identified. President Mbeki laid the first plank in the fight against poverty earlier this year. And what we are doing now amongst many things, is to build, on that.

We are implementing a programme of action that will expand economic opportunities so that even the most marginalized of our people can reap the fruits of their labours, already enjoyed by South Africans in the mainstream.

The MTBPS will also allocate resources sequentially to implement these measures. In the context of the global economy the resilience of the South African economy has enabled South Africa to successfully weather the 2003 economic slowdown. Moody’s imminent upgrade of South Africa’s rating to be BAA 1 is yet another indication and endorsement of South Africa’s economic growth and its potential to overcome poverty.

The external position and liquidity have been underpinned by our recovery and capital inflows and a broadly balanced current account. As a catalyst to increase income’s resources, the Ministry will facilitate economic activity in the second economy through a flow of resources to underdeveloped areas. There will also be a strategic deployment of resources to facilitate the capacity of people to participate in the mainstream and earn a living wage.

The Expanded Public Works Programme is indeed government’s pre-emptive strike against poverty, contrary to what my hon colleague, Ms Taljaard, said earlier. She said that this might not be the most effective instrument. I am surprised to hear this coming from a DA quarter, considering the many times this House has heard over the last 10 years about the effectiveness of the Roosevelt plan and the Marshall Plan, both of which relied on expanded public works.

And indeed, the government in our own country in the 1930s relied on an expanded public works programme, albeit for the whites only. Now, acknowledging the increasing pressure of social grants, the MTBPS lays down a timeline to ensure that we meet these commitments without destabilising the Budget in any way. Systems are being developed to ensure that only those eligible to access and receive social grants will do so.

The ANC as a government is certainly committed to maintaining and sustaining the integrity of social grants in the long term. We heard comments about jobs and the unlikelihood of being able to meet the targets that we have set. No, we are not going to throw cash at people for very short-term, emergency-type jobs. No, that is not our policy, and, as you have yourself acknowledged, the ANC has not changed it policies, but merely developed strategies to implement its sound policies.

So, the jobs we are creating are capable of not only being sustained from the 400 000 increase, but growing and contributing to transforming the second economy, so that it joins in the mainstream of the first economy eventually. And it is not how many times - we will repeat saying this because it is a reality. [Interjections.] This is a realistic Budget that takes into account constraints we have in this country, including most unfortunately a few people still using brakes. [Interjections.] The Budget deficit of 3,2% is sustainable, notwithstanding the expansionary nature of the Budget; and indeed it will stimulate the economy.

The commitment of government to create an enabling environment to increase the rate of investment, that is gross fixed capital formation in the public and private sector from 16% to 25% by 2014, is indeed possible.

The ANC party fully supports the Medium Term Budget Policy Statement measures and accelerated implementation as a platform for economic growth and sustainable measures that I believe will reverse the ravages of poverty. The set of measures outlined here, I believe, is an optimistic platform. [Time expired.] [Applause.]

Mr M STEPHENS: Madam Speaker, hon Minister and hon members, recently I said in this House that the funding of social services is a fundamental duty of the state. No socially responsible state can escape or avoid its vital duty to support the weak, the poor and those in society who find themselves in need; nor should it wish to do so.

Whatever the incentives offered to individuals and private enterprises to contribute, the lion’s share is inevitably and quite correctly borne by the fiscus. Obviously, the long-term solution for poverty is job creation. However, sustainable jobs cannot be created overnight. In the interim poor people must live. They cannot exist in suspended animation until jobs have been created for them. Poverty relief must thus be the number one priority of the MTBPS.

Thus, while we are pleased to see the estimates for social services grow significantly over the MTEF, we are concerned that they are still wholly inadequate. The real value of most grants and pensions is insufficient to relieve the desperate poverty of the beneficiaries.

Poverty relief cannot be achieved parsimoniously. Grants must be big enough to sustain the receivers as independent people living with dignity. Yet during a committee meeting the Minister stated that we cannot afford higher, living pensions and grants. Moreover, although the social security grant net has been cast wider, it falls far short of reaching all those who should receive them.

It is incredibly disturbing that the Minister of Finance describes the expansion of the social grant net as unsustainable. The Minister seems to consider this expansion to be merely the result of cheating. Does he not consider that around half the population lives below the poverty line? Given a population of some 45 million, this translates to around 23 million poverty-stricken people, of which only 8 million – roughly one third - receive social security grants. The Minister should not be surprised by the expansion, but should budget for it.

Every household not elevated from poverty today will result in three or four poor households over a generation. Malnourished and undereducated children face almost insurmountable obstacles to eventually rise above their poverty. They will present an even greater challenge to the fiscus in future. The nettle must be grasped now.

Consequently, government’s claim that we cannot afford to sustain poverty relief is unacceptable. We cannot afford not to sustain it. Pleading inaffordability rings hollow after years of tax cuts, foregoing billions in royalties in annual revenue through largesse to companies, the rich and middle classes.

We do not lack the wherewithal to sustain social security. What we do lack is the political will to find the funds to finance an adequate, holistic social security system. The system that will allow our people to live without fear, without want and to be treated by their government with the care, love and compassion they deserve…

The SPEAKER: Order, order! Hon member, I’m just trying to get the hon members to listen to you. That’s all I’m trying to do. [Laughter.] Hon members, please lower your voices so the hon member can be heard. [Laughter.]

Mr M STEPHENS: Can I repeat that, Madam Speaker? I conclude by indicating that it is not enough for government to sympathise with the desperately poor; it must put its money where its mouth is. I thank you. [Applause.]

Mr Y WANG: Madam Speaker, Deputy President, hon Minister, hon members and everyone who is watching, thank you very much. Given the limited time, I would just like to raise two points from our party for consideration by our hon Minister.

Firstly, the ID would like to see perhaps more tax incentives for our professionals in South Africa. One should admit the fact that there are lots of doctors, IT professionals and engineers leaving South Africa.

A month ago I delivered a speech, together with my fellow students, at the Information System Department at UCT. They had a very good project where students went to the communities – the disadvantaged groups - to give them guidance on computer skills and so forth. They wished to do that as an offering to the communities. Perhaps there should be some incentives for these professionals when they graduate, such as some kind of tax relief. That needs to be considered. I have one minute left, which is quite nice.

Secondly, as far as the relaxation of foreign exchange controls is concerned, the ID believes that the Minister is liberalising them at a correct pace and bit by bit, which is very nice. What we would like to see though, is a speeding up of these steps. I always see this as a Halloween party, because investors are like kids running to get treats.

If we can provide them with better opportunities and worth, as the hon Fubbs mentioned earlier, a better economy, and speed up the process of relaxing foreign exchange controls, I’m pretty sure we will boost their confidence in South Africa and will give them better shares. I think in that way we can create more job opportunities and a better economy. I thank you.

Mr K D S DURR: Speaker, may I first say to Ms Taljaard that we in the opposition liked, respected, and admired her. Her going will be a great loss to this Parliament. [Applause]

This budget, Minister, is expansionary and focuses on growth and development by deepening the means to achieve it, and comes with particular locomotive projects linked to infrastructure and social services that will trigger general development.

We will need to attract more foreign capital to augment savings. Saving incentives and instruments such as retirement annuities, which you, yourself, have mentioned, will have to be revisited, as well as additional business investment spending incentives. Growth will itself attract further foreign capital investment and in turn create employment that will in turn expand the tax base, which will enable us to meet expanding social and developmental needs.

A willing workforce will be vital. We will need to deregulate the labour environment if we want the rising tied to lift all boats, even the poorest of the poor. This is the virtuous circle and the balance needs to be struck. I am sometimes fearful, Minister, when critics of the long-term economic plan take too much for granted. They focus on our successes as a nation and blame the shortcomings that we have on our successes and the things we are doing, instead of the things that we fortunately did not do.

We cannot sacrifice the growth we have achieved thus far in pursuit of failed policies and ideologies. The macroeconomic success has set the scene, I believe, for a massive upliftment of South Africans from poverty through economic growth. This country at the moment is moving into a boom, which has the potential of lifting this nation to new heights.

We don’t want to be in circumstances for the captain to leave the bridge. Don’t respond to the siren sounds of the private sector. We have the chance to make this country truly great; and that chance is now. The ACDP supports the medium-term budget. I thank you. [Applause.]

Mr G D SCHNEEMAN: Madam Speaker, Comrade Deputy President, Ministers, comrades and hon members, the Medium Term Budget Policy Statement we are discussing today is the first in this the third democratic Parliament. It lays the foundation for the continued implementation of the ANC’s programme of creating work and fighting poverty. It forms a key component of government’s commitment to enter into a people’s contract to create work and fight poverty.

The mandate of the Joint Budget Committee was to consider the distribution of available resources in line with the policies and priorities of government through engagement with national government departments. Two of the themes covered during the hearings included rural development and urban renewal, on the one hand, and social services on the other, which I will focus on in this debate.

The development and renewal of the 21 rural and urban nodes form part of the strategy of government in addressing the challenges of the second economy.

The successful development and renewal and the long-term economic sustainability of the identified nodes require that all involved departments in the three spheres of government work together in a co- ordinated manner. The respective departments should be encouraged to indicate in their annual reports their participation in the rural and urban nodes. In addition, they should also include their budgeted participation in each of the nodes over the MTEF period. The nodal financing protocol, which is currently being developed, will play an important role in speeding up the development of these nodes.

The Departments of Agriculture and Land Affairs play an important role in the rural nodes. In particular, the Microagricultural Finance Scheme will provide financial services to those in rural areas who need it most. A clear operational plan needs to be put in place to ensure its success.

The Integrated Sustainable Rural Development Programme is not focused solely on building physical infrastructure. It is also about improving the lives of the people, and in particular the lives of farmworkers.

The collaboration of the Departments of Social Development and Home Affairs to curb the fraudulent use of false identification documents is welcomed and supported. These two departments indicated that they work jointly in promoting access to social grants and the necessary identification documents, birth certificates and so on. They further advised that it is only recently that such active co-operation has come into being. Of concern, however, is the duplication by both the national and provincial departments in investigating whether beneficiaries are correctly receiving social grants.

Whilst it is correct that government should ensure that only those beneficiaries who qualify for grants receive them, it is also incumbent on both officials in the respective departments and members of the public to ensure that fraudulent access to grants is curbed and that such acts are reported when they become known. Those who gain access to grants through fraudulent means need to be dealt with harshly and must feel the full might of the law. At the same time efforts will need to be intensified to grow the economy and create work so that over time the number of people who rely solely on social grants is reduced.

The actions being undertaken by the Department of Home Affairs to establish the numbers of people without the necessary documents are supported. This will assist in ensuring that we reach a stage where all South Africans have the correct identification documents, enabling them to access social services, grants and other services such as being able to open bank accounts.

The budget allocations need to take into account the commitments made with regard to school buildings, water, sanitation, electricity, housing, health facilities and the comprehensive plan on HIV and Aids, as announced by President Mbeki in this House on 21 May.

The Integrated Development Plans need to include participation from all spheres of government. This process should not be regarded as a local government function alone. The departmental budgeting processes must take the IDPs into account when finalising spending priorities. We would encourage departments to have clear spending plans in place so that last- minute spending and roll-overs are reduced. In addition, we urge departments to ensure that staff vacancies are filled with the correct staff. That will help to ensure that the expenditure of government generates quality outcomes.

Both national and provincial departments also need to ensure that amounts owing to municipalities are paid timeously to avoid strain being placed on the finances of local government. Effective mechanisms to monitor and evaluate how funds transferred to provinces and local government are spent need to be developed and put in place.

The hearings on the Medium Term Budget Policy Statement have allowed the Joint Budget Committee to engage departments on their budgets and their state of readiness to both implement and deliver quality services to the peoples of our country.

Whilst we are satisfied with the state of readiness of departments in terms of their plans, we must emphasise the need for greater co-operation and co- ordination between departments. However, the commitment of officials and staff in all government departments to providing quality services that will assist in the improvement of the quality of life of our people is imperative.

As with previous budget policy statements, commentators across the spectrum, including minority parties here in this Parliament, have indicated their satisfaction with the way in which the economy is being managed and the choices being made by government.

This Medium Term Budget Policy Statement includes the commitments made in the 2004 election manifesto of the ANC and underlines the commitment of the ANC-led government to create work and fight poverty. We in the ANC support the 2004 Medium Term Budget Policy Statement. I thank you. [Applause.]

Dr P W A MULDER: Mevrou die Speaker, as in die breë na die begroting en die Minister se prestasies oor die afgelope nege jaar gekyk word, moet die VF Plus eerlik wees en die Minister gelukwens. Om oor die korttermyn met sekere finansiële verstellings sukses te behaal, is veel makliker as wat dit is om dit oor so ’n lang tydperk vol te hou.

Die VF Plus steun die Minister in sy bekommernis oor die abnormale druk wat op die begroting geplaas word deur die groot toename in sosiale toelaes. Meer as ‘n 30% toename in ongeskiktheids- en pleegsorgtoelaes is nie normaal nie. Ons kan net hoop dat dit nie met die afgelope verkiesing verband hou nie. Uit ons ervaring weet ons dat stemme met sulke toelaes gekoop word.

Ons steun alle maatreëls om duplisering en korrupsie in die toekenning van hierdie toelae te beperk. Suid-Afrika se belastingbasis is so klein dat ons nie die luukse van ’n welsynstaat kan bekostig nie.

Die geld wat die regering aan die verbetering en uitbreiding van Suid- Afrika se infrastruktuur gaan bestee, word verwelkom. Dit is ’n belegging in toekomstige groei en versekering van toekomstige belastinginkomste. Daarom is dit dringend nodig dat ‘n balans tussen welsynsbesteding aan die een kant, en aan die ander kant die uitbreiding van die infrastruktuur verkry word.

Die VF Plus is wel baie bekommerd oor senior burgers wat op ’n verantwoordelike wyse vir hul aftrede beplan het. As gevolg van lae rentekoerse is daar tans baie finansiële druk op hierdie persone. Belastingtoegewings op pensioenfondse sou hierdie probleem in ’n groot mate kon help verlig. Die Minister se belofte dat hierdie saak eers in Februarie aangespreek sal word, is nie goed genoeg nie. Die VF Plus kan geen rede insien waarom hierdie saak nie nou reeds volledig aangespreek kon gewees het nie, aangesien ons dit die afgelope paar jaar al noem by elkeen van hierdie besprekings. Van hierdie mense se finansiële posisie verswak so vinnig dat hulle nou ’n las vir die staat kan word.

Die VF Plus wil by die regering daarop aandring dat die geld wat vir plaaslike besture begroot word - ek dink dit is R 2000 miljard - onder baie streng kontrole bestee moet word. Hierdie geld durf nie vir die verhoging van salarisse, veral van plaaslike bestuurders, gebruik te word nie, maar eerder vir beter munisipale dienste. Die meeste van hierdie bestuurders se salarisse is reeds buite verhouding met die res.

En ek wil tog die Minister gelukwens met sy vermaning onlangs in KwaZulu- Natal waar hy nie gehuiwer het om mense aan te spreek wat hierdie abnormale salarisse kry op daardie vlak nie. Ek dank u. (Translation of Afrikaans speech follows.)

[Dr P W A MULDER: Madam Speaker, if we take a general look at the budget and at the Minister’s achievements over the past ten years, the FF Plus must be honest and congratulate the Minister. To achieve success with certain financial adjustments over the short term is much easier than it is to maintain this record over such a long period.

The FF Plus shares the Minister’s concern about the abnormal pressure exerted on the budget by the large increase in social grants. An increase of over 30% in disability and foster care grants is not normal. We can only hope that this bears no relation to the recent election. We know from experience that such grants are used to buy votes.

We support all measures taken to prevent duplication and corruption in the allocation of these grants. South Africa’s tax base is too small to allow for the luxury of a welfare state.

We welcome the money the government is going to spend on the improvement and extension of South Africa’s infrastructure. It is an investment in future growth and ensures future tax revenue. It is therefore of crucial importance to achieve a balance between welfare expenditure on the one hand and infrastructure expansion on the other.

Nonetheless, the FF Plus is very concerned about senior citizens who have provided for their retirement in a responsible way. These people currently experience a lot of financial pressure on account of low interest rates. Tax relief on pension funds could help to ease this burden to a great extent. The Minister’s promise that this matter will only be addressed in February is not good enough. The FF Plus can see no reason why this matter should not have been dealt with comprehensively at this stage, since we have raised it at each of these discussions over the past few years. The financial situation of some of these people is now deteriorating at such a rate that they may soon become a burden to the state.

The FF Plus urges the government to ensure that the resources allocated to local authorities – I believe it amounts to about R2 000 billion – are spent under very strict supervision. This money dare not be used for salary increases, particularly for municipal managers, but rather for the improvement of municipal services. The salaries of most of these managers are already disproportionate to the rest.

And yet I wish to congratulate the Minister on his recent warning in KwaZulu-Natal, where he did not hesitate to address people receiving such abnormal salaries at that level. I thank you.]

Mr I S MFUNDISI: Madam Speaker and hon members, the 2004 Medium Term Budget Policy Statement is tabled at a time when South Africa has shown improved performance of 3,3% in the first half of the year, after a slowdown in 2003 when the Gross Domestic Product fell to around 2%.

The Medium Term Budget Policy Statement emphasises the commitment of this government to a policy framework that supports economic growth and development and improves the quality of life by reducing poverty. The spending priorities include the stabilising of social security grants.

The UCDP hopes that employees charged with this responsibility will exercise their duties with honesty, while the department will also be on the look out and not abdicate its responsibility to control the funds allocated for this purpose. The time has come for the aged, the infirm, the poor and all vulnerable groups, such as orphans, to be treated with the utmost respect and love.

All are aware that the deadline for finalising the land distribution programme is 2005. Funds for this purpose have been made available in the Budget Policy Statement and it is hoped that all involved claimants, those on the land and government, will play open cards so that when the programme is wound down energies may be directed to other programmes.

Attention has been given, this time, to improving the salaries of the police and educators. This will surely boost the sagging morale in the ranks of these public servants, most of whom are already suffering from stress-related illnesses.

The budget is directed at addressing a whole range of issues in the provision of and access to education. The nightmare of children being taught under trees is soon to be a thing of the past. Further, Education and Training is set to be realigned to meet the needs of the present day. We hope that the additional funding for the National Student Financial Aid Scheme will be able to meet the needs of all the students.

May we make this special call to Water Affairs and Forestry to use the top- up funding provided to them to provide water and sanitation to people. It is very unfortunate to see people queuing up for water at a communal tap in a neighbouring residential area because there is no water at their homes, as is the case in the Lehurutshe area.

As the budget stands, it is a real attempt to address the social and economic needs of the country. The UCDP supports the Medium Term Budget Policy Statement. I thank you.

Ms S RAJBALLY: Madam Speaker, Deputy President, Ministers and colleagues, poverty alleviation, social development and a better South Africa are what our budget serves most of all, to suffice.

It is most encouraging to note the Medium Term Budget Policy Statement’s positive macroeconomic intentions. The MF takes this opportunity to thank the hon Minister of Finance, Mr Trevor Manuel, and the department for once again devising a suitable strategy reflective of government’s ambition of job creation and poverty alleviation.

In view of the medium term expenditure, the MF is pleased with the budget and policy framework for 2005 that aims at increasing disability and foster care grants, and salaries of the police and educators; speeding up land restitution, housing, quality of schooling, health services, as well as expanding the capacity of water resource management.

The division of revenue amongst spheres has been adequately devised and sufficiently delegated. However, the MF shares the concern that our social security net is under strain and that the rapid growth in grant applications is a major contributor to this. We support the aim to reduce dependence on social grants, and the increase in employment and the potential of the economy regarding alleviation of poverty. Further, the issues of savings and investment need to be earnestly addressed. The MF supports putting a greater dent in unemployment to attain our desired annual growth rate.

In terms of the MTBPs, the MF is pleased and hopes that we shall attain our ends. However, the MF wants the South African citizenry to realise that our economy and our advancement extend beyond government’s responsibility. The MF encourages all South Africans to embark on strategies to alleviate poverty, strengthen our economy and create jobs in order to secure a better South Africa for all. Once again, we thank you, hon Minister. The MF supports the Medium Term Budget Policy Statement. Thank you very much. [Applause.]

Mr P J NEFOLOVHODWE: Madam Speaker, Azapo agrees that there are now signs of some minimum economic growth and job creation in some economic sectors. Having said this, the questions we should ask ourselves are: Can the champions of capital sustain the jobs that are being created? Which economy has experienced economic growth - the first or the second economy?

These questions are important, in view of the fact that champions of capital create jobs to expand the wealth that they accumulate for themselves, not for the rest of our society. In fact, the champions of capital have, despite having had a better economic environment in the new society and despite having increased their wealth, created very few jobs over the past years – let alone the fact that they still refuse to invest in areas that service the people of the second economy.

The reluctance to invest in townships and rural areas as well as not making funds available for residents of these areas does not change the inherited economic inequalities. Azapo would like economic growth to be accompanied by economic changes within the second economy and sustainable job creation in rural areas. We would like the Setas to train people not only to queue for the next available job at the mercy of the champions of capital, but also to train people to be creators of jobs themselves.

Azapo believes that the prerequisite for economic development for people who depend on the second economy for their livelihood is a programme that is geared towards making them champions of their own destiny as well as creating their own jobs. Unfortunately, the training by some Setas, to a large extent, has tended to focus on training people to queue for jobs rather than making them job creators for their own ends. I thank you.

Dr S C CWELE: Somlomo, uKhongolose uyayixhasa le nqubomgomo yesabiwomali sale minyaka emithathu ezayo. [Madam Speaker, the ANC supports the budget policy framework of the next three years.]

Years of apartheid continue to haunt us with gross inequalities, underdevelopment and unemployment. This budget is an important instrument to implement government policy of a better life for all. The developmental state seeks to build a single integrated competitive and growing economy that encourages and absorbs greater participation of and benefit to all South Africans. It also seeks to confront the injustices of the past and protect the vulnerable by creating safety nets through social transfers.

We further agree with the words of the President in May this year in this House that the goal of ensuring a better life for all of our people also rests on increasing the capacity of the state, and ensuring that the public sector renders services to our people as a critical player in the process of growth, reconstruction and development of our country.

Our economy is on a growth path under stable macroeconomic conditions and this brings a real possibility of job creation in the first economy. Public investments are being realised in the parastatals and through government programmes such as the Expanded Public Works Programme. In the medium term, R16,6 billion will be spent on the creation of sustainable human settlements. The broad-based black economic empowerment is a critical programme for addressing the challenge of racial and gender inequalities, and disempowerment of the vulnerable groups.

The learnership and internship programmes are on course. In the Public Service Seta there are over 4 000 learnership programmes for the unemployed youth. More than 500 community development workers have been trained and about 3 000 interns have been deployed to the Public Service in national and provincial departments. Further positive outcomes have arisen from departments who have recruited some of these interns to fill vacancies in the areas of scarce skills.

We have to finalise the implementation of the financing protocol for the Expanded Public Works Programme in order to co-ordinate the financing of these programmes by three spheres of government and different departments. The finalisation of the public property asset register is also urgent.

The ANC welcomes the development of capacity to monitor and evaluate the implementation of comprehensive government programmes in the Presidency. This unit identifies the impediments and institutes quick interventions before they cause the failure of a programme.

Somlomo, sibonga futhi nohlelo lokuqinisa ohulumeni basekhaya olubizwa ngokuthi i-Project Consolidate olumenyezelwe uMongameli ngesonto eledlule. Lolu hlelo luzogxila ekuthuthukisweni kwemiphakathi; ekuqiniseni ukusebenza komasipala; ekuqaleni uhlelo olusha oludidiyele lokwakha izindlu nezizinda zokuhlala; ekusizeni abantulayo ngezidingongqangi ezinjengamanzi nogesi; ekuqiniseni ukuthi izinhlelo zokuthuthukisa imiphakathi ziqonde ukwakha imisebenzi; nokwakha izinhlelo zokwazisa imiphakathi ngokwenziwa uhulumeni. (Translation of Zulu paragraph follows.)

[Madam Speaker, we are also grateful for the programme to strengthen local government, called Project Consolidate, announced by the President last week. This programme will focus on developing the communities; strengthening the working of municipalities; starting the new integrated programme of building houses and shelter; helping the destitute with necessities such as water and electricity; making sure that the programmes of community development are meant to create jobs; and also on developing programmes that will enable people to know about what the government is doing.]

The President reminded us earlier this year that economic growth not only depends on the macroeconomic stability but even more on political and social stability, as there can be no human development and progress under conditions of lawlessness and war.

The ANC welcomes the progress made in the establishment of the protection and security division in the SAPS that will, among other things, bear the responsibility of protecting national key points. The current pilot projects are at Johannesburg International Airport, Cape Town rail transport security, Durban Harbour, Beit Bridge border gate and in all High Courts.

We welcome the efforts that are directed at improving the administration of the courts, access to justice and transformation of the judiciary. More efforts are needed to deal with case backlogs and alternative sentencing. We need to speed up progress in dealing with the challenge of overcrowding in our correctional facilities. While the Department of Defence reported some spending pressures in the military health services, they will get additional funding for peace operations, repairs and maintenance of defence facilities and integration of corvettes and submarines.

In conclusion, there is no doubt that despite initial challenges, we are on track in the implementation of the people’s contract to create work and fight poverty. There is a need for a greater co-ordination of both action and purpose in the implementation of these programmes. The challenge is for this Parliament and its committees to play a meaningful role in mobilising communities to participate in their development, and ensure effective and relevant oversight. In this way, we may unite the nation to unleash an attack on poverty and underdevelopment. I thank you. [Applause.]

The MINISTER OF FINANCE: Deputy Speaker and hon members, firstly, I would like to express my sincere appreciation to hon Nene and all hon members of the Joint Budget Committee.

I think what we’ve heard here this afternoon reflects a particular point in the discourse and economical development, and I want to commend the Budget Committee for the maturity with which they’ve handled the report, not only as tabled in the house here, but also in the engagement with the various committees. It is reflected in the way in which this debate has been handled.

There’s broad agreement on the challenge of democracy and I think that is to be encouraged, because we are not turning the economy and the challenges of democracy; it is something that we want to fight about in the House. The gist of the debate focuses on the means to address the second economy and, of course, there will be some disagreements in the margin but they must be seen as disagreements in respect of the detailed implementation rather than a disagreement about the need to get there as soon as we possibly can.

With regard to some of the issues that were raised in the course of the debate - firstly the deficit and, again, an appreciation of why the deficit is enlarged - I think we share the concern of those members who raised a concern about the quality of the deficit. It’s important that we remind ourselves that when deficits arise, they should primarily be for expansion in areas of infrastructure and an expansion of the opportunities for future growth.

On the issues of infrastructure, again, there is broad agreement and we appreciate that. The issues of the triggers for growth and jobs were raised and, again, whether through the private sector or through the Expanded Public Works Programme, those issues are appreciated. I disagree with those who’d say that we have jobless growth. We don’t have jobless growth, as the Labour Force Survey reflects. We aren’t creating sufficient employment, but it’s not akin to jobless growth.

On the issues of social security transfers, there was a useful debate and I abstract the comments of the hon Stephens and the hon Schneemann. I think what we said in the House when we tabled the Medium Term Budget Policy Statement, which we will say again, is that the fact that poverty exists in South Africa is not a secret, but we must prevent the social security system from being abused by people who violate the law.

The concern that we expressed about the disability grants is that many people who are getting them are not entitled to them. We have responsibilities as South Africans, as members and as elected representatives of our people to ensure that those who are entitled should get them. However, we must at the same time close the system to abuse. That’s what I’d like to believe is a collective responsibility, and I think the hon Mulder touched on that issue.

In respect of the issue of pension funds, of course, it remains an ongoing concern. About 10 days ago Nedlac, as one of its commitments made in the Growth and Development Summit, had a full day’s debate on the issue of pension fund trusteeship and, I suppose, under the broad rubric of trying to preserve for pensioners what they’ve invested as a nest egg.

Tomorrow, the Portfolio Committee on Finance will deal with a very important subject for discussion, which relates to a report by an actuary, Dr Rusconi, who did a Ph D thesis on the fees charged by insurance companies for retirement annuities. So, when we look at the issue of taxation, I think what we shouldn’t lose sight of is the horrendous fee that is taken by the institutions from people who frequently find themselves in positions where they actually have less than what they paid into their funds.

We’ve got to deal with these issues together, and the two papers that the Treasury is preparing will deal with both sides - the taxation and also the need for transparency in the form of respective retirement funds.

I’d hoped that the committee would reflect - and, certainly, members would have reflected a bit more - on two issues that we raised when introducing the Medium Term Budget Policy Statement. The one is the intergovernmental system – very prominent, now that Minister Mufamadi has tabled the Intergovernmental Relations Bill – and also one of the other issues that we dealt with, which is the capacity of the state. That is something that we need to ensure that we can continue discussing.

In conclusion, in expressing my appreciation to all members, I’d like to express a special tribute to the hon Taljaard, whose contributions to the debate this afternoon I’m responding to for the last time in this House. I would imagine that the debate between her and I would continue in different forums publicly, but in this House it’s the last opportunity. [Interjections.] I want to pay tribute to her for the role she’s played as a member of the Portfolio Committee on Finance. [Applause.] I think that, either notwithstanding or because of her youth, she demonstrated both the curiosity and the confidence that she drew from Bertrand Russell, this afternoon. I think that it’s very important; notwithstanding the disagreements we’ve had on issues. They’ve been on issues and have never been on personalities. I think that her role in the committee and in this House has defined what I would consider responsible opposition. This House will be the poorer for your absence. Raenette, thank you very much for the role that you’ve played here. [Applause.]

Debate concluded.

                     REVENUE LAWS AMENDMENT BILL


                           (Introduction)

The MINISTER OF FINANCE: Madam Deputy Speaker, I introduced the Revenue Laws Amendment Bill on 26 October. The Joint Tagging Mechanism has reviewed the Bill and is of the view that it does not meet the requirements for a money Bill in the light of the large number of administrative provisions contained therein, such as those related to the advanced tax ruling system and the registration of tax practitioners. This arises primarily because of amendments to section 77 of the Constitution.

The Bill is therefore being split and I hereby table the Revenue Laws Amendment Bill, [B24-2004], which excludes these provisions. The second Revenue Laws Amendment Bill, [B25-2004], contains the remaining provisions of the original Bill. Members will be relieved to know that the two Bills are the equivalent of the original Bill, barring some minor corrections. It seems a good lawyer will always find something to tweak when the opportunity presents itself.

Deputy Speaker, I hereby introduce the two new Revenue Laws Amendment Bills.

Bill referred to the Portfolio Committee on Finance for consideration and report.

CONSIDERATION OF REPORT OF JOINT BUDGET COMMITTEE ON MEDIUM TERM BUDGET POLICY STATEMENT

There was no debate.

The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move:

That the Report be adopted.

Motion agreed to.

Report accordingly adopted.

                   ADJUSTMENTS APPROPRIATION BILL


                       (First Reading debate)

Mrs R R JOEMAT: Madam Deputy Speaker, Deputy President and hon members, we are asked to consider a request for funds for the 2004-05 financial year. These funds are in addition to those appropriated in the Main Estimate that was tabled in Parliament this year.

This process before us is a normal procedure in any government worldwide. A budget is approved but during that financial year, needs arise. The budget is then adjusted upwards, downwards or priorities of spending are shifted. These adjusted estimates fall within the ambit of the well-known Public Financial Management Act which generally gives guidelines to government regarding financial management.

Section 30 of the PFMA allows adjustments to the Budget under specific conditions, namely, significant economic and financial events affecting fiscal targets, unforeseeable and unavoidable expenditure, emergency situations in terms of section 16 of the PFMA, expenditure already announced in the Budget Speech, shifting of funds between and within Votes in terms of section 42, virement between main divisions within Votes in terms of section 43, and roll-overs of unspent funds from the preceding financial year.

With the PFMA in place a much clearer picture emerges and spending patterns, delivery and accountability can be monitored. The subtotal of the adjustment before us is, in fact, R7, 8 billion. We then deduct the R3, 5 billion contingency reserves and also deduct the projected savings of R1, 4 billion, bringing the final total to R2, 8 billion that we need to approve.

The majority in this House agrees to the broad outline of this Bill before us. Therefore, I will not debate each issue that constitutes the amount that needs to be appropriated. When the Minister tabled this Bill he outlined the framework for the allocation as indicated in the Bill. I would like to extract only certain issues under the categories of unforeseen and unavoidable expenditure, emergency situations, roll-overs and unspent funds.

The municipal and rates backlog is an example of the unforeseen and unavoidable expenditure. An amount of R599 million is being allocated to settle a long-outstanding claim from the Department of Provincial and Local Government for rates owed to certain municipalities on properties owned by the state. We would encourage the Department of Public Works to ensure that the payments for services are done according to the agreements with the municipalities. We cannot only advocate and promote the Masakhane campaign to encourage payment for services, we and the departments must lead by example.

One of the unavoidable expenditure items is that of the Department of Trade and Industry. The department has R500 million for the Pebble Bed Modular Reactor Programme. The PBMR company was unsuccessful in securing external financing, but wants to secure the socio-economic benefit that this project will bring in developing a low-cost and safe nuclear option to generate electricity. It will include local industrialisation of component manufacture and significant job creation. The PBMR is a new type of high temperature, helium-gas-cooled nuclear reactor.

The first phase of the project, which comprised a detailed feasibility study and environmental impact assessment has been finalised. The EIA reports were submitted to the Department of Environmental Affairs and Tourism. The reports available regarding this project are promising. But we, as government, must take the responsibility to do oversight on these new types of projects to ensure that they have no negative impact on the health of our people and that the environment is protected as well.

Two hundred million rand has been allocated to the Department of Land Affairs to settle targeted land restitution claims in line with the presidential directive to settle all claims by the year 2005.

Section 30 of the PFMA, I refer specifically to 16 (1), outlines the use of funds in emergency situations. An amount of R100 million will be used for drought relief, drilling new and reactivating old boreholes, and purchasing and transporting fodder to assist farmers in affected drought-stricken areas.

Regarding provincial and local government, approximately R280 million has been allocated and should be transferred and then administered by provinces and local authorities that have been affected by the drought in order to bring relief to these areas. This allocation is mainly directed specifically at water for human consumption.

Regarding provincial adjustments, R4,1 billion needs to be distributed to provinces to provide for the shortfall in social grants that amounts to R3,27 billion mainly for the disability grant. An adjustment of R847 million will take into account the final outcome of salary negotiations. Those who will benefit from this salary negotiation can also adjust their budgets accordingly.

Finally, the roll-over of unspent funds can be divided into two categories: savings and underspending. The main saving of R1 billion came through the favourable rate of exchange. Unspent funds from previous years and delays in delivery schedules resulted in this saving on the strategic defence package. This is but a general outline of the Bill.

I am sure I speak for all members in the finance committee and wish to express our appreciation to the Minister of Finance and the National Treasury for the informed documentation of the adjusted Estimates. We sometimes do not realise the amount of time and quality of work that is put into the preparation of these heavy maroon books that we receive, but we do want to assure them that we appreciate it.

We will always be guided by the Freedom Charter, which says, “The people shall share in the country’s wealth’’. The ANC supports the Bill. [Applause.]

Dr P J RABIE: Madam Deputy Speaker, hon Minister, hon members, expenditure provided for by the adjustment of the Appropriation Bill includes the roll- over of unspent funds from the preceding financial year, unforeseeable and unavoidable expenditure recommended by the executive, and utilisation of savings under the main division of a Vote for the defrayment of excess expenditure. Other aspects are the shifting of funds between and within Votes, adjustments required due to significant and unforeseeable economic and financial events affecting fiscal targets set by the annual budget, and any funds required for emergency situations.

A summary of the adjustments for 2004-05 is appropriations amounting to R150 million and other allocated funds of R1 billion. Other aspects are approved roll-overs of R2 billion, additional allocations for unforeseeable and unavoidable expenditure of R1,6 billion, and the drought-relief of R4,30 million. Self-financing expenditure amounts to R165 million and black economic empowerment, R150 million. The DA supports this Bill.

The Adjustments Appropriation Bill must be seen against a significant improvement in the general performance of the South African economy. The GDP growth increased to an annualised rate of 3,3% in the first half of

1. The Medium Term Expenditure Framework for 2005 to 2007 anticipates GDP growth of up to 4% over the corresponding three-year period. My personal opinion is that the average annual growth rate of 4% is not adequate. In order to alleviate the present official unemployment rate of almost 30%, a growth of at least 6% is required. Allow me to mention that a number of emerging economies have attained this particular figure.

Economic indications are favourable to economic growth. Our consumer price index inflation is 4,4% despite a sharp rise in the price of crude oil. Consumer and business confidence is positive, with real interest rates at their lowest level in 30 years. The rand rose by 8,2% during the first half of the year due to a weaker US dollar and high commodity prices. Our gross domestic expenditure rose by 5,7% in the first half of this financial year which will, in turn, lead to an increase in revenue.

The Appropriation Bill expenditure is also closely interlinked with section 30 of the Public Finance Management Act. What is of concern, however, is that social services at present absorb nearly 60% of government expenditure. To cite one example, the disability grant of R740,00 a month is received by 1,3 million people. This figure doubled over the last two years. The latest adjustments in the minibudget bring welfare spending this year to R4,57 billion. It’s calculated that this figure will rise to R6,46 billion in the forthcoming three years. Seen in the light of future escalating welfare costs, it is necessary that a balance be retained between the state’s spending on welfare and economic programmes that could stimulate future economic growth.

Hon Minister, when you appeared before the finance committee, you expressed concern regarding the possible misuse and the exploitation of individuals regarding child support and foster grants. Hon Minister, the DA supports your concern and appeals to all role-players and departments to enable all eligible beneficiaries to participate in the welfare system. No stone should, however, be left unturned in identifying those individuals that defraud and corrupt the welfare system.

Despite the past four years of rising welfare grants, the levels of poverty have remained unacceptably high. The Financial Mail of October 2004 mentioned that a staggering 57% of our population live below the poverty line. For a household of four, this means an income of under R1 300 per month.

The best way out of this vicious circle of poverty is education to enable individuals to apply the necessary skills. Public funds are limited. It is in the national interest that national and provincial inspectors who investigate whether beneficiaries of grants qualify see to it that they do not duplicate costs. During a submission to the Joint Budget Committee, it was mentioned that the province of KwaZulu-Natal spent R80 million in the past year on investigating corruption regarding grants.

A colleague and friend has just made a farewell speech on behalf of the DA. Allow me to thank Raenette - it was a privilege to work with you for six years. Raenette made positive contributions in debates and committees. She is hard-working, loyal and prepared to do hard work; qualities that made her an outstanding parliamentarian.

Raenette is ’n dame met geen bang haar op haar kop nie. Sy is bereid om standpunt in te neem en daarby te staan. Raenette, ons in die DA gaan jou mis. Ons gaan kontak met jou behou en jou verdere loopbaan met groot belangstelling volg. Dit is my bede dat die Goeie Gewer jou sal behoed en bewaar. (Translation of Afrikaans paragraph follows.)

[Raenette is an absolutely fearless lady. She is willing to take a stand and stick to it. Raenette, we in the DA are going to miss you. We are going to keep in contact with you and follow your future career with great interest. It is my prayer that the Good Provider will guard and protect you.]

Usebenze kahle, Raenette. [You did your work very well, Raenette.]

Thank you. [Applause.]

Mr T E VEZI: Madam Deputy Speaker, the adjustments budget allows for adjustments due to several factors such as significant economic and financial events affecting physical targets, unforeseeable and unavoidable expenditure, emergency situations in terms of section 16 of the Public Finance Management Act, shifting of funds between and within Votes in terms of section 43 of the PFMA, movements between main divisions within Votes in terms of section 43, and the roll over of unspent funds from the preceding financial year.

The IFP is, however, concerned about the R599 million adjustments in municipal services and the rates backlog which is attributed to weaknesses in the administration. The IFP welcomes the R165,4 million self-financing expenditure by seven departments and also the declared savings by the Department of Defence, National Treasury and others. The IFP supports the R200 million adjustments for land restitution to address rural claims. The IFP therefore supports the Bill. [Applause.]

Madam Deputy Speaker, on behalf of my party, allow me also to say to the hon Taljaard:

Hamba kahle ntombazane! Usikhonzele phambili. [Ihlombe.] [Go well, young lady! Our greetings go to those who will work with you in future. [Applause.]]

Mr Y WANG: Madam Deputy Speaker, hon Ministers and members, the ID supports the Bill in general but we do have some concerns with some departments, mainly Health, Defence, Provincial and Local Government, Labour, and the Department of Trade and Industry. There are actually quite a few concerns, but I only have 30 seconds left and that time is not enough. So we will leave some questions for the second part of the consideration. Thank you. [Laughter.]

Mr K D S DURR: Madam Speaker, Minister, now you see me, now you don’t - one minute. The great General Erwin Rommel once said that no plan survives a battle, and that is also true of budgets. A few years ago underspending was a great problem. Now it seems seven of the nine provinces overspent their welfare budgets last year thus inducing a squeeze, often on education budgets when education is the one avenue through which an escape from welfarism and poverty is possible. We must beware of not being a nation at welfare but a nation at work.

The figures are alarming and we are on an unsustainable growth path. We noticed the additional R40 million for improving the integrity of the grant system, particularly for implementing immediate steps to stem unwarranted and fraudulent growth in the programme. But, of course, we have to understand that much of the stability that we have enjoyed in South Africa has been because of our well-developed social security system, and it must be right that we police and administer the scheme better. I must caution, however: Those of us that have been active in the constituencies will know that we have been through reregistration at least once before recently. It causes tremendous problems for the disabled, particularly the mentally disabled who cannot do anything for themselves.

Often reregistration results in months of evaluation delays, with payments suspended. This forces the disabled to borrow money - sometimes at high interest rates - from microlenders to stay alive. When payment resumes, they don’t take into account the payments withheld. It would be better to target particular categories and areas of concern, and to do the rest with selected random inspections. [Time Expired.] Because of the improvements, the ACDP supports the Budget.

Mr I S MFUNDISI: Motlotlegi Motlatsa-Sebui, le ditokololo tse di tlotlegang, ditekanyetso tse di tlhabolotsweng tse tsa ngwaga o, di supa fa e le gore go ikaelelwa go bakanyetsa dintlha dingwe tse di neng di saletse kwa morago jaaka di ne di atlanegisiwa ke khuduthamaga. [Hon Deputy Speaker and hon members, the revised Budget for this year shows the intention to accelerate where a backlog was experienced, as the executive outlined it.]

This exercise is also meant to seek authority to utilise savings, shift funds between and within Votes and money that was presented earlier in the year. It is encouraging that, among other things, black economic empowerment has been allocated R150 million and drought relief R430 million.

These two allocations will be helpful to those who need help. More blacks will go into the mainstream economy, while the vulnerable and the unemployed will be assisted through drought relief projects in an effort to dispel and repel poverty from the peoples’ doorsteps.

The Adjustments Appropriation Bill will come in handy for members of Parliament as some R11,993 million meant for their remuneration had been inadvertently allocated under Administration but has since been redirected, thanks to this exercise. The R48,182 million roll-over in Education will assist in inter alia meeting the educational needs of victims identified in the Truth and Reconciliation Commission process. Surely there could be no better use for this money. [Time expired.] The UCDP supports the Adjustments Appropriation Bill.

Mr M T LIKOTSI: Deputy Speaker, hon members, in full confidence, we passed the initial Budget Votes for this financial year. Therefore, we must be consulted when funds are shifted around and the approval of applications for additional funds is given. The masses of our country have entrusted us as trustees of state resources and we must not fail them.

The PAC of Azania is extremely aggrieved by people who misappropriate state funds at any given opportunity. It becomes a bigger disappointment when these are people who were entrusted with positions of responsibility. In the Free State, in Lejweleputswa district, a construction company was paid R5 million for building only 6 toilets out of the total required.

You must agree with me that our country has a big backlog in development and cannot afford to lose money through bad financial practices. The PAC approves the Bill.

Miss S RAJBALLY: Thank you, Madam Deputy Speaker. The MF supports the changes that the Adjustments Appropriation Bill serves to accommodate. Section 32 of the Public Finance Management Act caters and provides for adjustment of appropriation. In view of the central government administration most of the sectors have been given an increase, but there is a decrease regarding Parliament. We would like to know why.

For the financial and administrative services sectors a valued increase is noted and a decrease in Statistics SA is noted. Further, a valued increase to social services is acknowledged and it is hoped that it will be utilised effectively and efficiently for the benefit of the sector. In terms of justice and protection services, we kindly request substantiation for the large decrease in defence. As for economic services and infrastructure development, we question the decrease in housing, noting the shortage and need in this sector.

The MF supports the Adjustments Appropriation Bill and looks forward to the Estimates of National Expenditure to substantiate most of the above. The MF also takes this opportunity to wish our colleague, the hon Taljaard, the best in her future. We enjoyed your debates as well and we hope you will have all success. Thank you very much. [Applause.] Mr B A MNGUNI: Thank you, Deputy Speaker. Ministers and colleagues, as already outlined by colleagues, this is a normal, yearly budgetary exercise to make good where there were shortfalls in the Budget and to redirect resources to places where they are needed most. As you are all aware, this is a very transparent process that enables any member of the public to voice his/her views about the reallocation of these resources and it is this House that finally takes decisions on the matter.

Further, transparency in the use of public funds is enhanced by a multiyear budgeting process in which projected government revenue and spending for three subsequent years is made public for anyone to see. As the Medium Term Expenditure Framework is a model, it is bound to have some deficiencies in one way or the other. That is why we have these adjustments today.

What we must take note of is the commitment of Cabinet and government at large to accountability and transparency with which it is handling public resources and thus accountability to the people who lay their trust on us. In real terms we need to approve only R2, 8 billion because R2, 5 billion of the adjustments is contingency reserves that were budgeted for before. And there is R1 billion that was unallocated funds.

According to percentages, the amount of R2, 8 billion only amounts to 0,759%. Now, regarding any model, whether spatial or economic, since this model has still to be refined towards perfection, an error of less than 1% is not bad at all. In fact, in my view, 0,759% is negligible. We might say we are almost approaching zero tolerance as far as budget projections are concerned.

We know that from time to time the opposition likes to argue that there is no capacity to spend at local and provincial government levels and that there is corruption, and so on. The fact is that this government is fighting corruption by all means and at all levels. Colleagues must be aware that you cannot fight corruption in one fell swoop. There are officials who are not there to serve the people, but who are there to line their own pockets. So, it is such people who should take note that to be in the Public Service is a calling rather than a profession, because you went there to serve the needs of the people.

These adjustments indicate the level of commitment in fighting poverty and unemployment by the ANC-led government. In this case I would like to quote the Minister of Finance at a senior management services conference held on 21 September here in Cape Town when he said:

The two main thrusts of the budget of a developing state must be how much the state spends fighting poverty and deprivation and how much of the country’s resources go towards expanding economic opportunities of all citizens.

In order to fulfil these commitments, government has allocated, amongst other things, R500 million to DTI for the pebble-bed modular reactor plant that has a potential of creating 56 000 direct and indirect job opportunities in the Western Cape.

The challenge we are facing is a negative perception held by the public regarding nuclear power. In most cases, it is associated with hazardous nuclear waste that is not properly disposed of, or people associate it with the Chernobyl incident in Russia in 1986, where a reactor exploded and killed a lot of people. The public has to know that this is one of the cleanest and safest methods of generating electricity without the tons and tons of carbon dioxide emissions that are generated from burning fuel fossils.

Another spin-off that we see today is the R1 billion that has been saved from the strategic defence package, and also the other spin-offs that are coming from this package from which, today, there are some jobs that have been created.

Today the social budget is more than 60%. Colleagues have said we must remember that we have a state that is developmental, where health and social development are the highest expenditures. We are faced with a lot of unemployment. Therefore the government is forced to take care of all those people who are unemployed, otherwise they will go to bed hungry without any food and that will, at the end of the day, increase the level of crime, and so forth. When we talk of underexpenditure we should qualify it with the level of skills shortages we are facing in the public sector and the absorption of skilled personnel into the private sector.

I usually say to the opposition that suffice it to say - without being nasty to the opposition – that they should acknowledge the consequences of the negative effect of their past policies and start doing the right thing when the time allows them to do so. I thank you. [Applause.]

Debate concluded.

Bill read a first time.

                   ADJUSTMENTS APPROPRIATION BILL





                (Consideration of Votes and Schedule)

The DEPUTY SPEAKER: The proceedings will initially take the form of a question-and-answer session. I shall put each Vote in turn, whereupon members will have the opportunity to put questions to the relevant Ministers. Hon members should please wait until I recognise them before putting their question.

I’ve just been advised that I should go through the time that you have. The ANC has 34 minutes. The DA has nine minutes, the IFP five, the UDM three, the ID three, the NNP three, the ACDP three, the FF Plus three, the PAC three, the UCDP three, the MF three and Azapo also has three minutes.

Vote No 1 – Presidency – put.

Vote No 2 – Parliament – put.

Vote No 3 – Foreign Affairs – put.

Vote No 4 – Home Affairs – put.

Dr C P MULDER: Deputy Speaker, I’ll put the first question to the hon Minister. In the additional budget provision has been made to the amount of R23,8 million for unforeseen and unavoidable expenditure. We were told during the last election that it was very expensive to enable voters to vote overseas. However, I don’t see any amount that provided for this in the additional budget.

There is R1,589 million that has specifically been allocated for the cost of allowing prisoners to vote, but I don’t see any amount for people from abroad, South African citizens. How was this achieved? Was it already provided for, or was it not that expensive?

The MINISTER OF HOME AFFAIRS: Deputy Speaker, the money allocated by the adjusted estimate was indeed unforeseen expenditure, money which was provided to the IEC in order for it to prepare for the elections and to allow the prisoners to vote.

Yes, you are right. There was no money allocated for people to vote abroad. We did not ask for such money, because we did not make provision for them, because in principle there was no agreement on the matter. We could not provide for that, as no political decision was taken for people who were abroad to vote. So, we couldn’t allocate such money, because there was no political decision taken for South African citizens abroad to vote.

Mr H P CHAUKE: Madam Deputy Speaker, I want to ask the Minister a question based on the question that was asked by the member over there: Do we have to put a lot of infrastructure in place and spend a lot of money to allow people to vote overseas? During the last elections it was just a waste. In fact, less than 3 000 people exercised their right to vote overseas. Is it necessary for us to continue to allocate money for that particular task?

The MINISTER OF HOME AFFAIRS: Chair, no, hon Chauke, it’s not necessary, precisely because we have not taken that decision that South Africans who are abroad during the time of elections should vote, unless they are South Africans who, of course, are there because they are deployed by the State to be there. But South Africans who go there for their own leisure or on business, we’ve not taken that kind of decision, as a government in power, that they should actually be provided for to vote. [Applause.]

Dr C P MULDER: Deputy Chairperson, I was not going to pursue the matter further, but seeing that the hon Mr Chauke made the point, I’ll have to pursue it further. Hon Minister, you are not correct. We have amended the Act to make it possible for South African citizens who are abroad to vote under certain circumstances. The point I’m making is that despite that fact you have not made any provisions in these adjustments to pay for those expenses. And, unlike Mr Chauke from the ANC, I believe that it’s the right of each and every citizen, regardless of how many, that they should be allowed to vote. They are citizens and they are entitled to vote.

The MINISTER OF HOME AFFAIRS: Chair, I heard Dr Mulder saying, ``certain specific circumstances’’. We did provide for specific circumstances, and in this case we are talking about people deployed by the South African government in their missions abroad. We did provide for that. We also talked about soldiers who are deployed, for instance, in Burundi and we did provide for that.

So, what circumstances are we talking about? Are we talking about people who are sent abroad by their companies? It is not government that send these people on business during that time. We did provide for those people who were sent abroad by our government and who were deployed during that time. [Applause.]

Vote No 5 - Provincial and Local Government - put.

Mr L M GREEN: Deputy Speaker and hon Minister, R3,4 million has been rolled over to complete a reconstruction project in a declared disaster area, due to delays caused by the involvement of the local communities in the project. We commend the Department for Provincial and Local Government for involving the local community, but will the department assist to empower local communities with the needed project management skills to ensure that reconstruction projects will be completed on time? I thank you.

The MINISTER FOR PROVINCIAL AND LOCAL GOVERNMENT: Yes, the department will.

Mr B W DHLAMINI: Hon Minister, in view of the fact that the Cabinet has taken the decision to shift the programme from sports to local government on building for sports, would the department consider ringfencing that particular vote to make sure that that money is used to build facilities for sports?

The MINISTER FOR PROVINCIAL AND LOCAL GOVERNMENT: Yes, Madam Deputy Speaker. [Laughter.]

Mr M T LIKOTSI: Hon Minister, a number of local municipalities nationally are unable to provide efficient services due to a number of factors. Do you think the funds allocated to you will improve the situation?

The MINISTER FOR PROVINCIAL AND LOCAL GOVERNMENT: Yes. [Laughter.]

The DEPUTY SPEAKER: The Minister is out of order, he was not asked to respond yet. The hon Minister.

The MINISTER FOR PROVINCIAL AND LOCAL GOVERNMENT: Yes, Madam Speaker. [Laughter.]

The DEPUTY SPEAKER: I just want to make it clear that you are not limited by the 34 minutes of the ANC.

Mr A HARDING: Thank you, Madam Deputy Speaker. This question does not require the simple yes or no. [Laughter.] Can the hon Minister please explain to the House why the funds to the Municipal Demarcation Board, to finalise ward boundaries in view of the impending national local government election, was so late?

The MINISTER FOR PROVINCIAL AND LOCAL GOVERNMENT: Yes, the Municipal Demarcation Board is within schedule as far as the delimitation of municipal boundaries is concerned, and the resources which has been allocated for this purpose in the view of government is adequate.

Vote 6 - Public Works - put:

The DEPUTY SPEAKER: Hon Likotsi, I do not know whether you still have time left but I will be advised. Please do not exhaust your three minutes.

Mr M T LIKOTSI: There is a big backlog with regard to the maintenance of state assets. How do you think the adjustments in the Medium Term Budget Policy Statement will ease the challenge?

The MINISTER OF PUBLIC WORKS: For this time around we shall use the money we have to deal with major issues of maintenance, but we will continue to ask Treasury in the next budget to make sure that we do.

Vote No 7 - Government Communication and Information System - put:

Vote No 8 - National Treasury - put.

Vote No 9 - Public Enterprises - put.

Vote No 10 - Public Service and Administration - put.

Vote No 11 - Public Service Commission - put.

Vote No 12 - South African Management Development Institute (SAMDI) - put.

Vote No 13 - Statistics South Africa - put.

Vote No 14 - Arts and Culture put.

Ms D KOHLER-BARNARD: Madam Deputy Speaker, there are endless questions one could, in fact, put to the hon Minister of Arts and Culture in this regard. But he could perhaps give an explanation why his department totally failed to spend the R21 million rolled over to next year; why over R9 million was needed to set up his Ministry; and above all why the National Arts Council that has to date not only failed to provide audited accounts, but according to the auditors has also failed to hand out R8, 5 million to our artists, has now asked for a whopping R44, 6 million more. The amounts are outrageous, but the department’s seeming inability to deliver to South Africa’s artists is even more so. [Applause.]

The MINISTER OF ARTS AND CULTURE: Deputy Speaker, I think the hon member is aware that this is a new Ministry which was set up this year and therefore had to be provided with moneys for setting itself up. Well maybe she thinks I don’t deserve it, but that is her opinion. [Laughter.] It just so happens that the Minister of Finance agrees with me.

The R44 million, which you see reflected for the National Arts Council, was voted for the National Arts Council for the financial year ending next year. So it was voted even before I became Minister. I am not responsible therefore for that appropriation. [Interjections.]

However, her allegations about the National Arts Council are a complete exaggeration. I think she is aware of it. There have been problems with the National Arts Council, but to suggest that the National Arts Council has not made any provision for South African artists is a complete and outrageous exaggeration. The National Arts Council spent lots of money on running the Grahamstown festival and many other festivals. If you have problems with the National Arts Council, raise the issues properly. Do not exaggerate. There is no one who does a good cause a greater disservice than he who exaggerates, and that is the hon member’s problem. [Applause.]

Vote No 15 - Education - put.

Miss S RAJBALLY: Madam Deputy Speaker, would the Minister so kindly let us know whether the budget that has been allocated to the Education Department would provide for feeding schemes in schools, especially in our rural areas? Thank you.

The MINISTER OF EDUCATION: Madam Deputy Speaker, in order to be different from my colleague in the Department of Provincial and Local Government, my response is that it will. [Laughter.] [Applause.]

Mr A M MPONTSHANE: Thank you, Deputy Speaker. Hon Minister, scholar transport remains a sticky point in our education system, presenting the most serious barrier to the poor in terms of access to education. With the elimination of conditional grants to provinces the situation is not made any better. The question is: What budgetary relief can provinces expect and hope for in order that learners who walk long distances, often on empty stomachs, are not denied their rights to basic education? I know that the department has at some point toyed with the idea of providing bicycles to learners. Is that all provinces can hope for? Thank you.

The MINISTER OF EDUCATION: Madam Deputy Speaker, we have encouraged provinces to identify ways in which they could assist young people with transport to school in order to avoid the current situation where many young children walk very long distances without any form of assistance from the provincial education departments. I must stress that the provision for scholar transport would have to come from provincial education departments. It is not provided by the national department.

However, what has happened is we have seen some improvement. In KwaZulu- Natal the MEC for Education has begun to provide scholar transport for children who travel very long distances. In the Western Cape we have also seen an initiative by the MEC to provide similar transport. We are discussing this with colleagues in other provinces so that they could make similar arrangements. These would range from the utilisation of scholar transport, which is currently not available to children in poor communities or the rural areas. So the use presently of education department transport tends to circulate in the urban area for privileged children and doesn’t address the needs of poor children.

So all of these are areas in which we are trying to find solutions. But the preference would be to try to have community initiatives where such transport support is provided and I still remain convinced that perhaps bicycles might be a good idea for distances that are rather shorter than the 15 km that some children have to walk. But the situation is being improved. We are making some progress and all the provinces are trying to attend, in a limited budgetary context, to that particular challenge.

Mr G G BOINAMO: Madam Deputy Speaker and hon Minister, the country is in the grip of the scourge of poverty, unemployment and HIV/Aids, which has left millions of children orphaned. These children are often sent home by headmasters for not paying their school fees. I can quote two examples from the 20:30 SABC news broadcast on 3 November: Poor learners from Gaopalelwe and Thutolore schools in Bloemhof were sent home for not paying their outstanding school fees and were subsequently not allowed to sit for examinations.

Given the prevalent economic situation in our country, hon Minister, what mechanisms have you put in place to increase the education budget in order to increase the exemption from school fees for poor learners thus making the budget a meaningful exercise for schools, and thereby affording them better cash flows and allowing them to operate more efficiently? Thank you.

The MINISTER OF EDUCATION: Madam Deputy Speaker, the hon member is, I am sure, certainly aware that this is a concern of government that we should find means of relieving the poorest in our society from the burden of having to pay school fees. The member would be aware that we have exemption provisions in the current legislation, the South African Schools Act, and the norms and standards for the funding of public schools.

However, I have found that those provisions are not working in the interest of poor learners in our schools and therefore further remedies have to be taken. We are in discussion with the provinces to try and find ways firstly of improving the current exemption system to make governing bodies more accountable in terms of indicating the manner in which they are assisting poor families with applications for exemption. But secondly, we also need to address whether indeed schools should be forced to charge school fees of R50 in communities where clearly that R50 is not available.

So we are looking at whether it is possible to exempt schools that are located within the poorest communities from the need to charge user fees. So these are some of the elements on which we are currently consulting and I am hoping that provinces will act in positive support of the approaches that I wish to advocate.

I think the time has come for South Africa to ensure that indeed all our children enjoy the right to the basic education promised in our Constitution and fees is one of the barriers to poor children enjoying such access. So we are discussing a potential mechanism and I will be publishing the proposals that I wish to put before the public very soon, once we have agreement with the provinces. Because the compensation for schools for that exemption or the non-fee charging would have to come from provincial budgets.

Therefore we must make sure, if we agree on proceeding with exemption, that administratively we are organised in a manner that doesn’t then burden schools with further problems so that we relieve one situation and add to a problem for schools in another way. So all of these things are being looked at and I hope, hon member, by 2005 the situation will be rather clearer, and by 2006 better for our children.

Vote No 16 - Health - put.

Mr R COETZEE: Madam Deputy Speaker, hon Minister, you will know that the hospital revitalisation programme is essential if we are going to provide South Africans with quality care and retain the skills of healthcare professionals in the Public Service.

The Medium Term Budget Policy Statement makes it clear that Finance is willing to pay for 36 such projects at a time. But no additional allocation was made for that, basically because many of the national and provincial departments do not have the management capacity to implement 36 projects at the same time.

In light of this, could you please tell us whether that capacity would be in place in time for next year’s Budget so that we can fund 36 such projects at the same time, or if not, when the capacity would be in place so that we can revitalise 36 hospitals at a time.

The MINISTER OF HEALTH: Madam Speaker, if you look at the moving of funding from programme to programme, you will realise that indeed we have provided for that. So, it will be there. Thanks.

Miss S RAJBALLY: Deputy Speaker, Minister, in your budget, can you please tell us whether there will be nutrition, baby feeding, in all the clinics? Thank you.

The MINISTER OF HEALTH: We have provided for it in next year’s budget. It will be there. Thank you.

Mrs C DUDLEY: Hon Minister, the ACDP is concerned about the low level of spending on HIV/Aids. Now, this is obviously linked to the fact that so few people are on antiretroviral treatment programmes. What is the real problem, hon Minister, is it administrative or ideological? Why are we not able to treat our people?

While the Minister of Finance makes every effort to expand the economy and ensure a skilled workforce, why are we undermining these efforts by allowing our skilled workforce to die off? Surely it is in everyone’s best interest to ensure that South Africans access the treatment that is available which undisputedly adds years and increases quality of life. Why are we stalling when it is possible for more people to continue to support their families financially, for more children to grow up in the care of their own mummies or daddies or both parents, for hospital bills and pressures to decrease and our economy to grow? Are we purposely underspending on HIV/Aids? Surely, this is something we cannot afford. Thank you.

The MINISTER OF HEALTH: Deputy Speaker, obviously the hon member of Parliament has not read the comprehensive plan on HIV and Aids, because this plan is not just about ARVs. It is about prevention, nutrition and about improving the whole healthcare system and our laboratories in order for us to be able to monitor the patients on ARVs. It is about the information system and doubling up the VCT sites, and about research regarding traditional medicines. It is about training health professionals and treatment, yes, indeed, including ARVs.

If the hon member had looked properly at what we are discussing today, she would indeed have understood where we had not spent all the money and the reasons are given for that. For example, we had to transfer money to the national laboratory services. We transferred half of it this year, but we did not transfer all of it, because we think that would be financially irresponsible of us to transfer all the money before we can see that there are deliverables; so that is why we are asking for the roll-over.

You will also see that, in fact, we are asking for the roll-overs, because in terms of prevention we needed condoms and we order them on a monthly basis. By the end of the previous financial year, at least by the first of March, we hadn’t gotten all the invoices; therefore, that money still has to be paid.

You will also understand, if you read the documents properly, that we also had to spend money on medicines and the process of ordering the medicines. Making sure that they are available in the country is a very long process. But that does not mean that we did not provide for the medicines in the interim, because we had interim measures in place, and that was to call for information. We also had to study the information that was presented to us to make sure that we were getting value for money.

We had to call for proposals, evaluate them and reduce them to a short list; then we had to interview bidders and announce the successful ones; and offer tenders thereafter. So, it is indeed a long process. It is not that anybody is sitting on the money. It is primarily about improving our healthcare system, which is absolutely fundamental for the provision of ARVs.

Let me say ARVs are not just aspirins. There are certain things that you have to put in place to ensure that you provide the quality healthcare that you are talking about. We are on course. Thank you. [Applause.]

Vote No 17 - Labour - put:

Mr V C GORE: Thank you, Madam Deputy Speaker. Hon Minister, the ID has noted government’s intention to allocate an additional R22,85 million for corporate imaging. Although we realise the importance of marketing and public relations, particularly in a competitive private sector, we question whether such an amount is justified, especially for a government department.

Hon the Minister, the question to you today is, can you please explain to this House the reason for the allocation of R22,85 million for corporate imaging, and how this money is going to be spent to ensure and enhance service delivery, especially around unemployment and job creation?

The MINISTER OF LABOUR: If you go to a Standard Bank, or a street where Standard Bank is, you will know where it is because of corporate imaging. If you go to ABSA and you turn, for example, the corner of Plein Street into Adderley Street, you will know exactly where ABSA is because you see the corporate imaging of ABSA. If you go to the ANC office, you will know exactly where the ANC office is, because you see the corporate imaging of the ANC. [Laughter.]

Therefore, if you go to a government department like the Department of Labour, we want our people to know exactly where the Department of Labour is, in order to make sure that our Batho Pele process is achieved. [Interjections.] Thank you very much, loudmouth.

Ms O R KASIENYANE: Thank you, Chairperson. Hon Minister, I have observed that R30,3 million of the total roll-over of R36,9 million, has been as a result of decisions taken by other departments. Your corporate imaging programme was put on hold after the GCIS intervention, to ensure uniformity of corporate imaging in government.

Secondly, all repair and maintenance projects of government departments are done through the Department of Public Works. By any standard, this is too much for one department. Now, hon Minister, the issue of the roll over of funds occasioned by the function residing in one department, while funds of expenditure thereof is dependent on another department, needs revisiting. Don’t you think that this House should assist where possible to ensure that the function, the budget and the decision to spend are kept under the same department at all times, if possible? In our view this will reduce roll- overs, and enhance service delivery. I thank you.

The MINISTER OF LABOUR: I agree with the hon member. We should probably look at this matter so that we work much better, because it is a very tedious process and quite cumbersome to transfer money from one department to another. However, hon member, there is a hymn in the church hymnal of the Presbyterian church.

Wa zi thwala izono yesu, zinge zono zakho’’. [Jesus sacrificed his life for our sins.’’]

The HOUSE CHAIRPERSON (Mr G Q M DOIDGE): Are there any further questions on labour? I put Vote number 18, Science and Technology. Are there any questions? I see your hand up hon member, are you asking a question? Do so, please sir.

Vote No - 18 Science and Technology - put:

Mr B T MNYANDU: Thank you, Chair. This morning when the Portfolio Committee for Science and Technology was briefed by the NRF, it heard disturbing facts that from every pool of 500 undergraduate students that the country produces, it only produces one Ph D. This is alarming by any standard.

After 1994, the Department of Education did away with study leave with pay, which had enabled educators to pursue postgraduate research without sacrificing their financial responsibilities to their families.

Now the question is, is there any communication or discussion that the Minister is engaged in with the Minister of Education to ensure that experienced educators get capacitated through pursuing postgraduate studies to become researchers, so that they can add to the pool of knowledge, without actually sacrificing their family responsibilities? Will those include maybe bringing back study leave with pay? Thank you.

TONA YA TŠA SAENTSHE LE THEKNOLOTŠI: OF SCIENCE AND TECHNOLOGY: Modulasetulo ke a leboga. Ke nyaka go lebella mokgalabje yola ka mola ge ke bolela le yena, ka gore ditaba di mahlong. Rena le Letona la Thuto, re hlakana mehla ye re a boledišana, ka gobane selo seo se dirago gore re šome mmogo, ke seo e lego gore se nyaka gore re šomišane, ge re sa šomišane, tema e ka se tšwele pele. Ka nnete tše dingwe tšeo o di bolelago nkabe e sa le wa di botšiša pele, nakong yela go sa botšišwa Letona lela la Thuto, ka gore tše dingwe di wela ka fase ga lefapha la gagwe. Eupša, re šomišana mmogo go dira gore dilo di tšwele pele ka tshwanelo, lefase la rena le tle le thušege. Ke a leboga mokgalabje. (Translation of Pedi paragraph follows.)

[The MINISTER OF SCIENCE AND TECHNOLOGY: Thank you, Chairperson. I want to face the old man on that side when I speak. The Minister of Education and I meet every time and talk, because we must work together. If we don’t work together we will not progress. Indeed, some of the things you are talking about you should have asked about them then, at the time when people were asking the Minister of Education, because some of the things fall under his department. But we work together so that there will be progress in order for our country to benefit. I thank you, old man.]

Vote 19 - Social Development - put:

The HOUSE CHAIRPERSON (Mr G Q M DOIDGE): Are there any further questions? I now put Vote 19 - Social Development. Are there any questions? Yes, hon member.

Mr M WATERS: Thank you, Chair. Indications are that the dramatic increase in disability grant applications are because people with Aids are applying for it. At the same time, the uptake of the government’s antiretroviral treatment has been too slow – only 12 000 people have received it so far. This lack of co-ordination and control between the Department of Health and the Department of Social development is a cause of overspending.

Since Aids is a treatable condition - and in most cases people on antiretrovirals live a full and productive life - will it not make more sense for your department to work with the Department of Health to get these people into treatment, rather than signing them up for disability grants? I thank you.

The MINISTER OF SOCIAL DEVELOPMENT: They must know that we are working as a social cluster and we work very closely with the Minister of Health, and all other departments that are in that cluster. So, there can be no way in which we could differ on some of those issues. We are working as much as we can, and we will do whatever is possible. Without any pressure from the DA, we will be able to do what we are supposed to do with the means that we have.

Vote No 20 - Sport and Recreation - put:

Mr T D LEE: Chairperson, the Auditor-General has issued a disclaimer of audit opinion on the financial affairs of Boxing South Africa. My two questions to you, Mr Minister, are: Firstly, are you going to make sure that their reports are submitted timeously; and secondly, are you going to make sure that controls and accounting systems are in place to enable the Auditor-General to verify the accuracy, the validity and the completeness of their accounting records? I thank you.

The MINISTER OF SPORT AND RECREATION: The question whether or not we are going to make sure that these things are done timeously in the future is already obsolete. We have taken the necessary steps to get those things corrected and that boxing association has already reported on the issue to the standing committee. The question of whether we will make sure that these things do not happen again is also answered in the first question.

Miss S RAJBALLY: Chairperson, can the Minister please tell us whether in his budget he has provided for better facilities for sports in all schools in all nine provinces? Thank you.

The HOUSE CHAIRPERSON (Mr G Q M Doidge): Hon Minister, the microphone is already on for you.

The MINISTER OF SPORT AND RECREATION: Chairperson, thank you very much, we do not have microphones in Alice. [Laughter.] The hon members should listen to this very carefully, because it is not the first time that I am being confronted with this question, which in fact should be directed to the Minister of Provincial and Local Government. [Interjections.] The situation has changed. Can you listen, Mr Gibson? When I was a Chief Whip you used to listen in this House. I do not know what happened. [Laughter.] [Applause.]

Mr Gibson, the situation is as follows: Infrastructure, be it for schools, for water, for electricity, for bulk water, for streets and all these things is now budgeted for under what the government calls the Municipal Infrastructure Grant, MIG, and it is located within the Ministry of DPLG.

Vote No 21 - Correctional Services - put.

Vote No 22 - Defence - put:

Mnu V B NDLOVU: Sihlalo, bengicela ukubuza – kodwa angazi ukuthi ubani ozowuphendula umbuzo. Kunemali ewu-R1 billion lapha ebuyiselwe kwa-National Revenue Fund. Kwathiwa ayikho imali yokukhokhela odokotela abasebenza ezindaweni zasemakhaya, khona futhi kwezokuvikela. Kwenzeka kanjani lokho? (Translation of Zulu paragraph follows.)

[MR V B NDLOVU: Chairperson, I would like to ask something - however I don’t know who is going to respond to the question. The sum of R1 billion was returned to the National Revenue Fund. It has also transpired that there are no funds to pay the doctors working in rural areas in the defence sector. How has that happened?]

USEKELA-MPHATHISWA WEZOKHUSELO: Mhlalingaphambili, unyanisile utata uNdlovu ukuba ikhona imali, kambe akuyonyani ukuba loo mali ibuyiselwe. Iza kufakwa kwiakhawunti eyodwa. Laa mali yimali ezelwe kukomelela kweRandi. Ngokomthetho, laa mali kufanelwe ukuba ibuyiselwa kuNongxowa weSizwe, iNational Treasury, yaye asinakukwazi ukuyijika loo nto. Yiyo loo nto ke ngoku sifuna imali yokuncedisa ekuphuhliseni izakhono zoogqirha noonesi emaphandleni. [Kwaqhwatywa.] (Translation of Xhosa paragraph follows.)

[The DEPUTY MINISTER OF DEFENCE: Chairperson, the hon member Ndlovu is telling the truth when he says there is money available, but it is not true that money has been returned. It is going to be deposited into a separate account. That money is as a result of the rise in the value of the rand. Procedurally, that money is supposed to be returned to the National Treasury, and we cannot change that. It is for this reason that we want money for assistance in developing the skills of the doctors and nurses in the rural areas.] [Applause.]]

Moulana M R SAYEDALI-SHAH: Chairperson, we know that the strengthening of the rand and unspent funds from previous years have resulted in the savings of R1 billion. However, these are not the only contributing factors. What we also know is that delays in the delivery schedules have also resulted in the saving of R1 billion.

Can the hon Deputy Minister kindly tell this House which part of the SDP, or strategic defence package, referred to in programme nine of the special defence account resulted in the so-called saving of R1 billion? Thank you.

The DEPUTY MINISTER OF DEFENCE: Mr Chairperson, the question that is asked here has nothing to do with adjustments, but I was trying to answer it, and now he wants details of how this money was accumulated. I have told him that this saving was mainly because of the strength of the rand. If he wants details, I am not able to give him those details now. Thank you. [Interjections.]

Vote No 23 – Independent Complaints Directorate - put:

Vote No 24 – Justice and Constitutional Development - put:

Mrs S M CAMERER: Thank you, Chair. Minister, the accounts reflect that R77 million was overbudgeted for goods and services in the courts and other branches of the department, resulting in transfers in the adjustment account to personnel, which was underbudgeted for in the state legal services, court services and administration by the said R77 million.

What is the reason for this? Who were the beneficiaries of these payments, and why were they necessary? And, what steps have been taken to rightsize the different components of the Justice budget? According to the chief financial officer of the department, these problems keep cropping up, though officials claim they will be rectified. I would like to get the Minister’s explanation for this and possibly her commitment to the rightsizing aspect. Thank you, Chair.

The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Well, hon member, I can only make a commitment. All those who have long served in the Portfolio Committee on Justice and Constitutional Development will know that this has been a recurring problem.

All I can say is that we have in place a joint task team with Treasury. I hope that in the next term we will have more definite answers and better plans. So, yes indeed, there will be changes – we’re committed to that. I don’t want to go into details about the whole movement of moneys. The truth of the matter is that we have been underfunded in certain instances, or that’s what we believe, and the Minister of Finance agrees with me. [Laughter.] This is a matter that we are unravelling.

Ms F I CHOHAN-KHOTA: Thank you, Chairperson. Minister, sometimes the real issue with regard to the adjusted estimates doesn’t arise from what is contained in the estimates themselves, but in what is not received and not approved. In this regard, could you tell us how much the department has requested to beef up security at courts? Why was this necessary, and what are the implications of not receiving this amount? Thank you.

The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Well, the matter of security, broadly speaking, is a very serious one. It is infrastructure that is required at courts and also other related key points. Part of the answer will lie with us working together as a cluster, and looking at static security where it’s necessary with our Safety and Security department.

Also, we will have to get a budget for infrastructure security. We requested an amount of R1,2 billion, and the funds allocated were R17 million. However, as I said, this really is a work in progress, and I would plead that we be given time to work this out with Treasury. But I am pleased, hon member, that you brought up this issue as it is a serious one.

Vote No 25 - Safety and Security - put:

Rev K R J MESHOE: Hon Minister, I want to know what the motivation is for transferring R30 million from the Department of Transport for security infrastructure for the Cape Town Metro railway pilot project only, while commuters in Gauteng are subjected to criminal activity on trains on a daily basis. Not enough seems to be done to eradicate crime on our trains in that province. I also want to know whether there are any plans to allocate similar fund amounts to other provinces to ensure that our commuters enjoy safety.

The MINISTER OF SAFETY AND SECURITY: People who are English- speaking have told me that when you talk about a project which is a pilot project, you mean that you are starting - that it’s the first step towards a broader programme. [Applause.] People who are English-speaking have told me that. Obviously, because it is a pilot project it is the foundation, the springboard that is going to allow us to learn lessons in the first instance and ensure, therefore, that when we go out broadly we have a programme that is going to produce the results we require.

Mr V B NDLOVU: Thank you, Chairperson. Minister, there is a transfer of an amount of R246 000 to the Department of Public Works for leasing their offices. Are we going to do this every year, or is this a once-off thing and then all the buildings will belong to us, or what?

The MINISTER OF SAFETY AND SECURITY: Well, these are special circumstances. We are renting those premises, and for as long as we rent them this is what we will do. However, we have an arrangement with Public Works. We are going to get a facility that is going to be one of the facilities that Public Works will make available to us. So, it’s not going to be perpetual. We are going to arrive at some accommodation.

Rev K R J MESHOE: I appreciate what the hon Minister has said. I understand that this is a pilot project. That is why the second part of the question was whether there were plans to ensure that other provinces also got such allocations once the government has convinced itself that there was a need to have such projects throughout the country. [Interjections.]

The MINISTER OF SAFETY AND SECURITY: Minister for Provincial and Local Government, may I say, “Yes, that will be the situation”? [Laughter.]

Vote No 26 - Agriculture - put:

Vote No 27 - Communications - put:

Vote 28 - Environmental Affairs and Tourism - put.

Mr K D S DURR: Chairman, my question relates to points three and six of the items listed, and is: What has the government done to examine the potential of existing or new small boat harbours so as to unlock their potential for sailing, sport fishing, leisure boating and attracting small boats from around the world into our waters? This could be done by providing a series of small boat harbours within sailing distance of each other along the coast of South Africa, thus stimulating tourism and economic activity in often depressed areas, and unlocking economic development relating to the leisure and hospitality industry.

Minister, all small boat harbours of the world play a direct role not only in the fishing industry, but also in the leisure and hospitality industry. Our fishing harbours on our coast are mostly hopelessly underutilised for most of the year for single interest and not multiple use. I know that the Public Works department will also have to get involved, but the Department of Environmental Affairs and Tourism is the planning department, and so I ask this question – for which I failed to get an answer from the committee – with respect. I thank you.

The DEPUTY MINISTER OF ENVIRONMENTAL AFFAIRS AND TOURISM: Chairperson, our tourism branch in the department is in consultation with the marine and coastal management branch. We have identified and are going to start with four fishing harbours, and that decision was based on a study that was done by Deloitte and Touche. Those harbours are Kalk Bay, Saldanha Bay, Lamberts Bay and Stilbaai. This is to develop the potential of tourism that exists out there in accordance with the government’s objectives, which are GDP, economic growth and job creation. Stilbaai was chosen because of its proximity to the Garden Route.

We have already had our first meeting with stakeholders and communities to discuss how they can take advantage of the opportunities that come as a result of people using that route. Kalk Bay, we know very well, is in a fantastic location and we want to link the community there with tourists so that a tourism route can be established there, which could include, among other things, cultural tourism.

Saldanha has a very rich history of whale watching. In fact, we have also put up an interpretation centre there. Lamberts Bay has got a major tourism attraction that includes bird watching and harbour tours. We are also thinking of establishing an information point there. Community members, especially the youth, will be trained as tour guides and as such can provide a better service as they know the place better than anyone else.

We are collating all proposals relating to tourism around the harbours to enhance tourism. We also intend to have a geographic spread so that other provinces along the coast can benefit as well. Thank you. [Applause.]

The CHAIRPERSON OF COMMITTEES: Could hon members please lower their voices? Thank you very much.

Ms E THABETHE: Thank you, Chairperson. I just would like the Deputy Minister to clarify or elaborate on the broader agenda of transformation insofar as the previously disadvantaged are concerned, and whether these changes won’t affect that particular process. Furthermore, will they try to prioritise the previously disadvantaged in terms of tourism and their scoreboard, as per the departmental agenda?

The DEPUTY MINISTER OF ENVIRONMENTAL AFFAIRS AND TOURISM: Definitely! The HDIs are going to benefit more than the previously advantaged, the Pas, the previously advantaged. That is the reason we are going to establish a tourism route that encourages cultural tourism. As we know, these days there is a great demand for cultural tourism. When our guests come they want to stay and interact with communities and enjoy their culture. This will benefit the communities. We have trained a lot of tour guides that come directly from these communities.

We are also encouraging our communities to participate in the boat industry. Yesterday I was in the Free State at Xhariep, and we found a community that builds boats and most of them are being used. Those people are being trained not only to build boats, but also to use them so that they are able to ferry tourists. We are going to source funding to make sure that this dream comes true. Thank you. [Applause.]

Vote No 29 – Housing – put.

Miss S RAJBALLY: Hhayi-ke, sesizwile sonke manje. [Uhleko.][By now, all of us have heard.[Laughter.]]

Thank you, Chairperson. As we all know we are facing a tremendous backlog with regard to housing. Can our hon Minister tell us whether an allocation has been set aside in this budget for building more and better houses for our homeless? Thank you.

The MINISTER OF HOUSING: Thank you, Chairperson. I did not know that there had been a marriage of convenience between the PAC and the MF. Please don’t do it. We’re still here for you. My paper reflects the PAC.

Chairperson, the budget that we are considering now unfortunately does not cater for the plan that we have outlined. We have outlined an elaborate plan and I’m certain that given an opportunity, I’ll be able to come to your caucus to explain it to you. The elaborate plan does indeed – I will be available for you - allow for better quality, better-situated houses and all those good things that you would like for our people. [Applause.] The CHAIRPERSON OF COMMITTEES: Order! Ikhona eminye imibuzo? [Are there any other questions?]

Mr B W DHLAMINI: Ngqongqoshe, ngicela ukubuza ukuthi umnyango usubile yini nomhlangano noNgqongqoshe ophethe ezemihlaba, ngoba sidinga imihlaba ukuze sakhe izindlu, ukuze siqiniseke ukuthi siyazakha lezi zindlu eziningi, sakhele abantu abakithi abaswele izindlu? [Minister, I wish to ask if the department has had a meeting with the Minister for Agriculture and Land Affairs because we need land to build houses, to make sure that we build the many houses for our people who need them.]

The MINISTER OF HOUSING: UNgqongqoshe wezoLimo neMihlaba, udadewethu, ngiphila naye. Sihlangana onke amalanga siphinde futhi sikhulume isiSwati naye. [The Minister for Agriculture and Land Affairs, is my sister; I live with her. We meet daily and we also talk siSwati together.]

However, I wanted to indicate to you that within this comprehensive plan we have an interministerial committee that will allow us as government to work smart, and the Minister for Agriculture and Land Affairs is a central part of that strategy. So, indeed, I will make sure that I consult her on a regular basis.

Vote No 30 – Land Affairs – put: Mr A H NEL: Thank you, Chairperson. I want to put my question on Land Affairs to the Minister of Finance because he is the source of the problem. He knows that to settle all restitution claims by next year we will need R13 billion. He also mentioned his commitment to significant funds for restitution five times in the Medium Term Budget Policy Statement, but could find only R200 Million for the last four months of this financial year. My question is whether this small amount is a reflection of his commitment to land reform and restitution for next year’s budget. Thank you.

The MINISTER OF FINANCE: Chairperson the answer is no. Thank you.

Vote No: 31 – Minerals and Energy – put:

Mr H C SCHMIDT: Thank you, Mr Chair. Hon Deputy minister, an amount of R1,6 million is being rolled over for purposes of, inter alia, the formulation of the petroleum policy. In the light of the rising international oil costs

• approximately R1,37 of the final petrol price per litre, which is approximately 30% of the price of petrol - to state revenue and the consequent negative effect it has on the economy, particularly on the inflation rate and the rising food prices, at steps are currently being considered by the department, acting of course in consultation with Department of Finance, to protect the public from an exorbitant and ever- increasing fuel price? Thank you.

USEKELA-MPHATHISWA WEZEZIMBIWA NAMANDLA: Enkosi Sihlalo, Maninzi amalinge enziwa lisebe lezezimbiwa namandla, ukujonga ukuba ixabiso lepethroli liyakhuselwa. Njengokuba besele sitshilo, siyadibana kwakhona nebhanki enguvimba(Reserve Bank) kunye nesebe lezemali. Ikhona imisetyenzana ethile eyenziwayo, ejonge ukuba sifumane ezinye indlela zokufumana i-oyile.

Sinazo neenkqubo ezizakusinceda ukuba sibone ezinye iindlela zemveliso, kuqukwa ne-biofuels. Apho sizakube ngaxeshanye sizukube siseka iinkqubo kunye neentlanganiso ukuqinisekisa ukuba sinazo ezinye iintlobo zamandla ezenziwayo eMzantsi Afrika. Umbandela we-oyile, ndiyacinga ukuba sonke siyayazi ukuba ingaphaya kwamamndla ethu. Ixabiso le-oyile lilawulwa kwihlabathi liphela yi-OPEC. Urhulumente kunye nesebe akanalo ulawulo lwelaxabiso kungoko ke sisenza ingowa mali ekhethekileyo ukuba ikhusele elaxabiso kodwa nayo iyakwazi ukuphela.

Ngokoke ikhona imisetyenzana esiyijongileyo, umzekelo sijonge ukuqala ezinye iintlobo zezibaso(fuel)ezizakuthatha indawo yeparafini nokuba sijonge ukuba asinikho na ukufumana amanye amazwe enza i-oyile anokusinceda, ingakumbi apha eAfrika. Ndiyabulela Sihlalo. (Translation of Xhosa paragraphs follows.)

[The DEPUTY MINISTER OF MINERALS AND ENERGY: Thank you, Chairperson. Many attempts are being made by the Department of Minerals and Energy to ensure that the petrol price is protected. As we have already said, we are going to meet again with the Reserve Bank and the Department of Finance. Some endeavours are being made, which are aimed at finding other ways of getting oil.

We also have programmes which are going to help us to find other methods of production, including biofuels. At the very same time we shall be establishing programmes and meetings, to make sure that we have other types of energy produced in South Africa. The oil issue, I think we all know, is beyond our control. The price of oil throughout the world is controlled by OPEC. The government and the department have no control over it, and that is why we established an exclusive fund to afford some protection with regard to the latter, but it can also be exhausted.

Therefore, there are other projects that we are aiming for; for example, we aim to introduce other types of fuel, which will replace paraffin. We also aim to check whether we cannot find other oil-producing countries to assist us, especially here in Africa. I thank you, Chairperson.]

Vote No 32 – Trade and Industry – put:

Mr L W GREYLING: Thank you, Chairperson. The ID is very concerned about the R500 million that is being transferred to the pebble bed modular reactor project because of unavoidable expenses. This was unavoidable; in fact, we should not have invested in this in the first place. And the project is actually going backwards at the moment. And I would like to the Minister to tell us how much money the government, through its various agencies, put into this project?

And also, if you could tell us how much money the various foreign partners, who are essential to the success which you stated in the feasibility study, have actually invested in this project. I include the one who has pulled out. How much money did they put into this project? And secondly, British Nuclear Fuels Ltd - who is in fact bankrupt - have they actually committed any financial resources to this project? Can you also tell us what assurance do we have that the Government will not be called upon to bankroll this project continuously; that a foreign investor will be found for this project; and that we will not have to bankroll R12 billion, which is the cost of building this PBMR project. The cost of R12 billion for 110 Megawatts does not sound like cheap electricity to me. And also if it is such a good job creation project, why is Cosatu so outspoken about it? Thank you.

The MINISTER OF TRADE AND INDUSTRY: Thank you, Chairperson. The work on the pebble bed modular reactor is work that we are managing as Government in a very balanced way. We are looking at the potential benefits that it holds for our energy requirements and also the possibility it offers South Africa to provide leading-edge technology to the global energy community. We are in negotiation with potential partners, and so the question about how much each of them is going to put in I cannot answer right now because these are negotiations that are on going. So far the Government has spent money as follows: We are putting in R500 million now and the Department of Trade and Industry has put in R100 million during the course of this financial year. And we are going into this with our eyes wide open.

We are not calling for an open-ended commitment even from the Treasury because there are different phases through which this project is going to go. And through each of those phases it offers us an opportunity to make critical decisions about whether we go forward with the project or not, but all of this under consideration on the part of government. And the negotiations with the potential partner are also going on at the same time. Thank you very much, Chairperson.

Vote No 33 – Transport – put:

Mr S B FARROW: Chairperson and Minister, there are two critical transport issues that I believe are in adequately addressed in the medium-term budget review. The first relates to the fact that despite the extension of the primary network by over 2 000km into the hands of Sanrail from provinces, no increase in funding is reflected despite assurances in your budget speech that the whole aspect of road classification was under review and, in terms of the intergovernmental fiscal review, would be reworked in order to meet its commitments towards maintenance and also the Expanded Public Works Programme.

The second two aspects relate to the safety of commuters on rail and road. The much acclaimed national highway patrol unit has not materialised despite the R5,9 million expenditure on a feasibility study. Yet we sit with a shortage of thousands of traffic cops, which has a direct impact on the bankruptcy of the RAF and the effectiveness of the Arrive Alive campaign. If we had more visible cops we would have less accidents and less claims submitted to the RAF. Further investments in this quarter are long overdue, Minister.

The transport police, despite the transfer from your department of R30 million to Safety and Security for the proposed pilot project in the Western Cape, did not materialise on 1 April as promised. It is being dogged by a lack of commitment from both departments while rail commuters have to contend with violent crimes on a daily basis.

Can the Minister explain why this situation still prevails after six years of my standing here, reporting about these very same issues? Thank you.

The MINISTER OF TRANSPORT: Well, if the hon member was listening carefully to the Minister for Safety and Security, he would have realised that the rail police are going to start operating in the Western Cape on 1 January

1. That is what is going to happen and that is why we have shifted this R30 million to the Budget Vote for Safety and Security.

The issue of the South African National Roads Agency is an issue for the next financial year. If you recall, in the policy budget statement of the Minister of Finance, the issue of the maintenance and construction of road networks is one of the priorities for the next three years. We are dealing with the budget adjustment for this year. That issue arises in the next financial year where the details are going to be indicated.

The HOUSE CHAIRPERSON (Mr G Q M DOIDGE): Are there any further questions? The DA, I am advised that your time is also up. Are there any further questions? None.

Vote No 34 – Water Affairs and Forestry – put.

The HOUSE CHAIRPERSON (Mr G Q M DOIDGE): Are there any questions? No questions. Order! That concludes our question-and-answer session on the Votes. We shall now proceed to decide on the Votes and Schedule.

Where we have been advised that there will be no objection to a series of Votes, I shall put these votes together.

Vote No 1 - Presidency – agreed to.

Vote No 2 – Parliament - agreed to.

Vote No 3 – Foreign Affairs – agreed to.

Vote No 4 – Home Affairs – agreed to.

Vote No 5 – Provincial and Local Government – agreed to.

Vote No 6 – Public Works – agreed to.

Vote No 7 – Government Communication and Information System – agreed to (Democratic Alliance dissenting).

Vote No 8 – National Treasury – agreed to.

Vote No 9 – Public Enterprises – agreed to.

Vote No 10 – Public Service and Administration – agreed to.

Vote No 11 – Public Service Commission – agreed to.

Vote No 12 – South African Management Development Institute (SAMDI)– agreed to.

Vote No 13 – Statistics South Africa – agreed to.

Vote No 14 – Arts and Culture – agreed to (Democratic Alliance dissenting).

Vote No 15 – Education – agreed to (Democratic Alliance dissenting).

Vote No 16 – Health – put.

Division demanded.

The House divided:

AYES-265: Abram, S; Ainslie, A R; Anthony, T G; Arendse, J D; Asiya, S
E; Asmal, A K; Balfour, B M N; Baloyi, M R; Bapela, K O; Benjamin, J;
Bhamjee, Y S; Bhengu, F; Bhoola, R B; Biyela, B P; Bloem, D V; Botha, N
G W; Burgess, C V; Buthelezi, M G; Cachalia, I M; Carrim, Y I;
Chalmers, J; Chang, E S; Chauke, H P; Chikunga, L S; Chohan-Khota, F I;
Combrinck, J J; Cwele, S C; Dambuza, B N; Davies, R H; De Lange, J H;
Dhlamini, B W; Diale, L N; Didiza, A T; Dikgacwi, M M; Dipico, E M;
Direko, I W; Dlali, D M; Du Toit, D C; Erwin, A; Fihla, N B; Fraser-
Moleketi, G J; Frolick, C T; Fubbs, J L; Gabela, L S; Gcwabaza, N E;
George, M E; Gerber, P A; Gigaba, K M N; Gillwald, C E; Godi, N T;
Gololo, C L; Goniwe, M T; Greyling, C H F; Gumede, D M; Gumede, M M;
Gxowa, N B; Hajaig, F; Hanekom, D A; Hangana, N E; Hendricks, L B;
Hendrickse, P; Herandien, C B; Hogan, B A; Huang, S; Jacobus, L;
Jeffery, J H; Joemat, R R; Johnson, C B; Johnson, M; Jordan, Z P;
Joubert, L K; Kalako, M U; Kasienyane, O R; Kasrils, R; Kekana, C D;
Kholwane, S E; Khumalo, K M; Khunou, N P; Komphela, B M; Kondlo, N C;
Kota, Z A; Kotwal, Z; Landers, L T; Lekgoro, M K; Lekgoro, M M S;
Lishivha, T E; Louw, J T; Louw, S K; Lucas, E J; Ludwabe, C I; Luthuli,
A N; Maake, J J; Mabandla, B S; Mabe, L L; Mabena, D C; Mabudafhasi, T
R; Mabuyakhulu, D V; Madlala-Routledge, N C; Maduma, L D; Madumise, M
M; Magazi, M N; Magwanishe, G B; Mahlangu-Nkabinde, G L; Mahlawe, N M;
Mahomed, F; Mahote, S; Maine, M S; Maja, S J; Makasi, X C; Malahlela, M
J; Maloyi, P D N; Maluleka, H P; Manana, M N S; Manie, M S; Manuel, T
A; Mapisa-Nqakula, N N; Mars, I; Martins, B A D; Maserumule, F T;
Mashangoane, P R; Mashiane, L M; Mashile, B L; Masithela, N H; Masutha,
T M; Mathebe, P M; Mathibela, N F; Matlala, M H; Matsepe-Casaburri, I
F; Maunye, M M; Mayatula, S M; Maziya, A M; Mbombo, N D; Mdladlana, M M
S; Mdlalose, M M; Mentor, M P; Meruti, M V; Mgabadeli, H C; Mkhize, Z
S; Mlangeni, A; Mnandi, P N; Mnguni, B A; Moatshe, M S; Modisenyane, L
J; Mofokeng, T R; Mogale, O M; Mogase, I D; Mohamed, I J; Mokoena, A D;
Mokoto, N R; Molefe, C T; Moloto, K A; Montsitsi, S D; Morobi, D M;
Morutoa, M R; Morwamoche, K W; Mosala, B G; Moss, M I; Motubatse-
Hounkpatin, S D; Mpahlwa, M B; Mpaka, H M; Mpontshane, A M; Mshudulu, S
A; Mthembu, B; Mthethwa, E N; Mufamadi, F S; Mzondeki, M J G; Ndlovu, V
B; Ndzanga, R A; Nel, A C; Nene, N M; Newhoudt-Druchen, W S; Ngaleka,
E; Ngcengwane, N D; Ngcobo, E N N; Ngculu, L V J; Ngele, N J; Ngema, M
V; Ngwenya, M L; Nhleko, N P; Nhlengethwa, D G; Njikelana, S J; Njobe,
M A A; Nkuna, C; Nogumla, R Z; Nqakula, C; Ntshulana-Bhengu, N R;
Ntuli, B M; Ntuli, M M; Ntuli, S B; Nwamitwa-Shilubana, T L P; Nxumalo,
M D; Nxumalo, S N; Nzimande, L P M; Olifant, D A A; Oliphant, G G;
Oosthuizen, G C; Padayachie, R L; Pahad, E G; Pandor, G N M; Phadagi, M
G; Phala, M J; Phungula, J P; Pieterse, R D; Pule, B E; Radebe, B A;
Radebe, J T; Rajbally, S; Ramgobin, M; Ramotsamai, C P M; Ramphele, T D
H; Rasmeni, S M; Reid, L R R; Roopnarain, U; Rwexana, S P; Saloojee, E;
Schneemann, G D; Schoeman, E A; Seaton, S A; Sefularo, M; Sekgobela, P
S; September, C C; Sibande, M P; Sibanyoni, J B; Siboza, S; Sibuyana, M
W; Sigcau, S N; Sikakane, M R; Simmons, S; Sisulu, L N; Sithole, D J;
Skhosana, W M; Skosana, M B; Skweyiya, Z S T; Smith, V G; Solo, B M;
Solomon, G; Sonjica, B P; Sonto, M R; Sosibo, J E; Sotyu, M M; Stofile,
M A; Surty, M E; Thabethe, E; Thomson, B; Tobias, T V; Tolo, L J;
Tsenoli, S L; Tshabalala-Msimang, M E; Tshivhase, T J; Turok, B; Vadi,
I; Van den Heever, R P Z; Van der Merwe, S C; Van Wyk, Annelizé; Vezi,
T E; Vos, S C; Vundisa, S S; Xingwana, L M; Xolo, E T; Yengeni, L L;
Zikalala, C N Z; Zita, L; Zulu, B Z; Zulu, N E; Zuma, J G.


NOES-45: Blanché, J P I; Boinamo, G G; Botha, C-S; Camerer, S M; De
Lille, P; Doman, W P; Durr, K D S; Ellis, M J; Farrow, S B; Gibson, D H
M; Gore, V C; Green, L M; Harding, A; Henderson, R K; Jankielsohn, R;
Kalyan, S V; King, R J; Kohler-Barnard, D; Labuschagne, L B; Lee, T D;
Lowe, C M; Maluleke, D K; Meshoe, K R J; Minnie, K J; Mnyandu, B J;
Morgan, G R; Morkel, C M; Nel, A H; Nkem-Abonta, E; Ntuli, R S;
Opperman, S E; Sayedali-Shah, M R; Schmidt, H C; Seremane, W J; Smuts,
M; Swart, M; Swart, P S; Swathe, M M; Taljaard, R; Trent, E W; Van der
Walt, D; Van Dyk, S M; Waters, M; Weber, H; Zille, H.

Vote accordingly agreed to.

Vote No 17– Labour - agreed to.

Vote No 18 – Science and Technology - agreed to.

Vote No 19 – Social Development - agreed to.

Vote No 20 – Sport and Recreation South Africa - agreed to (Democratic Alliance dissenting).

Vote No 21 – Correctional Services - agreed to.

Vote No 22 – Defence - agreed to (Independent Democrats dissenting).

Vote No 23 – Independent Complaints Directorate - agreed to (Democratic Alliance dissenting)

Vote No 24 – Justice and Constitutional Development - agreed to.

Vote No 25 – Safety and Security – agreed to (African Christian Democratic Party dissenting).

Vote No 26 – Agriculture – agreed to.

Vote No 27 – Communications - agreed to.

Vote No 28 – Environmental Affairs and Tourism - agreed to.

Vote No 29 – Housing - agreed to.

Vote No 30 – Land Affairs - agreed to (Democratic Alliance dissenting).

Vote No 31 – Minerals and Energy - agreed to.

Vote No 32 – Trade and Industry - agreed to.

Vote No 33 – Transport - agreed to (Democratic Alliance dissenting).

Vote No 34 – Water Affairs and Forestry - agreed to.

                   ADJUSTMENTS APPROPRIATION BILL



                       (Second Reading debate)

There was no debate.

Bill read a second time.

The House adjourned at 17:09

                             __________


            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. Introduction of Bills

 (1)    The Minister of Finance


     (i)     Revenue Laws Amendment Bill [B 24 - 2004] (National
          Assembly - sec 77)


     (ii)    Second Revenue Laws Amendment Bill [B 25 - 2004] (National
          Assembly - sec 75)

     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
     9 November 2004.

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

1. Classification of Bills by Joint Tagging Mechanism:

 (1)    The Joint Tagging Mechanism (JTM) on 9 November 2004 in terms of
     Joint Rule 160(3), classified the following Bill as a section 75
     Bill:


     (i)     Second Revenue Laws Amendment Bill [B 25 -2004] (National
          Assembly - sec 75)


 (2)    The Joint Tagging Mechanism (JTM) on 9 November 2004 in terms of
     Joint Rule 160(6), classified the following Bill as a money Bill:


     (i)     Revenue Laws Amendment Bill [B 24 -2004] (National
          Assembly - sec 77)

1. Draft bills submitted in terms of Joint Rule 159

 (1)    Close Corporations Amendment Bill, 2004, submitted by the
     Minister of Trade and Industry on 26 October 2004. Referred to the
     Portfolio Committee on Trade and Industry and the Select Committee
     on Economic and Foreign Affairs.


 (2)    Intergovernmental Relations Framework Amendment Bill, 2004,
     submitted by the Minister for Provincial and Local Government on 4
     November 2004. Referred to the Portfolio Committee on Provincial
     and Local Government and the Select Committee on Local Government
     and Administration.

COMMITTEE REPORTS:

National Assembly:

1. Report of the Portfolio Committee on Health on the Choice on Termination of Pregnancy Amendment Bill [B 72D - 2003] (National Assembly - sec 76), dated 9 November 2004:

   The Portfolio Committee on Health, having considered the Choice on Termination of Pregnancy Amendment Bill [B 72D - 2003] (National Assembly - sec 76), amended by the National Council of Provinces and referred to the Committee, reports that it has agreed to the Bill.

   The Committee further reports that the Democratic Alliance abstained and that the African Christian Democratic Party opposed the Bill.

 Report to be considered.

CREDA PLEASE INSERT REPORT - Insert 1ATC1109